A federal grand jury in Dallas handed up a 15-count indictment against a former Triad Hospitals executive related to commissions the executive took on land sales to Triad. James McElhaney, 55, was vice president of acquisition and development for Triad until he resigned when the investigation began in January 2002, according to his attorney. The indictment alleges McElhaney used an intermediary to buy 47 acres that Triad was targeting in Sherman, Texas, and then raised the price to Triad by $750,000. The indictment also accuses McElhaney of inserting bogus fees into several land purchases from late 1998 to October 2001. His attorney, Jay Ethington, said McElhaney plans to plead not guilty at his arraignment this week. McElhaney contends he secured deals for Triad while working on his own time and as a licensed real estate broker in Texas was entitled to commissions, Ethington said. Ethington said the probe was prompted by land developers who were unsuccessful in their attempts to sell land to Triad. In a written statement, Triad said it became aware of possible irregularities related to the land purchases in 2001. The company said it conducted an internal investigation and turned its findings over to federal authorities.
VA system halves hospital use
The Veterans Affairs Department's healthcare system cut total hospital use in half and reduced admissions by one-third since 1995 while improving mortality rates among patients with several types of chronic diseases, according to a study in the Oct. 23 New England Journal of Medicine. The VA reorganized in 1995 in an attempt to provide more comprehensive primary care and reduce hospitalization. Researchers theorized that any adverse consequences from the shift would show up first in people with serious chronic diseases. Urgent-care visits would increase or survival rates fall if reductions in hospital care were not offset by better ambulatory care. An examination of 342,000 patients with nine chronic conditions from 1994 through 1998 showed urgent-care visits fell 37% as use of outpatient services increased moderately. Survival rates for five of the conditions-angina, bipolar disorder, depression, heart failure and pneumonia-significantly improved or were unchanged for the remaining four conditions.
HCA official dies in crash
Phil Patton, senior vice president of human resources at HCA, died while piloting his personal plane. Authorities found the crash site near Spencer, Tenn., about 95 miles southeast of Nashville, HCA's hometown. Patton, 50, joined what was then Hospital Corporation of America in 1979 and became senior vice president of human resources in 1992. He worked at two other for-profit hospital companies and then returned to HCA in 1998 in his former position. Patton is survived by his wife, Susan, his son, Ben, and two daughters, Julie and Elisabeth. His death is reminiscent of that of another HCA executive, Scott Mercy, who died when the plane he was piloting crashed outside of Nashville in 2000. Mercy, 38, was chairman and chief executive officer of HCA spin-off LifePoint Hospitals at the time.
Insured boost ER usage
Insured Americans accounted for most of the 16% rise in hospital emergency room visits between 1996-97 and 2000-01, countering common perceptions that the uninsured are the major cause of ER overcrowding. According to a report by the Center for Studying Health System Change, ER visits increased 24% for the privately insured, 10% for Medicare beneficiaries and 10% for the uninsured between 1996-97 and 2000-01. They were unchanged for Medicaid beneficiaries. Together, the privately insured and Medicare beneficiaries accounted for almost two-thirds of the overall increase in ER visits. Uninsured patients accounted for 11% of the increase, and people with other sources of coverage, such as workers' compensation, accounted for the remainder.
Kohl seeks tighter GPO controls
Sen. Herb Kohl (D-Wis.), ranking minority member of the Senate Judiciary Committee's antitrust subcommittee, again asked federal officials to tighten the reins on hospital group purchasing organizations. In a letter to Timothy Muris, chairman of the Federal Trade Commission, and R. Hewitt Pate, assistant attorney general, Kohl reiterated a request that the FTC and U.S. Justice Department re-examine a joint policy statement providing an "antitrust safety zone" for GPOs. Kohl said the subcommittee's 18-month inquiry into the GPO industry, as well as recent FTC-Justice Department hearings, "has convinced us that revision to (the joint policy statement) is necessary." Kohl first requested a review of the policy statement in April 2002. The Health Industry Group Purchasing Association, which represents GPOs, said it was not surprised by Kohl's action given his "singular views of the industry."
Humana settles with docs
Humana, Louisville, Ky., reached a proposed settlement with Cincinnati-area doctors who sued Humana and three other insurers last year for allegedly conspiring to reduce reimbursement. Under the proposed settlement, Humana would increase physician reimbursement by $20 million in 2004, $15 million in 2005 and $10 million in 2006. It also would create a compliance committee to monitor payment rates for at least three years starting in 2007. The company admitted no wrongdoing. The settlement awaits approval by state courts in Kentucky and Ohio. Aetna, Anthem and UnitedHealth Group remain defendants.
Health Net settles lawsuit
Health Net agreed to pay $137 million to settle a lawsuit alleging that the insurer misrepresented the financial health of a workers' compensation unit it sold in 1998 to Superior National Insurance Group, Calabasas, Calif. The lawsuit was filed in 2000, shortly after Superior was seized by state regulators and filed for bankruptcy protection. Superior accused Woodland Hills, Calif.-based Health Net of making misleading statements about the unit's reserves and sought to undo the $285 million purchase.