Monthly Commentary from the Executive Director - Tuesday, October 1st, 1996

WI HMO Rates Falling Behind

The typical HMO payment rate available for a Medicare beneficiary in 1997 will be $467, but the rate in every Wisconsin county is now substantially below that average. The national average went up 5.9% but a simple calculation shows Wisconsin went up only 4.5% (non-weighted average of 72 counties). As Dane and Milwaukee each only went up 2.5%, our weighted state average is probably closer to half the national increase.

Two years ago Milwaukee was right at the national rate; now they are seven percent below (as shown on the adjacent map.) Rural Wisconsin counties have generally dropped to thirty to forty percent below the average.

The difference between Wisconsin's and the average national HMO rate is indeed diverging. Our Congressional Delegation needs to get moving before we drop right off the map...

NRHA On To Medicare Reform

The National Rural Health Association (NRHA) is preparing for the down to basics, post-election brawl over Medicare. A first step is the development of a compendium of rural sensitive policy proposals advanced over the last few years to see where we have been. Then the NRHA Health Policy Board at its Fall meeting will build on these proposals to map out a strategic direction for our work with the next Congress.

Rural health advocates bring a unique perspective to any debate that focuses on reforming Medicare:

(Above data from Medicare And The American Health Care System, Report To The Congress, Prospective Payment Assessment Commission, June 1996)

Rural health has a troubled legacy from the Medicare program. The overwhelming and disproportionate share of patients seen by rural providers are Medicare enrollees while in a contrary manner, rural health represents a very minor portion of Medicare program expenditures. The small portion of Medicare expenditures for rural communities makes it difficult for them to gain the attention needed to solve long-standing rural equity issues. In summary: "Medicare casts a long shadow over rural health while rural health is largely ignored by Medicare."

Your input is invited into this process; a draft of the compendium of rural sensitive recommendations to reform Medicare can be found at our RWHC web site:

AHA Supports Fairer Medicare HMO Rates

The American Hospital Association (AHA) has come off the fence and is proposing a position closer to that long called for by rural advocates. The AHA Board of Trustees has endorsed as "long-term Medicare principles" that "equal payments per person that are adjusted to reflect regional input price differences and utilization that results from differences in beneficiary health status." The participation of the AHA is most welcome in the coalition of national advocates for geographic equity. We will continue to discuss differences over the use of regional input price differences.

The AHA is also proposing that "payments for medical education should be paid directly to organizations serving those responsibilities," This position has been sought by a coalition of academic medical centers who see HMOs increasingly capturing these Medicare funds without being medical education sites, and advocates for primary and rural based education previously locked out of the reimbursement formula.

Employer-Based Health Insurance Shrinking

From an American Hospital Association Press Release, 9/10/96:

"Employer health insurance coverage in the United States has declined steadily in recent years. The percentage of American workers and their families covered by employer-sponsored health insurance dropped from a high of 77.7 percent in 1990 to 73.9 percent in 1995 and is projected to decline to 70.4 percent by 2002."

"AHA President Dick Davidson said: 'This study makes it all too clear that employer health insurance has been eroding throughout the decade and will continue to do so, despite the success that employers have had in controlling health care costs... families are hardest hit when employers increase out-of-pocket payments, switch many jobs to outside contractors who are less likely to provide health benefits, and cut early retiree coverage programs..."

"The number of uninsured will increase steadily from 39.6 million in 1995 to 45.6 million by the year 2002"

The report was produced for the AHA by the Lewin Group, a Washington, D.C.-based health care consulting firm.

Creating Functional Competition

The following is from Harnessing Competition for Patients and Communities, A Statement of Principles prepared by: Association of American Medical Colleges, Catholic Health Association of the United States, InterHealth, National Association of Children's Hospitals, National Association of Public Hospitals.

"Competition in healthcare without explicit and enforceable ground rules is likely to be a dysfunctional competition. It will be based more on avoiding the uninsured and high risk populations than on treating them efficiently. It will encourage lowest unit costs rather than overall system savings and improved community health. And, without adequate performance standards, it is likely to favor the lowest price in the market rather than reward quality."

"Without explicit and enforceable ground rules, competition will inevitably erode support for essential community-wide functions... Public policies and emerging market competition must be judged on how well patients and communities are served. Current trends in the marketplace can bring new efficiencies and enhanced quality to healthcare. But these advantages can only be fully realized if six principles for accountable competition are met:

"Ground rules for competition must be shaped to serve people and communities first and foremost -- not institutions, professionals, or investors. The primary goals of competition in healthcare are efficiency and improved health status, not the financial success of individuals, providers, or plans."

"Real and continuous progress must be made toward universal access for all Americans. Competition will be counterproductive if millions of Americans remain uninsured and otherwise lack access to timely care. Access must be achieved through:

"Ground rules for competition must ensure a focus on efficiency, quality, and improved health status rather than on:

"Ground rules for competition must encourage the development of community based networks and providers that are:

"Appropriate levels of financial support must be sustained for societal-wide needs in healthcare, including support for:

"The Medicare and Medicaid programs should be restructured for greater efficiency and effectiveness in a way that meets each of the above principles. They must be moved toward real savings while improving quality and accountability."

