Now that a sweeping healthcare reform bill seems unlikely to pass this year, policy wonks are talking incremental reforms, like community rating. And they've made New York state's community rating law an example of how not to do it.
On April 1, 1993, New York began requiring insurers that write small-group and individual insurance to use "pure" community rating. That means premium rates are calculated without regard to age, sex, health status or occupation.
Nine months after the law took effect, 1.2% fewer people, or 25,000 subscribers, had coverage. Among individual policyholders, the state recorded a 12.4% decline in coverage, a loss of 43,600 subscribers.
Commercial insurers think New York's law is unfair and ineffective. As younger people experienced huge premium hikes to subsidize coverage for older, sicker residents, the under-35 population began dropping out.
The "death spiral" will continue "until what you have left is a pool of sick people," predicted a spokesman for the Health Insurance Association of America. The association supports modified community rating, with adjustments for age and health status only.
But according to Gov. Mario Cuomo, the most significant loss of covered individuals came from Blue Cross plans, which have been community rated for years. If those losses are excluded, the first year of community rating resulted in 70,000 new subscribers, an 8.8% increase. Meanwhile, Medicaid supplemental policies drew 13,000 new subscribers.
New York State Insurance Superintendent Salvatore R. Curiale accuses commercial insurers of embarking on "a campaign to disparage the initiative." He continues to defend the program as "remarkably successful, providing a model well worth emulating."
The other cost of mergers.The cost of merging just got a little higher. The Federal Trade Commission has raised the fee for companies that are required to file pre-merger notification documents with the federal government to $45,000 from $25,000.
The filing requirement and fee apply to any merging or acquiring companies, including healthcare organizations, that exceed a certain asset threshold. The new fee took effect on Aug. 29. After two organizations file the documents and pay the fee, the FTC and Justice Department determine which agency will review the transaction for possible anti-competitive effects.
Just Trust us.Journalists are among those who pay particularly close attention to names and how they're spelled.
That's why Outliers took note recently when Healthtrust issued a press release in which the company's name no longer had "The Hospital Company" trailing behind it. What's more, the company's name was spelled HealthTrust, with an uppercase "T."
Company spokeswoman Paula Lovell said the Nashville, Tenn.-based hospital chain's legal name is Healthtrust (lowercase t), but for marketing purposes, the company capitalizes the "T" in trust. That's why all the company's legal and financial documents have the lowercase version.
However, she declined to comment on what happened to "The Hospital Company" portion of the name.
Outliers has a theory: The 116-hospital chain may be dropping that part of the moniker in keeping with a trend of other hospital organizations. Few of them want to be pegged as hospital companies anymore-they're health systems, which implies a multitude of healthcare services.
Homeo-antipathy.Overwhelmed by work? Here's the homeopathic solution: a drop of the essence of elm. That and other homeopathic remedies have grown into a $250 million annual scam, contends Stephen Barrett, M.D., a retired psychiatrist in Allentown, Pa., who says he's spent the last 25 years fighting healthcare fraud.
Some forms of unconventional medicine might be catching the attention of mainstream providers (July 25, p. 10), but much of it is quackery, he says. Homeopathy, in particular, is "a car with no engine. Its remedies don't work."
Dr. Barrett and 41 other individuals recently petitioned the Food and Drug Administration to subject homeopathic products to the same standards as over-the-counter drugs. The FDA has three months to respond. "If the FDA required homeopathic remedies to be proven effective in order to remain on the market, homeopathy would face extinction," Dr. Barrett writes in a forthcoming book taking on the larger industry. Its title? The Vitamin Pushers: How the "Health Food" Industry Is Selling America a Bill of Goods.
POG wild.The University of California Irvine Medical Center in Orange, Calif., is one of the first hospitals to get in on the POG craze.
For those of you too unhip (read old) to know about it, POG is a pastime involving little round milk-bottle seals, inscribed with a logo. Hit them with a plastic slammer, and you win a "POG" chip if the logo lands right side up. Legend has it that an elementary school teacher in Hawaii invented the game, and his students' favorite caps came from a local dairy. The POG name stands for passion fruit, oranges and guavas. Got it?
UCI Medical Center, a 493-bed teaching and research hospital, plans to sell its version of the milk caps that kids are flipping over at health fairs and in the pediatrics unit. They're selling like hot cakes in the gift shop.
UCI Medical Center POGs have a white background decorated with a blue illustration of an enlarged UCI Medical Center building telescoping out of a world globe.
The design is taken from a promotional campaign boasting that the center has some of the best doctors in America. Of the 37 Orange County physicians included in the 1994-95 edition of The Best Doctors in America, published by Woodward/White of Aiken, S.C., 20 are UCI Medical Center physicians.
The medical center hopes the POGs will be a draw to exhibits at community events. "Where children go, parents follow, so we thought the milk caps would be a terrific promotional item to get people acquainted with our services," says hospital spokeswoman Geri Schanz.