2003janfeb

Jan/February 2003

OB

MALPRACTICE

In this issue

Medicare Update Consumer Incentives College Planning

The MMIC Group offers: • HIPAA-ready NextGen Practice Management Software • No extra charges for HIPAA-ready upgrades • Electronic claims can be submitted directly to any payor or clearinghouse that accepts HIPAA-compliant transactions • Claredi certified HIPAA-compliant claims transactions are available • Fully integrated with NextGen’s award-winning electronic medical record system • Expert installation, training and support services With the new HIPAA deadline approaching, now is the time to make the move to MMIC’s practice management software solution.

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Doctors MetroDoctors THE BULLETIN OF THE HENNEPIN AND RAMSEY MEDICAL SOCIETIES

Physician Co-editor Thomas B. Dunkel, M.D. Physician Co-editor Richard J. Morris, M.D. Physician Co-editor David L. Swanson, M.D. Physician Co-editor Charles G. Terzian, M.D. Managing Editor Nancy K. Bauer Assistant Editor Doreen M. Hines HMS CEO Jack G. Davis RMS CEO Roger K. Johnson Production Manager Sheila A. Hatcher Advertising Representative Betsy Pierre Cover Design by Susan Reed

CONTENTS VOLUME 5, NO. 1

2

JANUARY/FEBRUARY 2003

LETTERS

Future Restrictions on Physician Practice

3

SOAPBOX

Medicare and the Practicing Physician

To promote their objectives and services, the Hennepin and Ramsey Medical Societies print information in MetroDoctors regarding activities and interests of the societies. Responsibility is not assumed for opinions expressed or implied in signed articles, and because of the freedom given to contributors, opinions may not necessarily reflect the official position of HMS or RMS. Send letters and other materials for consideration to MetroDoctors, Hennepin and Ramsey Medical Societies, 3433 Broadway Street NE, Broadway Place East, Suite 325, Minneapolis, MN 554131761. E-mail: bauerfamily@earthlink.com.

For advertising rates and space reservations, contact: Betsy Pierre 2318 Eastwood Circle Monticello, MN 55362 phone: (763) 295-5420 fax: (763) 295-2550 e-mail: betsy@pierreproductions.com.

MetroDoctors reserves the right to reject any article or advertising copy not in accordance with editorial policy.

Non-members may subscribe to MetroDoctors at a cost of $15 per year or $3 per issue, if extra copies are available. For subscription information, contact Doreen Hines at (612) 362-3705.

MetroDoctors

4

Will Congress Act to Prevent Future Medicare Cuts?

6

FEATURE

OB Malpractice: What Can We Learn?

10

Classified Ads

11

Consumer Incentives to Address Cost Increases

14

COLLEAGUE INTERVIEW

Macaran A. Baird, M.D., M.S.

18

Key to Successfully Starting Medical Technology Company Lies in the Details

21

PERSONAL FINANCE

The “What-Ifs” of College Planning

RAMSEY MEDICAL SOCIETY

23 24 25 26 27

President’s Message 2003 RMS Election Results/Member News New Members/In Memoriam/RMS Annual Meeting Caring Hearts for Homeless People Supply Drive RMS Alliance HENNEPIN MEDICAL SOCIETY

28 29 30 31

Chair’s Report

32

HMS Alliance

HMS in Action/Hennepin Medical Foundation

Jan/February 2003

MetroDoctors (ISSN 1526-4262) is published bimonthly by the Hennepin and Ramsey Medical Societies, 3433 Broadway Street NE, Broadway Place East, Suite 325, Minneapolis, MN 554131761. Periodical postage paid at Minneapolis, Minnesota. Postmaster: Send address changes to MetroDoctors, Hennepin and Ramsey Medical Societies, 3433 Broadway Street NE, Broadway Place East, Suite 325, Minneapolis, MN 554131761.

OB

MALPRACTICE

In this issue

Medicare Update Consumer Incentives College Planning

New Members of the HMS Leadership Team Hoban Scholarships/Charles Bolles Bolles Rogers Award/In Memoriam

The Journal of the Hennepin and Ramsey Medical Societies

On the cover: A drastic hike in OB malpractice premiums has physicians fleeing Las Vegas.

Will the same scenario happen in Minnesota? Feature article begins on page 6.

January/February 2003

1

LETTERS

Future Restrictions on Physician Practice Editor: I am a physician practicing with Minnesota Oncology Hematology, P.A. (MOHPA), a 28-physician group practice dedicated to the care of patients with cancer and hematologic disease. We have specialists in hematology, medical oncology, gynecologic oncology, and radiation oncology who practice together to provide an integrated multidisciplinary approach to the complex field of cancer care.

Our vision is to meet our patients’ needs by making all the services necessary available within our practice in order to assure coordinated, efficient, and convenient delivery of that care in a way that promotes high quality. We see all patients regardless of their ability to pay, and as such provide a substantial amount of uncompensated care.

Recent events affecting our practice have raised issues that affect all independently practicing physicians in Minnesota. These issues center on certificate of need policies and what has been referred to as “self-referral.”

Although the certificate of need approaches of the past have been largely abandoned as ineffective ways to control costs or improve quality, Minnesota law does require that major capital expenditures greater than $500,000 be subject to “retrospective review” by the Department of Health. Providers failing this retrospective review are then subject to prospective review for subsequent capital expenditures. This means that any capital expenditure greater than $500,000 must then be approved before any commitment is made to such a project. Once imposed, this prospective review requirement remains in effect for five years. For radiation therapy facilities, Minnesota law is even more restrictive – it requires prospective review of any new radiation facility to be built within 10 miles of an existing facility. Hospitals, however, are exempt from these more restrictive review requirements.

This legislation has seriously impaired our efforts to pursue the integrated model of 2

January/February 2003

care we believe provides the best care for our patients. In addition, it has major implications for physicians who wish to provide other services within their practice. Examples that come to mind would include outpatient imaging, outpatient surgery facilities, endoscopy, dialysis and many others.

Another emerging issue at the legislature of even greater significance is that of restricting what has been called “self-referral.” There is a very real potential that our state legislature could enact legislation that would go beyond the restrictions that exist currently under Stark II. Stark II refers to the federal regulations restricting physician referrals to so-called “designated health services” with which a physician has a compensation relationship or in which a physician has an investment interest.

Based on what we have observed at the legislature, there is a definite possibility that additional state restrictions could be put in place that would be more stringent than federal law. Under such restrictions, not only would we not be able to refer a patient to another physician in our group for radiation treatment, but also other physicians would likely not be able to send a patient for an imaging study on equipment owned by their practice, to an endoscopy or dialysis facility in which the practice has an ownership interest, or for a hearing test in the office.

EKGs, echocardiograms, stress tests, colonoscopies, and even lab tests could be restricted. All of the services we have added to our practices that improve quality and convenience for our patients could be in jeopardy. Patients would have to suffer the delays, extra travel, and stress of dealing with a hospital system to obtain these out-patient services; services we know we can provide at less cost while assuring they are the highest quality when delivered under our control.

Taken to the extreme, these restrictions could make it impossible for large entities such as

the Mayo Clinic, Park Nicollet, or our academic centers to function.

We at MOHPA have been severely hampered by the existing restrictions in our efforts to pursue the model of integrated multi-disciplinary care we believe is best for our patients. Should further restrictions on referral within our own practice be enacted, the very survival of our group will be threatened. However, this is not just our issue. The implications for anyone who does anything more than examine and counsel patients in their office are enormous.

The restrictions related to radiation facilities were promulgated initially by another physician group seeking to protect its own interests. While understandable at its inception, the process now has taken on a life of its own. Pandora’s box has been opened.

Without vigorous opposition from physicians, and educational efforts directed at our legislators, legislation and regulations could be put in place that will affect the way most of us practice, and, more importantly, harm our patients.

The precedent that has been set in restricting MOHPA financially and geographically we see as something very dangerous. Physicians all over the state could be severely affected if certificate of need restrictions and limitations on referrals within a practice are allowed to move forward.

Please join with us in working to repeal all certificate of need legislation and to prevent the enactment of so-called self-referral restrictions that will only serve to limit the availability of lower cost services and reduce patient access to care. We ask the medical societies to vigorously oppose these legislative restrictions by taking an official position on these matters, and to urge the members to make their concerns known to their legislators as soon as possible. ✦ Sincerely, Thomas P. Flynn, M.D., President, Minnesota Oncology Hematology, P.A.

MetroDoctors

The Journal of the Hennepin and Ramsey Medical Societies

PHYSICIAN'S SOAP BOX

Medicare and the Practicing Physician

C

CONTINUED DECREASES IN MEDICARE reimbursement are forcing

physicians to make difficult decisions. Medicare payments to physicians were cut 5.4 percent in 2002. Some subspecialties are expected to see cuts of up to 14 percent. Unless new legislation is passed this year, physicians will see an additional cut in Medicare reimbursement of 4.4 percent in 2003. Legislation being considered in Washington would prevent the planned cuts in 2003, and would increase physician reimbursement by around 2 percent in 2003, 2004, and 2005 – increases that would barely keep pace with inflation. This legislation would allow payments to revert back to current reimbursement levels in 2006, which means an 18 to 20 percent reduction in 2006.

The fact that physician reimbursement for Medicare services continues to fall is not the worst part of this unfolding debacle. Much more troubling is that a large part of physician income is being decided upon and set by our elected officials in Washington. The current cuts in reimbursement and efforts to reverse them are products of legislation passed each year; legislation which is subject to the political winds and forces in Congress as well as lobbying efforts of many rich and powerful special interests. Yes, the AMA and many subspecialty societies are lobbying for fair reimbursement in Washington, but this is part of the problem, not a solution. Having the livelihood of physicians subject to legislation passed each year in Washington is untenable and unsustainable.

What are the implications for physicians? It is important to recognize that the Medicare program has been a tremendous boon to the elderly and disabled in this country, providing essential health care to these segments of our society. Without a program like Medicare, many of these people would be suffering, and receiving less health care services. Many would be unable to afford care. Medicare’s problems are not with the provision of care, but with the administration and financing of care. These aspects of the Medicare program must be taken out of Congress and given to a regulating body that is appointed, not elected, analagous to certain other quasi-governmental agencies, such as the Federal Reserve Board for the banking system. Regulation of health care should be the responsibility of appointed officials who are not continually working toward re-election and subject to continued lobbying efforts of special interests.

It is unlikely that this important change will occur in the near future.

Until true reform occurs, what are the realistic options for practicing physicians? Employed physicians do not feel decreasing reimbursement directly, and they have little choice but to leave their employer if their salary falls to unacceptable levels. Independent physicians have more B Y LY L E J . S W E N S O N , M . D .

MetroDoctors

The Journal of the Hennepin and Ramsey Medical Societies

options. For many, especially primary care physicians, when Medicare reimbursement falls to the point where expenses are not covered, they must, by necessity, stop taking new Medicare patients. Somewhere between 17 and 22 percent of family practitioners in this country have already made that change. Physicians have essentially three options regarding Medicare reimbursement: 1) they may be a participating provider; 2) they may be a non-participating provider; or 3) they may be a private contractor.

The participating provider can decide to not take new Medicare patients, but must accept Medicare payments without the option of “balance billing.” Non-participating providers can “balance bill” patients to receive better reimbursement. However, Medicare payments to nonparticipating providers are 5 percent less than payments to participating providers, so the non-participating providers are dependent on Medicare patients’ ability to pay. In addition, many states limit by state law how much physicians can bill, and some states, such as Minnesota, prohibit balance billing altogether, making this option a non-option. The final option, private contracting, is becoming more common. Medicare patients who see physicians who are private contractors cannot receive Medicare payments for physician fees. Therefore, many Medicare patients are financially unable to use private contractors. Physicians practicing on a cash-only basis are using this option for Medicare patients.

An additional option that can be considered independent of these three Medicare options is a practice called “concierge medicine,” where patients are charged an annual fee for extra services, such as access to their physician’s e-mail, 24-hour a day access to their personal physician by phone, same day appointments, appropriate time allotted for appointments, personal involvement of their physician at specialist appointments, and house calls.

While agonizing over these options, should we continue to press for better Medicare reimbursement, when the best that can be achieved is a transient improvement that barely keeps pace with inflation? The time has come to change our tactics and argue for real reform of Medicare. The profession of medicine is being held hostage by the current process of establishing reimbursement for our services. What other profession would allow their livelihood to be decided by legislation passed each year, with that legislation influenced by issues that have nothing to do with the value of that profession’s services? This is demeaning to physicians and is bad for our profession.

The details of budgeting and reimbursement for Medicare services must be taken out of Congress and given to a regulatory board that will make appropriate decisions based on merit and value, not on politics. ✦ January/February 2003

3

Will Congress Act to Prevent Further Medicare Cuts?

I

IT IS WEDNESDAY, November 13, 2002, and

I am reading the New York Times article with the headline, G.O.P. Decides to Delay Spending Bills Till January. The first line reads, “Republican leaders in Congress moved today to put off difficult spending decisions until next year, when they will have control of both Houses.” “What about Medicare?” I ask myself. I read on, growing more concerned that the needed action to halt further cuts in physician Medicare reimbursements will be lost in the late crush of business in this so-called “lame duck” session of Congress. The president’s top priority is the Homeland Security Department which received a strong boost from the latest Osama bin Laden tape.

Other priorities, according to anonymous sources, include government-subsidized terrorism insurance, a revision in the bankruptcy law, and a backlog in nominations waiting Congressional approval. But, no mention of any fix to Medicare was included in the Washington, D.C. story.

There are two bills pending to fix the flawed Medicare payment system, the Thomas/ Tauzin bill in the House and the Baucus/ Grassley bill in the Senate. The need to pass legislation was underscored when the Center for Medicare and Medicaid announced that it would delay publishing the final physician payment rule for 2003. CMS Administrator Tom Scully admitted that new data came to light that caused CMS to question the previous decision on anesthesiology payments. To correct the anesthesiology update, across-the-board cuts would be required in other payments to maintain budget neutrality. CMS will publish

BY ROGER K. JOHNSON, CAE, CEO of the Ramsey Medical Society

4

January/February 2003

the 2003 rule by December 1, 2002. Scully stated that if Congress leaves without making the correction, “It’s going to be bad for seniors and bad for docs.”

Previous errors in estimating the growth in gross domestic product and other factors could result in a reduction in payments for physician services of $30 billion to $40 billion from 2002 to 2005. In January of this year physician reimbursement was reduced by 5.4 percent. One stumbling block is that Congressional budget rules attach a cost to any legislation that will fix the problem. If Congress does not adopt corrective legislation by November 25, 2002, payments in January of 2003 will reflect the scheduled 4.4 percent reduction.

Unless Congress acts this year, Medicare physician payments will be cut by an additional $11 billion nationwide over the next three years.

The cost to Minnesota will be $149 million in lost Medicare payments to physicians from 2003 to 2005. That comes to $12,670 per physician in Minnesota.

