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Providers in the Inland Empire are movingtoward the formation of a regional healthinformation organization (RHIO) to betterprovide coordinated patient care to the far-

flung area, but raising money for the effortcould prove a formidable obstacle.

The Inland EmpireHealth InformationTechnology Coalit ion hassolicited ten potentialbidders from a recently-issued request forproposals, attractingattention from somepowerhouse IT firms suchas Microsoft.

However, thecoalition, which was

formed about a year agoand includes 22 hospitalsand 27 medical groups in Riverside andSan Bernardino Counties, may take a stepback first and hire a consultant to ponderits options for raising capital.

What we hope to do is to be able tohire a consultant that has successfullyimplemented a health informationexchange in other communities, saysDolores Green, executive director of theRiverside County Medical Association. Weneed to be able to get to a model that isself-sustaining.

Green says that an IT contractortypically charges implementation fees of$200,000 to $500,000, plus an ongoingoperational fee that is usually several

dollars each month for each patientbeing cared for by the providers

involved.Its millions of dollars,

says Christina Bivona-Tellez, regional vicepresident for the HospitalAssociation of SouthernCalifornia, which has beenconvening meetings of allthe coalition members.

The potential payoff isimmense, however. Anintegrated data exchange

network between providersin the nations two largest

counties where some hospitals arenearly 200 miles apart could reducecosts signi ficantly. Bivona-Tellez saysthat most providers are investing inelectronic health records, but have noway of sharing them with other hospitalsor physician groups.

Its a very valuable tool in terms ofprimary care, says Green, noting thatbeing able to exchange patient records

Inland Empire Inches Toward A RHIO10 Bidders Interested, But Funding Remains Big Issue

California Edition

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Payers & Providers

would eliminate services that are oftenduplicated when an Inland Empireresident has to travel between providers.

Bivona-Tellez says star tup funds forthe project could be raised by imposing afee on all the RHIO participants, or bysoliciting grant funds. One potential areaof capital might be stimulus funds fromthe Obama Administration, which hasbeen encouraging the use of electronicmedical records and electronicexchanges. The California e-HealthCollaborative (CAEHC) is the likeliestconduit for such funds, she adds.

RHIOs, also known as healthinformation exchanges, have beenstruggling in California to remain

Page 2

operational in the long-term. The CaliforniaRHIO all but disbanded last year after beingin operation since 2005. Although it wasnamed as a co-finalist to act as a conduitfor federal funds, it could not reach anagreement with CAEHC, the other co-finalist, on how such an arrangement wouldoperate.

According to the CAEHC website, onlyfive of 14 planned RHIOs in California arecurrently operating. Two others, in SantaBarbara and San Jose, have ceasedoperations.

The price tag is so big to get started upthat we dont want to make a mistake,Green says.

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Physical Therapists Criticize AnthemClaim Payment Changes Will Hurt Practices, Care

In Brief

Anthem Blue CrossDelays Rate Increases

Anthem Blue Cross of Californiahas agreed to delay a rate increaseof as much as 39% for its individual

health plan enrollees.The increase, which was tohave gone into effect on March 1,will be stayed 60 days in order tobe reviewed by the CaliforniaDepartment of Insurance, Anthemsaid late last week.

Anthem has come under firefor the rate increases. Both stateand federal officials have asked forreviews.

Our decision to agree topostpone the rate adjustment doesnot change the underlying issue. Allhealth plans are in the samesituation in trying to deal with thesteadily increasing medical costs in

the delivery system, which are notsustainable, said Brian Sassi,President of Anthems consumerbusiness unit, in a preparedstatement. We are alsoexperiencing a higher proportion ofhealthy individuals choosing not toenroll, leaving an insured pool thatutilizes significantly more services.

OSHPD Grants $1.7MFor Nurse, PA Training

The Office ofStatewide Health

Planning and Development hasawarded $1.7 million in grants to15 universities statewide to fundtraining programs for nursepractitioners and physicianassistants.

The grants, which were givento both public and privateuniversities, ranged from $25,530to $170,000. Recipients of thelargest grants were Cal State Long

Inland Empire (Continued from Page One)

Under re in recent weeks for attempts toincrease individual policyholder premiums asmuch as 39%, Anthem Blue Cross ofCalifornia is now drawing criticism fromphysical therapists for potentially cutting theirpayments by as much as half.

