PHYSICIAN OWNERS: Face Hurdles in Launching Products
A coalition of Minnesota physicians and clinics that hoped to create its own health plan saw its efforts denied by the state Health Department, the St. Paul Pioneer Press reports. Although Community Coordinated Health Care filed its application with the state last fall, it has not yet produced information about its finances and provider networks. "There are just too many hurdles to overcome," said CCHC Chair Dr. E. John English, noting that in the end, the "group wasn't sure it wanted to create an organization that would evaluate the risks involved in underwriting health insurance and then set prices." For Tom Ebert, president and CEO of the 1,700-member Employers Association, the move comes as no surprise, as the coalition has had trouble raising $3 million needed to gain a license. "We're terribly disappointed," Ebert said, adding, "We're back to Russian roulette for small employers' health insurance" (Padley, 8/11).
Texas Hospital Competition
Frustrated with overworked nurses and unyielding hospital visitation hours, Wichita Falls, TX, doctors wrote their own script in launching their own hospital last January, the Wall Street Journal/Texas Edition reports. When the town's two "hospitals merged, it was like having only Wal-Mart," said Kell West Regional Hospital Chair Jerry Myers. "[W]ouldn't it be better to have a Target and a Kmart, too?" The 70 doctor-owners are aiming for "hotel-like service," training "employees to smile more often and chat regularly with patients." Nurses are required to call patients during their first day home and plan to install a "concierge to help patients and families with anything they need." The 30-bed facility houses six operating rooms for neurosurgery, vascular surgery, plastic surgery and general surgery for its relatively few surgeons, most of whom overlap with competing hospital United Regional. Officials are expecting a nine-month operating profit of $111,000. The physicians, who fronted $5,000 to $60,000 each and signed onto to bank loans to cover construction costs, are not expecting a return on their investment for several years.
Competitor Getting Nervous
Although United Regional has been stung by Balanced Budget Act reimbursement cuts, Kell West has been less affected, as Medicare beneficiaries account for fewer than half of its patients. Clinics of North Texas President Lawrence Lyford takes issue with Kell West for restricting hospital use to the physician-owners, and for luring good employees from other facilities. "But the biggest concern is the damage it could do to the other hospital. There's concern that if they skim the cream and don't provide the more expensive facilities .... there could be problems at the bigger hospitals in the long run" (Flood, 8/11 issue).