News in brief - Sept. 1, 2003

Study claims ED boon, not bane - Fla. seeks info on Tenet - Wis. businesses set fees for physicians - Pain management practice sold - Heart drug market set to grow

Study claims ED boon, not bane

A new study bucks the popular belief that emergency departments are money pits for health systems.

The California HealthCare Foundation's study concluded that the average non-trauma-center ED in California contributes 20% of a hospital's profits by serving as a gateway for patient admissions.

But critics say the study didn't offer a realistic picture because it relied on averages and excluded data from trauma centers. They say other evidence suggests a much bleaker outlook for emergency services, particularly in California, where dozens of EDs have closed in recent years.

The foundation's study examined data from 1998 on California's 245 non-trauma EDs and found that the hospitals' total profits were $657 million, with EDs contributing about $131.4 million, or 20%. At the same time, 2.1 million patients were admitted to the hospitals, including nearly 800,000 who came through EDs.

Fla. seeks info on Tenet

Tenet Healthcare Corp. has revealed that state authorities are investigating its hospitals in Florida, marking the latest in a series of government probes of the troubled chain.

The Florida Medicaid Fraud Control Unit issued an investigative subpoena in June seeking employee personnel records and contracts with physicians, therapists and management companies, Tenet disclosed in a regulatory filing on Aug. 7. The records sought include agreements since 1992 for loans, purchases and sales.

A representative of the state attorney general's office, which oversees the unit, declined to comment.

A Tenet spokesman said the Santa Barbara, Calif.-based firm was cooperating with investigators and had provided documents from six of its 16 hospitals in Florida. He didn't know if more documents were being sought.

The investigation was disclosed a day after Tenet announced that it would pay $54 million to settle federal government claims that hundreds of unnecessary heart procedures were performed on patients at a Redding, Calif., hospital. Under terms of the settlement, Tenet did not admit any wrongdoing.

Wis. businesses set fees for physicians

A group of Milwaukee-area businesses is finalizing a plan to lower health care costs by reducing the fees it will pay physicians and hospitals for services. The idea, however, has found few fans among the doctors who would be asked to accept it.

The Business Health Care Group of Southeast Wisconsin plan, which officials have stressed is not official, proposes to set a maximum allowable charge that employers would pay for services. If doctors decided to charge more for some services, it would be up to employees to cover the difference, officials said.

The fee schedule would be 150% of what Medicare pays for services, according to the business group. The tentative schedule would be to roll the plan out for physicians next year, then introduce it to hospitals in 2005 and possibly expand to the pharmaceutical industry in 2006.

It's a concept, however, that already has raised eyebrows in Wisconsin health circles. Mahendr Kochar, MD, president of the Medical Society of Milwaukee County, said the business group has not solicited any input from the physician organization.

Pain management practice sold

PainCare Holdings Inc., an Orlando, Fla.-based company that runs orthopedic rehabilitation, spine surgery and pain-management centers across North America, has acquired Associated Physician Group, a practice with three offices east of St. Louis.

The practice is the sixth in PainCare Holdings' network. The company, which started in 2000, also runs a turnkey orthopedic rehabilitation program for practices to incorporate into their overall service package.

PainCare Holdings estimated the acquisition of Associated Physician Group would equal about $2.8 million a year in revenues. The company already reported its revenues were nearly $3.8 million in the second quarter of 2003, a 111% increase over the nearly $1.8 million it reported during the same period of 2002. The company reported net income of $563,000 during the most recent quarter, a 214% jump over the $179,147 it reported during the second quarter last year.

Heart drug market set to grow

The market for drugs to treat heart disease will continue to balloon, reaching $15 billion in 2007 and $23 billion in 2012, according to Decision Resources Inc., a research and advisory firm focusing on pharmaceutical and health care issues.

The Waltham, Mass.-based firm said the market growth will be driven not only by more expensive treatments, but also the number of heart disease cases. The firm predicts cases of coronary heart disease will increase from 187 million in 2002 to 217 million in 2012 in seven major pharmaceutical markets worldwide.