News in brief - Oct. 25, 2004

Groups feel cost pressure - Texas osteopathic hospital closes - National foundation awards grants for online disease management research - South Carolina Blues implements Internet telephony

Groups feel cost pressure

Primary care practices are working hard to contain rising costs, including cutting back support staff, according to a new report released by the Medical Group Management Assn.

The MGMA's "Cost Survey: 2004 Report Based on 2003 Data," revealed family physician groups, for example, have seen medical revenue after operating costs increase 2.2% since 2002. Pediatric practices saw a 2.4% decline in operating costs last year, but at the same time, medical revenue dropped 4.3%. Costs for multispecialty groups remained flat in 2003.

Groups reported fewer full-time staff positions on average, and higher fees paid to management services organizations, according to the report.

Medical liability premiums were a major culprit for increasing costs in 2003, according to the report.

Multispecialty groups, for example, saw a 22.7% increase in liability costs, the report said.

Texas osteopathic hospital closes

A 206-bed facility billed as the only osteopathic hospital in Texas is closing because of financial problems.

Leaders of the Osteopathic Medical Center of Texas, in Fort Worth, voted on Oct. 7 to shutter the facility, succumbing to the pressures of long-standing debt and difficulty negotiating competitive managed care contracts, said Bo Brannon, spokesman for the hospital's parent company, the Osteopathic Health System of Texas.

"We had no leverage and couldn't compete with the big guys as a small teaching hospital," said Brannon.

He said the hospital was carrying $85 million in bond debt.

The emergency department was closed on Oct. 8 and Brannon said other patients would be discharged or transferred.

The hospital, which opened in 1946, was used as a teaching facility for the University of North Texas Health Science Center. The university said it had a contingency plan to cope with the closure that included transferring interns and residents to programs at other hospitals.

National foundation awards grants for online disease management research

The Robert Wood Johnson Foundation has awarded $2.45 million in grants to fund research projects designed to assess the effectiveness of patient-physician Web portals in improving the health of the chronically ill.

The grant recipients will evaluate the effectiveness of portals in improving patient-physician communication, containing costs, providing reliable health information, reducing medical errors and enhancing efficiency. The Robert Wood Johnson Foundation, a Princeton, N.J.- based philanthropy, awarded grants ranging from $397,000 to $400,000 to Aurora Health Care, Milwaukee; Beth Israel Deaconess Medical Center, Boston; Geisinger Health, Danville, Pa.; HispaniCare, Roswell, Ga.; Cleveland Clinic Foundation; and the University of Colorado Health Sciences Center, Aurora, Colo.

South Carolina Blues implements Internet telephony

BlueCross BlueShield of South Carolina has added VoIP (Voice-Over-Internet Protocol) technology to its Web site, giving physicians priority for customer service when they telephone the plan over the Internet.