Government officials fear that if the Medicare cuts are not halted, access to care by seniors will become an increasingly difficult problem. The Medicare Payment Advisory Commission released a study that found a seven percentage-point drop in the number of physicians taking new Medicare patients from 1999 to 2002. Linked to that finding is that the proportion of practices open to all new Medicaid patients dropped during the same period from 48 percent to 37 percent. Many analysts believe that Medicare payment cuts may cause practices to close the door to Medicaid patients as well.

The American Medical Association reports that its surveys indicate that 24 percent of physicians have placed limits on the number of Medicare patients they treat or plan to instiMetroDoctors

tute limits in the next six months. If additional cuts are implemented, 42 percent of the surveyed physicians said they would not sign or continue a Medicare participation agreement.

A survey by the Medicare Rights Center of 30 states found that beneficiaries in 15 states and the District of Columbia are having trouble finding a physician who accepts new Medicare patients. The American Academy of Family Physicians released a survey showing that nearly 22 percent of family physicians no longer take new Medicare patients.

Physicians have three options to consider when making Medicare contractual decisions.

They are to sign a PAR agreement, which means you are a participating physician; to be a nonPAR physician; or to privately contract to provide services outside the Medicare system. There are many aspects of each option to carefully consider before electing any one of them. The non-PAR option for physicians is also affected

by Minnesota State law. Each practice should carefully review the options and seek professional advice if you are not certain of which option is best for your practice.

By selecting the PAR option you agree to take assignment on all Medicare claims. That means you agree to accept Medicare’s approved amount (80 percent of what Medicare pays plus the 20 percent patient co-pay) as payment in full for all covered services for the calendar year.

The patient or the patient’s secondary carrier is responsible for the 20 percent but the physician is prohibited from billing the patient for amounts that exceed the Medicare allowance.

It is important to note that Medicare participation agreements do not require physicians to accept every Medicare patient who seeks treatment. If you limit the number of Medicare patients in your practice you must not discriminate in any way. There are incentives for PAR The Journal of the Hennepin and Ramsey Medical Societies

physicians. They include a 5 percent higher payment amount than for non-PAR physicians, inclusion in a directory of PAR physicians provided to senior citizen groups and individuals, and toll-free claims processing lines and faster claim processing.

If you are considering a change to nonPAR status, you need to consider that Minnesota State law prohibits non-PAR physicians from billing Minnesota residents above the Medicare approved amounts for PAR physicians. Most states allow non-PAR physicians to bill the patient up to 15 percent above the Medicare fee schedule. When you consider that the limiting charges for non-PAR physicians are set at 115 percent of the Medicare approved amount, but because the rate for non-PAR physicians is 95 percent of the rate for PAR physicians, the 15 percent limiting charge ends up at only 9.25 percent for non-PAR physicians. The effect of Minnesota State law is that it deprives physicians of the ability to bill for that additional 9.25 percent. As a result, there is no advantage to the non-PAR option in Minnesota.

The Balanced Budget Act of 1997 initiated the Medicare cuts and is the origin of the problems with Medicare reimbursements. That Act did include provisions for physicians and

patients to privately contract for health care services outside the Medicare system. However, once physicians opt out of Medicare, claims cannot be submitted to Medicare for a twoyear period. In addition, there are requirements that the physician must file an affidavit that meets strict criteria and is received by the carrier at least 30 days before the first day of the next calendar quarter. Physicians who have never previously opted-out can revoke the optout and return to Medicare during a 90-day period after the effective date of the first optout affidavit. If you are seriously considering this option you should contact the MMA at 612/378-1875 for additional information regarding the affidavit that must be filed.

By the time this issue of MetroDoctors is mailed, the “lame duck” session of Congress will be history and physicians and their practice administrators will either be breathing a sigh of relief (most likely shortened by the economic reality) or they will be forced to consider how they will continue to afford to care for their Medicare patients for the next three years. Only time will tell if Minnesota seniors will be able to access the medical care they need or if they will be forced to seek care at hospital emergency rooms and neighborhood community clinics. It is apparent that the fundamen-

tal problem of low Medicare physician reimbursement will exist even with Congressional action to correct the current physician payment schedule. Hopefully, with continued efforts of the AMA, the MMA, and the Hennepin and Ramsey Medical Societies, we will eventually convince our elected leaders in Washington that senior patients deserve adequate access to their physicians and, in turn, that physicians deserve adequate compensation for the excellent care they deliver to the seniors.

Publication of the regulation containing the 2003 Medicare physician payment schedule was delayed beyond its usual date of November 1. As MetroDoctors goes to press, the regulation is scheduled for publication in early December. In mid-December, Medicare carriers are expected to send a letter to each physician with information about Medicare’s payment rates for 2003 and a Medicare Participating Physician/Supplier Agreement. Physicians are to have from about December 15 to about January 31 to make a decision about Medicare participation for 2003. It is possible that both the date of the carrier’s letter and the deadline for participation decisions will be further delayed. For more information, contact the MMA at 612/378-1875. ✦

Newsflash Tuesday, November 19, 2002

Senate Fails to Act All physician organizations across the nation were angry and disappointed when the U.S. Senate failed to pass H.R. 5063 before adjourning the “lame duck” session. Some Senators opposed taking action based on their belief that any Medicare adjustments should also benefit hospitals and nursing homes. As a result, the Centers for Medicare and Medicaid (CMS) reported that a CMS announcement would be made on December 1, 2002 that the scheduled 4.4 percent reduction in Medicare physician reimbursements would go into effect on February 1, 2003. Slim hope exists for Congressional action to halt the scheduled cuts, however, both the House and the Senate would need to vote to approve a bill after Congress reconvenes on January 6, 2003.

The U.S. House of Representatives passed H.R. 5063 Friday night, November 15. H.R. 5063 included language that provided legal immunity for the Centers for Medicare and Medicaid from lawsuits if the administration corrects past errors in the Sustainable

MetroDoctors

The Journal of the Hennepin and Ramsey Medical Societies

Growth Rate (SGR) formula. The bill then moved on to the U.S. Senate.

The net effect of H.R. 5063 was to throw the ball back into the court of CMS Administrator Tom Scully. CMS would have needed to make the adjustments to the formula to offset the scheduled cut of 4.4 percent in January and the additional cuts in 2004 and in 2005. CMS would have also been able to avoid scoring by the Office of Management and Budget (OMB). With the immunity included in the bill, CMS would have been able to act without fear of lawsuits from physicians seeking damages from the errors in the formula. In order to avoid the budget review process, Mr. Scully never promised to fix the formula, however, the best guess was that CMS would have fixed the formula and the fix would have resulted in a 1 percent increase in physician reimbursement for 2003 rather than a 4.4 percent reduction. ✦

January/February 2003

5

FEATURE STORY

OB Malpractice What Can We Learn?

P

“This isn’t so much about when doctors are leaving anymore.

It’s about the doctors who are left and how many patients we can safely handle.”

PICTURES PACK A WALLOP. Who isn’t either chilled, or cheered, by the “perp walks” staged by prosecutors to humiliate and punish corporate officers who have been accused of defrauding shareholders and companies of millions of dollars by their accounting trickery or misapplication of funds? Another recent news image haunts me, however. It too is a walk, but it is a tearful walk out of a shuttered office by a Las Vegas obstetrician, forced by a sudden and calamitous malpractice premium hike to abandon her obstetric practice and her obstetric patients for another state. How could such a thing happen?

Could it happen here in Minnesota? Is this simply News Hour sensationalism, or might it foreshadow a new and frightening norm?

Let’s hope that that vignette from Las Vegas doesn’t represent a snapshot of our future. According to a Medical Liability Monitor survey of malpractice rates as of July 1, 2002, for a mature claims made policy of $1 million/$3 million (the minimum coverage required by most Minnesota health insurance companies), the annual rates quoted by the three companies writing for Ob/Gyn in Clark County (where Las Vegas is located) were $93,151, $107,994, and $141,760.1 These represented increases ranging from 31 to 49 percent in a single year. For an obstetrician doing 100 deliveries/year (the national average), the figures translate to $931 to $1,418 per delivery. That’s just for malpractice insurance alone! You can do the math if you, God forbid, had to amortize that premium over fewer than 100 deliveries/year.

The situation in Las Vegas is particularly grim. While attending a conference there in late October, I picked up a local newspaper. The headline for the October 28 edition of the Las Vegas Review-Journal: Obstetrician exodus causes concern. According to the article, “most area hospitals have lost dozens of obstetricians since the beginning of the year, and some are seeing an increase in the number of women giving birth in emergency rooms without ever having prenatal care.”2 Leave it to hospital administrator Allan Stipe of Sunrise Hospital and Medical Center to put it into numbers we all can relate to: “We’ve lost 43 obstetricians since the beginning of the year due to the medical malpractice issue. That’s huge. It’s gravely concerning, considering we’ll have 23,000 babies to deliver in the next 12 months. The hospital now has 53 obstetricians left to deliver babies.” That’s a loss of 45 percent of one hospital’s OB staff in a single year - and still counting.

Understandably, the increased load of responsibility and work worries the remnants of the staff remaining even more directly. According to obstetrician John Martin, “This isn’t so much about when doctors are leaving anymore. It’s about the doctors who are left

BY RONALD J. PETERSON, M.D.

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January/February 2003

MetroDoctors

The Journal of the Hennepin and Ramsey Medical Societies

and how many patients we can safely handle. When we can’t handle any more, where are those women going to go?” The primary clinical concerns from an obstetrician’s view are unrecognized and untreated preterm labor and pre-eclampsia and the well-documented costs to the system that these conditions represent. According to NICU director Dr. Philip Riedel, “We are full with very sick kids, and it’s safe to say that, if you have no prenatal care, there’s a greater likelihood your baby is going to end up in the intensive care unit.”

What about the situation here in Minnesota? Fortunately, for the time being at least, the crisis has not landed here yet. According to David Bounk, the CEO of MMIC, formed by the medical societies and one of the largest providers of malpractice insurance in Minnesota, we can look for an overall increase of just 5 percent in rates for 2003 over Severity of Paid Claims 2002. This is on top of an 8 percent increase for 2002 over 2001. The average 2002 rate 1997 $181,000 for a mature $1 million/$3 million claims 1998 $187,000 made policy for an OB/Gyn was $17,431/ year. For 2003, it will be $18,307. This com1999 $175,000 pares to an annual rate in 1997 that was 2000 $241,046 $18,075. Rates have been fairly steady in 2001 $252,905 Minnesota over the last five years.

2002 Holding, small What has made Minnesota unique? Acincrease cording to figures provided by Mr. Bounk, claims payouts have basically been steady for MMIC since 1997. Though there has been an unsettling increase in the severity of paid claims, from $181,000/claim in 1997 to almost $253,000 in 2001, there has been an accompanying decline in the number of cases filed in all specialties from 8/100 doctors in 1997 to 5.4/100 doctors in 2001. In addition, almost 64 percent of claims have been closed with no payment.

Are we good, or are we lucky? Probably, so far, a little bit of both. According to Mr. Bounk, the standard of medical care practiced here in Minnesota is among the highest in the United States and, if mistakes have occurred, they have generally not been egregious.

In addition, the local bar has generally been responsible as well. Lawyers have not brought bad cases forward. It is unclear whether this has been out of a sense of community responsibility or because of the knowledge that bad cases will end up inevitably in a courtroom, because of a company policy not to cave for unwarranted claims. There are some state policies and procedures which also help. Though there are no monetary caps on awards in state law, punitive damages cannot be included in the original filing of a case and an attorney must make a case to the judge that there is “clear and convincing evidence” supported by the facts of the case for punitive damages to be sought. Also, for a

What about the situation here in Minnesota?

Fortunately, for the time being at least, the crisis has not landed here yet.

(Continued on page 8)

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The Journal of the Hennepin and Ramsey Medical Societies

January/February 2003

7

Feature (Continued from page 7)

case to be filed, an expert witness must file an affidavit that the case has some medical merit. Mr. Bounk also takes a great deal of pride in the efforts of MMIC to promote effective risk management for covered entities and practices.

For local payers, HealthPartners and Medica, the steady local malpractice rate climate has kept these potential reimbursement issues at a level of minor importance as plans have wrestled with the cost increases of medical care generated by aging patients and increasing technology. Neither has any specific plan to deal with evaluating reimbursement levels should a sudden malpractice rate spike occur here in Minnesota. A HealthPartners representative expressed confidence that a process could be quickly assembled to address a specific specialty situation should that arise.

Medica official Dr. Ted Loftness acknowl-

edged a concern about malpractice and generally increasing practice expenses in general. Blue Cross/Blue Shield, with its affiliations with the BC/BS Plans of other states, who have serious current malpractice premium issues, has had a much clearer sense of the potential impact that malpractice premium increases have had on the viability and survival of providers in other states, and their Office of Clinical Affairs has produced an excellent analysis published in September 2002 entitled: Medical Malpractice Insurance: An Unstable Market.

Indeed, if we leave our own pocket of relative, temporary isolation, it would appear that our national system of malpractice insurance is broken and careening out of control like an SUV with a blown tire on an Interstate. The American College of Ob-Gyn has declared a Red Alert Status in nine states where there is a particularly serious crisis of declining care access due

to malpractice insurance rates: Florida, Mississippi, Nevada, New York, Pennsylvania, Texas, Washington, and West Virginia. The situation in Las Vegas today may represent an end game to which we all, even here in Minnesota, may be headed. ACOG warns of a number of important consequences: less prenatal care, shorter visits and longer waits, less gynecologic surgery, less preventive health care, and less training in women’s health.

The inevitability of the scenario seems preordained by the intransigence of the many stakeholders who seem only to be capable of acting in their own self interest with little heed to the consequences of their actions on the other stakeholders in the system. There are two very powerful motivators that drive the stakeholders’ intransigence and prevent a reasonable solution: Money and Fear.

For doctors, ultimately, it’s a simple economic equation. Reimbursement lev-

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els from health plans here in the metropolitan area, for example, are and have been, flat for six or seven years despite steadily increasing costs of salaries, supplies, and space. Medicare fees have been cut.

Adding insult to injury, malpractice rates also figure less significantly than formerly in equations of practice expense calculations.3 Insurance plans, focused primarily on their own competitive priorities, have been unresponsive thus far, and physicians have been constrained from organizing themselves to make the case for increasing fees to them in a powerful collective way.

An increase of $50-$75K/year in a single year for malpractice insurance causes sufficient financial hardship to force many physicians to confront bitter choices of retiring, moving, or quitting either obstetrics or medicine altogether.

So it is for malpractice insurance. An insurance company estimates expenses, factors in an acceptable risk and the desired return, and then calculates the premium necessary to generate those returns.

They have no particular moral imperative to concern themselves about the necessity or importance of maintaining a viable system of medical care. There is no consideration of consequences. They answer to stockholders and the marketplace. Survival is simple mathematics.

In fact, there are increasing expenses for malpractice insurers. The number of malpractice cases filed continues to increase. This varies widely by geography, but is particularly true in many large metropolitan areas and in several particular states.

The levels of awards by juries continue to grow at even a more rapid rate.4 Though the number of successfully prosecuted cases hovers at a steady 38-40 percent of cases, the costs of defending those cases is also rising. Reinsurance rates for large claims have increased dramatically since the widespread losses following September 11.

