News in brief - June 4, 2001

Discount programs aren't saving much - Cigna gets tough in Tennessee, Chicago - Shorter stays create added costs - California PPO ends medical necessity - N.J. doctors seek probe of Magellan - All-products ban goes to Fla. governor - Calif. negotiations bill makes progress - Tenn. HMO liability bill moves ahead - Experts say Calif. system in crisis

Discount programs aren't saving much

New drug discount programs for seniors in nine states don't cost much to run, but critics say they don't yield many savings, either.

The programs have sprouted up in the past two years in California, Florida, Iowa, Maine, Maryland, New Hampshire, Vermont, Washington and West Virginia, says the National Conference of State Legislatures.

States pay little or nothing because the discounts come from pharmacies. Washington officials say their program, which began in January, costs the state absolutely nothing and has signed up 4,600 patients so far.

But a price survey by a Tacoma newspaper found that savings were often much less than the 12% to 30% that the state touted, and seniors usually can get better deals by not paying the $25 entry fee for the program and just shopping around.

Richard Cauchi, an NCSL analyst, said the media also have questioned savings in the Florida and West Virginia programs.

Lisa Geiger, director of state and federal policy at the American Pharmaceutical Assn., which represents pharmacists, said the group opposes discounts because they harm pharmacists and give a false notion that something is being done to help seniors.

Cigna gets tough in Tennessee, Chicago

In its contract dispute with 11 HCA hospitals in Tennessee, Cigna said about 130 Nashville-area physicians who admit only at HCA hospitals have to admit to other hospitals or lose their contracts.

And in Chicago, Cigna is moving some 15,000 enrollees in small groups into a new plan that won't cover treatment at prominent local hospitals such as Northwestern Memorial and Rush-Presbyterian-St. Luke's.

Shorter stays create added costs

Hospital stays for bypass surgery have dropped from nine days in 1990 to 5.4 days in 1998, but readmissions and use of extended care facilities have risen, according to a study in the May issue of the Journal of Thoracic and Cardiovascular Surgery.

In 1990, almost all bypass patients went directly home and only 0.5% had to be readmitted. In 1998, 57% went directly home and 5% of those had to be readmitted, while the other 43% stayed for more than 10 days at extended care facilities.

California PPO ends medical necessity

San Diego-based CCN, whose 32 million members make it the nation's largest PPO, says it will eliminate medical necessity reviews for nonemergency hospitalizations and certain outpatient procedures as contracts expire.

CCN will still require doctors to pre-notify the company about certain procedures. It said the data will help group health clients more accurately track and manage benefit costs.

Tenn. HMO liability bill moves ahead

The Tennessee House judiciary committee has approved a bill that allows patients who are harmed by the denial of medical treatment to sue their health plans.

The bill says that before suing, patients must appeal a plan's medical decision through an internal process and then an external review by an independent medical expert.

Experts say Calif. system in crisis

Health care experts at the California Health Care Symposium 2001 in San Francisco said the state's managed care system faces major problems but they had different ideas on how to fix it.

While the California Medical Assn. wanted HMOs to pay higher reimbursements, managed care guru Alain Enthoven suggested that employers look to create large purchasing consortiums to buy health care.