By BEN SULLIVAN
In what could be the first of many such partnerships, the country’s largest physician practice management company and second-largest for-profit hospital chain have agreed to form a provider network in Southern California.
Alabama-based MedPartners and Santa Barbara-based Tenet Healthcare Corp. said they will create a contracting network of 33 Tenet hospitals in Los Angeles and Orange counties and roughly 4,000 MedPartners physicians. The move will give the million-plus patients currently seeing MedPartners physicians in the L.A.-Orange County region access to the hospitals. Tenet will also buy the small Pioneer Hospital in Artesia, which MedPartners inherited when it bought Mulikin Medical Enterprises in 1995.
MedPartners and Tenet said the new partnership is something of a trial, and that if it is successful, the two might create similar physician-hospital pairings throughout the country.
Tenet bought the OrNda hospital chain in late January, adding 18 acute care hospitals to its existing 15 Southern California facilities. It is now the largest hospital group in the L.A.-Orange County area, with facilities such as USC University Hospital, Western Medical Center, Midway Hospital Medical Center and St. Luke Medical Center in its quiver.
Bernard Salick has parted ways with the company he founded a decade ago and helped grow into the nation’s largest chain of for-profit cancer clinics.
Salick turned down an offer to stay on with Los Angeles-based Salick Health Care Inc. after the British drug firm Zeneca Group PLC last week purchased the remaining 50 percent of the company it didn’t already own.
The parting was not pleasant. Zeneca CEO David Barnes offered to keep Salick on as an honorary chairman and advisor, with an annual salary of $800,000. But Salick turned down the offer, declaring it insincere, and announced he would start a new company to compete with his namesake organization.
Zeneca would not comment on the parting.
“I have been released of my management responsibilities by Zeneca without cause, to be replaced by a new British management team from the agrochemicals and specialties divisions of Zeneca,” Salick said. Salick declared he will “use every effort” to start a new company to compete with Salick Health Care, focusing especially on care for patients being treated for cancer, renal failure, AIDS and organ transplants.
During Salick’s tenure at Salick Health Care he grew the company to 11 general cancer centers, eight breast-cancer clinics and 10 outpatient dialysis treatment facilities. The company had $164 million in revenues last year.
Throwing its weight around
Adding further proof to the adage that there’s strength in numbers, the nation’s largest public retirement system the million-member California Public Employees’ Retirement System wrangled out of its providers 1998 health insurance premiums just 2.7 percent above this year’s rates, and actually lower than those from five years before.
CalPERS contracts with 12 HMOs to serve its members, and it was able to wrangle an average monthly premium of $157 per person for 1998, compared to about $153.50 for 1997. The figure is down from 1993 rates of $161.27. The inflation rate for general health care in 1997 is projected to be 5 percent.
Margaret Stanley, an executive in the health benefits division of CalPERS, said the 1998 rates reflect competition between the 12 plans to gain as much of the CalPERS pie for themselves as possible by offering low rates.
About 76 percent of CalPERS members are enrolled in one of the 12 HMOs.
In related news, the Health Insurance Plan of California (HIPC), a state-sponsored health insurance purchasing pool for small businesses, said last week its 1998 rates would increase 3 percent for HMO coverage, and about 4 percent overall. About 92 percent of the 127,000 employees and family members covered under HIPC have HMO coverage.
HIPC brings small businesses with between three and 50 employees together to leverage their combined purchasing power with insurance providers.
The California Association of HMOs, the main lobbying and industry association for the state’s managed care industry, has changed its name to the California Association of Health Plans. The group said that changes in the managed care scene, including the emergence of non-HMO managed care plans, drove the move. “In the last few years alone, nearly 900,000 Californians have enrolled into point-of-service plans,” said Myra Snyder, president of the group.
The California Association of Health Plans represents 38 managed care companies with 14 million enrollees.
UCLA researchers report that hundreds of thousands of hysterectomies performed each year to ease bleeding and pain caused by so-called fibroid tumors can be avoided by a process that requires just a small incision in the groin.
In the new operation, physicians thread a small tube through arteries to the main blood vessel leading to the uterus, and permanently plug it up. Dr. Scott Goodwin, head of vascular and interventional radiology at UCLA Medical Center, said that once deprived of blood from the artery, the tumors shrink and often vanish. The uterus, however, continues to get enough blood from other blood vessels.
About one-third of the 500,000 hysterectomies performed in the United States each year are to relieve pain from fibroid tumors.
New quality standards
The National Committee for Quality Assurance released new reporting guidelines for health plans that should give employers more-accurate information on which to base purchasing decisions. The new guidelines standardize the way health plans report on 71 performance indicators. The indicators, which include data on issues from success rates in treating various ailments to costs of coverage, are used by employers to compare the pros and cons of competing health plans.