1. Our Friend the Hospital
2. Our Friend the JCAHO
3. Our Friends the Insurers
4. Our Friends the CMA and the Governor
4. Our Real Friend: CANS

1. Our Friend the Hospital: Sneak Attack
As you may know, the California Hospital Association is sponsoring an initiative for the next ballot that would increase tobacco taxes to fund emergency care in California hospitals. While the initiative will provide significant increase in emergency department (ED) funding, it includes provisions limiting hospital charity care requirements and severely restricting stipends to on-call physicians. Stipends would be the same for all on-call physicians and be determined by an independent financial analyst hired by the Board of Trustees of the hospital without any input from the hospital staff. This would cripple marketplace negotiations as they exist and bypass all discussions with specialists. The ED docs have signed on to this initiative because EDs would be benefited. CANS has joined the CMA in opposition to this initiative’s blatant attempt to remove the marketplace from the ED coverage issue. We can understand the hospital attempt to improve their ED revenue to cover some of the costs of providing uncompensated care, but the skewering of those who actually do the care to tweak the ED bottom line is another example of big business pushing little business around. We need to push back.

2. Our Friend the JCAHO:
Who needs Enemies with Friends like These?
That venerable institution we all love, The Joint Commission on Accreditation for Healthcare Organizations (JCAHO), apparently has some big business aspirations of its own. It turns out JCAHO has been selling the hospital and patient data it creates to Blue Cross Blue Shield. Just how such a maneuver conforms to the quality of care issues the organization is supposed to encourage and judge is a bit unclear. The aforementioned California Hospital Association (CHA) is a bit upset about this and has mounted a campaign to prevent any more such goings on. Caught failing to past the smell test for activity beyond reproach, JCAHO will cease such sales. Now the CHA knows how it feels to have a purported ally slip a shiv up one’s backside (see item 1).

3. Our Friends the Insurers : Medical Provider Network List
The medical provider networks (MPNs) that are being cobbled together by many Work Comp (WC) Insurers and self insured entities are not mandated by law but once formed, they keep medical care of the injured worker “in house” as it were. There is some evidence that medical costs for insurers are lower using an MPN. For those interested in joining an MPN for particular insurers or other entities, a list of all approved MPNs can be found at DWC MPN Web page: One should exercise caution when signing a contract with one of these MPN’s so as to have a good escape clause if the new Comp fee schedule, due out in January, is onerous enough to make you want to quit the WC game.

The new fee schedule is likely to be onerous because it will be promulgated by the Governor’s WC Administrative Director and it is the Governor’s goal (and only real achievement so far) to reduce WC costs. Injured workers have seen reductions in care and awards, attorneys have taken a hit and non-MD providers have had their income curtailed. To think that surgeons won’t get their share of misery is unrealistic, particularly since a recent assay of WC costs by the California Workers’ Compensation Institute showed that in the face of the new Comp law, fees paid to surgeons and medical-legal evaluators increased while other health-care specialists saw steep cuts. The report said the average payment for a medical-legal evaluation increased 43.6% from 2002 to 2004 while payments for surgical procedures (aka spine surgery) increased 13.1%. Average payments for every other physician-based medical service declined. The average payment for anesthesiology procedures dropped 57.1%; special services 33.1%, pathology and laboratory services 31.8%, medicine 25.7%, acupuncture 13.9%, chiropractic manipulation 11.4% and physical therapy 7.9%. It would appear we have a surgeon’s perfect storm brewing.

4. Our Friends the CMA and the Governor:
Collective Bargaining; Part 2
The recent CANS survey allowing expression of interest in pursuing a collective bargaining agreement for ED coverage with the state of California was met with near coma by California neurosurgeons. The survey was sent as follows: 236 to CANS members (12 of these were Senior members) and 334 to non members. Tally: 41 were returned (36 from CANS members; 5 from non-members). In the survey, 88% of the 41 total responses received endorsed CANS undertaking collective negotiations, but only 44% would financially support this effort which was estimated to cost about $100,000.

This cost, which would have to be borne by neurosurgeons alone since the CMA would not sponsor such legislation for so insignificant a group as neurosurgeons, plus the likelihood the legislation would be vetoed by the Governor (who is advised by three former HealthNet executives regarding legislation with medical impact), has resulted in the CANS Board choosing to put any attempts on hold pending further input. The Board, with major help from Don Prolo, has arranged to have Charles Bond, a lawyer in Berkeley who represents physicians in all aspects of their practices as well as their relations with hospitals, payers and managed care organizations, speak to the Board and membership at the CANS meeting in January.

Mr. Bond believes that physicians can organize to negotiate for increased reimbursement if their bargaining unit is simultaneously working to reduce overhead. Soberly, he points out that in California 65 insurers have consolidated into 4 and now exert tremendous leverage with solo or small group physicians in bargaining for fees. The large multi-specialty groups and hospitals do very well in bargaining with insurers, but the independent and small group physicians are toast. It will be of some considerable interest for us bread slices to hear him in January.

5. Our Real Friend: CANS Annual Meeting
By now, you should have received the annual meeting announcement. If you haven’t, let Janine Tash, our Executive Secretary, know ASAP. She can be reached at 916-457-CANS or

Looks like a fine show so register early and often. Don’t be put off by the Pevehouse Award recipient. No meeting is perfect.

Randy Smith, M.D.

The newsletter is a mix of fact, rumor and opinion. The facts are hopefully clearly stated. The rest is open to interpretation. The opinion is mine. R.S.

The assistance of Janine Tash and Michael Edwards in the preparation of this newsletter is acknowledged and appreciated.

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