Wholesale prices for acute-care hospital services dropped 0.2% in August, erasing the 0.2% increase the previous month, according to the U.S. Labor Department's Producer Price Index released Friday. For the 12-month period ended in August, hospital prices were up just 1.0%. The PPI measures changes in net revenues per episode of care. Wholesale prices for physician services, meanwhile, dropped 0.1% in August and were up 1.2% for the 12-month period ended in August.
HCFA staffers late last week forwarded to HCFA Administrator Bruce Vladeck the names of the provider, insurer and consumer interest groups that will help the agency draft the financial solvency rules governing provider-sponsored organizations. PSOs are networks of providers that would contract directly with Medicare for care to beneficiaries and assume the financial risk of providing that care. Congress approved the creation of PSOs in the recently enacted federal balanced-budget law. The provider groups recommended to Vladeck are the American Hospital Association, the Federation of American Health Systems, the American Medical Association, the National Rural Health Association and the American Medical Group Association. Health plan representatives will be the Blue Cross and Blue Shield Association and the American Association of Health Plans. HCFA must publish the final PSO solvency rules by April 1999.
President Clinton on Friday nominated as surgeon general David Satcher, M.D., a family physician who heads the federal Centers for Disease Control and Prevention. If confirmed, Satcher would be the first permanent surgeon general since Clinton fired Joycelyn Elders, M.D., in December 1994. Clinton's previous appointment of Henry Foster, M.D., was defeated in 1995 during a controversy over how many abortions Foster had performed. Satcher also would fill the post of HHS assistant secretary for health, which has been a separate post since the Carter administration.
University HealthSystem Consortium, Oak Brook, Ill., late last week awarded a three-year, sole-source X-ray and MRI contrast-media contract to Nycomed, Princeton, N.J. The agreement takes effect Jan. 1, 1998. Financial terms were not disclosed. Nycomed has been a UHC supplier for six years. UHC said negotiations for the contrast-media deal were under way when the alliance of academic medical centers agreed to merge purchasing operations with VHA, an Irving, Texas-based hospital alliance. After that merger, expected to be completed next month, the new purchasing group will decide whether to maintain, renegotiate or discontinue existing contracts from both alliances.
HCFA late last week accepted Kaiser Permanente's plan to correct problems investigators found at its Walnut Creek and Martinez, Calif., hospitals in June. A HCFA spokeswoman said the agency would revisit the facilities within 30 to 45 days to see if Kaiser implemented plans to correct deficiencies, including long delays in emergency rooms and problems with staffing, quality assurance and documentation. The California Nurses Association said Kaiser's correction plan does not address "the erosion of care standards within Kaiser."
The California Nurses Association struck five Kaiser Permanente facilities in the San Jose area last week, alleging that changes in the phone advice line and staffing changes in hospitals and clinics were not safe. About 1,200 nurses walked out on Sept. 8 and 9. Two hospitals, Kaiser Santa Clara and Kaiser Santa Teresa, were affected, as well as clinics in Mountain View, Milpitas and Gilroy. The facilities stayed open, staffed by supervisors and managers.
Two Southeast Baptist healthcare systems late last week signed a letter of intent to explore a formal affiliation. Combined, Baptist Health System, Birmingham, Ala., and Baptist Health Care Corp., Pensacola, Fla., would have assets of $1 billion. The proposal calls for the creation of a holding company to manage the systems. Baptist Health System has 11 hospitals in Alabama; Baptist Health Care has three in Alabama and three in northwest Florida. The systems plan to continue their due diligence review for another six months before signing a definitive agreement.