The bankruptcy of Allegheny Health, Education and Research Foundation and the subsequent sale of its eight Philadelphia-area hospitals were among healthcare's greatest debacles in 1998. But AHERF's experience should also be considered a watershed for healthcare governance.
Experts believe the current probes of AHERF's governing-board dealings will lead to greater self-examination by boards at other organizations. Multiprovider systems such as AHERF's -- where the trustees confront issues that are often far-reaching and complicated -- will take the closest looks at their governance arrangements.
"Everyone should be looking very closely at AHERF and how the shoe drops there," says James Orlikoff, president of Orlikoff & Associates, a Chicago-based governance consulting firm.
The end result may be what many governance experts have advocated for years: smaller and fewer boards at the system level.
On the purchasers/payers front, insurance premium increases became a big issue in 1998, yet some companies avoided the high single-digit and even double-digit increases initially forecast.
That won't be the case this year. In late 1998, many employers in major metropolitan areas were already reporting double-digit increases for their 1999 coverage. The increases are expected to hit especially hard in firms with 200 employees or fewer, observers agree.
Expect some companies to require large increases in employee copayments or to drop employee health coverage altogether. A recent study by the U.S. Chamber of Commerce indicated 41% of employers said they would drop coverage if premiums increased by more than 10%.
That course could help the emerging trend of healthcare "discount cards" for the uninsured. Through such programs, entrepreneurs cobble together a regional network of providers willing to offer discounted fee-for-service care, then furnish "membership cards" to individuals for an annual fee.
Neil Carrey, a healthcare attorney in the Los Angeles firm Jenkins & Gilchrist, says the cards are a promising way to address the growing ranks of the uninsured but cautions that they should be set up to comply with federal provisions against kickbacks for patient referrals and against the corporate practice of medicine.