Why Farm Rescue Training?

Wisconsin Center for Agricultural Safety & Health:

"Agriculture is a dangerous industry

"Many incidents require special care

"Farms pose hazards to rescuers

To arrange a farm rescue training session, please contact the agricultural agent at your county Extension office. For further information, contact

Mark Purschwitz, Ag. Safety and Health Specialist
University of Wisconsin - Madison
460 Henry Mall, Madison, WI 53706
Phone 608-262-1180, Fax 608-262-1228

Long Awaited Rural Family Medicine Track

Congratulations to St. Clare Hospital & Health Services in Baraboo and the U.W. Department of Family Medicine and who have "now up and running the first approved full time family practice rural training track residency in the state of Wisconsin."

Chilly Shoulder Given Primary Care

The following is from the conclusion of a study published in the Journal of the American Medical Association, September 4th, 1996; Susan D. Block, MD et al:

"Medical educators and policy makers are placing increasing emphasis on primary care education and practice. Marketplace factors are encouraging Academic Health Centers (AHCs) to recruit and affiliate with primary care physicians. In many schools, increased attention to education for primary care practice is evident. Yet, in spite of these changes, the values of traditional biomedicine and medical education continue to emphasize specialized knowledge and competence as opposed to breadth of knowledge; biological factors as opposed to social and emotional factors in health; and inpatient as opposed to outpatient care and training."

"We suggest that the pervasiveness and magnitude of the negative attitudes toward primary care in AHCs constitutes a form of professional prejudice. While inter professional rivalries and stereotypes are an inevitable feature of academic medicine, we believe that the negativity toward primary care goes beyond benign professional rivalry and is deeply rooted in the culture of medicine."

"The presence of a chilly climate for primary care in AHCs represents a barrier to primary care career choice and education and compromises the quality of professional life for primary care-oriented students, residents and faculty. Major changes in the culture of AHCs will be necessary to make their climate hospitable for primary care."

Physician Salaries Drop For First Time

The following is from an Associated Press article by Laura Meckler, 9/3/96:

"Physician salaries dropped in 1994 for the first time in more than a decade, with specialists taking the hardest hit as managed care became more widespread."

" 'This is the first time we've seen a reduction in take-home pay' since statistics were first compiled in 1982, said Carol Simon, an economics professor at the University of Illinois at Chicago and co-author of a new study published in the health policy journal Health Affairs. On average, doctors' income has risen nearly 6 percent annually since 1982... 2.2 percent when inflation is taken into account. With an average income of $187,000 in 1994, doctors were still among the highest-paid workers in America. But that was 4 percent less than in 1993, the report said."

"Lower-earning doctors, mainly generalists, saw their incomes rise modestly while higher-paid specialists saw their incomes drop. Specialists' salaries have dropped the most, as managed care has pressured primary care physicians to minimize expensive, specialist care."

Family Medicine & Rural Health

The following three recommendations are from "Continuing Family Medicine's Unique Contribution to Rural Health Care," by Robert C. Bowman, MD in the August, 1996 issue of American Family Medicine:

  1. Family medicine should encourage states, medical schools, primary care organizations, rural organizations and primary care training programs to work together to prepare a strategy that will best meet the needs of rural populations."

  2. "Family medicine should use residency programs to engage residents in longer and better rural rotations and obstetric training."

  3. "Family medicine should preferentially encourage the creation of residency programs and other experiences in smaller towns."

AHEC To Become Real Joint Venture

This is a seemingly all too rare example when good politics is also good policy. There is a growing consensus that the Wisconsin Area Health Education Center (AHEC) System can only survive and succeed if it goes beyond traditional "partnership" rhetoric and actually creates a structure to share decision-making on statewide issues. A world increasingly characterized by scarce public funds and private managed care competition, will no longer sustain educational systems led by anything short of a full partnership between our communities and our schools.

The proposal for a AHEC Partnership Council is in the process of being further refined as a compliment to Wisconsin's two Medical Schools re-negotiation of the "Gobbler Accord," an imposed/negotiated truce that allowed Wisconsin to finally receive our first Federal AHEC dollars in 1991. (The Gobbler was a restaurant half-way between Madison and Milwaukee best known for its floor to ceiling purple shag carpet.)

While this approach is equally applicable to most states, Wisconsin will be one of the first to take the leap. As Chair of the advisory body that this Partnership Council will replace, I would appreciate your suggestions as we move forward to implement this model; the current proposal is summarized below:

"The newly-formed AHEC Partnership Council would recognize that community-academic partnerships are key to the long-term success of the AHEC program. The council would support and foster these partnerships using the philosophy that, working together, community and academics can achieve more than each of us working separately, and sometimes at odds."

"The purpose of the council would be to develop policy and provide broad oversight with respect to programmatic direction, long-term financial planning, review and implementation of the strategic plan, system budget development, statewide initiatives, and future directions for the Wisconsin AHEC system. The council would be built on the foundation of open communication, respect for the strengths that each of the partners bring, and a willingness to understand and incorporate diverse perspectives in finding common ground."

