ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Sunday, January 5, 1997 TAG: 9701070021
SECTION: BUSINESS PAGE: 6 EDITION: METRO
TYPE: ECONOMIC FORECAST
SOURCE: SANDRA BROWN KELLY STAFF WRITER
The honeymoon between businesses and health care providers could be over, said Lisa Craft, executive director of the Blue Ridge Regional Health Care Coalition. The group represents 55 Western Virginia companies with a total of about 30,000 employees.
While the Clinton administration discussed health care reform, insurance companies controlled health insurance rates. Some companies even got lower rates at renewal time.
Not anymore.
During one week in December, Craft spoke with four companies that had received 15 percent rate increases at renewal.
Companies might start thinking of adding managed care plans to their options to avoid this happening again, she said.
Western Virginia companies are glad to see managed care - which directs employees toward specific doctors and hospitals - but neither the businesses nor their employees have really committed to managed care, Craft said.
Employees love some of the benefits of managed care, such as coverage for visits to doctors, but still resist being forced into a particular network of doctors and hospitals, Craft said.
Insurers, however, are really banking on managed care plans as a growth area, but the companies also are wary of an adversarial political atmosphere.
Last month, the federal government limited the types of bonuses that can be paid to doctors who see Medicare and Medicaid patients. The limits are designed to make sure patients aren't denied care so a physician can make more money.
But while the rules apply only to patients in the government health programs, they also are likely to become guidelines for financial incentives provided to doctors under any health care plan. The government already declared that HMOs may not limit what doctors tell patients about treatment, thereby eliminating the possibility that a doctor might withhold information about expensive treatments that could affect the insurer's costs.
State legislatures are expected to follow suit with more laws that will control health care delivery, Craft said.
The Virginia General Assembly likely will get a bill that mandates that all companies must supply health care insurance to employees, Craft said.
The legislation probably won't go anywhere during the session that begins this month, but it is an example of a trend that makes health care providers and buyers nervous.
* * *
And while insurers and businesses see pressures from government and each other, hospital systems expect to continue to be scrunched three ways, by government, insurance companies and businesses, said Bill Downey, president of Columbia Lewis-Gale Hospital in Salem.
They all want the highest quality of care at an affordable cost, he said.
Hospital systems are reacting in kind, Downey said.
Columbia Healthcare of Southwest Virginia, made up of Lewis-Gale and four other hospitals, is expanding its outpatient services to keep peace with insurance companies that want more and more treatments done without the patients being hospitalized. It has added a behavioral health center in Richlands near Columbia Clinic Valley Medical Center and is expanding physical rehabilitation facilities throughout.
Columbia also is always looking for more hospital partners and linkups with physician groups so it can get their referrals of patients, he said.
"I'm optimistic about the outlook for next year," Downey said.
A hotel being developed on the Lewis-Gale campus by a private company is scheduled to open in April, and this month a piece of high dosage radiation equipment will be ready for use, increasing the number of people the hospital can treat for cancer.
The number of days a patient spends in the hospital will continue to go down, said Don Lorton, executive vice president for strategic services at Carilion Health System Inc. Carilion represents 13 hospitals, including Carilion Roanoke Memorial and Carilion Roanoke Community, both in Roanoke.
Nationally, patient days are expected to decline from 4 percent to 7 percent a year over the next two years. Inpatient care amounts to about 40 percent of the health care dollar spent now, but it might be as low as 20 percent in the future, he said.
That can change, however, depending upon health care "weather," Lorton said. Some years, the flu epidemics are greater than others. Some years have higher cases of pneumonia. When that happens, hospitals have a lot of business.
Like Columbia, Carilion also looks toward relationships with more hospitals. Currently, Carilion and Sentara Health System, a Norfolk-based hospital operator, are "looking for opportunities," Lorton said. Carilion also has discussions going with other systems about combining purchasing and sharing technology, he said.
Hospitals still account for the largest chunk of health care expenditures so naturally get the most attention. The hospital officials expect insurance companies to start feeling more pressures from all quarters too.
Insurers will be expected to produce results for premiums paid by keeping employees healthier through immunization programs and certain regular tests such as mammograms and by making certain that most of the premiums actually go toward claims and not insurance company expenses, they said.
"We're ready to enter a new generation of managed care based on smarter patient care," Carilion's Lorton said. Hospitals also will get smarter with better technology to link doctors' offices and hospitals and eliminate many of the duplicate paperwork and tests that patients now experience.
Initially, the technology is costly, but it can lead to declines in hospital prices, Lorton said.
Carilion, for example, has to interact with more than 700 physicians, plus providers, home health care group and pharmacies and little of that is currently done by computer, Lorton said.
In the next 24 to 36 months, though, the system plans to have primary care doctors' offices linked to the hospitals so that records can be transferred electronically.
Electronic records are the priority, but once those are on line, then test results can be shared among officials. Eventually a CAT scan done in Rocky Mount can be electronically made available to a specialist in Roanoke, Lorton explained.
Hospitals have to control their costs to be competitive, he said.
In 1996, Carilion hospitals raised prices 2 percent, but had no raise for fiscal 1997, which began Oct. 1, he said.
LENGTH: Long : 114 linesby CNB