According to the California Physical

Therapy Association and other sources,Anthem will move on March 1 from adiscounted fee-for-service model for physicaltherapists participating in its PPO network to$75 per visit. As a result, therapists expectaverage payments for their work to dropsignicantly.

Richard Katz, who operates physicaltherapy practices in both Los Angeles and theBay Areas, estimates that the averagereimbursement has been close to $100 pervisit. If you get into specialty care, such ashand therapy, it goes much higher. This

payment (from Anthem) will be regardless ofcare, he says.

Physical therapy provided via medicalgroups or in hospitals will be excluded fromthe payment change, according to Katz, whosits on the CPTA board.

Katz also claims that Anthem dropped a

longtime provider of networked physicaltherapsists, Calabasas-based PTPN, and willnetwork with individual practices directly.PTPN ofcials were not immediately availablfor comment.

Anthem conrmed the changes inreimbursement through a written statement,but would not comment further. Under thenew structure if the amount paid to thetherapist is reduced then the member willexperience a corresponding decrease in theirout of pocket expense, read a portion of thestatement.

Continued on Page 3

NEWS

Continued on Next Page

http://www.lakesidecommunityhealthcare.com/

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Citing a bounceback of the nancial markets,Kaiser Permanentes health plan and hospitalsystem were able to return to the black during

2009.The Oakland-based Kaiser posted fourth

quarter net income of $490 million onrevenues of $10.6 billion. That compares to aloss of $996 million on revenues of $10billion for the fourth quarter of 2008.

Aiding Kaisers bottom line was net non-operating income of $276 million for thequarter, compared to a net non-operating lossof $1.1 billion in the fourth quarter of 2008.Kaiser ofcials attribute that to a rebound ofthe nancial markets.

We arepleased that our non-operatingincome beneted from the partial recovery of

the nancial markets, and returned to a level

that more appropriately supports ourinvestments in our care deliveryinfrastructure, says Kathy Lancaster, Kaisers

executive vice president and chiefnancialofcer. Given the volatility in the nancialmarkets and ongoing governmental actionsrelated to Medicare Advantage payment rateswe are continuing to take prudent measuresto manage our operations and investments ina responsible way.

For calendar 2009, net income was $2.1billion, compared to a $794 loss for calendar2008. Of that, $524 million came from gainsin investments. That compares to aninvestment loss of $2.3 billion in 2008.

Kaisers capital spending totaled $2.6billion in 2009, compared to $2.9 billion in

2008.

Page 3

Kaiser Reports Strong ReboundInvestment Bounce Puts it Back in the Black

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NEWS

In Brief

Beach, UC Davis, Cal State Fresnoand Sonoma State University.

Each of these programs haveshown ongoing commitments intraining and preparing healthcareprofessionals with the knowledgeand skills necessary to provideculturally competent healthcarethat meets the needs of Californiasunderserved populations, saysOSHPD Director David Carlisle.

Three colleges includingUSCs Keck School of Medicine also received grants of nearly$100,000 apiece to providestudents with specific training inmental health services.

SDSU Partners in $5MBiotech Training Grant

San Diego State University andthree other partners have received

a $5 million grant from the U.S.Department of Labor for a newinitiative to help grow the regionslife sciences industry.

The Biotechnology Readiness,Immersion, Certification andDegrees for Gainful Employment(BRIDGE) project will provideeducation, training, andplacement services to more than1,000 veterans and unemployedworkers in the San Diego area. Theprogram will work on enhancingthe number of clinical laboratoryscientists, medical laboratorytechnicians, medical physicists,and

professional scientists.Along with SDSU, granteesinclude the San Diego WorkforcePartnership, the SouthernCalifornia Biotechnology Center atMiramar College and the tradegroup Biocom.

The money is part of thefederal governments nearly $800-billion effort to stimulate theeconomy.

Physical therapists provide rehabilitativecare to patients with constricted motion,particularly after spinal and limb surgeries, orstrokes.

Although Katz says he has a minimalnumber of patients insured by Anthem BlueCross, he notes many practices rely on theinsurer for as much as 60% of their income.He estimates that Anthem has contracts witha network of about 1,000 physical therapistsstatewide.

