News in brief - June 25, 2007

Calif. group lists prices online - Cigna doesn't go exclusive with labs - Brailer starts investment fund - Pa. RHIO dies - Former medispa owner wins judgment

Calif. group lists prices online

HealthCare Partners Medical Group in Southern California, a staff-model HMO and physician group, recently posted on its Web site prices for 58 medical procedures. It's a move CEO Robert Margolis, MD, described as a response to the growing trend of patients shopping around for health services and paying out of pocket.

"We clearly have a new generation of patients, of consumers, who believe they can shop for anything on the Internet, find what they want and interact with their purchasing decisions," said Dr. Margolis, an internist. "That's a health care phenomenon to some degree."

Patients can click a link at the group's Web site (www.healthcarepartners.com) for fees for basic services and find prices for such procedures as a colonoscopy, flu vaccine for a baby, and a sports physical.

"Before the advent of health insurance, doctors always posted their prices and people paid out of pocket," Dr. Margolis said. "Then insurance came along and people didn't have to pay out of pocket so they had no real interest in what prices were. Now with higher deductible plans, they're interested in prices again."

The AMA supports the posting of prices by physicians and others. But the Association says true transparency will come only when insurers reveal to consumers what they pay.

But Dr. Margolis said that should not be a plan's responsibility.

"People get their health care from their doctor group, and that's where they should get that information," he said.

Cigna doesn't go exclusive with labs

Instead of following in the footsteps of UnitedHealth Group and Aetna and signing an exclusive deal with an independent laboratory services company, Cigna decided to keep up a relationship with both Quest Diagnostics and Laboratory Corp. of America.

On June 7, Burlington, N.C.-based LabCorp announced it had signed a multiyear deal with Cigna to become a "preferred provider" of lab services nationwide. But unlike United's deal with LabCorp, Quest remains in Cigna's network. Quest also had recently signed a deal with Aetna granting it national exclusivity, leaving its rival LabCorp out of the plan's network.

One gain LabCorp did make was that as of the contract's effective date, Jan. 1, 2008, it will no longer be restricted from marketing itself as a member of Cigna's network.

Brailer starts investment fund

David Brailer, MD, PhD, President Bush's former national health information technology coordinator, is leading a new $700 million venture capital fund on behalf of its lone investor -- the California Public Employees Retirement System.

Dr. Brailer's fund, called Health Evolution Partners, is slated to invest $500 million in companies whose objective is to slow the rate of increase for health care premiums. The other $200 million would go toward other health care company investments.

CalPERS is a $240 billion pension fund that is the nation's third-largest buyer of health care. Before joining the Bush administration, Dr. Brailer had been a health technology CEO and senior fellow of a health technology research organization in San Francisco, where his fund will be based.

Pa. RHIO dies

An organization to connect hospitals, physicians and patients to a computerized database has dissolved before ever really getting started.

The Northeastern Pennsylvania Regional Health Information Organization in the Wilkes Barre-Scranton area was folded after failing to come up with $26,000 needed to pay for the process of applying to the Internal Revenue Service for nonprofit designation, the organization said.

The RHIO was formed last year but said money promised by donors didn't come through, the size of the board was decreased, and other signs pointed to a lack of support for the RHIO.

Former medispa owner wins judgment

A former Sona MedSpa franchisee was awarded nearly $400,000 after he sued the company, alleging he was duped into opening a franchise on the basis of faulty information.

According to a statement released by the plaintiff's attorney, Michael Garner, his client Kempton J. Coady invested in Sona due to claims that its laser hair removal concept would permanently remove 93% to 97% of unwanted hair in five treatments. Coady invested in a franchise and repeated the claim to clients.

An arbitrator in Atlanta held Nashville, Tenn.-based Sona, as well as an executive and a group of investors who later bought the franchisor from Jones, liable for not correcting the misleading information.

The arbitrator found Sona "did not exercise reasonable care in obtaining reliable evidence about the validity" of the claims it was making about the hair removal system. Sona and its executives and investors did not admit guilt.

The doctors are in the house
The AMA's House of Delegates is holding its Interim Meeting Nov. 7-10 in Houston, addressing issues such as health system reform and physician payment.
Meeting coverage - Slideshow