It is dismaying that Modern Healthcare chose to exaggerate and sensationalize findings of a recent audit by HHS' inspector general's office of Premier's compliance with safe-harbor rules ("Full disclosure," March 17, p. 4).
Contrary to your cover headline, the actual inspector general's audit report in no way can be said to rip "Premier disclosure policies," which are in fact consistent with all requirements. The report's recommendations concerning process were modest in comparison to the audit's scope. The inspector general's office simply recommended we improve our existing process. No inaccuracies in information or record-keeping were noted.
The first paragraph of your article is not accurate. Premier is not required to "disclose more detailed financial information to all of its 1,500 hospital members to avoid unleashing the federal antikickback laws." Such hyperbole is unwarranted by the facts.
The audit showed that Premier did indeed provide required advance agreements and full disclosure reports (entirely adequate in detail) for all hospitals participating in its group purchasing program. These were sent to our owner health systems and group affiliates, which were obligated contractually to distribute them to their subsidiary and affiliated hospitals.
The audit found that some hospitals did not receive these documents or could not locate them, a circumstance described in the audit report as "caused by Premier's reliance on its partners and group affiliates to disseminate information to (their) members." The audit report recommended that Premier work with its health systems and group affiliates to improve the process and ensure distribution. Premier went even further in response-we will now provide advance agreements and disclosure reports directly from Premier to all participating hospitals rather than through their hospital systems.
The inspector general's auditors had access to all Premier contract, member, volume and financial records for the period covered. Although pleased with the way our efforts to comply with safe harbors met such scrutiny overall, we welcomed the opportunity to improve our dissemination process.
Senior vice president of communications
Ownership isn't the issue
Your magazine consistently misses the point of a subject vital to the business health of today's hospitals.
I am referring to the three puff pieces that were in the Feb. 24 edition on physicians owning and operating hospitals ("Doc-owned and -operated," p. 26; "Saving the day in Missis-sippi," p. 28; "A helping hand for his family," p. 30). The thrust of these pieces seems to be to proclaim that physician-hospital direction or ownership was clearly superior to the "bloated bureaucracies that weigh down some healthcare systems."
Let's try to state the obvious. Can physicians be terrific hospital executives? Absolutely. Can they run effective, efficient operations that serve their communities well? No question. So your point is?
The question never has been whether physician entrepreneurialism is a bad thing. Clearly not. The question is, what are the results of that market-driven approach? General acute-care hospitals in this country are required to care for anyone who shows up at our door, with the full expectation that we often will be paid nothing for our efforts.
We then are expected to compete with entrepreneurial ventures that often have none of that responsibility. Niche hospitals commonly have no services that are not profitable, have no emergency rooms, sometimes are not even willing to take emergencies in their own specialty. These ventures often transfer patients as soon as insurance evaporates, or ship patients that need surgery in the middle of the night so as not to have to pay overtime.
Hospital ownership or direction, whether by physicians or by laymen, is unimportant, provided they play by the same rules and meet the same community requirements.
President, chief executive officer
A model for working together
In his editorial "The high cost of finger-pointing" (March 17, p. 45), Todd Sloane has it almost right. He correctly points to the fact that the healthcare system is inefficient and further identifies some of the symptoms or consequences of that inefficiency.
I suspect he may be too optimistic or trusting to suggest that payers (presumably he limits this term to third parties) and hospitals can or should get together to forge a lasting solution or at least cut unnecessary costs.
The root cause of inefficiency may be healthcare delivery processes and how the various components fit or do not fit together. Doctors, hospitals and other providers are rewarded for inefficiency or for keeping their roles isolated when it comes to financial incentives and defining quality and efficiency, at least from the payer's perspective.
Much of the solution to this situation must be imposed on the system. There are too many power centers and interests in the current financial and organizational infrastructure. We must look to the National Committee on Quality Assurance, the Leapfrog Group and their ilk for our impetus.
Yet, you are correct to suggest that part of the solution resides in imposing change on the processes of healthcare delivery. There is one model for that called disease management. When practiced at its best, it is a mini model that works for patients' and purchasers' best interests.
Health Options Program
Pennsylvania Public School Employees' Retirement System
Your March 3 article "Consolidation squabble" (p. 7) mentions a study that the national Blue Cross and Blue Shield Association released last fall. That study determined that healthcare costs were rising mainly because of hospital consolidation and the overuse of new medical technology.
On p. 15 of the same issue is an article ("Margins grow at health plans") in which a Blues association study determined that a smaller portion of health plans' premiums (presumably including Blues plans) is being used to pay medical claims. At the same time, the plans' pretax profit as a percentage of premiums increased 21.8%.
Perhaps last fall's study was a little hasty.
Director of financial services
Shriners Hospitals for Children
What do you think?
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