20 August 2009
PAYERS & PROVIDERS
Calendar
August 29-Sept. 2
Western Angiographic and Interventional
Society Annual Meeting
Torrey Pines Resort, La Jolla
Discusses advances in interventional
procedures. Keynote Speaker: Joan
Embery. Fee: NA
Register online:
http://www.westernangio.org/9199.html
September 13-15
California Healthcare Financial Manaement
Association Annual Meeting. Hyatt
Regency Monterey.
Will discuss capital markets and upcoming
challenges for CFOs. Fee: $695; $795 for
non-members.
Register Online:
http://www.hfma-cafallconf.org/
September 24
P4P Stakeholders Meeting, Sheraton
Gateway, Los Angeles.
A forum for California healthcare
stakeholders to discuss pay-for-
performance efforts. Conducted by the
Integrated Healthcare Association.
Fee NA.
Info:
http://www.iha.org/2009P4PSM.htm
E-Mail
payersandproviders@gmail.com
with the details of your event, or
call (877) 248-2360, ext. 3. It will
be published in the Calendar
section, space permitting.
California Edition
Recession Pushes Plan Costs Up
Consumer Groups Concerned About Remedies
The recession is driving up costs for officials say it is tied to the state’s higher-
California’s health plans on outpatient care, than-average unemployment rate.
according to plan officials and earnings “As employers have responded to
reports released by the publicly-traded economic conditions, we're finding that
insurers earlier this month. The trend has lower utilizing employees are
consumer activists concerned the response disproportionately losing or dropping
will be higher premiums and more claim coverage, leaving a higher percentage of
denials. other employees enrolled in our
Overall medical cost ratios among the products,” says Peggy Hinz, an Anthem
state’s leading health plans have trended spokesperson for the California market.
upward a percentage point or more over Anthem would not release its
the past year (see specific medical
chart). Those
Medical Cost Ratios, June 30, 2009 vs. June 30, 2008
cost data for
numbers were California. Kaiser
nationwide, but the 2009 2008 Foundation Health
bulk of enrollment 86.8 Plan, the state’s
87%
for these plans is in 86.1 biggest insurer, did
California. 86% not release cost ratio
“We had 112,000 data to Payers &
new members (in 85% 84.7 Providers.
California) and if they 84.2 84.2 Plan officials
are…accessing Medi- 84% attribute the rising costs
Cal coverage, there is 83.3 to a variety of factors,
often a lot of pent-up 83% including treating
demand for services,” Blue Shield Health Net Molina patients with the H1N1
says Richard Bock, swine flu virus.
M.D., Molina’s medical director for However, the consensus is that plan
California. enrollees are seeking out care more
This was echoed by commercial frequently as a precautionary measure
insurers such as Anthem/Blue Cross, whose should they lose their jobs – and
cost ratios were down companywide for the insurance – in the near term.
second quarter of 2009, yet saw a Additionally, Hinz notes that COBRA
significant spike in California. Company
Continued on Next Page
www.lakesidecommunityhealthcare.com
info@AthenaGroup1.com
www.AthenaGroup1.com
2009 by Payers & Providers Publishing, LLC
 Payers & Providers
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In Brief
Prospect Projects
Profitability for Brotman
Buoyed by a major financial
restructuring, Los Angeles-based
Prospect Medical Holdings sharply
narrowed its losses for the third
quarter ending June 30.
Prospect, which operates five
hospitals in Southern California –
including the Brotman Medical
Center in Culver City – reported a
loss of $238,000 on revenues of
$114.3 million. That’s compared to
a loss of $3.5 million on revenues
of $80.9 million for the third
quarter of 2008. Company officials
say much of the revenue bump was
attributable to folding in Brotman’s
operations. It also says that
Brotman is projected to return to
profitability after losing as much as
$1 million per month. Prospect had
held a minority stake in Brotman
since 2005, and acquired majority
ownership last spring, just as the
hospital emerged from chapter 11
bankruptcy protection.
Prospect also announced a July
29th closing of a $160 million
senior secured notes offering,
which cut the interest rate on its
borrowing by 6% per year, and will
increase after-tax cash flow by
about $12 million per year.
The company’s stock fell by
about 5%, to $4 a share, in after-
hours trading on the American
Stock Exchange late Wednesday.
L.A. Supes Vote to
Reopen MLK Hospital
The Los Angeles County Board of
Supervisors voted unanimously on
Tuesday to try and reopen the
perennially troubled Martin Luther
King Jr./UCLA Medical Center
while shifting responsibility for its
day-to-day operation to the
University of California.
Continued on Page 3
NEWS
Health Plans
