The people of Massachusetts are getting a message whispered in their ears-or earphones. Radio advertisements paid for by the Massachusetts Hospital Association will repeat the same theme throughout their eight-week run: We're for universal health coverage.
It's a message that may not have sunk in among the populace, association spokeswoman Carol Riffman said. "In part, I think (hospitals) are being tarred by the brush of those in the past who have not supported universal coverage," she said, counting the American Medical Association as well as some hospitals as part of that past opposition.
The $200,000 ad campaign is intended to convey hospitals' strong support of national reforms that would ensure health security, and to trace that support to hospitals' historical commitment to their communities, Ms. Riffman said. The May 2 startup coincided with hearings on a state plan to help broaden insurance coverage for the uninsured (April 25, p. 23).
The association also launched a second initiative targeted to hospital leaders, healthcare professionals, lawmakers and news media: a twice-monthly newsletter focusing on reform in the state and spinning a state angle on reform news coming out of Washington.
Priorities.Minnesota Democrats recently charged that Gov. Arne Carlson, a Republican, cared more about spending public money to keep the NBA's Minnesota Timberwolves in Minneapolis than keeping 48-bed Gillette Children's Hospital open in St. Paul.
Now it seems, the Timberwolves care more about cutting team losses through a $152 million buyout by a New Orleans group than accepting Gov. Carlson's offer to buy its privately owned arena, the Target Center, for $46 million. The offer would have lowered the team's debt and helped it stay in Minnesota. If the NBA approves the team's sale, the Minnesota Timberwolves are history.
And Gillette Children's? Well, the specialty hospital that treats children with severe disabilities will live on, a hospital spokesman said. The day the Timberwolves announced they would be moving for the 1994-95 season, Gov. Carlson held a press conference to announce he had reached a compromise with Gillette and other similarly affected hospitals with high proportions of Medicaid patients.
The agreement calls for Medicaid funding cutbacks to be delayed to at least July 1, 1995, the governor said. The cutbacks, if made effective later this year, would have cost Gillette $1.5 million of its total annual revenue of $25.5 million, the spokesman said.
Subcapitating.Vencor has carved out a profitable niche treating patients on ventilators and other life-support devices. Now the Louisville, Ky.-based company is eyeing a unique marketing strategy.
Willis Corroon, an international insurance broker and consultant, has agreed to introduce Vencor to some of its reinsurance carriers who provide capitation insurance. Vencor officials have already met with Southeastern Risk Specialists, an Atlanta-based underwriter for the Lexington Insurance Co., a Boston-based insurer, although no agreement has been reached.
As an "excess payer," Willis Corroon can't direct where patients go for care, said Scott Walker, an assistant vice president for the underwriter. But the company can bring Vencor to the table during capitation insurance negotiations with hospitals, he said. Such contracts are renegotiated annually.
Vencor would agree to "subcapitate," taking the hospital's ventilator-dependent patients in exchange for a portion of the capitation fee. The idea is to create new referrals for Vencor while helping hospitals to reduce their inpatient and reinsurance costs and lowering the reinsurer's loss ratio.
It's "another opportunity for Vencor to leverage its unique position in the industry," said W. Earl Reed III, Vencor's vice president for finance and development. "It's in the very preliminary stages right now," he said. Mr. Reed declined to give other details of the marketing scheme. "I consider it proprietary," he said.
Rosty's last maneuver?House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) may be headed for indictment and probable resignation from Congress, but he's said to be fighting for his hospital constituents to the bitter end.
A proposal that is rumored to be circulating within the committee would give "certain urban teaching hospitals with major facilities replacement programs" federal subsidies to help finance their interest payments. The measure seems tailor-made to help Chicago teaching institutions that have embarked on major rebuilding projects, including Northwestern Memorial Hospital, which needs to fund its nearly $600 million rebuilding project.
Under the proposal, teaching hospitals would get federal subsidies of 4% of interest payments for projects of $600 million or more. The total loan amount eligible for subsidies could not exceed 65% of the cost of the project.
The initiative hasn't been debated by Ways and Means, nor is it included in the reform plan that is currently being considered by the panel.
No riddle.The answer is money; what is the question?
That snappy retort is the name of a new column in the Remington Report, a monthly home healthcare magazine, and Outliers thought it applied well to what happened at two shareholder meetings this month.
At Community Psychiatric Centers, shareholders went against management's wishes in approving a proposal by Amalgamated Bank of New York to rescind the company's "poison pill," which makes an unfriendly takeover more difficult.
Earlier in the month, shareholders of Surgical Care Affiliates voted down five anti-takeover proposals that executives of the outpatient surgery chain had proposed.
In both cases, institutional investors own a majority of the company's stock-more than 60% at CPC and 51% at Surgical Care. Anti-takeover proposals, such as "poison pills," allow executives to make an unfriendly takeover more expensive by issuing discounted shares to current shareholders.
Company executives contend that anti-takeover measures help ensure that they have sufficient time to negotiate a good price in the wake of such an offer. However, some shareholder groups contend that they simply entrench managers who may fear for their jobs in a takeover attempt.
In any case, institutional investors will nearly always vote against anti-takeover proposals because a takeover usually means a run-up in the company's stock price. Why don't they simply trust management to make the right decision if a buyout offer is made? That's right, the answer is money.