There were, in addition, actuarial miscalMetroDoctors

culations made during the 90s, as the very high award amounts were judged by planners (then in the midst of a highly competitive market) to be temporary, rather than targets for further and larger awards.5 Then, of course, there is the stock market.

Those investment miscalculations have eroded the levels of reserves so that premiums must both cover anticipated losses and replenish that financial corpus.

For payers, be they health insurance companies, large employers, or individual patients, it is also simply economics. The escalating cost of malpractice insurance is but another mysterious component of a black hole of frightening increases of medical care costs that they already cannot afford. We practitioners are also employers, and annually have come to understand the pain other employers feel when we renew our own health insurance plans. Other employers share our economic distress in a competitive marketplace. They care little for the details and rationales that demographically and actuarially justify these increases. Patients don’t have a clue. Accustomed to having someone else take care of their health care economic problems, they simply want someone else (their employer, their insurance company, or the state) to fix it so that they can get what they have always been able to get before without any increase in out of pocket expense.

Lawyers, of course, have a different perspective. The flaws of the malpractice system are not rooted in the astronomical costs of the malpractice system, they contend. They are rooted in the widespread incidence of malpractice. Let’s run through their analysis, however, and allow you to be the judge as to whether economics doesn’t confound a rational solution here as well.

There is no question that medical error is all too common. The 1990 Harvard Medical Practice Study and the 1999 IOM

The Journal of the Hennepin and Ramsey Medical Societies

report To Err is Human: Building a Safer Health System provide ample documentation of the high incidence of medical error and its high financial and human cost.

Unfortunately, the current tort system simply does not accomplish its stated aim as lawyers themselves express it: reprimanding and punishing incompetent providers, protecting injured patients’ rights, and deterring negligent and incompetent health care. 6 On the contrary, the current tortbased malpractice system distributes funds very inefficiently and, further, acts as an impediment to achieving meaningful improvement in medical care quality. According to Robert Gilmore, Deputy Executive and Vice President of the AMA, “Data shows that the major driver of increased liability cost to the ‘system’ is not an increased volume of settlements, but higher settlement amounts per individual case.”7 It is those lottery-sized jackpots that are at the root of the problem. In addition, according to the Health Care Liability Alliance, only 43 percent of award amounts overall go to injured plaintiffs.8 Finally, those jury awards reflect an overall success rate of only 38 percent during the year 2000.9 Nonetheless, the costs of defending the other 62 percent add in an increasing way to the costs of the entire tort system. The Harvard study found that only one of every eight medical incidents resulted in a claim of malpractice.10 It really is a lottery in every respect.

Elimination of medical errors must be a high priority in everyone’s interest. To achieve this, the IOM’s Committee on Quality of Health Care in America believes that “our health care culture needs to be transparent, open, safe, and honest about its defects in order for patient safety to improve.”11 It can never be, however, without tort reform.

(Continued on page 10)

January/February 2003

9

Feature (Continued from page 9)

Concrete suggestions at tort reform from many sources take direct aim at limiting the large awards (and very large contingent fees) of these small number of cases.

These suggestions were recently summarized in a very comprehensive analysis published by Blue Cross and Blue Shield of America in September of 2002:12 • Caps on non-economic damages; • Modifications to statutes of limitation; • Administrative modifications such as mandatory arbitration or mediation; • Pre-trial screenings and stricter peer reviewed certifications of merit; • Stricter expert witness qualifications; • Abolition of joint and several liability; • Elimination of collateral source rules; • Judicial review of jury awarded damages and determinations on just value of awards;

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January/February 2003

•

Periodic payments of awards and settlements rather than lump sum payment; • Limitations on attorney fees; • Replacing jury trials with health care tribunals; and • No-fault compensation systems, such as those in Sweden and Finland.

Solving these mutually incompatible economic equations has thus far proved impossible. To make matters worse, when we add the emotion of fear, the necessity for a radical new approach to this vexing problem becomes clear.

Fear? The specter of a financially and emotionally devastating lawsuit hovers over every one of us, dogging every decision we make and every conversation we have. Our families, our reputations, our pride, our financial security are each at risk in all that we do. The reaction to that risk is a very personal one. One particularly disturbing preliminary piece of data from an ACOG Liability Study is that 30 percent of female obstetricians who have been successfully sued have discontinued obstetric practice.

The potential of that, if generally found to be true, would be hard to comprehend.

Fear? Malpractice insurance companies, even the largest, like the St. Paul Companies, get out of the malpractice business altogether. Health insurance companies navigate carefully between employers and providers, hoping ultimately to maintain the economic health of each at least at a level sufficient to be able to maintain each as customers.

Fear? For patients, access to a physician in a time of crisis or extreme need is akin emotionally to one’s instinct for survival. The need for protection of that right and that choice is felt viscerally by all.

Threaten that access only at great peril.

The system for redressing medical error has achieved gridlock. Gridlock, according to Peter Senge in The Fifth Discipline: the Art and Practice of the LearnMetroDoctors

ing Organization results when individual actors continue to behave as if they were independent of everyone else. Does that not currently define our system of malpractice? And how do we move out of gridlock?

First, all the individual groups must begin to define the problem in a similar fashion.

That has not yet begun to happen. Each party still tends to define the problem in a linear fashion, blaming primarily one party to the system or another. The notion of a true definition starts to coalesce when each of the interested parties start to understand the consequences of continuing to ignore the problem. It is in that sense that the crisis in Las Vegas perhaps may be a useful step to achieving a comprehensive solution to medical error. We start to see the consequences to the system of continuing to ignore the problem: the loss of the capability for providing any medical care, whatsoever.

Each party must begin to focus on the goal to which we all subscribe: building a medical system which is free of predictable medical error. ✦ Ronald J. Peterson, M.D., practices obstetrics and gynecology at John A. Haugen Associates, P.A.

1 Trends in 2002 Rates for Physicians’ Medical Professional Liability Insurance, Medical Liability Monitor, October, 2002, p. 9.

2 Babula, Joelle, Obstetrician Exodus Causes Concern, Las Vegas Review-Journal, October 28, 2002.

3 Medical Malpractice Insurance: An Unstable Market. A Blue Cross Blue Shield Association Analysis, Office of Clinical Affairs, September, 2002, p. 15.

4 Shannon, Jennifer and Boxold, David. Medical Malpractice: Verdicts, Settlements and Statistical Analysis. Jury Verdict Research. 2002. LRP Publications.

5 Medical Malpractice Insurance: An Unstable Market, p. 9.

6 Albert, Tanya, Trial Lawyers Give Theory on Rising Liability Rates, AMNews, February 18, 2002.

7 Medical Malpractice Insurance: An Unstable Market, p. iii.

8 How Patients and Doctors are Suffering While Lawyers Profit from Litigation, hcla.org.

9 Jury Verdict Research-News Release, March 22, 2002.

10 TA Brennan, et al., “Incidence of Adverse Events and Negligence in Hospitalized Patients,” New England Journal of Medicine, 324. No. 6, (1991).

11 Institute of Medicine, Crossing the Quality Chasm: A New Health System for the Twenty-first Century (Washington: National Academy Press, 2001).

12 Medical Malpractice Insurance: An Unstable Market, p. iv.

The Journal of the Hennepin and Ramsey Medical Societies

Consumer Incentives to Address Cost Increases Editor’s Note: In December, 2001, Governor Ventura and legislative leadership convened the Joint Task Force on Health Care Costs and Quality (JTF). The purpose was to “address the underlying issues affecting the cost and quality of health care in Minnesota.”

Membership on the JTF included agency commissioners and legislators. Several workgroups were also created which, in turn, created subwork groups. In late summer, 2002, JTF Chair and Health Commissioner Jan Malcolm abruptly suspended the JTF’s work, citing conflicting schedules. The draft report of a Consumer Engagement sub-workgroup then became orphaned. The convenor of that group, Liz Quam Berne of AMOM, has shared with us this final draft.

T I.

PURPOSE OF DISCUSSION

The Joint Task Force’s (JTF) Cost Drivers Workgroup has identified consumer incentives as a potential, if partial, strategy to address continued cost increases. This may be based, in part, on phrases du jour such as “cost-sharing” and “patient accountability” or even “consumerdriven health care.” However, it may be an appropriate strategy because of the data that indicates increased utilization by patients throughout the health care system.

Additionally, there are indications in the statewide marketplace that a growing number of consumers are interested in having more involvement with their health care purchasing decisions. An example of this interest was demonstrated by the changes made unanimously by the 2002 Legislature to the HMO demonstration language, allowing more community-focused involvement in health care product design and funding.

The subgroup concluded it is a worthy activity to diligently look at possible and practical MetroDoctors

ways to foster the development of more consumer incentives that encourage wellness as well as prudent use of health resources.

II. THE POTENTIAL FOR (AND LIMITATIONS OF) INCENTIVES

The subgroup decided it first needed to define what incentives can and cannot do, arriving at the following conclusions: Consumer cost-shifting Example: Higher deductible or larger co-pay for the consumer.

The group raised a cautionary note that the design of an incentive is not just a cost-shift to the consumer without affecting overall cost trend.

For some consumers, financial incentives in the form of increased cost-sharing may only transfer the cost from the employer to the employee without having an effect on the underlying cost trend because consumer behavior doesn’t change. Such cost-sharing will then show up as a one-time blip in the upwards spiral of overall health care costs. The worst case scenario is if cost-sharing increases the overall trend because of an increased delay in care. For example: a 27 year old male, with a $500 deductible, delays his annual physical despite intermittent abdominal pain to avoid out-of-pocket expenses.

Result is $30,000 in antibiotics and another $30,000 in surgery and hospitalization for the ruptured appendix.

System cost-shifting Example: Someone without insurance may seek emergency room services for a condition that may have been more efficiently treated earlier, if there had been access to a primary care provider.

Consumer incentives must be designed so that costs aren’t shifted but instead designed to incent the most efficient use of health resources.

The Journal of the Hennepin and Ramsey Medical Societies

The subgroup recognized that there are costs to the health care system that could more appropriately (e.g., less costly) be addressed elsewhere, such as the health care system being used as a social stimulant by some elderly as well as the issue of mental health services that could be reduced or avoided if the exacerbating situations are alleviated.

The design of consumer health incentives must be done with a sensitivity to other social system components to allow for better overall use of resources and avoiding expensive costshifts. This may require social program funding (Continued on page 12)

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January/February 2003

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Consumer Incentives (Continued from page 11)

reforms and will certainly require public officials to understand the relationship between health care costs and other human services.

Consumers in “active disease” are “price-insensitive” Example: Parents who have a child with leukemia, in “blast” stage, will sell the cars, mortgage the house and sign whatever financial commitment is put in front of them while demanding all available health services for their child.

The group did not believe this stage of disease is the appropriate target for consumer financial incentives, despite how costly these situations are. Indeed, most consumers “invest” in health care coverage to avoid the financial risk of this situation. [Note: incentives to encourage providers to develop “centers of excellence” which specialize in treatment of certain diseases may be appropriate for this expense category.]

End of life decisions Example: Does the family continue aggressive and experimental chemotherapy regimens or move their very weak loved one to hospice care?

Neither did the subgroup believe it is appropriate for consumer financial incentives to

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January/February 2003

be designed to focus on end-of-life situations, even though it is estimated that as much as 24 percent of the health care dollar is used in this way. Again, the group believed the very purpose of insurance, coupled with general cultural norms, prohibits policymakers and the health industry from targeting these expenses.

Chronic conditions and managing risk factors Examples: diabetes, heart conditions, asthma, some types of arthritis, etc.

The cost of treating consumers with chronic conditions may encompass as much as 65 percent of our total health care dollars. It is readily apparent to the subgroup that reducing chronic condition risk factors through education and lifestyle changes as well as managing active, chronic conditions is where consumer financial incentives may be the most appropriate and productive.

Further, and possibly more important, reducing the risk for developing a chronic condition has the added benefit of encouraging wellness in this population.

Information for the consumer Example: Understandable information on risk factors and differences in cost and quality of a particular health care service.

Information is key if consumers are to become more engaged and develop an understanding that the health care dollars spent are their dollars and for these consumers to be encouraged to begin to manage these dollars as they would other financial investments while also meeting personal health goals which allow optimal wellness – thereby protecting their financial investment.

This means the consumer needs to be an active participant not just with the financial choices in health care but also be an active participant in disease management and health risk reduction.

It also means that the information that is key for consumer involvement must include information on such categories as: • Costs; • Personal risk assessment; • Healthly lifestyles, including nutritional and exercise information; • Prescription drug realities of FDA approval process, generics, etc. (e.g., “newest or most MetroDoctors

• •

expensive doesn’t necessarily mean better”); Disease Management and/or risk reduction for themselves/loved ones; and Quality measures and satisfaction data on health plans, individual providers, facilities and procedures.

III. INCENTIVES WHICH EXIST OR ARE BEING DEVELOPED

The subgroup then looked at what incentives already exist and which could possibly target consumer financial and wellness decisions.

Fear/personal experience This incentive is probably the biggest motivator to change some consumers’ behavior, whether it’s fear of having to visit a doctor, pay 20 percent of a hospital bill, developing colon cancer (as has a family member), or having another heart attack.

Risk aversion is also one of the only effective motivators for “keeping” young, healthy adults in the insured population, when the employer is not sponsoring 100 percent of the coverage. Based on state statistics, it is obvious a more effective incentive must be developed or we will continue to struggle to retain this valuable part of the insurance pool. [Note: the subgroup thought the issue of retaining young, healthy adults in the insurance pool is bigger than its charge or that of the full Cost Drivers workgroup – although losing the healthy population to the insurance pool is certainly a cost driver. The group therefore recommended the issue definitely be addressed somewhere within the JTF structure.]

By “order” of the doctor Some data indicates that pointed/direct orders from a physician–such as “you must stop smoking or you won’t live to see your son graduate” or “I want to see you back here in six months and 10 pounds lighter” as well as positive feedback such as “keep it up, you are doing great”– motivate many consumers to change health behavior–in the process, saving health care dollars.

Legal penalties Fear of a ticket has been verified as a way of changing risky behaviors, such as seat belt usage and drinking/driving. Secondarily, it also has been effective in inhibiting sales of nicotine to minors. While not reflected in health care ex-

The Journal of the Hennepin and Ramsey Medical Societies

penditure pie charts (see System cost-shifting on page 11), legal penalties are costly to administer and cost-based analysis often would not indicate an overall cost savings; rather these penalties are imposed when society agrees that such a penalty is appropriate based on many values, not just health care dollar expense.

Health/wellness Some consumers are motivated by wanting to maintain optimal health or prolonging their life and, therefore, they avoid risky behaviors. Again, information is key. The subgroup also made the observation that the consumer demand for health/wellness information is growing and the market is responding–from the internet to magazines to restaurant offerings. Much of this information appears to be targeted at the baby boomer generation.

Image Some consumers are motivated by wanting to achieve a certain image and therefore they avoid risky behaviors, such as overeating. Smokers at the workplace now vs. 1950s movies and recent anti-tobacco ads targeted at young people are examples of how image-motivation can change.

There are many other examples.

