HMOs Facing Deadline to Decide on Medicare Coverage
Bergen Brunswig Corp. launched iBergen.com, a site that will enable pharmacists to buy products and services online. The Orange-based company, with approximately $22 billion in revenue, distributes pharmaceuticals and healthcare products to hospitals and pharmacies. The Web site may minimize costs involved in the supply chain from manufacturer to distributor to healthcare provider.
Getting an Internet presence for Bergen Brunswig has been a pet project of Brent Martini, who runs Bergen Brunswig Drug Co., the corporation’s largest subsidiary. His responsibilities, among other things, include oversight of Bergen’s myGNP.com and joint ventures more.com and HealthCentral Rx.com, three online business-to-consumer sites allied with health information sites.
Bergen Brunswig has struggled in recent months, as a result of a drop in its stock price and the dismissal of its president and chief executive, Donald Roden, in November. Robert Martini, Brent’s father, retook the reins of the business after Roden’s departure, and speculation has surfaced about Brent Martini becoming permanent chief executive.
Meanwhile, Bergen Brunswig said it selected a trading engine made by Cyclone Commerce Inc. of Scottsdale, Ariz., to facilitate its Internet-based business-to-business initiatives. The distributor said in a release that it already is using Cyclone’s trading engine with several large pharmaceutical managers, such as Pfizer Inc., maker of Viagra and other well-publicized prescription drugs.
In other Bergen Brunswig news, its Bergen Brunswig Medical Corp. subsidiary entered into a medical-surgical distribution partnership with Health Services Corp. of America, a privately held group-purchasing association based in Cape Girardeau, Mo., for Health Services Corp.’s HSCA Select program.
HSCA Select is a supply expense reduction program for the company’s member hospitals and health systems that Health Services Corp. says will save its participating hospitals $30 million in supply costs.
It works like this: Performance incentives are offered participants in return for their compliance with contracts for commodity medical/surgical products and pharmaceuticals. Jim Ross, Bergen Brunswig Medical’s chief operating officer, said in a release that the HSCA Select program would create “a much tighter partnership” between Bergen and the health systems.
Health Services’ clients in Orange County include PacifiCare, Friendly Hills Healthcare Network, Caremore Medical Management and TMMC medical centers in Anaheim, Fountain Valley and Santa Ana. Also, Orange County Community Hospital of Buena Park has indicated that it will be a program participant.
Medicare Decisions Due
Several large health maintenance organizations have been cutting and running from the Medicare-risk business during the past two years, citing decreased government reimbursements and higher costs to provide care for senior clients.
HMOs, including PacifiCare Health Systems Inc., Santa Ana, have a July 3 deadline to inform the U.S. Health Care Financing Administration about whether they will provide Medicare HMO coverage under the Medicare Plus Choice framework. HCFA funds and regulates the federal health insurance program that serves approximately 40 million Americans, the vast majority of whom are older than 65.
“We’re not prepared to make any announcement on Medicare Plus Choice,” said Marie Connell, PacifiCare’s corporate public relations manager. PacifiCare will comply with HCFA’s July 3 deadline and will make its announcement at that time, she said.
Health Care Financing Administration spokesman Peter Ashkenaz said he was not in a position to comment on whether PacifiCare or any other Medicare-risk HMO operating in Orange County has submitted any paperwork regarding Medicare Plus Choice. HCFA can’t comment on any particular plan’s decision “until they notify us that they’re not going to play,” he added.
Medicare Plus Choice was created as part of the Balanced Budget Act of 1997 and was intended to give more options to beneficiaries. But health plans and their representatives, particularly the American Association of Health Plans, have alleged that the government does not reimburse them enough to care for seniors, who are heavier consumers of healthcare services than the overall population. Firms often cite the “fairness gap”,industry talk for the difference between what HCFA reimburses for patients who are in Medicare-risk HMOs and traditional, fee-for-service Medicare.
Industry critics, on the other hand, say HMO operators came into Medicare with inflated expectations and that they were overpaid for services in the past. HMOs are built around using incentives to control utilization,a tenet that was upheld earlier this month in a U.S. Supreme Court decision.
Heart-to-Heart Talk
Dr. Jack Matloff, board chairman of Global Healthcare Alliance LLC, will be the featured speaker at the American Heart Association’s fifth annual healthcare symposium Tuesday at the Irvine Marriott. The event presents speakers who address recent developments in the prevention, diagnosis and treatment of heart disease.
Matloff, an alumnus of Yale College and Tufts University School of Medicine, founded the department of cardiothoracic surgery at Cedars-Sinai Medical Center in Los Angeles in 1969 and was its chair until 1996, when he became emeritus chairman.
His current company, Global Healthcare Alliance, specializes in developing information management technology solutions to guide cardiovascular care programs.
Before Matloff’s talk, a panel discussion on how the Internet and information technology can improve the outcome of cardiovascular care is scheduled.
Symposium registration begins at 3:30 p.m., with the panel discussion at 4 p.m. and Matloff’s address at 6:30 p.m. Tickets are $250; proceeds benefit the American Heart Association’s research and community education programs.
