The American Medical Association's heart was in the right place when it unveiled a plan last fall to help physicians find capital sources to fund their own HMOs (Nov. 7, 1994, p. 17). But one consultant who's helped several physician groups form and capitalize HMOs said it's a plan that could make fish bait out of physicians.
Thomas Garvey, a Merrick, N.Y.-based consultant who's helped doctors in Connecticut, New Jersey and Oklahoma raise capital to run their own HMOs, contends the AMA's plan "leaves the doctors at the mercy of financial barracudas who will disregard physicians' needs and run the networks as purely profit-making ventures."
While Garvey pulls in one-time fees for feasibility studies and capitalization work, venture capitalists seek continual returns on their investments. So, the only way for physicians to control the HMO is to control the financing through self-capitalization, he asserts.
"If doctors cede this power to others, by turning to insurance companies, hospitals or (giant hospital chains) for the capital to run their HMO, then they can't hope to have a real voice in how the HMO is run," he added.
Trout's long run.Son of a carpenter, raised during the Depression along with 13 other children, Monroe Trout, M.D., former chairman, president and chief executive officer of American Healthcare Systems, has come a long way.
This week, Trout, 63, will make another trip, this time from his home in San Diego to Washington to receive the Horatio Alger award.
"It's for individuals who have gone from nothing to become successful," Trout said of the award. "I remember standing in line for food (during the Depression) in Harrisburg, Pa. I suppose I qualify."
The award is given to about 10 individuals each year by the Horatio Alger Association of Distinguished Americans, an Alexandria, Va.-based philanthropic education organization.
Besides Trout, Miami Dolphins football coach Don Shula and jazz musician Quincy Jones will receive the award, which is named after American author Horatio Alger, who wrote adventure novels about youths who rose from adversity to lead exemplary lives.
Since Trout retired from AmHS in January, he has turned down at least 10 offers to serve on various boards of not-for-profit and for-profit organizations. He currently serves on six boards, including those of Baxter International and two social service organizations serving underprivileged and troubled teens in San Diego. He also is chairman of the University of California-San Diego Foundation board.
Rebirth.With its proposed sale to Columbia/HCA Healthcare Corp., JFK Medical Center in Atlantis, Fla., has further distanced itself from a financial scandal that nearly sent the once proud community institution into bankruptcy.
In 1987, James Johnson, JFK's chief executive officer; William Moses, chief financial officer; and Samuel Raymond, chief operating officer, were charged, convicted and imprisoned for stealing thousands of dollars of hospital funds for vacations, cars and home improvements.
By 1988, JFK's reputation in the community had dropped as low as its finances. The hospital lost a record $4.8 million that year. Employee turnover exceeded 50%, and donations to its foundation dwindled.
At the time, Generso Pope Jr., owner of the National Enquirer, was chairman of the board. A longtime supporter of JFK, Pope wasn't tied to the scandal, and he reportedly was devastated by the negative publicity. In 1988, Pope died in JFK's emergency department after suffering a heart attack.
Under the new management of then-CEO James Knoble and CFO Richard Cascio, the turnaround began. Managed-care contracts were renegotiated or canceled, more favorable vendor contracts were signed, and bonds were refinanced, said Cascio, who became JFK's CEO in 1994.
"We needed to get our cash flow on track and improve profitability," Cascio said. "We think we have put our dark side behind us. We have had six straight years of profitability."
Cascio said even during the worst years, the community continued to view JFK as a high-quality provider. "Our board is quite proud of how far we have come since those dark days," Cascio said.
Holistic.The staff at Hutzel Hospital in Detroit was horrified when seven city children died in a house fire in February 1993, trapped by security bars on the windows. Two of the children had been born at Hutzel, the city's largest maternity hospital.
"People were really upset to think they deliver healthy babies and then the babies die in this kind of tragedy," said Shari Cohen, spokeswoman for Detroit Medical Center, of which Hutzel is a part.
Such incidents led Hutzel to seek solutions to Detroit's infant death rate, which is second highest in the nation.
In February, the hospital delivered its response: the Family Road program. It's a sprawling replica of a town on the hospital's first floor. Inspired by a similar project for rehabilitation patients at Cedars-Sinai Medical Center in Los Angeles, Family Road is designed to lead new parents to a better life.
It includes an apartment with a fire-safety demonstration, a Chrysler Neon donated to show the importance of child safety seats, healthy cooking classes led by a local chef and male parenting classes sponsored by the Detroit Tigers baseball team.
Visitors also can apply for jobs and career training, and access public assistance and social service programs.
Much of the estimated $300,000 cost of Family Road came from corporations, physicians and other local donors. The hospital provides two full-time employees.
Many visitors are shocked to find these services at the hospital, but hospital officials say new parents often can't access them otherwise. "In essence, it's a holistic approach to maternal and health services," said Chris Allen, Hutzel's chief operating officer.