Active participation in case management Some patients are incented to follow a disease management program (e.g., diabetes, cardiac care, psychotropic medication regimen) but it is not as well documented as to why: optimal health? continued monitoring/support by health care personnel? doctors’ orders? fear/risk aversion? lack of financial resources for hospital? The group believes case management may be an appropriate target for creative efforts to design effective consumer incentives. Obviously, the financial consequences are significant.

Discounts Sane people will spend an inflated amount for a cup of gourmet coffee but refuse to purchase a certain breakfast cereal without a 25 cent coupon. Consumers respond to buying incentives and this may be an area for investigation. For example: HealthPartners 10,000 steps program to promote physicial activity includes a pedometer valued at $29.95, but the entire program (including motivational and planning materiMetroDoctors

als) is only $20.00 for HealthPartners members.

Over 15,000 people are now participating in the 10,000 steps program. One of the two top reasons for joining the program was “the pedometer.” The other was health.

Consumer-direct financial impact As indicated in the market in general, consumers respond to price differentials. This has been most effectively illustrated in the health care market recently with price differentials for drugs, sometimes through a “tiered” approach of high and low co-pays. In general, consumers will respond if they have information on price differences and a choice that will affect their pocketbooks.

Financial avenues for the consumer to begin “managing” and “recognizing” that the health care dollars are finite probably can’t be done without a direct-impact financial reward for positive behavior. Over the past few years, several designs have been proposed to create direct-impact incentives. Many of these employ a “defined contribution” by the employer.

Benefit designs are currently being offered that take a “tiered” approach with financial incentives. Employers can purchase a level of benefits for their employees who then have the option to buy – with their own dollars – additional benefits (e.g., reducing co-pays by paying a higher premium) or buy access to a larger provider network. In this way, consumers have a direct financial impact in choosing the benefit level of their health coverage.

Taking the Defined Contribution model even further, several “Patient Incentive Account” designs, such as Medical Savings Accounts (MSAs) and flex accounts (Section 105s) are now being marketed. In these types of plans, if the consumer does not use all of his/her allotted health care dollars during the course of a year, the employee can roll the remaining dollars over to the next year. These dollars then become available for future health care needs, including long term care insurance, COBRA benefits, etc. This type of plan includes management and ownership for one’s own health care expenses, exaggerating the direct financial impact of health care decisions. This direct financial impact may inhibit consumers use of health care dollars and may encourage them to lead healthier lifestyles (e.g., to avoid getting

The Journal of the Hennepin and Ramsey Medical Societies

bronchitis or a sinus infection again or possibly to manage a chronic condition more aggressively). Policymakers want to watch closely to assure consumers are not avoiding preventive care (e.g., “well baby care” or annual physicals).

No data is complete on the assumption that Patient Incentive Accounts will accomplish the goal of more careful consumer use of health care resources but anecdotal information is encouraging regarding the initial efforts now underway.

Financial Incentives for Maintaining Optimal Health The subgroup concluded that there is much more work and creativity that can be applied to designing new incentives that incorporate a financial incentive for maintaining optimal, individual health, emphasizing that optimal health is different for each person. The group recommends that this area be pursued with a general openness by public agencies and the health care marketplace, both in terms of regulatory flexibility and sharing of information on what is working throughout the state and elsewhere. ✦

Recruit Your Colleagues Do you have a colleague that you feel would benefit from becoming a member of Hennepin or Ramsey Medical Societies?

Would you like some information about incentives for recruiting new members?

Call Susan Schettle, Director of Marketing and Member Services for Hennepin and Ramsey Medical Societies.

612-623-2889 or e-mail her at sschettle@metrodoctors.com

January/February 2003

13

COLLEAGUE INTERVIEW

Macaran A. Baird, M.D., M.S. Editor’s Note: Macaran A. Baird, M.D., M.S. currently serves as the Professor and Head, Department of Family Practice and Community Health, University of Minnesota Medical School. Dr. Baird received his medical degree from the University of Minnesota and completed his family practice residency at Bethesda Lutheran Hospital in St. Paul.

In addition, he holds an M.S. degree in Environmental Health and an M.S. Degree-Major-Family Practice and Minor in Counseling, all from the University of Minnesota. Previous professional positions and appointments include: Medical Director, Mayo Management Services, Inc., Rochester, MN; Professor, Dept. of Family Medicine, Mayo Medical School; Associate Medical Director for Primary Care, HealthPartners; and Co-Director, Human Sexuality Program, SUNY Health Science Center at Syracuse and Syracuse University.

Q A

Now that you’ve completed your first 100 days as department head, what are some of your impressions and ideas?

Since arriving at the University of Minnesota July 1, 2002, I have been meeting with faculty, staff, residents, students, community physicians, hospital administrators, and leaders of the University’s Academic Health Center (AHC). The Department of Family Practice and Community Health is large, with seven affiliated family practice residencies, a growing research program, extensive responsibilities for medical student education, the Program in Human Sexuality, and evolving links to the Duluth campus. The complexity and geographic span of the department is impressive. I have observed our multiple clinic practices affiliated with our department and participated in teaching conferences on a limited basis.

As department head, I have also assumed my responsibilities as chair of the UCare Minnesota Board of Directors. I have also visited a few rural practices where we have major teaching activities. In all of these interactions, I have observed that our faculty, staff, residents, and students are eager for me to set a direction for our collective efforts and are eager to contribute to the overall success of the department.

I am impressed not only by the size and scope of the department but also by our outstanding faculty and staff and those affiliated with us.

I am convinced that by working together we can meet the challenges ahead. Beyond the classic budgetary struggle, we face the overall challenge of reinvigorating each other, re-defining primary care to match the needs of populations with both acute and chronic health problems, and re-energizing medical students about the exciting careers in family medicine. Such themes will keep me busy in the foreseeable future.

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January/February 2003

How do you see the role of family physicians evolving in the next five to 10 years? In what ways do you think family practice residency programs should adapt to meet these needs?

Each medical specialty is evolving and challenging its leaders to declare a new and more secure direction. Family medicine is no exception. A national program entitled “The Future of Family Practice” is addressing this challenge. This program is a million-dollar effort sponsored by the major family medicine educational and practice organizations in our country. The process will include a national survey of physicians, patients, health plans, and economists to determine our specialty’s future.

My own perspective is that, in the future, family physicians must be more effective in: 1) managing patients’ chronic illnesses; 2) interacting effectively with teams of nurses, pharmacists and health educators; and 3) utilizing population-based approaches for determining quality and effectiveness. We have joined other primary care specialties in advancing our skills in patient interviewing beyond taking histories to “motivational interviewing” as a means to help patients change long-standing behavioral patterns or lifestyles.

Our residency programs must shift the focus from acute care toward more effective longitudinal care for patients with chronic illness. I believe we will also evolve toward extended elective training for those trainees who want to do more extensive skill and knowledge development in sports medicine, geriatrics, in-patient care, and women’s health care including pregnancy care. We already have fellowships in some of these areas as well as in public health and health services research. We need to create these added months or years of training opportunities in cost-efficient ways to enhance private practice or academic opportunities. Geriatric fellowships, for example, add depth to family physicians’ or internists’ skills, but improved income does not easily follow. Improved MetroDoctors

The Journal of the Hennepin and Ramsey Medical Societies

income for geriatric providers may develop eventually as the need for skilled care for our aging population becomes even more painfully obvious. It is unfortunate that it does not exist now for most geriatric clinicians. Such options for added training for family physicians are among the larger questions being addressed by “The Future of Family Practice” program. In the near term, however, there is no plan to add required time to the three-year family practice residency.

Many young physicians are completing medical school and opting for part-time work. Do you have a feeling for how often this is happening, and what does it mean for manpower projections and planning for training programs?

Indeed, more and more physicians in most specialties are working less than full-time. I have been at several large institutions where slightly over 30 percent of physicians do not work full-time. The reasons are complex but include: desire for a more balanced life, dual-professional households, and the reality that many full-time physicians in all specialties routinely work 50+ hours each week. My generation thought this was normal. However, our younger colleagues may have a better model of how to balance professional, personal, and family commitments. Obviously, this puts pressure on our nation to find alternatives to our current model of providing health care. The old model was more efficient in the short-run by expecting many years of extraordinary commitment from physicians, sometimes at the expense of our own mental, physical, and family health. I presume we will find ways to use multi-professional teams, technology, and self-care to maintain and restore health to our patients without demanding so much from our physicians. Eventually, this would be a much better solution. Our current model creates scapegoats when care is disappointing. A more systematic approach to health services would generate fewer scapegoats and move toward increased individual responsibility for self-care. The Institute of Medicine report “Crossing the Quality Chasm” points in this new direction.

Now, or very soon, we are facing a severe shortage of physicians in primary care and many specialties. What can the University do to alleviate this?

This week I received updated information that there are more than 100 family physician vacancies in Minnesota. As our population ages and increases in size, and we persist with our current models of care, there may be an impending shortage of many kinds of physicians. It seems unlikely that we have the resources to increase the number of admissions to medical school (as we did 25 years ago) or expand some currently shrinking residency programs. Five years ago I was a member of the Council on Graduate Medical Education (COGME) in Washington. The major concern we faced was a surplus of physicians. Currently, there are local and national debates about a shortage. However, a significant degree of our current workforce shortfall is influenced by our prevailing reimbursement models, our physician-oriented care models, and our professional interests in defending our individual and collective incomes. We need to MetroDoctors

The Journal of the Hennepin and Ramsey Medical Societies

find a better solution. We cannot provide quality care, balance our lives, and be self-sacrificial all at the same time.

The University and other health care system leaders can help address these challenges by collaborating across the boundaries of payers, providers, and educators to test new models of team-based care, telephonic care, e-mail visits, and community-based health care resource enhancement.

I am eagerly promoting small experiments in the management of medically minor but common illnesses by nurses using physician-approved protocols. For years, such protocols have existed for management of simple urinary tract infections in healthy females. Now we need to test these models on other acute illnesses such as sinusitis, conjunctivitis, and low back pain. However, once we demonstrate safety and effectiveness, we must work toward fair payment schedules for this type of health care delivery. Such changes would eliminate the need for thousands of office visits, reduce travel costs, decrease parental time lost from work, and decrease demand for physician-based office visits. Using these methods, fewer primary care physicians could provide care for a significantly expanded number of patients. Movement in this direction depends as much on changing payment models as it does changing clinical care models.

Do you see a continuing public/private partnership to train qualified physicians?

There has always been a public/private partnership to train qualified physicians. Most residency programs rely heavily on volunteer, unpaid community clinicians to provide a balanced training experience. Medical schools across the country depend on voluntary preceptors for students as they seek an understanding of the “real world” of medicine. An outstanding example of such a partnership with community physicians, hospitals, and patients is the University of Minnesota Rural Physician Associate Program (RPAP), in which third year medical students spend nine months in a rural Minnesota preceptorship with periodic visits from appointed University faculty. I participated in RPAP when I was a University medical student and developed a replica of the program 13 years ago when I was at Upstate Medical University in Syracuse, New York. A parallel option for urban areas, Urban Community Ambulatory Medicine (UCAM), currently exists and could be expanded.

This partnership also must include those who pay for health care services. In the United Sates, employers or the government ultimately pay for up to 80 percent of health care costs. Much of this is derived from taxes and reduced salaries for employees. Physicians often call insurance companies the payers, but they usually only administer health care benefits and tabulate the costs so that employers can try to understand it. In the end we are all payers. With that as background, I can add that as a member of COGME, I was among those who recommended an “All Payer” policy for funding medical education. Currently, only Medicare has specific (and shrinking) funding related indirectly to medical education. In the future, I would recommend that all health insurance (Continued on page 16)

January/February 2003

15

Colleague Interview (Continued from page 15)

share in an explicit tax for medical education. That would make our partnership explicit and help define goals and public strategies for medical education and workforce requirements for a balanced delivery system. If such a major change occurred, I would also recommend that community physicians who teach students or residents receive a slight increase in payment for clinical services. Since rotating off COGME, I have not given up on such policy changes but realize it will not happen soon. Minnesota would demonstrate courageous leadership if we joined other states in testing such concepts.

Professional and lay publications have noted significant unmet mental health treatment needs in our general population. Lack of adequate clinical psychiatric specialists seems to place this treatment burden on primary care specialties. What plans or recommendations do you have to increase proficiencies in mental health care in family practice residents to accommodate the need?

I have long been a champion of increased collaboration between mental health and medical providers. There is much evidence that psychosocial issues arise frequently in primary care offices and hospital practices. The reality is that the primary care workforce is the source of mental health care for the majority of Americans. In many well-studied populations, visits for mood disorders are the second or third most common reason for an office visit. We must prepare our graduates to deal successfully with that reality. For many years psychologists, psychiatrists, and social workers have been a basic part of the clinical and teaching teams within our University affiliated family practice residencies. In fact, that is true for almost all family practice programs. We will continue to improve the knowledge and skills of our residents regarding mental health issues.

However, it is common that graduates enter practices where mental health services are carved out of provider teams and payment schedules thus blunting the graduates’ abilities to continue to provide balanced, on-site bio-psychosocial care. My continuing recommendation to graduating residents is to seek practices in which family therapists, psychologists, and/or social workers are part of the on-site practice team. Ideally, a psychiatrist should also be available for support, supervision, and care of unusually complex patients. By improving clinic-based care teams, using nurse care managers for patients with chronic and major depressive disorders, and by improving our consultative access to psychiatrists, we can reduce the need for hospital services for depression and other mental health disorders.

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In the last two decades, I have seen a significant increase in pharmacologic management of depression, mood disorders, and anxiety. Many patients have multiple drug regimens. The metro area has poor access and a paucity of mental health problems that might provide a cognitive/ behavioral solution to the underlying dysfunctional life styles/behaviors/past experiences of these patients. Any thoughts as to how the community of professionals might develop a metro system to treat mind and body…perhaps with the goal of resolving mental health issues instead of increased reliance on medical management?

Pharmacological management of serious mental health disorders has improved dramatically over the past 20 years. However, we have become overly impressed with the benefit of medications for the most common mental health disorders of patients seen in primary care practices.

For seven years I have been a consultant and member of an advisory council to fund research focused on “Depression in Primary Care” sponsored by the MacArthur Foundation and, more recently, the Robert Wood Johnson Foundation. Both foundations have funded research to expand our knowledge of what is different about patients with depression who are seen in primary care practices. A full discussion is not appropriate for this interview. However, it is now apparent that primary care physicians do prescribe the majority of antidepressants in this country, often without access to a psychiatric consultant. The old complaint about underdiagnosis of depression in primary care seems less supportable now that antidepressants are among the most commonly prescribed chronic medications and are often among the most expensive category of medications for any insured population. Unfortunately, it is not clear that medications alone help our patients.

The majority of primary care patients with depression may benefit less from medication than those seen in the psychiatric clinic for a variety of reasons. There is a tendency to rely more on medications because the options for providing psychotherapy of any kind are limited in most practices. We are also lacking community resources such as communitybased mental health programs that may require less professional involvement. Therefore, we rely primarily on medications to assist patients who are overwhelmed with work, children, and conflict within intimate relationships. The good news is that empathic listening, supportive counseling and brief psychotherapy by either physicians or collaborative therapists is helpful and often blended together for the patient’s benefit. The bad news is that we have limited research that is directly applicable to primary care populations. We also suffer from a health care system that does not reward physicians for taking the time to listen, offer support, or engage in brief counseling. Research is exploring this terrain.