enrollment is up about 28% companywide
compared to the end of 2008. That’s also
driving up medical costs, since many
enrollees often obtain services before their
coverage runs out.
To combat this trend, Molina rolled
out about a year ago a program that
profiles all enrollees. Those patients with
chronic conditions, take multiple
medications or over-utilize hospital
emergency rooms are more closely
monitored to ensure they receive cost-
appropriate care.
Officials with the commercial plans
have also said they would be proactive
about addressing costs, particularly as
most also reported sagging earnings. But
they were less forthcoming than Molina
with specifics.
“We continue to focus resources on
outpatient costs and believe we can
effectively manage this trend in the
second half of the year,” Health Net Chief
Operating Officer Jim Woys told analysts
earlier this month. However, a Health Net
spokesperson declined to elaborate on
Woys’s comments.
Hinz notes that Anthem would
“continue to price our business for a slight
New Website Assists On Hospital Bills
Joint Effort Helps Patients Navigate System
Californians vexed by the seeming finality of
their hospital bills have a new Internet-based
navigational tool sponsored by a variety of
advocacy groups.
The website, www.hospitalbillhelp.org,
contains advice regarding patients who qualify
for bill reductions under AB 774, the Hospital
Fair Pricing Act. The site contains a variety of
information for patients who are uninsured and
underinsured and may qualify for billing
discounts. They include sample letters to send to
hospitals, as well as articles advising how to
RFS Consulting
Expert Healthcare Communications
■White Papers ■Media Campaigns
(818) 848-8510
2009 by Payers & Providers Publishing, LLC
Page 2
(Continued from Page One)
increase in medical cost trends this year,”
and would work for low-cost alternatives,
but could not provide specifics.
The obliqueness has healthcare
consumer activists worried.
“Unfortunately, their track record has
been to squeeze the patient dry and deny
care wherever they can,” says Anthony
Wright, executive director of Health
Access, a Sacramento-based consumer
advocate group. Wright adds that a recent
uptick in requests for independent medical
reviews filed with the Department of
Managed Health Care bears out this notion.
Judy Dugan, research director for
Consumer Watchdog, an advocacy group in
Santa Monica that has sued health plans
over coverage issues, is worried that cost-
shifting will occur, particularly among the
individual and small group markets.
“They’ll raise their rates, and try very
hard to make them go away altogether,”
Dugan says, adding that most plans will
tolerate higher medical costs for large
groups because that business segment
remains lucrative. She also notes that
providers may see delays in claims
payment, or extra steps to file and approve
claims.
purchase insurance. It also has links to a
variety of consumer organizations.
The site, which is operated by
Sacramento-based consumer advocacy group
Health Access, was funded by $250,000 in
grants from Community Catalyst and the
California HealthCare Foundation.
“We worked on this law for five years to
help people out who don’t have insurance
and a high hospital bill, and this is a way to
Continued on Next Page
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Payers & Providers
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*For our ads, not your hospital
In Brief
Under the proposal endorsed by
the board, Los Angeles County
would contribute more than $350
million – including $278 million
for seismic upgrades – to reopen
the hospital with 120 beds by late
2012. The UC system would
operate it on a daily basis as a
teaching hospital with 250 medical
resident slots. It would be
governed by a not-for-profit
venture jointly run by the county
and UC.
Although the UC Board of
Regents may vote on the proposal
at its next public meeting Sept. 15,
Los Angeles County Supervisors
Gloria Molina and Mike
Antonovich acknowledged that the
deal could still unravel.
County officials closed the
hospital back in August 2007, after
the Centers for Medicare and
Medicaid Services withdrew
funding for repeated lapses in
patient care. It has operated as an
outpatient clinic since then.
County officials have talked with
several potential partners –
including the University of
Southern California and Pacific
Hospital of Long Beach – to try
and reopen the facility.
John Muir Receives
$10 Million Grant
The K.H. Hofmann Foundation has
made a $10 million grant to the
John Muir Foundation to help John
Muir Health with an $800 million
expansion of its Walnut Creek and
Concord campuses. As a result, the
planned new patient tower on the
Concord campus will be named
