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Rising costs could boost Web-based health programs, in the Healthcare column



PacifiCare Pondering Appeal; Edwards Makes Investments

The Internet as a large part of healthcare hasn’t yet caught on in a big way among U.S. employers, regardless of size.

But the online financing, delivery, management and purchasing of health benefits could gain steam if healthcare costs continue to rise, predicts William Maloney, a national practice leader for consultant William M. Mercer Inc.

Interest in electronic health services could increase if healthcare cost inflation,driven by prescription drug prices and regulation,continues to hit businesses. Specifically, employers could open up to allowing employees more choice and control over their health benefits using the Internet, Maloney said.

“Maybe, if the costs go down, both sides will win,” Maloney said during a seminar presented by Mercer’s Orange office and held recently in Newport Beach. “Employers are going to figure out a way to hand off more costs to employees. Employers recognize that managed-care techniques have run their course and employees must play a bigger role in the future.”

But if an accompanying Mercer survey is any indication, it’s going to take a while before OC employers start considering electronic health benefits.

Around 80% of respondents said it was either unlikely or not likely at all that in the next 12 months they would investigate or evaluate so-called consumer-driven or defined-contribution health programs, or a combination of both. About 20% said it was possible.

When the question’s time frame was stretched out to three years, however, the numbers changed. Between 80% and 90% of participants responded that it was possible, somewhat likely or very likely that they would either investigate or evaluate consumer-driven, defined-contribution strategies or a combination.

Even though some employers appear willing to look at alternative benefit programs, the Mercer study indicates that adoption is a different matter.

All participants said they weren’t likely at all or were unlikely to implement consumer-driven or defined-contribution health strategies within the next 12 months. Around 90% said it was either unlikely or possible during the three-year time frame.

The survey also asked participants what they now use Web or computer networks for. Most cited communication, providing summary health plan descriptions and general health information to their employees. None said they used Web or Intranet applications for procurement or purchasing healthcare benefits.

Maloney’s talk was billed as an educational session on electronic business and consumer-driven approaches to healthcare. It included a breakdown of ways the Internet is involved with healthcare delivery. Those include: Web-based benefit administrative applications; clinical applications; insurance procurement exchanges; consumer DC exchanges where employees choose plans from all available ones in a geographic area; and e-health insurance plans, including personal care accounts, defined employer contributions and personalized health information and feedback.


PacifiCare Weighing Appeal

PacifiCare Health Systems Inc., Santa Ana, hadn’t decided as of last week whether it plans to appeal to the U.S. Supreme Court a California ruling that allows patients to sue their Medicare health maintenance organizations for damages.

On May 2, the California Supreme Court reversed an Orange County Superior Court ruling that dismissed a lawsuit filed in 1998 by George McCall, a now-deceased Huntington Beach resident. McCall, who belonged to PacifiCare’s Secure Horizons plan, alleged that PacifiCare and its medical group wouldn’t refer him to a lung-transplant program unless he left the health maintenance organization.

McCall eventually left Secure Horizons and received his lung transplant in 1999. But he died 24 hours after receiving his new lung. McCall’s family continued with the lawsuit.

“Now that HMOs are accountable for their misconduct, as are other businesses, perhaps they will reform their practices,” said Carol Jimenez, a Los Alamitos attorney representing the family, in a statement.

PacifiCare argued it didn’t deny McCall his lung transplant. Rather, it denied McCall his choice of hospitals, according to company spokesman Ben Singer.

“We want to remind one and all this was not about the denial of his lung transplant,” Singer said in an e-mail message. “That is an approved and covered benefit of Medicare and Medicare HMOs. It was strictly a matter of which hospital he wanted to have it performed at.”

Singer said PacifiCare offered to refer McCall to Loma Linda University Medical Center, but McCall wanted to have the procedure done at hospitals at the University of California, Los Angeles or San Diego, which PacifiCare didn’t contract with.


Bits and Pieces:

Edwards Lifesciences Corp., Irvine, has invested an undisclosed amount in Foundation Medical Partners, a venture capital fund focusing on medical devices. Separately, Edwards entered a product development agreement with Gunstar LLC, a Holland, Mich., company that assists physicians in bringing new product ideas to market California Medical Association, Sacramento, recently called for a 20% hike in MediCal rates during a state Senate budget session. The association contended, among other things, that more than half of all MediCal patients struggled to find physicians who would accept them.

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