We spend a good deal of time in our residency programs teaching our residents how to recognize mental health issues and encouraging them to spend time with patients addressing their concerns and offering support and guidance. Many problems can be resolved by taking a few minutes of extra time. When the problem is more serious, however, we teach residents to utilize consultants and refer to mental health specialists.

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The Journal of the Hennepin and Ramsey Medical Societies

What special efforts are being made in training to develop residents’ skills in an organized approach to quality improvement?

Has the University of Minnesota placed too much emphasis on primary care and neglected specialty training?

Each of the affiliated residency programs involves residents in quality improvement efforts. Some are more focused on hospital programs, and a few are related to improved quality in ambulatory care. I anticipate increased emphasis on systematic approaches to quality improvement as we move forward with improvements in our training programs.

As a publicly funded institution, the University of Minnesota has striven to meet the health care workforce needs of this state and region. For many years the University, including Duluth, was leading the nation in the number of students who chose primary care residencies. The state has benefited from that strategic success. Recently, however, that trend has changed, and our students are less frequently choosing family practice, other primary care specialties, and general surgery careers. In addition, the increasing percentage of practicing physicians opting for part-time medical careers may create shortages in other specialties. Heavy debt carried by medical students and flat salaries currently offered for primary care physicians may also be influencing career choices for students. Yet our population continues to grow, and that growth may accelerate over the next 30 years at the same time the public appetite for funding the medical school is being tested. A related change is the decrease over the past several years of the medical school class size. The first year student class size for the Twin Cities campus has decreased from 240 to the current 165 medical students. That is close to the medical school class size before the legislative mandate in the 1970s to increase the number of family physicians trained at the University. The result of smaller class sizes, compounded by a lower percentage of students choosing family practice careers, is that there will be too few family physicians to meet the need when current baby-boom family physicians seek new partners seven to 15 years from now. Our task over the next decade is to solve this puzzle by improving the effectiveness, efficiency, and attractiveness of family practice in both rural and urban settings, thereby avoiding that impending shortfall. I’m an optimist and enjoy that kind of grand challenge.

What do you do to improve residents’ service quality skills as they care for patients?

Currently, all residents are evaluated on teamwork, professionalism in the workplace, and patient satisfaction. However, attention to improving service, respectfulness, punctuality, and communication skills can always be more explicit and systematic. As we strive to improve our practices around the Twin Cities, we will expand our efforts to help residents understand the components of high quality service, how to evaluate any practice for such service, and how to move toward improving this important aspect of patient care.

What steps are you going to take to increase the research activity of your department?

The research activity of the department has been very successful. Department faculty received grant funding in the amount of $3,250,000 in 2001, and to date in 2002, we’ve received $5,250,000 grant funding for multi-year projects. Research expenditures for 2001 were $2,050,000 and estimated spending for 2002 is $2,700,000. In addition to research by faculty, we received federal funding in 2001 to develop a research fellowship to prepare family physicians for careers in academic research.

Our research includes HIV/STD prevention, diabetes care, smoking cessation, women’s health, geriatrics, nutrition as it relates to cholesterol management and heart disease, and cancer prevention. Several of our recent grant applications have included interdisciplinary components.

We are also trying to collaborate with our adjunct faculty to develop a practice network for clinical research as we build on our current success.

Given your experiences at HealthPartners, Mayo, and now the University of Minnesota, in what ways do you envision academic and nonacademic physicians collaborating to meet future challenges?

I believe all primary care clinicians and practices can help each other by working with large and small payers to experiment with new payment and care delivery options for phone-based care, group visits, e-mail patient exchanges, and collaborative care with mental health professionals.

If we learn together we can help reshape primary care to more effectively and efficiently care for our patients.

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The Journal of the Hennepin and Ramsey Medical Societies

What are the keys to successful practice, or financial viability for family physicians in the future with fee limits, managed care discounts, increasing overhead, and increasing regulations?

We need to re-define and re-organize family practice in order to have a very successful future. Of course, leaders of many other specialties are saying similar things about their areas. We must experiment with new models for payment, design and test innovative practices such as group visits and phone-based care, and we must learn how to enable appropriate self-care. Improving care for patients with chronic illnesses, improved team-based care, more innovative design of medical benefits, and moving our electronic medical records toward efficiency will be among the tools we will use to succeed. Let’s talk again in five years to see how far up this mountain we will have climbed by then! ✦

January/February 2003

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Key to Successfully Starting Medical Technology Company Lies in the Details

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IN THE RECENTLY published book, The Tip-

ping Point, author Malcolm Gladwell observes that the success or failure of a social phenomenon, the momentum behind a cause or issue, or the rise and fall of a business venture often resides in a series of small events that come together to create a catalytic “tip.”

Such could be applied to the success and failure of many medical technology, biotech, and life sciences companies. It’s often not one major breakthrough that usually guarantees the success of a new venture, as some may think.

Success often lies in the details that in many cases lay hidden within lab notes, sketches and e-mails of a physician thinking through an idea as they try to bring it to life.

For physicians, surgeons or medical researchers who dream of owning a medical device company, the thought of playing the role of CEO can sometimes cloud the reality of understanding exactly what it takes to reach that point. The key is to start at square one – identifying some of the most basic factors of launching a medical technology business, and then, to tip success your way by executing to the nth degree on the details.

Here are 10 tips that may help you turn that idea hastily drawn on a cocktail napkin into a fast-growing medical technology business.

Understand if you have something to protect.

One of the most critical tipping points to forming a successful medical device company rests with capturing and documenting a physician’s intellectual property. In other words, an inventor’s “marketable” ideas.

Intellectual property is a phrase that is broadly used to describe intangible assets that have an inherent value (in other words, they can be bought or sold like a piece of real estate). Just as a company’s machinery or office furniture have value and can be bought and sold, so too can ideas, methods, names, phrases and logos. Intellectual property comes in many forms, ranging from a patent on a mechanical device, such as a vascular stent or a business process (Amazon.com’s one-click shopping) to a trade secret, such as Coca-Cola’s famous secret formula, or a trademarked brand name (Pfizer’s Lipitor®-brand cholesterol reducing drug). The U.S. Patent and Trademark Office is a government body that serves as a public regulatory clearinghouse to which inventors and companies apply for patents and trademarks are granted.

Intellectual property is the lifeblood of an organization. For example, consider the value of the Coca-Cola® and Coke® brand names or its trade secret for the Original Coca-Cola formula to the Coca-Cola Company. Surely, those two intangible assets are worth more than all of the plants, equipment, office furniture and other tangible assets owned by that company combined. Likewise, the same can be said of patents and trademarks held by many medical technology companies.

David Kline, author of Rembrandts in the Attic: Unlocking the Hidden Value of Patents (Harvard Business School Press, 2000), says the knowledge economy isn’t rhetoric. “Intellectual assets drive competitive advantage and ultimately shareholder value. Intellectual property can make or break a business. If your competitor owns a patent that precludes you from even being in business in the first place, then you’re in big trouble.”

Document your idea.

Properly documenting an idea(s) is a critical factor to starting a new medical technology company. Even if your idea is a twinkle in your mind’s eye, write it down. Get it on paper. Date it. When you do document your idea, make sure you have a witness, preferably a peer who is knowledgeable in your profession and is willing to sign a confidentiality agreement.

Better yet, instead of writing or sketching an idea on a piece of paper or a napkin and stashing it in a file cabinet somewhere, begin the daily practice of jotting down notes to yourself each day in a lab book. The discipline of writing down your insights on a daily basis will not only help you document your efforts in a continuous, systematic approach, it will more than likely inspire further insights. This practice will allow your ideas to build upon themselves, and may lead to something even more truly unique and patentable than your original idea.

Don’t ask, don’t tell.

Documenting an idea is one thing, preserving it is another. Because of the collaborative nature of the health care culture, it’s very difficult for many physicians and researchers not to share their ideas with another colleague or to obtain an affirmation from a respected peer that they are truly onto something special. It’s at this point that physician-inventors often create the most problems for themselves – sometimes years down the road. It’s absolutely critical that if you want to share your idea with someone, even in passing, that they sign a confidentiality agreement. That means not just with other physicians, but also with assistants, administrators and nurses, and even your closest friends and family members.

BY TOM LETSCHER

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The Journal of the Hennepin and Ramsey Medical Societies

Likewise, if you have a hint that a peer or colleague is researching or may be inventing a medical product, don’t ask them about it. This is to protect yourself in case you should develop a product or method that may be similar to what your peer or colleague is developing.

Estimate the size of the market.

Of course, just because you have a unique idea doesn’t mean that it’s groundbreaking. One of the most common mistakes that many inventors make in the early stages of starting a medical device company is underestimating the need for their product.

The first place to start is to identify the number of people who are affected by a particular medical problem. Example: the number of men and women in the United States who suffer from genetic-related heart disease.

From there, you need to create a profile of your future customer – who they are, where they live, how and/or why they suffer from a certain medical condition, current treatment options and the success rates of those options, and at what cost to the patient and to the health care system do they suffer. This process involves some digging – into medical journals, medical device trade magazines, the Internet, etc. To develop a very thorough analysis of the marketplace, it may be necessary to enlist the service of an actuarial consulting firm as well as a market research firm.

Determining market size also involves researching similar types of existing products and determining a potential price for your product and what share of the potential overall market that you can realistically capture.

Another aspect of this process is determining how distinct your product is to existing treatment options. To understand the value proposition of your new product idea, think of other great products, not necessarily other medical products. In the fast-food arena, McDonald’s built its value not just by delivering a hamburger quickly, but also by doing so with a high level of consistency. Dominos Pizza was founded on the value proposition of delivering a good-tasting pizza in 30 minutes or less.

When you look at your product, what do you see? Is it a revolutionary or evolutionary advance? Is it therapeutic or diagnostic? Will it cost less and be more effective than the current therapy most often prescribed or recomMetroDoctors

mended? Will it be faster to implant, thereby cutting surgical time? Will it substantially increase a patient’s recovery time? Will it substantially improve or enhance how the body performs a function or improve a person’s quality of life? The more you can quantify these benefits, the greater the odds that your product will succeed in the marketplace.

File for a patent.

Building a patent portfolio is a lot like building a fence around a piece of land that you own.

It creates a fence that publicly tells others that you own a piece of intellectual property. The concept behind a patent is to build the highest and largest perimeter fence that will prevent others from taking a portion or laying a claim against your piece of property.

It’s crucial to file a patent properly. A poorly submitted patent application can wreak havoc on your intellectual property rights in the future, so hire a reputable, experienced intellectual property attorney (registered to practice before the U.S. Patent and Trademark Office) who can examine your ideas, help you obtain a thorough search of existing patents that may be similar to your idea, and help you devise a patent strategy. An experienced attorney will not only understand how high to build the fence around your idea, but also how to help you keep that fence up for as long as possible.

To file a patent, in particular for a device, you will need to have a blueprint (mechanical drawing) developed. Consult with a patent attorney, who can connect you with mechanical and electrical engineering firms that specialize in medical device products. It’s at this stage that you will begin to better understand how much it will cost to produce your product, how it will be manufactured, and how it can be sold.

Do not be surprised if the design and prototype firm offers suggestions to improve your device (and in which case, may make your original idea obsolete).

Find a mentor.

If you’ve never been through the process of patenting an idea and possibly forming a company, it can be overwhelming. That’s why it may be a good idea for you to find a mentor, perhaps another physician who has been through the process, to provide thoughtful advice and counsel. If you don’t have any physi-

The Journal of the Hennepin and Ramsey Medical Societies

cian colleagues or acquaintances, contact your state’s department of economic development to obtain the names of local medical device companies or the names of nearby medical device or medical technology industry associations. Regardless of how well you know a mentor, make sure that they sign a confidentiality agreement that prevents him or her from making a claim on your intellectual property.

Determine if it’s a product or a company.

An idea by itself is not a company. In the initial burst of excitement that comes with developing a new medical device it’s easy to let your imagination do the leading. But the fact is, determining whether your product has the potential to grow into a company really is dependent on whether that product may lead to other products. In other words, a single product is not a company unless it has a very large market potential in and of itself. Companies usually have a family of products and focus on a particular area. A company that is targeting a smaller market opportunity, for example, less than $200 million, may be a great candidate to be purchased by a much larger company. A company that is targeting a much larger market, for example, more than $1 billion, will find greater support among the investing community. Furthermore, there are different types of corporations, each of which have their advantages and disadvantages. Let an experienced business attorney help you understand the best path to take.

Another aspect of this decision-making process is for the inventor to give some thought to whether they even want to run a company in the first place, which as many entrepreneurs will tell you can be an all-consuming effort and will drastically alter a person’s lifestyle. An alternative to consider is licensing the rights or outright selling patent(s) to an established company that may be able to bring the idea to market much more quickly. Typically, an inventor receives a percentage of the sales of a licensed product as a royalty and possibly an upfront payment. However, the inventor will be dependent upon another company’s ability to finish developing and selling the product. Fantasizing about owning and running a company is (Continued on page 20)

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Starting a Medical Technology Company (Continued from page 19)

easy. But ask any entrepreneur who has ever gone through the process of launching a medical technology company and you’ll understand that the process is not for those weak hearts.

Write a business plan.

If you’re determined to launch a company then you’ll need to write a business plan that creates a blueprint for your new organization. A business plan is essential for attracting capital and the talent to bring your ideas to life. It generally addresses core issues such as the unique product idea(s), the market size and potential, company management and company operations. It also outlines equity structure (who owns what), and identifies the opportunities as well as risks associated with marketing a product. It’s at this point that an inventor should consult with an attorney who specializes in business formation.

Attracting the right talent.

Running a company that manufactures a product is a lot different than running a lab or simply maintaining your own busy medical practice. Many physicians desire to maintain control of their business and avoid bringing in experienced executives and managers who clearly understand what it takes to launch a medical technology company. While success certainly isn’t a guarantee with professional managers, taking the time to study other successful medical device companies and the models they use to grow their business can be useful in determining the type and experience level of the talent you need to lift your company off the ground.

the brunt of the start-up process. And with good reason. They don’t want to risk their capital (or someone else’s) without fully seeing that the inventor has thoroughly thought through the basic elements of launching a new medical technology product, and put in their fair share of sweat and equity.

So, if you want to “tip” your new medical technology venture in the right direction, be sure to focus on the little things that can have a huge impact both short term and long term.✦ Tom Letscher (tletscher@oppenheimer.com) is a partner and co-chair of Oppenheimer Wolff & Donnelly’s Medical Technology practice. © 2002 Oppenheimer Wolff & Donnelly LLP

Raising money.

Many inventors make the mistake of thinking that attracting venture capitalists and angel investors is the first step of launching a new company. But usually most funding sources, whether it’s a bank or a corporate partner, won’t even pick up the phone until you’ve undertaken

Membership Advantages for Metropolitan Physicians and their Practices AmeriPride Linen Service has recently partnered with HMS and RMS to provide our members with group purchasing power. They offer our members discounts on their products and services, including medical garments, linens, among other things. Visit our website at www.metrodoctors.com. If you are an existing customer, you can still benefit from our discounted pricing.