after benefactors Jean and Ken
Hoffman.
The Concord-based foundation
has made several other grants to
John Muir Health in the past to buy
medical equipment and to help
found the John Muir Cancer
Center.
NEWS
Website (Continued from Page Two)
communicate that they have options,” says
Health Access Executive Director Anthony
Wright.
AB 774 was signed into law in 2006 by
Gov. Arnold Schwarzenegger, and requires
hospitals to provide discounts to uninsured
or underinsured patients whose income is at
or below 350% of the federal
poverty level. Hospitals are also
Survey of 66 Hospitals on
required to post the availability AB 774 Compliance
of discounts in conspicuous
places.
The hospital industry was
35%
neutral toward the bill in its
final form, and has no
objections toward the website.
“We’re very supportive of
Notice
hospitals implementing AB not
774,” says CHA Vice President properly
posted
of External Communications
Jan Emerson, although she
Source: Western Center on Law and Poverty
adds hospitals may be
encountering issues
regarding full compliance.
A study performed earlier this year by
First 5 Helps Out Healthy Families
Despite Grant, Hospitals Face Potential $680M Tab
First Five California, the program that gives an
economic and healthcare boost to the state’s
preschoolers, has injected $81.4 million into
the Healthy Families program to protect it
against looming brutal budget cuts. However,
the money falls far short of preserving the
beleaguered program.
The money First Five has put into Healthy
Families will keep some 200,000 preschoolers
on its rolls. Healthy Families is California’s S-
CHIP plan.
First 5 has put almost $100 million into
Healthy Families so far this year. It contributed
$16.7 million last February to stabilize the
program from budget cuts enacted in this
current fiscal year.
For 2009-2010, Healthy Families faces a
$194 million shortfall and may wind up cutting
as many as 669,000 children off the rolls
between now and June 2010 – 73% of the
program’s total.
Since many children in Healthy Families
have chronic health conditions, they are in
2009 by Payers & Providers Publishing, LLC
Page 3
the Western Center on Law and Poverty in Los
Angeles concluded that many hospitals have
yet to comply with the posting requirements of
AB 774, and many others would not furnish
their discount policies on request. Western
Center Staff Attorney Jen Florey says her group
is working with the CHA on templates for
multi-lingual signage that can be
appropriately posted on hospital
premises. Florey’s organization
lent some technical assistance
in developing the website.
43% One other issue posed by
30% the Western Center study was
the fact that many patients
who could avail themselves of
Only
Policy not
the discounts may lack the
available
available in savvy to use the Internet,
on English meaning they may not be
request
able to use its services.
Wright says several thousand
dollars of the grant money
has been earmarked toward
marketing the site and making it more
accessible.
great need of complex care. According to Jim
Lott, executive vice president of the Hospital
Association of Southern California, it’s
estimated that roughly 30% of Healthy Family
enrollees will be hospitalized over the next
two years, at a cost of roughly $9,000 per
patient. Even excluding those covered by the
First 5 funding, the cost to California’s
hospitals would be about $680 million.
“We’ve got to eat that cost,” says Lott,
who sits on the Payers & Providers Editorial
Board.
Lott adds that hospitals are already being
overburdened by increases in emergency
room visits by uninsured patients, with some
public institutions seeing a 20% increase over
the past year.
In the meantime, First 5 is seeking other
contributions to keep Healthy Families
functioning.
“We encourage like-minded partners to
come forward with assistance to ensure the
program's survival,” says First 5 Executive
Director Kris Perry.
Payers & Providers
Vol. 1, Issue 3
Payers & Providers is
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Payers & Providers Publishing,
LLC. An annual individual
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Editorial Board
Steven T. Valentine, President,
The Camden Group
Ross Goldberg, Chairman of the
Board, Los Robles Hospital &
Medical Center
Jim Lott, Executive Vice President,
Hospital Association of Southern
California
Elaine Batchlor, M.D., Chief
Medical Officer, L.A. Care Health
Plan
Keith Richman, M.D., Executive
Vice President, Lakeside
Community Healthcare
Publisher
Ron Shinkman
ronshinkman@gmail.com
OPINION
Preserving The Community Benefit
Despite Financial Environment, Hospitals Must Soldier On
As healthcare reform is debated and the
current economic crisis continues to boil,
California’s hospitals find themselves
