The California Public Employees' Retirement System, often considered a bellwether for national healthcare cost trends, approved its smallest annual increase in HMO premiums since 1999, an average of 8.7% for 2006. That compares with an average of 11.4% for 2005, 18% for 2004 and 25.9% for 2003. The downward trend jibes with a recent study by Hewitt Associates, which found that HMOs nationwide were requesting smaller rate increases-an average of 12.4% for 2006 so far, vs. an average of 13.7% for 2005 the same time last year. CalPERS expects to spend $4.3 billion on healthcare in 2006. The pension fund is the nation's third-largest purchaser of healthcare, covering 1.2 million public employees, retirees and dependents. Among other factors, the lower HMO rate increase reflects $45 million in savings expected in 2006 from a more restricted provider network implemented last year for CalPERS' Blue Shield of California members.
La. lawmakers pass hospital tax
Louisiana's House and Senate passed a bill imposing a 1.5% tax on hospitals' net patient revenue. Gov. Kathleen Blanco backed the bill and is expected to sign it quickly, said John Matessino, president and chief executive officer of the Louisiana Hospital Association. The tax is expected to raise $87 million and with federal matching funds generate $290 million for Medicaid, the LHA said. It does not apply to rural hospitals, state- or federal-owned hospitals, or separately licensed long-term acute-care, rehabilitation or psychiatric hospitals.
Ind. counties sued by developers
Two hospital developers sued Clark and Floyd counties in southern Indiana under the Sherman Antitrust Act and state law, alleging that moratoriums on new hospital construction represent unlawful restraint of trade. The plaintiffs, Kentuckiana Medical Center, Louisville, Ky., and Sunnyside Land Co., Elizabethtown, Ky., allege that the moratoriums were passed to protect the counties' hospitals from new competition. The area is part of the greater Louisville market. According to the lawsuit, Kentuckiana has options to purchase land with local zoning approval for acute-care hospitals in Clarksville and New Albany, Ind. Sunnyside owns land with zoning approval for a hospital in Jeffersonville, Ind. Clark County officials did not return calls seeking comment. A lawyer for Floyd County refused to discuss the case. The suit was filed last week in U.S. District Court in New Albany.
CHE exec takes reins at Hoag
Richard Afable, executive vice president and chief medical officer of the 31-hospital Catholic Health East system, was named president and chief executive officer of 342-bed Hoag Memorial Hospital Presbyterian in Newport Beach, Calif. Afable has been the top physician at the Newton Square, Pa.-based system of 31 hospitals since 1999, and it will be Afable's first turn as a hospital CEO.
Denver hospital may go suburban
Catholic Health Initiatives approved $440 million to build a replacement medical campus for 100-year-old St. Anthony Central Hospital, Denver, and a site in suburban Lakewood, Colo., is being considered. Construction could begin next fall, with the new 330-bed hospital and adjacent medical office buildings completed in 2009. CHI announced its decision to rebuild in a new location in late March, after deciding it would be too expensive to renovate the current facility. Denver officials are working to establish a task force to discuss redevelopment options for the existing campus. The hospital has indicated a willingness to consider retaining some neighborhood healthcare programs.
Scrushy jury still at work
Jury deliberations in the criminal trial of Richard Scrushy, founder and former chief executive officer of HealthSouth Corp., will resume this week in U.S. District Court, Birmingham, Ala. Deliberations didn't take place on June 16 because a juror was sick but the jurors have met for 16 days total since they received the case on May 19. In previous weeks, the jurors have sent the judge in the case notes saying they couldn't agree on a verdict, but no notes were sent last week. The jurors are considering 36 counts that allege Scrushy led a scheme to fake the company's income by some $2.6 billion to drive up the prices of stock. He's the first to be charged under the federal Sarbanes-Oxley Act of 2002.
Residents still losing sleep
About 44% of doctors-in-training have experienced periods of sleep deprivation once a week or more during recent hospital shifts, and half of those said fatigue "may have had a negative effect" on quality of care, according to a survey by the American Medical Association. Meanwhile, about 39% of medical students said they felt sleep-deprived during their most recent rotation. The AMA conducted the survey of 1,010 resident physicians and 1,126 medical students to determine the effect of new rules restricting work hours. The rules, in effect since July 2003, limit residents to no more than 80 hours a week in most cases and restrict on-site duty to a maximum of 24 straight hours. Despite the new limits, 11% of residents said they worked more than 80 hours per week during their most recent rotation.
CMS disputes inflation index
The CMS disagreed with a Government Accountability Office recommendation supporting a separate inflation index for Medicaid payments to federally qualified health centers and rural health clinics in medically underserved areas. The GAO said there was not sufficient evidence to change base payments under the Medicaid prospective payment system for such providers. However, it said the CMS should develop a better way to update the payments for inflation rather than continue to use the Medicare economic index. The Medicare index reflects changes in physicians' costs when the costs of the centers and clinics could be different, the GAO said. In response, the CMS said there was no evidence showing inflation updates had been inadequate.