Code GREEN is a powerful stand-alone application for PALM OS devises that provide you with a simple tool to capture, verify and submit charges all with just a few clicks on your Palm. Shouldn’t you collect every dollar from every patient encounter? Code GREEN can help you do that. To learn more, call us, or visit Code GREEN’s website at www.mdvision.net.

Quest Card Services, LLC — Do you have patients who pay you using their credit cards? Have you done a comparison of the prices that you’re paying the company processing those transactions? HMS and RMS have found a credit card processing company that will offer our members reasonable rates, and understandable statements. To receive a FREE comparison, download the Quest Card Services form on our website at www.metrodoctors.com, and fax it to us at 612-623-2888.

HIPAAdocs is an on-line HIPAA compliance tool that’s easy to use. No HIPAA expertise required. We have negotiated a significant discount for the physicians in the metropolitan area.

Visit their website at www.hipaadocs.com/sponsor/ metrodoctors to get specific information about pricing and content, or contact us at 612-623-2889.

Call HMS or RMS at 612-623-2889 for details.

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The Journal of the Hennepin and Ramsey Medical Societies

PERSONAL FINANCE

The “What-Ifs” of College Planning

O

OF ALL PEOPLE TO TAKE education seriously, doctors and other medical professionals usually show a strong desire to help their children reach their own career goals. At the same time, savvy college planning can strengthen these parents’ own portfolios by taking advantage of tax-free earnings, tax-deferred income and other financial incentives.

The options for funding college education grow each year. Unfortunately, the time to focus on them does not. Since January 1, 2002, new incentives for considering all savings options — especially the expanded benefits of 529 Plans — are too good to pass up.

Here’s a quick overview of options that may work for you, based on the most common “what if” questions that parents typically ask about college planning. Please note that any recommendations would depend on your unique circumstances. For more details on tax advantages, contribution limits, penalties, beneficiaries and other details, an experienced financial planner can help you assess each investment vehicle in relationship to your financial circumstances.

Loads of Time What if my daughter is only three and we have all the time in the world to plan for her education?

An education IRA may be a good start because it can be used to pay for elementary school, high school, or college costs. The tax-free earnings can be gained through an investment of your choice. New income limits in 2002 are $110,000 for single filers and $220,000 for joint filers, which may preclude some doctors.

Although the contribution amount for an education IRA increased last year to $2,000 per B Y M A RY B O U TA , J . D . , C F P Schwarz Williams Companies

MetroDoctors

year for each child, it may not be enough to cover four years of college. Higher contribution limits are available through a 529 Plan, another recently enhanced college-savings option, which allows $11,000 annually per beneficiary by each person.

This portfolio-based plan has traditionally covered tuition, books and fees for any accredited school. As of 2002, it also covers room and board plus other educational expenses such as laptop computers. Another benefit is the ability to withdraw these dollars for a child living at home or off campus, based on the average cost of living determined by the college or university.

But the best news about the latest changes in this law is that 529 Plans now provide taxfree earnings — while used for educational purposes — rather than their former, tax-deferred status. This news is also retroactive.

Key to understanding the 529 Plan is that you need not invest in the state plan where your child is attending college or where you reside.

Look for the plan that best fits your financial needs and understand the benefits offered by that state and if you even qualify for those benefits. Every state’s plan will differ in maximum contributions, ranging from approximately $122,000 to $250,000. Yet, when the maximum is reached, the earnings can continue to grow.

Rollovers between plans are allowed without tax implications.

Time Crunch What if my son is already in high school and we’re running out of time?

Those with older children may want to take advantage of a five-year, lump-sum provision offered by the 529 Plan. This allows contributions of up to $55,000 per person in one calendar year for each beneficiary. Grandparents can

The Journal of the Hennepin and Ramsey Medical Societies

get into the act as well, which suggests an excellent estate-planning vehicle for maturing doctors.

Trust or custodial accounts may also be options when time is running short. Both allow relatively any type of investment. However, trusts require special trust documents that necessitate the cost of an estate-planning attorney.

Beyond these strategies, another option might be a taxable account in the parents’ name, which is “earmarked” for education. These funds can also be used to pay off existing student loans.

If you don’t mind the possible tax implications, these savings can be applied to your own retirement if not used for education.

Not in the cards What if my child decides not to go to college?

If it’s getting late but it appears that your child may not be interested in higher education, a custodial account may be the best route because it can be used for any purpose (e.g., buying a house or car). However, be sure to understand its many tax rules and the fact that control of the account turns over to the recipient at the age of majority, which in Minnesota is age 21.

Larger Families What if we need to save for several children?

Another benefit of the 529 Plan is that some accounts can include up to three beneficiaries.

Larger families may also like the simplicity of a taxable account, “earmarked” for their children’s education, because there’s only one account to track.

(Continued on page 22)

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College Planning (Continued from page 21)

Doctors — do you want to be independent?

Do you want to stay independent?

Full or partial “ride” What happens to the savings if my child receives a scholarship?

We want you to.

If your medical practice is interested in information about joining the MHN care system please contact: Minnesota Healthcare Network, LLC 7900 International Dr., Suite 1080 Bloomington, MN 55425-1510 Phone (952) 883-3150 Fax (952) 883-3134 E-mail info@mhcn.com

For over 20 years, Minnesota Healthcare Network has served physician groups throughout the Twin Cities and neighboring communities. We represent the interests of our member clinics in a competitive and increasingly complex marketplace. We provide a vehicle for independent clinics to contract and have good working relationships with health plans and other purchasers. We have innovative and comprehensive data systems that provide sound information, which allows our physicians to make wise medical and business decisions.

Our members are independent primary care (FP/GP, IM, Peds) and multi-specialty medical groups. We are physician-owned and governed. Over 50,000 health plan members have their care provided and coordinated by our independent physicians. This allows us to meaningfully advocate for our physician members and their patients in an era of health care where advocacy for these constituents is increasingly necessary.

If you are in private practice, or were and may be reconsidering that option, please contact us to find out how MHN may benefit you.

www.mhcn.com

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The Eating Disorders Institute (EDI) offers residential, inpatient, partial-day and intensive outpatient programs in a newly expanded space. EDI is a partnership with Methodist Hospital and University of Minnesota physicians.

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St. Louis Park, MN 55426 www.parknicollet.com

Fortunately, there are no major side effects if your child is blessed with a full or partial scholarship. With the 529 Plan, however, a scholarship is one of the conditions that allow parents to escape the 10 percent penalty that would normally apply for unqualified withdrawals.

(This also holds true in the case of death or disability.)

There are different time horizons for every family as they look to their children’s futures. Keep in mind that education, retirement and other investments should work together for maximum tax and savings benefits. 529 College Savings Plans are investments in municipal fund securities and are subject to market risk, including the possible loss of principal. There is no guarantee by the issuing municipality or any government agency. These securities are sold by an offering statement, which you should read carefully before investing or sending money. For more information, a useful website is www.savingforcollege.com. ✦ Mary Bouta is an account manager focusing on a wide range of personal financial services with Schwarz Williams Companies, Inc., a human resource services firm and an endorsed broker of the Minnesota Medical Association and Hennepin Medical Society. Bouta is licensed in securities and insurance, in addition to her bachelor’s degree from the University of Minnesota. She graduated from the College of Financial Planning in Denver and holds the Certified Financial Planning (CFP) designation, which is awarded to individuals who have successfully completed the CFP board’s initial and ongoing requirements. Bouta also holds a law degree from the William Mitchell College of Law. Securities offered through Walnut Street Securities, Inc., (WSS, Inc.) Member NASD & SIPC Investment Advisory Services offered through Personal Financial Strategies, Inc., (PFS, Inc.) Schwarz Williams Companies, Inc. and PFS, Inc. are not affiliated with WSS, Inc.

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PRESIDENT’S MESSAGE P E T E R H . K E L L Y, M . D .

Many Issues Remain RMS-Officers

RMS-Board Members

Kimberly A. Anderson, M.D., Specialty Director John R. Balfanz, M.D., Specialty Director Victor S. Cox, M.D., Specialty Director Gretchen S. Crary, M.D., At-Large Director Charles E. Crutchfield, III, M.D., At-Large Director Laura A. Dean, M.D., At-Large Director James J. Jordan, M.D., Specialty Director Robert V. Knowlan, M.D., At-Large Director Charlene E. McEvoy, M.D., At-Large Director Ragnvald Mjanger, M.D., Specialty Director Kenneth E. Nollet, M.D., Ph.D., At-Large Director Stephanie D. Stanton, Medical Student Lyle J. Swenson, M.D., MMA Trustee Charles G. Terzian, M.D., Specialty Director & MMA Trustee David C. Thorson, M.D., Specialty Director Russell C. Welch, M.D., At-Large Director RMS-Ex-Officio Board Members & Council Chairs

Brent R. Asplin, M.D., AMA Young Physician Section Blanton Bessinger, M.D., MMA Past President Kenneth W. Crabb, M.D., AMA Alternate Delegate Robert W. Geist, M.D., Ethics & Professionalism Council Chair *Michael Gonzalez-Campoy, M.D., Education Resource Council Chair Rebecca Gonzalez-Campoy, Alliance President Frank J. Indihar, M.D., AMA Delegate William E. Jacott, M.D., U of MN Representative Melanie Sullivan, Clinic Administrator Donald B. Swenson, M.D., Sr. Physicians Association President *Lyle J. Swenson, M.D., Public Policy Council Chair *Russell C. Welch, M.D., Communications Council Chair *Also elected RMS Board Member RMS-Executive Staff

Roger K. Johnson, CAE, Chief Executive Officer Doreen M. Hines, Membership & Web Site Coordinator Sue Schettle, Director of Marketing & Member Services

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I

IT’S HARD TO BELIEVE that my year as president of Ramsey Medical Society (RMS) is quickly nearing an end. It has been a busy year and while we have made important gains in many areas, there are many issues that remain on the front burner and will impact the future of RMS. The most immediate of these is the selection of a new CEO for the Minnesota Medical Association (MMA). Selecting the right person is very important for the county component societies. I don’t think it’s any big secret that there has been tension between the MMA and RMS and Hennepin Medical Society (HMS). There has been a lack of communication, a lack of cooperation, and a lack of trust between these societies. There has been an attempt by the physician leaders to come to grips with this during this past year but much work remains. The new CEO will need to work closely with RMS and HMS to assure that common projects are not duplicated and that we can all speak with one voice.

We will all benefit from a strong MMA and an MMA that does not feel threatened, but in fact encourages strong component societies.

RMS and HMS have benefited recently from close cooperation and have many ongoing joint projects (i.e. MetroDoctors). We need to continue this close working relationship. There has been much debate about possibly forming a metro-wide joint venture between the two organizations. The executive committees for RMS and HMS recently met and decided that a joint venture may be moving too fast but agreed that a Metro Advocacy Committee should be formed to address the issues that uniquely impact physicians in the metro area. After much discussion it was agreed that the respective executive committees, meeting jointly, would fill this role and meet at least once every other month or more often as the issues dictate.

This will be a great forum for metro-wide

The Journal of the Hennepin and Ramsey Medical Societies

issues and hopefully can be integrated closely with the MMA. Declining membership has plagued most medical professional societies and RMS is no exception. Several strategies have been looked at in the hopes of increasing membership, which is now less than 50 percent of the physicians in our area. First, the leadership of RMS has been making site visits to clinics where membership has declined or is absent. We present what RMS is about and the advantages of membership. Secondly, we have asked the MMA to conduct a study on separating the dues for state and county society membership. Currently the dues are bundled, meaning that in order to join one you must join the other. This becomes expensive and in this day of decreasing reimbursement and increasing overhead, many physicians opt to join neither. By unbundling the dues the physician would have a clear choice of joining one or the other, or both, but at varying costs. Thirdly, there has been some discussion of setting up a tiered dues structure, but the discussions on this are very preliminary.

These issues are critical to the ongoing success of RMS. While I appreciate being allowed to serve as your president this past year, I also look forward to continuing my involvement in RMS and helping to move these agenda items forward. ✦

January/February 2003

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Ramsey Medical Society

President Peter H. Kelly, M.D. President-Elect Michael Gonzalez-Campoy, M.D. Past President Robert C. Moravec, M.D. Secretary Jamie D. Santilli, M.D. Treasurer Peter J. Daly, M.D.

R M S U P DAT E

Member News

2003 Ramsey Medical Society Election Results Congratulations to the newly elected RMS leaders

President J. Michael Gonzalez-Campoy, M.D., Ph.D.

President-Elect Peter J. Daly, M.D.

Director-at-Large Robert C. Moravec, M.D.

Director-at-Large Peter B. Wilton, M.D.

Director-at-Large Lon B. Peterson, M.D.

Obstetrics/Gynecology Specialty Trustee Ragnvald Mjanger, M.D.

Pediatric Specialty Trustee Thomas D. Siefferman, M.D.

Psychiatry Specialty Trustee James J. Jordan, M.D.

Internal Medicine Specialty Trustee Jane C. Pederson, M.D., M.S.

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January/February 2003

Treasurer Charles E. Crutchfield III, MMB, M.D.

Frank J. Indihar, M.D., has been named interim administrator of Bethesda Rehabilitation Hospital by HealthEast. Dr. Indihar is the current medical director of Bethesda Rehabilitation Hospital. He served as president of RMS in 1991. Dr. Indihar was elected an AMA alternate delegate by the MMA House of Delegates in 1992. The MMA House of Delegates elected him to the position of AMA delegate in 1996, and re-elected him in 1998, in 2000, and again in 2002. He recently was elected chairperson of the Minnesota AMA delegation by the members of the delegation. He was elected this fall to the Board of Directors of the Minnesota Orchestra.

Dr. Robert C. Moravec was named medical director of St. Joseph’s Hospital in December. He will also continue as medical director for education with HealthEast. Dr. Moravec has been with HealthEast since 1983.

Most recently, he served as medical director for HealthEast Care, Inc., a subsidiary of HealthEast and HealthEast Physician Association. Dr. Moravec was president of the Ramsey Medical Society in 2001, and he is the current president of the Ramsey Medical Society Foundation. He is a member of the RMS Board of Directors. He serves as chairperson of the MMA Task Force on Patient Safety and he is a member of the MMA Continuing Medical Education Committee. He practices emergency medicine and he continues to provide coverage for emergency room services in HealthEast hospitals. âœŚ

MMA Delegates John R. Balfanz, M.D. Blanton Bessinger, M.D. Kenneth W. Crabb, M.D. Frank J. Indihar, M.D. Michael K. Loushin, M.D.

MetroDoctors

The Journal of the Hennepin and Ramsey Medical Societies

New Members RMS welcomes these new members to the Society.

Schools listed indicate the institution where the medical degree was received.

Active Peter J. Boosalis, M.D. University of Minnesota Anesthesiology Valley Anesthesiology Consultants, P.A.

Cara S. Walz, M.D. University of Iowa Internal Medicine/Pediatrics Associated Nephrology Consultants, P.A.

