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S&S Benefits.....Opinion, Hearsay & News Review

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S&S Benefits Consulting 219 Darien, Dundee, IL 60118 Phone: 847-428-5353, Fax:847-428-9876,

Email: ssbenefits@interaccess.com IF YOU WOULD RATHER RECEIVE THIS VIA E-MAIL !!!!

Volume 2 Issue 2-Street Talk March, 2000 Issue

MErgers and legal news help dominate the news for our March 2000 edition. We get an extra day this year, make the most of it!

BEech Street PPO, one of the countryís largest, has acquired MediChoice in the northeast to solidify their coverage in the tough New York, New Jersey market.

UICI and Health Plan Services have announced an agreement for UICI to acquire HPS. This merger reminds us of the First Health/First Data merger which did not work out too well, with First Health eventually sold to Healthcare Compare. HPS canít seem to make up their mind if they are a small group TPA or a large group TPA after acquiring Harrington. Very similar to the EBC/First Health merger before the acquisition of that company by First Data. Watch for fallout.

DId anyone notice the name change of Anthem (a Great West company) to Alta (like the old TPA that became First Health? One has to wonder why. On the other hand, PrimeCare in Milwaukee finally changed their name to reflect their ownership by UnitedHealthcare.

SPeaking of UHC, Georgia has fined them $123,500 for violations revealed in an audit of HMO business practices. Such violations consisted of slow payment of claims and failure to respond in a timely manner to consumer complaints. However, UHC did not have the highest number of complaints in Georgia according to Knight-Ridder. That honor fell on Aetna U.S.Healthcare. Georgia is tough on HMOs with the state also having fined Aetna and Cigna recently.

LAwyers are enjoying the fruits of HMO backlash. A RICO and ERISA lawsuit was filed against UHC by the "REPAIR Team" of lawyers. They say that UHC contradicted itself three weeks after announcing a "final say" policy for physicians, by doing retroactive review of physicians practices and still requiring UR for MRIs, CAT-scans and physical therapy. Quite frankly, the practices of the "Repair Team" are just about as annoying as those they try to stop.

COnfirming the obvious, a study of 6,000 Mass. State government employees shows more confidence in docs if they serve more than one health plan. Patients of staff model HMOs ranked their MDs the lowest in nine of ten categories.

CApitation normally ranks high on our list of how to build profits in MCOs. The principal is simple. Charge a lot of money ($40-$45 per member per month in many cases) to the group for people enrolled. Pay a lot less than that to the docs. Have no accounting available of the utilization for the employer to review and make claim experience hard to come by. No wonder a survey of healthcare executives reveals that 75% believe capitation is good for the MCO, but only 55% say it is good for the providers. Our opinion, unless you have a lot of utilization in your group, you are leaving substantial dollars on the table. But most employers donít get the data to know.

ALthough we like to have a little fun bashing some of the aspects of HMOs, the proposed patient protection legislation that is before Congress is nothing more than a tool to fill the pockets of trial attorneys. While claiming to help the public, if this "Trial attorney enrichment bill" passes, healthcare costs will go up and contribute even more to the number of uninsured. A survey in BI reveals that 76% of employers will pass on the expected cost increases from the bill. 52% will reduce the number of retirees, 35% will reduce the number of dependents and 33% will be forced to reduce the number of employees. 15% said they would terminate coverage for all employees. Why? Employers donít want to be sued for providing coverage.

MEt Life reported that 93% of their policyholders approved their plan to convert to a stock company. With a tumbling DOW, how much interest will they generate on Wall Street with the IPO?

SUrprise! Not really. America HealthCare HMO in Chicago faces bankruptcy ($25 million short of covering itís obligations according to reports).

CLinton canít decide if he wants to bankrupt Medicare by providing outpatient drug coverage (it helps you if you have retirees) or the employer, by allowing employees who elect to retire before age 65 to elect COBRA. This is tucked into his federal budget for fiscal 2001.

S&S Benefits Consulting is a partnership of benefits professionals with over 50 years in the health and welfare business. We specialize in the group business and donít try to sell you services where we have no expertise. If you need professional advice or an impartial analysis we are here to assist you. If we canít help you, chances are, we know who can.