This is going to have a huge impact onliterally hundreds of practitioners, Katz says.He adds that only PaciCare and UnitedHealthGroup have a per diem payment, butthose insurers often negotiate rates withindividual therapists. The CPTA, whichrepresents about 5,000 therapists statewide,claims Anthem has refused to negotiate.

Christina Kauk, who is chiefnancialofcer of a practice in Sonoma County, notes

that many therapists dropped PaciCare andUnited due to reimbursement issues, but giventhat Anthem Blue Cross covers some 6 millionCalifornians, it is a much more difcultdecision.

Anthem has a lot more clout than manyof the other plans, she says, adding that herpractice would operate at a loss if it acceptedthe per diem rate.

In addition to the nancial burden ontherapists, the CPTA suggests that it may alsoaffect patient care.

Physical therapists are concerned thatAnthem's dramatic and unilateral reduction inpayment will have a substantial effect on thequality of care being provided, as well as theability of therapists to continue to participatein Anthem's network, says CPTA PresidentCheryl Resnick, a professor of biokinesiologyat the University of Southern California.

Physical Therapists (Continued from Page Two)

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Google end-of-life care and you will find193 million entries. So surrounded by allthis information, why is the subject stilltaboo for otherwise educated people todiscuss?

Increasingly the public is demandingcandor when it comes to theirhealthcare so they can makeinformed decisions abouteverything from whether to get aflu shot to various cancertreatment options. But when itcomes to arguably the mostimportant decision they will ever

make -- how to live out theirfinal days -- there is a deafeninghush in the discussion. ! Itdoesnt need to be this way and itstime for all of us in the healthcarearena to do something about it.

Lets begin by openlyacknowledging that death is a part ofthe natural life-cycle. Our patients andmembers are best served by making surethat they are prepared both logically andemotionally and have the informationneeded to make informed decisions on thisimportant topic.

It is an indisputable fact that educationtrumps ignorance. A study publishedJanuary 10 in the Journal of ClinicalOncology found that cancer patients whowatched a six-minute video explaininglifesaving procedures, hospice care andpalliative care made far different choicesthan those who didnt watch.

By not addressing this issue openly weare failing in our duties to truly providepatient-centered care. For too long, therehas been a paralysis in discussing end oflife issues for reasons ranging from notwanting to dash patients hopes (a false

belief) to the outdated incentives incontinuing to provide care to sincerelybelieving that patients simply dont wantto hear about these things.! But patientswant to understand their illness and how itis likely to progress because only then canthey make knowledgeable choices. Ibelieve everyone who is part of the healthcare system has a moral obligation tospeak with patients and families abouttheir goals of care, what modern medicinerealistically can and cant achieve and

what options are available to each patienthis time in their life.

A good place to start would be educamore healthcare professionals on palliativcare so as to make the subject less queasyconfront.! In 2005 70 percent of large

hospitals in the United Statesreported having some palliaticare program in place, but mof these programs are very smand require primary carephysicians to make the referrwhich not enough are willingdo.

Health plans can play animportant role by encouragin

members to have advancedirectives, designate a durable powof attorney and have frank discussiwith their doctors.! At SCAN HealtPlan, we also make available the Wishes which has become Americ

most popular living will and which is apositive step in changing the way Americaplans for care at the end of life.!!!!!!In addition, weve embraced POL(Physician Orders for Life SustainingTreatment), a tool for patients with advan

illness which captures ones values andpreferences for treatment and facilitatesdiscussion between patients and doctors.are working to train our case managers topresent POLST to appropriate members anare also utilizing our website, our annualGeriatric Symposium and other means toengage physicians in this process.

There is mounting evidence that end life discussions lead to more contentedpatients as such conversations helpindividuals feel a sense of empowermentrather than hopelessness.! Such a feelingallows people to spend their last days wit

the dignity and compassion that a lifetimeliving deserves.

OPINION

A New Life For The Process Of DyinTo Address Subject, we Must Overcome Our Fear

By

Dave

Schmidt

Dave Schmidt is President and CEO of SCAN

Health Plan, the fourth-largest not-for-profit

Medicare Advantage Plan in the United States

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Op-ed submissions of up to 575 words a

welcomed. Please e-mail proposals to

editor@payersandproviders.com, or ca

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