Harvey E. Anderson Joel Borgen Kristina Borgen Wade Hedegard Wendy L. Sydlewski Nicole J. Williams ✦

R. JAMES VACCARELLA, M.D. died at the age of 69 on November 2. He received his medical degree from the University of St. Louis in 1958. He was board certified in allergy & immunology and pediatrics. Dr. Vaccarella joined RMS in 1969. ✦

Associate (working part-time) Heidi R. Hubbard, M.D. Loyola University Pediatrics Woodwinds-HealthEast Pediatricians for Health

David M. Cartwright, M.D. Medical College of Wisconsin Pathology/Cytopathology Central Regional Pathology Laboratories Martin St. John Lacey, M.D. University of Alberta Plastic Surgery Ramsey Clinic

Karrin L. Stoehr, M.D. Medical College of Wisconsin Anesthesiology Twin Cities Anesthesia, P.A.

Mark MacDonald, D.O. University of New England, College of Osteopathic Medicine Family Practice East Metro Family Practice-Gorman

Medical Student

Please Join Us For A Captivating Evening

Ramsey Medical Society 2003 Annual Meeting Friday, January 24, 2003

John E. Seng, M.D. University of Minnesota Hematology/Medical Oncology Minnesota Oncology Hematology, P.A. Mark D. Wojtowicz, M.D. University of Minnesota Anesthesiology Valley Anesthesiology Consultants, P.A.

Town & Country Club 300 Mississippi River Blvd. N., St. Paul • 651-646-7121 6:00 p.m.

7:00 p.m.

7:45 p.m.

7:50 p.m.

Georgia K. Zachman, M.D. University of Minnesota Internal Medicine United Hospitalist Service 1st Year Practice Timothy R. Toonen, M.D. University of Wisconsin-Madison Hematology/Medical Oncology Minnesota Oncology Hematology, P.A. MetroDoctors

Social Hour and Silent Auction bidding Dinner Presentation of Community Service Award Inauguration of J. Michael Gonzalez-Campoy, M.D., Ph.D., as the 132nd President of the Ramsey Medical Society 8:15 p.m.

Dessert and Dancing by:

Sabor Tropical “Hottest Latin Orchestra” 6-9:30 p.m. Silent Auction benefiting Ramsey Medical Society Foundation

The Journal of the Hennepin and Ramsey Medical Societies

Go to www.metrodoctors.com to view items available. Call if you cannot attend but would like to make a bid.

Please R.S.V.P. by January 13, 2003 to: Ramsey Medical Society, P.O. Box 131690, St. Paul, MN 55113 • 612-362-3705

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Ramsey Medical Society

(University of Minnesota)

JOHN B. COLEMAN, M.D. died November 11 at the age of 88. Dr. Coleman graduated from Northwestern University Medical School in 1943 and completed a fellowship in radiology at the University of Minnesota and a residency at Mount Auborn Hospital in Cambridge, MA. He served as a captain in the United States Army in the South Pacific on the hospital ship “Hope.”

He joined St. Paul Radiology in 1950. Dr. Coleman served as the first President of the Ramsey Medical Society Retired Physicians group and as Chairman of the RMS Delegation to the MMA. Dr. Coleman devoted many hours of his time to writing the history of Ramsey Medical Society for the 125th Anniversary Celebration. He served in many positions with numerous medical and volunteer organizations and enjoyed providing service to all of them. Dr. Coleman joined RMS in 1952.

Residents Bradley C. Linden, M.D. University of Minnesota General Surgery Regions Hospital

Thomas J. Losasso, M.D. Loyola University Anesthesiology Valley Anesthesiology Consultants, P.A.

In Memoriam

It Takes a Village Supply Drive February 7-24 THE PHRASE “IT TAKES A village...” certainly applies when looking at the wide-ranging needs of homeless people in the Twin Cities.

HealthEast Care System, Ramsey Medical Society, and the Ramsey Medical Society Alliance are sponsoring the Eleventh Annual “Caring Hearts for the Homeless People” supply drive from Friday, February 7 through 24, 2003.

Personal hygiene and related items (such as toothpaste, socks and diapers) will be collected to help support three St. Paul programs’ efforts to meet the needs of the homeless in our community: • Health Care for the Homeless - A team of medical, mental and social health providers bring care, medicine, referrals and sup-

plies into nine shelter and drop-in locations each week.

Listening House - “The living room of the streets” provides nurturing space, personal supplies, and a daytime sleeping place for night workers whose shelters are closed during the day.

SafeZone - A non-threatening haven for youth between the ages of 11 and 21, SafeZone provides hospitality, “family,” medical care, supplies and referrals.

•

•

Here’s how you can be a part of the village, and help combat homelessness. If every employee in your clinic donates items, what a difference a village can make!

Shopping List (non-alcoholic • non-aerosol • new items) Any of these items would be helpful.

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January/February 2003

Sponsored By: AS

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Commit your clinic to participate. All we ask is that you designate a “Caring Hearts for the Homeless People” coordinator for your clinic. Have this person call Doreen at 612-362-3705. We will then send you posters and a shopping list to post within your clinic. During the campaign, collect as many supplies on the shopping list as possible. On Monday, February 24 or Tuesday, February 25, volunteers from the Ramsey Medical Society Alliance will pick up the supplies from your clinic and deliver them to the collection site where they will be sorted and prepared for distribution. All participating clinics will be listed in the Ramsey Medical Society journal, MetroDoctors.

2. Another opportunity to help is by making a cash contribution. Just send a check payable to: Ramsey Medical Society Foundation, P.O. Box 131690, St. Paul, MN 55113-0015. Note in the memo that it is for the Homeless Collection.

Thank you for considering this opportunity to contribute to improving the health of our most vulnerable population, the homeless.

Please call the RMS office at 612-362-3705 if you have any questions. ✦

ER

Hygiene (travel size) • Sanitary pads/tampons, women’s underwear • Toothbrushes & travel size Toothpaste • Soap for sensitive skin, travel size shampoos and lotions • Deodorant & Razors

• Vaseline, lip balm Other • Foot care (corn pads, anti-fungal powder and cream, white socks) • Diapers (M to XL), travel size baby wipes • Band-aids for kids and new Ace wraps • Baby powder, baby bottles, teething rings, sippy cups, pacifiers • Winter gloves, hats, white socks, underwear • Washcloths

R AM S E Y

Medication (not expired) • Children’s pain relievers, cold products, and vitamins • Adult Tylenol, Ibuprofen, and Aspirin • Cold products (non-alcoholic), cough syrup, cold and flu tablets, cough drops, decongestants • Ointments (antibiotic, hydrocortisone, diaper rash, antifungal) • Antacids (Maalox, Tums, Rolaids) • Pedialyte, Enfamil or Similac (with iron)

1.

RAMSEY MEDICAL SOCIETY P.O. Box 131690 St. Paul, MN 55113

Volunteers sorting collected supplies during last year’s Caring Hearts for the Homeless People supply drive.

MetroDoctors

The Journal of the Hennepin and Ramsey Medical Societies

RMS ALLIANCE NEWS REBECCA GONZALEZ-CAMPOY

Making a Medical Marriage Work

O

The Alliances of both Hennepin and Ramsey have joined forces with the University of Minnesota Medical School to address the issue of medical marriages head on. Together, we are sponsoring a one-day seminar on “The Medical Marriage” with guest speakers Wayne and Mary Sotile, internationally respected experts and lecturers on physician marriages. The event will be held Friday, January 31, 2003, in Moos Tower, 2-650, on the University of Minnesota East Bank campus.

The itinerary is shaping up this way: First, the Sotiles will address medical students and their spouses or partners with a lunch and lecture at 12:15. At 4:00, there will be a lecture and hors d’oeuvres for residents, fellows, and their spouses or partners. An evening session with hors d’oeuvres and lecture will be held for faculty, practicing physicians, and their spouses or partners at 6:15. The event is free and CME credit will be available. You can attend any lecture, but each session will be geared toward the primary audience.

The Sotiles are among the most popular keynote speakers and workshop leaders for the

Mary O. Sotile, M.A., and Wayne M. Sotile, Ph.D.,will speak at a one-day seminar on “The Medical Marriage” on Friday, January 31.

MetroDoctors

The Journal of the Hennepin and Ramsey Medical Societies

medical profession. In fact, they were here in November to address the North Central Conference where they talked about their latest work, “the resilient physician.” They’re also frequent speakers at the AMA Alliance leadership conferences in Chicago. The AMA is publisher of their books, The Medical Marriage and The Resilient Physician.

The Sotiles are co-directors of Sotile Psychological Associates, PLLC and Real Talk, Inc., in Winston-Salem, North Carolina. Wayne also serves as Director of Psychological Services at the Wake Forest University Cardiac Rehabilitation Program. Their expertise comes from more than 20 years of counseling physicians and their spouses.

The purpose of “The Medical Marriage” seminar is to help participants identify key stressors, coping strategies and personality traits that are common to medical families and that can strain relationships. The Sotiles will then show how to use those coping skills in productive ways that will enhance the intimacy and passion in the physician marriage. In short, they’ll teach the secrets of medical couples who thrive.

And they’ll do so with grace, style, and humor.

Regardless of the stage of your marriage or partnership, you are sure to learn something useful at this seminar. I encourage you to invite your colleagues and friends who may or may not be active in either RMS or RMSA to this event. It’s a great opportunity to show them that organized medicine works hard to not only promote the health of the medical profession, but also the health of physicians and their families.

For more information, please contact me at gonza017@tc.umn.edu. ✦

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Ramsey Medical Society

OUR BEST FRIENDS are getting divorced.

Three of us didn’t see it coming – the physician husband knew three years ago what was going to happen. However, like many physicians, he suffered in silent desperation until he could no longer stand it and he walked away from his marriage.

It’s not by accident that I call him the physician husband because the complexities of being part of a medical marriage are daunting at best. Perhaps the biggest challenge is the expectation that the work of a physician comes first – everything else falls in line behind the demands of this profession. Role models for leading a balanced life are few so those who are struggling often do so in isolation, ashamed of their failure at home.

Our friends knew up front that a career in cardiac anesthesia would put their relationship to the test. Not only were they aware of national trends, the husband’s employer even made it clear. However, no one provided them, or any other physician family at this institution, with the tools to help them cope with the inevitable demands and stress of the job.

CHAIR’S REPORT T. M I C H A E L T E D F O R D , M . D .

Hassle Factor Reduction Initiative

I

IN 1999 THE HENNEPIN Medical Society cauHMS-Officers

Chair T. Michael Tedford, M.D. President Michael B. Ainslie, M.D. President-elect Michael B. Belzer, M.D. Secretary Richard M. Gebhart, M.D. Treasurer Paul A. Kettler, M.D. Immediate Past Chair David L. Swanson, M.D. HMS-Board Members

Michael Belzer, M.D. Jeffrey V. Christensen, M.D. Peter J. Dehnel, M.D. Drew Dietz, Medical Student Andrea J. Flom, M.D. Diane Gayes, Alliance Co-President Peggy Johnson, Alliance Co-President Ronald D. Osborn, D.O. James Peters, M.D. James A. Rhode, M.D. David F. Ruebeck, M.D. Richard D. Schmidt, M.D. Michael G. Thurmes, M.D. D. Clark Tungseth, M.D. Michael J. Walker, M.D. HMS-Ex-Officio Board Members

Paul F. Bowlin M.D., Senior Physicians Association Lee H. Beecher, M.D., MMA-Trustee Carl E. Burkland, M.D., Member-at-Large Karen K. Dickson, M.D., MMA-Trustee David L. Estrin, M.D., MMA-Trustee John W. Larsen, M.D., MMA-Trustee Henry T. Smith, M.D., MMA-Trustee David W. Allen, Jr., MMGMA Rep. HMS-Executive Staff

Jack G. Davis, Chief Executive Officer Kathy Dittmer, Executive Assistant Sue Schettle, Director, Marketing & Member Services

cus submitted a resolution to the MMA House of Delegates urging the MMA to create a Hassle Factor program. Physicians and their staffs submit descriptions of problems experienced in dealings with health plans, and the MMA documents, categorizes and reports our experience to the membership. Today, the Hassle Factor Reduction Initiative is going strong and gives us the data we need in regular meetings with managers at the plans to base our discussions on making measurable improvements.

Last year, HMS was a member of the Fair Contracting Coalition, the group of health care providers that supported a bill in the Minnesota legislature that would make nine specific improvements in health care contracting. Although the bill was not passed into law, its movement through the legislative committee structure was a strong success. The Minnesota Council of Health Plans was clearly told that legislators are very concerned about hearing the same complaints year after year from their provider community, and told to bring evidence of substantive change back to the state house this year. On November 11, 2002, we met with leadership from the Ramsey Medical Society, the MMA, and Medica to discuss progress on the contracting concerns. Here is a summary of the response from Medica: Disclosure Full Agreement: The Fair Contracting Coalition (FCC) expects that the full agreement between the health plan and provider be disclosed prior to signature. This includes the contract, administrative manual, fee schedules, and all appendixes. Electronic access to this information is acceptable. Medica views this request as fair and agrees to comply.

Public Disclosure: The FCC members stated that they expect consumers to have access to physician fee schedules in order to make informed health care decisions. Medica agrees in principle that consumers need to have more information when making health care decisions, but it is doubtful that publishing fee schedules will provide all of the information needed to compare costs. Medica is committed to finding ways to provide consumers with meaningful cost and quality information.

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MetroDoctors

Health Plan Accountability Although Medica and the FCC were not able to reach agreement on this point, there was a constructive conversation about the difference between making a contract benefit determination and the medical decisions made by a patient’s physician.

The collective group agreed to continue discussing this issue.

Shadow Contracting The FCC described that this principle applies to products with different financial terms. This does not apply to differences in co-payments and deductibles within products. In addition, the FCC does not intend to have this apply to government programs. Given this information, Medica is accepting of this principle.

Unilateral Terms The FCC requests that health plan contracts not contain unilateral terms. Medica agrees fundamentally that contracts should not contain unilateral terms. Medica further stated that termination terms should be bilateral and that both parties should be free to terminate the contract according to the terms agreed to by both parties.

Coding Changes The FCC requests that health plans follow the accepted standards related to coding changes and that providers are able to appeal changes to the coding logic.

Medica agrees fundamentally with this principle and follows two philosophies related to coding issues. First, Medica will always be able to communicate their coding policies and second, they will be defensible. Additionally, Medica does have a formal process for reviewing providers’ concerns/complaints and does make changes based on this feedback, as appropriate.

(Continued on page 30)

The Journal of the Hennepin and Ramsey Medical Societies

HMS IN ACTION JACK G. DAVIS, CEO

In excess of 10 years, the Hennepin Medical Society has sheperded the Abuse Free Medical Workplace Project. Along with several other HMS members, A. Stuart Hanson, M.D. continues to be the champion of this project. A key outcome of this project will be the publication of an AMA Guidebook on the issue. The focus of the Guidebook is Workplace Abuse in Health Care Organizations. The guidebook is in the final proofing stage and is expected to be published by the second quarter of 2003. It will be available online or in print.

