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Fam Pract Manag. 2002;9(10):31-32

Despite increased health care costs, consumer confidence rises

Health care spending rose 10 percent in 2001, marking the first double-digit increase in more than a decade and the fifth straight year that growth in spending exceeded the previous year's rate, according to a report by the Center for Studying Health System Change (HSC) published in the September 2002 Health Affairs. Growing use of services and higher payment rates drove the increase. Hospital costs, especially for outpatient care, accounted for 51 percent of the overall rise, followed by physician charges (28 percent) and prescription drug costs (21 percent). This is the first time in five years that prescription drug spending has not been the biggest contributor to rising costs.

“People are getting more tests and treatments as managed care plans abandon tight restrictions on care, but higher hospital prices are playing a role as well in rising costs,” said Paul B. Ginsburg, PhD, HSC president and one of the article's authors.

The loosening of health plan restrictions may be the main reason consumer confidence in health care has increased slightly during the past few years. New findings from the HSC's Community Tracking Study Household Survey indicate that 70 percent of privately insured consumers were very satisfied with their choice of primary care physician, up from 67 percent in 1997. Ninety-three percent said they trust their doctor to put their medical needs first, more than in previous years' surveys. And fewer people – including those switching health plans – reported changing doctors in 2001.

In the September 2002 issue of Hospitals and Health Networks, Ginsburg warned that confidence in the health care system may begin to suffer as consumers are asked to shoulder more of the cost of their health care. “Instead of worrying about managed care plans denying needed care, consumers may soon worry more about how they will afford needed care,” he said.


Jackson Hole Group renews push for health care reform

The influential Jackson Hole Group has reconvened for the first time in six years and is hoping to renew its push for reform. The group's founder, Paul Ellwood, MD, is credited with inventing the concept of health maintenance organizations in the 1970s, and the group's idea of “managed competition” was key in former President Bill Clinton's health care reform package. However, when Clinton's reform efforts lost momentum in the mid-1990s, so did the Jackson Hole Group – until now.

In September, Ellwood reconvened the group to discuss the promise of information technology in empowering patients and improving health care. The group's plan, called HERO-IC Pathways, includes a voluntary patient-held electronic medical record, or “personal health journal,” that patients could store on the Internet and make available to their physicians. The group also envisions giving patients access to evidence-based treatment recommendations and performance data on their doctors and hospitals.

“Our Jackson Hole Group has challenged the American health system before, usually by attempting to motivate the big players. But now we are going to take direct action on behalf of patients,” said Ellwood in the Oct. 2 Wall Street Journal.

The group plans a second meeting for mid-winter.

PRACTICE PEARLS from here and there

How to hire the right person

Good staff members can be hard to find. Here's how to ensure you make the best hiring decision for your practice:

  1. Involve staff in the hiring process by conducting group interviews or consecutive interviews with different staff members.

  2. Consider how the personality of the interviewee would fit with the personalities of the current staff.

  3. Spend most of the interview listening rather than talking.

  4. Don't rush into a hiring decision; follow the same deliberate process for each position you fill.

  5. Check all references, and verify education and license certifications.

– Kettlewell D. Five tips for effective hiring. Practice Options. Oct. 15, 2002:8–12.

PRACTICE PEARLS from here and there

Resolving loose ends with Medicare

What should you do if an audit reveals that your practice has received an overpayment from Medicare? Document the date you identified the discrepancy and refund payment within 30 days, submitting it however your local carrier requires (e.g., electronically). If your carrier happens to notice the problem before you do and asks for repayment, submit it immediately. It's important to find the cause of any case of overbilling and correct it. Having it recur may invite government scrutiny of your practice.

– Squaring accounts after an audit. Coding Compliance Alert. September 2002:4.

Medicare giveback bill unlikely

Passage of a Medicare giveback bill, which would restore the 5.4 percent cut in Medicare reimbursement rates that went into effect earlier this year, is growing increasingly unlikely. At press time, Congress had adjourned for the midterm elections, leaving much unfinished business in Washington. Although the House passed a Medicare giveback bill in June, Washington observers are growing skeptical that a similar bill will pass in the Senate this year, if at all. “If I had to guess right now, I'd guess there won't be any giveback bill,” said Centers for Medicare and Medicaid Services Administrator Tom Scully in the Oct. 9 Bloomberg News/Tennessean.

It almost pays for itself

Electronic billing greatly reduces the wait for reimbursement from third-party payers, notes a recent survey of physician practices by MediNetwork, a Dallas-based physician consulting firm. Before using electronic claims submission, 47 percent of the practices polled waited 61 or more days for reimbursement. Since switching to electronic claims, 51 percent indicated they were reimbursed within 30 days. “Timely reimbursement can mean the difference between making payroll and having to open a line of credit to get your staff paid,” said Mark Johnson, president of MediNetwork.

Sample interventions to improve quality

Practices looking to improve their quality of care now have online access to a variety of tools and interventions developed by quality improvement organizations participating in Medicare's Health Care Quality Improvement Program. At, users can download “interventions samplers” for the prevention and treatment of acute myocardial infarction, breast cancer, diabetes, heart failure, pneumonia and stroke.

Insurers underpaying docs

Nearly one in five health care claims are underpaid by insurers, costing practices millions of dollars annually, reports a study conducted for the Texas Medical Association by Medical Present Value, a San Antonio-based information technology services firm. Of the claims analyzed for 28 Texas medical groups, 17 percent were paid at less than the contracted amount. The overall underpayment rate was 7 percent.

Laughter – the best medicine

Who says there's nothing funny about the business of medicine these days? The Placebo Journal, published by a family physician, is trying to bring joy back into the world of the weary by poking fun at HMOs, pharmaceutical companies, the federal government, patients and even physicians. For example, a recent issue outlined the stages of a physician's career, from “I love my white jacket” to “I don't want to wear a stupid jacket” and “I want to be left alone.”

Adult immunization schedule

For the first time, the CDC has issued an adult immunization schedule, which is endorsed by the AAFP and the American College of Obstetricians and Gynecologists. “We're pretty accustomed to having our children immunized, but not so with ourselves. Having these guidelines that tell what we should get and when should make us all healthier,” said Surgeon General Richard Carmona in the Oct. 9 Arizona Daily Star. The immunization schedule is available at

Higher copays reduce spending

A study published in the Oct. 8 JAMA found that doubling copays from $5 to $10 for generic drugs and from $10 to $20 for brand name drugs reduced average annual drug spending by almost one third for working-age enrollees in employer-provided health plans. The higher copays resulted in less spending on both generic and brand name drugs. The study did not address how patients' health was affected by these choices.

Is that free meal a kickback?

The Health and Human Services Office of Inspector General has drafted compliance guidelines intended to restrict some of the aggressive marketing tactics that some pharmaceutical manufacturers use to persuade physicians to prescribe or recommend their products. Under the draft guidelines, incentives such as trips, entertainment and expensive meals could be considered kickbacks that violate federal fraud and abuse laws. Although the guidelines are not legally binding, companies that ignore them will increase their chances of being investigated and prosecuted.

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Copyright © 2002 by the American Academy of Family Physicians.

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