News in brief - Feb. 26, 2001

Premium hikes not passed on - U.S. health care tops $1 trillion - Practice wages rising faster - Managed ICU can save $1 billion - HMOs report on their promises - PacifiCare will back off HMOs

Premium hikes not passed on

HMOs didn't pass on their hefty premium increases to physicians last year and commercial reimbursements fell in relation to Medicare payments, according to a new study by the accounting firm Milliman & Robertson.

As of July 2000, HMOs reported that they were paying physicians on average 115% of HCFA rates per resource-based relative value system unit, down from 119% of the HCFA rates in July 1999.

U.S. health care tops $1 trillion

Industry revenues hit $1.01 trillion in 1999, up 4.3% from the previous year, according to the Census Bureau.

In that figure, revenue for physician offices was up 4.7% and hospital spending was up 3.9%. Physician offices took in $90 billion from private insurance payments, $45 billion from Medicare and $21 billion from patient "out-of-pocket" payments.

Practice wages rising faster

Physician offices plan to raise wages for office staff by an average of 2.7% to 5.2% this year, a higher rate than past years, according to a survey by the Health Care Group in Plymouth Meeting, Pa.

Low unemployment makes it harder to hire and retain staff, the Health Care Group noted. It surveyed about 1,200 practices across the country.

Managed ICU can save $1 billion

Intensive care units could save more than $1.4 billion dollars a year if they followed the practices of the nation's best ICUs, according to a study conducted jointly by Solucient (formerly HCIA-Sachs) and VISICU, both based in Baltimore.

The study found that these money-saving ICUs had mortality indices at least 12% lower than their peers.

HMOs report on their promises

The Coalition for Affordable Quality Healthcare, an alliance of 24 major U.S. health plans, said its members have made progress implementing goals announced last year but did not detail how much progress had been made.

The goals include guaranteeing access to ob-gyns and pediatricians without referrals, paying for emergency care that a "reasonable" person would consider necessary, and implementing a standard complaint-review process.

PacifiCare will back off HMOs

Smarting from a 42% decline in earnings in 2000, PacifiCare Health Plans announced a new corporate strategy that includes reducing its heavy dependence on HMOs in favor of more popular PPOs.

Other strategies include: lightening reliance on Medicare HMOs, beefing up pharmaceutical benefits management unit and offering more "lifestyle" coverage, such as laser surgery, weight loss, sports medicine and therapy for sexual dysfunction.