David Swanson, M.D., past chair of the Hennepin Medical Society, represented HMS and RMS at the October 5 Medical Student White Coat Ceremony at Northrup Auditorium. The two medical societies have participated in this event for the last six years. First year medical students are presented a white coat in a ceremony that recognizes their transition from a purely academic setting of learning to a clinical setting. It’s their first step into the profession.

Family and friends of the students usually attend this important event in their career. A Cross Pen is presented by HMS/RMS, on behalf of their future colleagues, as a gesture of welcoming them to the profession.

Representatives of the Ramsey Medical Society and HMS along with the MMA have met several times with Frank Cerra, M.D. and others from the University of Minnesota Academic Health Center (AHC) for the purpose of developing a “Brain Drain” Survey. The purpose of the survey will be to measure practicing physician’s plans and MetroDoctors

attitudes about their future and the successes or difficulties with physician recruitment.

The AHC’s survey center is assisting with the development of a scientific survey instrument. It’s hoped that the information will provide a benchmark for future comparison and be useful for predicting physician manpower needs. The development stage should be completed by January 2003 and the survey should take place by April.

HMS, along with the Ramsey Medical Society, is a member of the Minnesota Fair Health Plan Contracting Coalition. The Coalition continues to

meet on a monthly basis. In September, a meeting took place between representatives of the coalition and leadership of Medica. The purpose of the meeting was to discuss the Principle of Fair Health Plan Contracting, which was developed by the coalition and previously reported. To Medica’s credit, they

took the discussions very seriously. As an outcome, Medica has gone a long way in understanding and accepting the reasonableness of the principles.

HMS and RMS assisted with the sponsorship of the 2002 University of Minnesota Medical Student Residency Fair. The purpose of the fair was to educate medical students about midwest residency opportunities and provide insight into the selection process. Virginia Lupo, M.D., current HMS board member, participated on a panel discussion focused on the resident selection process. More than 300 medical students attended. ✦

Hennepin Medical Foundation As an HMS member, you should have recently received a solicitation from the Hennepin Medical Foundation. Please consider a gift to your Hennepin Medical Foundation, the philanthropic arm of our Medical Society. We have been supporting community programs and projects, and granting scholarships and loans to students of medicine and related disciplines since 1968.

We have carried out these responsibilities without fanfare or flourish, and virtually without overhead in staff, construct, or complex marketing programs. Rather, a small group of dedicated volunteer physicians—your colleagues—send this respectful letter of request and then simply transfer your generosity into meaningful contributions for profound programs and worthy initiatives.

We have an outstanding list of beneficiaries whom we have aided in recent years. They represent people of all ages and dimensions who are once again in need of our help in the areas of programmatic health and education. As physicians who care, we should continue to reach out to them!!! Please send your tax-deductible contribution to the Hennepin Medical Foundation at 3433 Broadway Street N.E. Suite 325, Minneapolis, MN, 55413.

Your contribution to our appeal is greatly appreciated. Thank you so very much!

Marvin S. Segal, M.D. President, Hennepin Medical Foundation

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January/February 2003

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Hennepin Medical Society

HMS in Action highlights activities that your leadership and executive office staff have participated in, or responded to, between MetroDoctors issues. We solicit your input on these activities and encourage your calls regarding issues in which you would like our involvement.

Chair’s Report

HMS NEWS

(Continued from page 28)

Efficient Notification The FCC requests that when health plans require prior utilization for services, there are processes in place that enable the provider to make the request in a timely and efficient manner. Through the use of technology, i.e., voicemail, facsimile, and the Internet, Medica’s processes are consistent with this principle.

Recoupment The FCC requests that providers receive notification and a reason for each recoupment along with an adequate amount of time to appeal. Medica’s recoupment policy provides a 30-day notification, a reason for the recoupment and a process to appeal. Medica does not recoup payment beyond 180 days, which meets the recoupment principle.

Profiling If a health plan creates a profile of providers based on cost and/or quality information, the FCC requests that the provider be given an opportunity to correct any errors and make comments prior to its release. Medica agrees to this principle when profiling information is used externally.

Interest Calculation The FCC requests that health plans automatically pay interest for any claim not paid according to the terms of the prompt pay law. Medica agrees with this principle and does automatically pay interest on late claims.

The HMS/RMS/MMA leadership had an extensive discussion with the Medica vice president of operations regarding the coding change principles and philosophies, with specific examples from our practices cited, especially regarding unilateral denial of payment for the –25 modifier that describes evaluation and management charges which should be paid in conjunction with procedures when multiple medical problems are treated during a single patient encounter. That discussion is ongoing.

HMS, RMS, and the MMA, will continue to work on behalf of our colleagues through direct relationships with the plans and legislative initiatives. Please report your health plan hassles through the MMA Hassle Factor Reduction Initiative at the website, mmaonline.net. And contact me (952.832.5252; drtedford@drtedford.com) if you have specific ideas to improve HMS advocacy for the profession. ✦ 30

January/February 2003

New Members of the HMS Leadership Team Michael B. Belzer, M.D. was recently elected president-elect of the Hennepin Medical Society. Dr. Belzer is the medical director of Hennepin County Medical Center and associate dean for the University of Minnesota Medical School Faculty at HCMC. He is board certified in internal medicine, medical oncology and hematology. He attended medical school at the University of Minnesota, completed a residency at the University of North Carolina Memorial Hospital, and completed his fellowship at the University of California School of Medicine.

Lee H. Beecher, M.D. successfully retained his position as a west metro trustee to the Minnesota Medical Association Board of Trustees. He was elected by the MMA House of Delegates at the MMA’s Annual Meeting in September. Dr. Beecher is board certified and a practicing psychiatrist in St. Louis Park. He attended the University of Minnesota Medical School and completed a psychiatric residency at the University of Chicago Hospitals and Clinics.

David L. Estrin, M.D. was elected to his first term as a west metro trustee of the MMA Board of Trustees. His election took place at the September meeting of the MMA House of Delegates. Dr. Estrin formerly represented Children’s Hospitals and Clinics on the HMS Board of Directors from 1990 to 1996, was elected HMS president-elect in 1997, president in 1998 and board chair in 1999-2000.

He also served as the secretary of the MMA MetroDoctors

Board of Trustees in 2001 and 2002. Dr. Estrin is board certified in pediatrics and practices at South Lake Pediatrics in Minnetonka. He attended the University of Minnesota Medical School where he also completed his residency.

Peter J. Dehnel, M.D. recently joined the HMS Board of Directors as a representative of Children’s Hospitals and Clinics in Minneapolis. Dr. Dehnel is board certified in pediatrics and practices at All About Children Pediatrics in Eden Prairie. He received his medical degree and completed his pediatric residency at the University of Minnesota. In addition to practicing pediatrics, Dr. Dehnel serves as the medical director for the Children’s Physician Network.

Janis C. Amatuzio, M.D. was elected to a second term to the Hennepin Medical Foundation Board of Directors. Dr. Amatuzio practices at Midwest Forensic Pathology, P.A. and is board certified in pathologyanatomic/clinical and forensic pathology.

Dale T. Dobrin, M.D. was recently elected to the Board of Directors of the Hennepin Medical Foundation. Born in Minneapolis, he attended the University of Minnesota Medical School where he also completed his residency. Dr. Dobrin is board certified in pediatrics and practices at South Lake Pediatrics in Minnetonka where he is also their medical director. ✦

The Journal of the Hennepin and Ramsey Medical Societies

Hoban Scholarships Awarded THE 2002 HOBAN SCHOLARSHIPS were

Back row, from left: Richard Frey, M.D., Paul Bowlin, M.D., David Allen, William Petersen, M.D., and H. Thomas Blum, M.D., Scholarship Chair. Front row, from left: Hoban Scholars: Samia Hamdan, Christine Taddy, Heather (Hez) Obermark; William Hedrick, M.D. and Marvin Segal, M.D., Foundation Chair. Not pictured: Hoban Scholars Gebra Cuyun Grimm and Benjamin Nielsen.

Dr. Lehmann Receives Charles Bolles Bolles Rogers Award JAMES D. LEHMANN, M.D. was selected as

the 2002 recipient of the Charles Bolles Bolles Rogers Award. Dr. Lehmann has practiced Internal Medicine in Waconia for 32 years and was nominated by the medical staff of Ridgeview Medical Center in Waconia. In the nomination letter submitted by Kerry L. Sheehy, M.D., Chief of Staff and Laurie C. Drill-Mellum, M.D., MPH, Chief of Staff-

From left: T. Michael Tedford, M.D. Chair of the Hennepin Medical Society, with Dr. Lehman, Laurie Drill-Mellum, M.D., and Kerry L. Sheehy, M.D.

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Hennepin Medical Society

awarded to five students pursuing a graduate degree in health care administration or nutrition. The Hoban Scholarship was established in 1994 by the membership of the Hennepin Medical Society in recognition of Thomas W. and Mary Kay Hoban and Tom’s 25 years of exemplary service as the Chief Executive Officer of the Society. Each year the scholarships are awarded at a breakfast honoring the individuals. Members of the Scholarship Selection Committee participate in the recognition event.

This year’s recipients are: Gebra Cuyun Grimm, Samia Hamdan, Benjamin Nielsen, Heather Obermark and Christine M. Taddy. ✦

Elect, they state that “First, Dr. Lehmann is a caring, committed and competent physician… and is the epitome of the ‘small town country doc’ who is dedicated to the well-being of his patients and his community. He is bright, devoted to furthering his knowledge, and tenacious when it comes to ensuring that his patients get outstanding care.”

In addition, Dr. Lehmann has demonstrated his leadership by his current participation on the hospital’s Board of Directors and his two terms as Chief of Staff at Ridgeview.

Dr. Lehmann is a graduate of the University of Minnesota Medical School and has been a preceptor for medical students for almost 30 years.

The Charles Bolles Bolles Rogers Award is awarded annually to a physician, who by reason of his/her professional contribution, has become the outstanding physician of this or other years. ✦

The Journal of the Hennepin and Ramsey Medical Societies

In Memoriam ROBERT W. GIBBS, M.D., died November 27 at the age of 86. He graduated from the University of Minnesota in 1943. Dr. Gibbs practiced pediatrics privately for 36 years and was a clinical professor of pediatrics at the University of Minnesota Medical School. He joined HMS in 1947.

SHELDON C. REED, M.D., died October 28.

He was 76. Dr. Reed joined HMS in 1957.

JOHN H. ROSENOW, M.D., died October 4 at the age of 89. He graduated from Harvard Medical School, completed his internship at Presbyterian Hospital in Chicago, and completed his surgical training at the Mayo Clinic. Dr. Rosenow taught at the University of Minnesota Medical School and he was the Medical Editor of Modern Medicine. He joined HMS in 1941.

ROBERT D. SEMSCH, M.D., died November 21 at the age of 83. Dr. Semsch served as president and chair of HMS and as a delegate in the MMA House of Delegates. He was also past president of the Minnesota Pediatrics Society.

Dr. Semsch received the Minnesota Medical Association’s Distinguished Service Award in 1980. Dr. Semsch had a long career in pediatrics and allergy medicine in the Wayzata-Minnetonka area. Dr. Semsch joined HMS in 1948. ✦ January/February 2003

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HMS ALLIANCE NEWS

Make Fitness Happen, 2003 Raise Funds for the AMA Foundation January 8, 2003, Walk-A-Thon at Mall of America: Join the walk with medical alliance members and raise funds for the AMA Foundation! Participants will have the chance to win prizes for the most dollars raised. Specific details of the Walk-A-Thon will be sent and/or emailed to medical resident/student spouses/ partners and Hennepin/Ramsey Medical Alliance members in the coming weeks. Non-members, guests and friends are invited to join the medical resident/student spouses/partners and medical society Alliance members January 8, 2003 for the AMA Foundation fundraiser. Contact Kathy at 612-623-2885 for further information.

Make Fitness Happen: Since 1997, Hennepin Medical Society Alliance (HMSA) members have gathered each January for a day of exercise and health education, “Make Fitness Happen.”

On that day, HMSA members reaffirm that maintaining their own personal health is as important as their efforts in promoting the health of others. After lunch, Laurie Speoncer, Personal Trainer, will teach us ways to maintain healthy living throughout our lives. Recently, the U.S. government released new activity guidelines, which doubles the amount of exercise adults should get each day to stay healthy. This year, they are partnering with the Medical Student Partners (MSP), Resident Student Partners

(RSP), and the Ramsey Medical Society Alliance (RMSA) in response to the Minnesota Medical Association Alliance’s (MMAA) call to organize events that combine exercise with fundraising for the AMA Foundation. Join HMSA and RMSA members for a day of fundraising, fitness and health education.

About the AMA Foundation: The AMA Foundation is a 501(c)(3) organization and the philanthropic arm of the AMA, dedicated to advancing health care through support of education, research, and service. The AMA Board of Trustees established the AMA Foundation in 1950 to help raise money for medical schools to keep up with the rapid advancements made in medical technology following World War II. Since 1950, the Foundation has distributed over $88 million in gifts to medical schools, guaranteed over $96 million in loans that have benefited more than 40,000 medical students, interns and residents and supported numerous research projects through grant programs (www.amafoundation.org).

Medical Alliance Members Partner with the AMA Foundation: The American Medical Association Alliance (AMAA) began fundraising along with the foundation in 1952. They have remained the foundation’s chief fundraiser ever since. Since 1952, over 90 percent of the 90 million dollars raised is due to the collective efforts of medical alliance members. The Minnesota Medical Alliance members (800) fundraise approximately $9,000 for the AMA Foundation each year.

And the grassroots fundraising efforts of medical alliance members (40,000) across the U.S. total over 1.1 million dollars every year for the AMA Foundation

Hennepin Alliance members participate in “Make Fitness Happen,” in January 2002.

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January/February 2003

Diane Gayes Co-President

Peggy Johnson Co-President

Current AMA Foundation Funds AMA Foundation Medical Scholars Fund: Since 1950, more than $88 million has been provided to medical students. Gifts to this fund are used for medical school student scholarships and grants. The funds may be designated to go to a specific medical school of the donor’s choosing. The medical school deans disseminate the funds to deserving students as scholarships and grants.

Leadership Awards: Selected medical students and residents receive grants to cover the full cost of attending the AMA’s National Leadership Conference.

Research Initiatives: Young clinical and biomedical researchers receive support through the AMA Foundation’s Seed Grant Research Program. In addition, the Foundation supports the National and Regional Student Research Forums, which recognize and reward individuals for their medical advancements.

Health Literacy: Nearly half of all Americans struggle with understanding basic health care information, such as prescription instructions and insurance forms. This translates into unnecessary physician visits and longer hospital stays, costing an additional $73 billion annually. The Health Literacy program focuses on increasing physicians’ awareness of this issue and providing steps for them to better educate and serve patients challenged by low health literacy.

Fund for Better Health: This fund awards financial assistance to AMA-affiliated organizations addressing anti-tobacco, violence and health literacy. Of the 25 grants ($1,000 each) awarded by the AMA Foundation in June of 2002, 15 medical alliances were recipients. ✦ *For information regarding membership in the HMS Alliance please go to www.hmsa.net.

MetroDoctors

The Journal of the Hennepin and Ramsey Medical Societies