increasingly challenged to balance social
and moral responsibilities
with an economic sanity that
ensures long-term survival.
Not-for-profit hospitals
play in a particularly complex
sandbox given our added
obligation of “giving back to
the community” in ways that
are both measurable and
meaningful. And while there
does not currently exist any
uniform standard as to the
percentage of revenues which
must be reinvested back into
the community in exchange
for a hospital’s not-for-profit
status, the American Hospital
Association has called upon
hospitals to “voluntarily, publicly
By
and proactively report to their
Jane
communities the full value of
Haderlein charitable giving is moving in the
benefits” provided.
Community benefit falls into three
categories. One is charity care, which
includes providing services to patients
who meet specific criteria and simply
cannot afford to pay. It also means
absorbing the differences between the
actual cost of care and government
reimbursement for Medi-Cal. Second is
health research and education, training
both tomorrow’s medical leaders while
assuring that current staff remains state of
the art in their knowledge and day-to-day
practice. Third are benefits directed at
vulnerable populations and the community
at large, such as Type Two diabetes
screening, asthma programs, cultural
outreach initiatives, etc.
All of these programs look great on a
blackboard, but it takes dollars to make
them possible. In the case of Huntington
Hospital, that amounts to about $44.7
million (or 11% of our revenue) in
recognized community benefit and a total
“giving back to the community” of $128
million annually. That includes such
locally “unduplicated programs” as trauma
care, geriatric psychiatric services and a
level three neo-natal intensive care unit.
2009 by Payers & Providers Publishing, LLC
Page 4
Amidst a slumping economy, where
will these dollars come from?
California’s hospitals are seeing fewer
elective cases, providing more charity care,
absorbing more bad debts and
caring for an increasing
number of patients who cannot
pay their bills. This puts an
added burden on not-for-profit
hospitals and helps explain
why about half of our state’s
community hospitals are
currently losing money.
In times like these, not-for-
profit hospitals must do more
than grouse, groan and grind
their teeth in deep frustration.
They must operate with peak
efficiency and, more than ever,
look to the generosity of
donors to help supplement lost
income. Trouble is, donors are
feeling harsh economic realities
themselves, and the needle for
wrong direction. In the most recent
accounting, 38 percent of hospitals
reported a decrease in philanthropic giving,
thus adding to the chamber of horrors not-for-
profits currently face.
Despite these obstacles, California’s not-
for-profit hospitals must not shrink from their
responsibilities, duty and heritage. It is
precisely when society needs us the most that
we must continue to focus on providing the
best care possible and in reinvesting back
into our communities to ensure that those
served have access to the right care at the
right place at the right time. Doing so is part
of our industry’s collective mission and
quantifying in dollars and cents the
community benefit we bring is required. But
far more important, it is simply the right thing
to do.
Jane Haderlein is vice president of
philanthropy and public affairs at Huntington
Memorial Hospital in Pasadena.
Op-ed submissions of up to 550 words
are welcomed. Please e-mail proposals
to editor@payersandproviders.com, or
call (877) 248-2360, ext. 3.
Payers & Providers EMPLOYMENT/MARKETPLACE Page 5

Compliance Advisor - Coordinates and drives the

development and implementation of L.A. Care’s
policy approval process and leads the Policy &
Procedure Review Committee (PPRC); actively
manages the Anti-Fraud, Waste & Abuse Program,
including investigation of fraud allegations and
annual reporting to the Department of Managed
Health Care (DMHC), as well as is the Team Leader
for the Special Investigation Unit (SIU); assists with the
implementation of new legislation; and champions
L.A. Care's Code of Conduct. This position is also
responsible for ensuring that fraud, waste, and
abuse compliance education programs are
developed, maintained, and facilitated for staff and
providers. Additionally manages the Fraud Hotline
complaints and related follow-up.

For complete job description, qualifications/

requirements, visit our website: www.lacare.org

To apply, email resume with salary history/

requirement to: recruiter@lacare.org, referencing
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It costs up to $27,000 to fill a healthcare job.*

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2009 by Payers & Providers Publishing, LLC