Thursday, August 26, 1999
Nine hospitals drop Medicare HMO
BY TIM BONFIELD
The Cincinnati Enquirer
In yet another example of the growing tensions between medicine and managed care, the nine hospitals of Catholic Healthcare Partners and several hundred affiliated doctors announced Wednesday that they will no longer do business with the Secure Horizons Medicare HMO.
More ominously, some predict that many other hospitals are likely to drop several other Medicare HMOs as contract terms expire.
“Hospitals are just getting killed under Medicare managed care. I've heard from several of our members who've told me they have either already dropped some Medicare HMOs or they plan to,” said Lynn Olman, president of the Greater Cincinnati Health Council.
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HELP FOR SENIORS
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• For information, seniors can call St. Elizabeth's ElderMed program at 578-5999 or Mercy's Golden Life program at 867-6440 or 870-7018.
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The Secure Horizons change takes effect Jan. 1. That means that next year, the number of hospitals available to Secure Horizons' 20,000 Tristate members will be cut in half and as many as 9,000 members either will have to find a new primary care doctor or switch health plans.
Catholic Healthcare Partners includes the three St. Elizabeth hospitals in Northern Kentucky and the six Ohio hospitals in Mercy Health Partners (including the two recently acquired Franciscan hospitals).
The hospitals say they couldn't afford to accept the latest contract offer from Secure Horizons, a Medicare HMO offered by PacifiCare in Santa Ana, Calif.
“The unfortunate reality is that our hospitals cannot continue to provide care and services when they are compensated less than the cost of providing those services,” said Ken Page, a regional vice president for Mercy Health Partners.
The action by Catholic Health Partners comes during a year marked by Medicare HMOs dropping seniors in unprofitable markets in several states, doctors talking about forming unions locally and nationally, a big specialty physician group dumping a large local health plan, and two local psychologists refusing to accept any managed care contracts.
“We tried very hard to reach agreement on the contract,” said Tom Anthony, president of PacifiCare's regional office. “But the hospitals' belief that there's not enough money in the Medicare system is something we could not overcome.”
Secure Horizons is losing nine of its 18 local hospitals and about 600 doctors who are part of Mercy's physician health organization. It also might lose up to 100 doctors closely affiliated with St. Elizabeth who negotiate their own contracts. As a result, Secure Horizons expects to lose many of its members.
However, the lost contracts are not a big enough blow to destroy the health plan, Mr. Anthony said. It still has contracts with the Health Alliance of Greater Cincinnati, TriHealth and Deaconess Hospital, he said.
“Obviously, we will lose membership, and we're disappointed about that. But we can still adequately serve our members,” Mr. Anthony said.
Mr. Anthony added that the hospitals' Medicare HMO decision does not affect PacifiCare's commercial, non-Medicare health plans, which include about 50,000 Tristate members.
Catholic Healthcare Partners is still negotiating with several other Medicare HMOs, but has not decided whether to drop them, Mr. Page said.
“It's not just Secure Horizons. These products have been a challenge for hospitals since their inception,” Mr. Page said.
Medicare HMOs are paying hospitals as little as 60 percent of regular Medicare reimbursements — which barely met hospital costs to begin with, Ms. Olman said.
“This doesn't surprise me at all,” she said. “I think you're going to see more announcements like this.”
Seniors affected by the decision have three basic options:
• They can find other doctors and stay with Secure Horizons.
• They can switch to any of several other Medicare HMOs offered locally.
• They can go back to regular Medicare.
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