Hopkins to create plan for poorer enrollees Result of Md. decision to shift all on Medicaid into managed care

November 07, 1996|By M. William Salganik | M. William Salganik,SUN STAFF

In a bid to protect roughly a fifth of its patient base, Johns Hopkins will form an HMO-like plan to enroll the poor and disabled as the state shifts its Medicaid patients to managed care.

The Hopkins decision comes as a result of Maryland's decision to move all Medicaid patients into managed-care plans next year and reflects concerns of teaching hospitals, which have higher rates to cover education costs, that managed-care insurers will funnel patients to lower-cost hospitals.

It also moves Maryland hospitals closer to thier goal of contracting directly with payers, thus capturing the piece of the premium dollar that has been going to insurance administration and profits.

Hopkins will also continue to treat patients enrolled in other HMOs, "but we're unwilling to rely on that as a sole means" of attracting Medicaid patients, said Dr. John D. Stobo, chairman and CEO of Johns Hopkins HealthCare. Medicaid, the state-federal insurance program covering low-income patients and some disabled and elderly, currently provides 18 percent to 20 percent of Hopkins' patients, Stobo said.

The Hopkins network will be statewide and will include other hospitals and community health clinics, said Jerome H. Gotthainer, president and CEO of Employee Health Plans (EHP), the other Hopkins effort at direct contracting with payers. EHP contracts with self-insured employers to provide medical care.

Like existing HMOs that will participate in Medicaid after the switch-over next year, Hopkins would receive "capitation" payments from the state, a flat fee per month for each patient it enrolls. Hopkins would then be responsible for all care, and reimburse participating doctors, clinics and hospitals.

Hopkins is precluded from operating a regular HMO before 2001 by an agreement under which it sold its HMO to Prudential in 1989. Joanne E. Pollak, vice president and general counsel, said Hopkins will not enroll Medicaid patients in central Baltimore unless they select a Hopkins faculty physician for primary care, and Prudential had agreed to the plan.

Stobo said Hopkins itself, Johns Hopkins Bayview and Suburban Hospital in Bethesda would be included. And Gotthainer said all 13 federally qualified community health centers in the state would participate as well. Those clinics, however, will also contract with other HMOs, he said.

Gotthainer said Hopkins is not yet prepared to identify all participants in its network. When the General Assembly passed legislation in the last session to move Medicaid patients into managed-care plans, the Maryland Hospital Association lobbied successfully to allow hospitals and other providers to form managed-care organizations to take Medicaid contracts directly. To qualify, would-be managed care organizations must get approval from the state Health Department for their care network, from the Maryland Insurance Administration for their solvency and fiscal reserves, and from the state's hospital rate-setting commission for their capitation rates.

Creating hospital-doctor organizations that avoid insurance companies will ensure that "the largest proportion of the health dollar is going to care," said Cal Pierson, MHA president.

The MHA also sought legislation last year that would make it easier for hospitals to create "community health networks" that would function similar to HMOs and compete for commercial patients. Nationally, 13 percent of hospitals have arrangements with employers, according to a 1995 American Hospital Association survey.

In addition to a fight to capture dollars, the effort to allow providers to function like HMOs "is a question of local control over the health system," said Thomas R. Oliver, an assistant professor of policy sciences at University of Maryland Baltimore County. There is a fear, he said, that out-of-state insurers will be "calling the shots and dictating ultimately the survival of various hospitals and medical groups."

In the Medicaid market, other Maryland hospitals besides Hopkins are widely rumored to be planning to qualify as managed-care organizations as well.

The University of Maryland Medical System has decided that "insurance companies have a legitimate role in the health care system," said Nelson Sabatini, vice president for integrated delivery systems operations. "It doesn't make sense for us to compete with them or try to duplicate their infrastructure."

"Up to this point, we've been payer-neutral," working with all Medicaid HMOs, Sabatini said. But now, "we are looking at a partnership with a payer that will be much more exclusive in the Baltimore area."

The five-hospital Helix Health system had no comment yesterday on its plans.

Pub Date: 11/07/96

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