"The council would have equal community and academic representation, all of whom would have familiarity with community-based health professions education. Suggestions for members include: AHEC center directors, AHEC board presidents, at-large community members, the deans of the two medical schools, representatives from other health professions schools, principal investigator on the federal AHEC grant."

Collaborative EMS Leadership Needed

Wisconsin's EMS Program continues to refuse to assure fair representation from physicians practicing in rural communities but the need for thoughtful regional planning continues; recent examples in southern Wisconsin:

While an accident victim eventually received appropriate care, five (yes, five) ground crews ended up being called to the site; the final irony was that the ultimate conveyance was by helicopter.

An example of an opposite response was the sheriff who had to argue for 45 minutes to get a single response team to a serious auto accident in an "in between zone" that had previously been the site of duplicative responses. The impact on care in this case was not known but can be imagined.

Resources For Rural Community Developers

From the W.K. Kellogg Collection of Rural Development Resources User's Guide:

"In 1994, the Heartland Center began work on the development of a special collection of resources for rural community developers. With support from the W. K. Kellogg Foundation, the Heartland Center developed a partnership with the University of Nebraska-Lincoln's College of Architecture where the Collection is located."

"The purpose of the Collection is primarily to gather in one place all types of resources used in rural community development projects that might serve as examples of program approaches or sources of innovation. Originally, emphasis was placed on those materials produced as part of a Kellogg Foundation-funded project. Soon thereafter, the search was broadened to include all types of quality print and video materials."

"The Collection project was designed to include both on-site and electronic access. In this way, an audience of academics (faculty and students) and community development practitioners might be served. Potential grant writers, project developers and researchers make up the majority of Collection users."

Information about the Collection is available by fax request (402-474-7672) or on the World Wide Web at:

RWHC Invites Urbans To Cooperative Forum

The Cooperative (RWHC) at its September Board meeting formally established an Affiliate Membership category for regional, specialty provider based systems. They believe that there is significant unrealized synergy to be obtained through the development of closer working relationships by rural providers, RWHC and key regional tertiary care based systems.

It is inevitable that multiple systems will exist in rural communities and our position is that there is a definite need for a mechanism to encourage symbiotic relationships by those working within the same rural communities. Collaboration within rural communities is consistent and complementary with competition between integrated regional systems.

There is a growing perception that regional systems will develop increasingly aggressive positions and seek to dominate rural health rather than work with the local communities and other systems serving those communities. There is an opportunity to counter this perception if we can jointly identify and implement collaborative initiatives in the best interests of rural health.

RWHC's "rural/local community" focus, full (voting) membership will be limited to local, rural facilities once individual affiliate members are accepted by board action. RWHC board meetings would continue to be limited to voting members. At this time, the University of Wisconsin Hospital and Clinics has been "grandfathered" as a voting member.

A Cooperative Forum limited to RWHC members (full and affiliate) will meet on a quarterly basis following a RWHC Board meeting. It is anticipated that ad-hoc initiatives would be spun off these quarterly meetings. The Cooperative Forum would serve to enhance rural health by bringing regional providers together in order to accomplish the following goals:

Negotiating With Kritek, You Read It Here 1st

In March we advised reading Renegotiating Health Care: Resolving Conflict to Build Collaboration, particularly Phyllis Beck Kritek's chapter, "Nursing Negotiating at an Uneven Table." The October issue of the Healthcare Forum Journal highlights her principles:

Find and inhabit the deepest and surest human space that your capabilities permit. To introduce alternatives to dominate power negotiation, remain grounded in self-awareness, self-honest, and self-confrontation.

"Be a truth teller. Be honest with yourself. Listen closely to recognize truth so that you can acknowledge an untruth placed on the table or a truth denied admission."

"Honor your integrity, even at great cost. There may be times when you stand alone at the table."

"Find a place for compassion at the table. Having acknowledged your own limitations and failures, do the same when viewing others."

"Draw a line in the sand without cruelty. Make explicit your own position on potentially destructive issues and your intention to leave the table if certain limits cannot be honored."

"Expand and explicate the contest. Bring all realities into focus for a more comprehensive awareness of the nature of the conflict and to develop useful options for resolution."

"Innovate. Question rules and their incongruities. You may expose power relationships that underlie the rules (which might also help you to change them.)"

"Know what you do and don't know. At an uneven table, those at an advantage often deny other people's realities. If you don't know something, say so. Create an environment where "not knowing" is accepted."

"Stay in the dialogue. Stay at the table, but don't enable its unevenness through co-optation or by being silenced."

"Know when and how to leave the table. Leaving is easier than staying where you don't belong. When alternative ways of being there can't be honored, leaving frees you to approach other tables."

For Or Non-Profit, Why The Fuss?

The following is from "Death knell for non-profit hospitals?" by Bruce Hilton, Director of the National Center for Bioethics in the Chicago Tribune, September 11, 1996:

"To communities where the local hospital has been struggling under the pinch of managed care, an outfit like Columbia can look good. It has the power to keep the hospital going and to pour millions into capital improvements. It can turn a community's tax-exempt burden into a tax-paying cash cow. If this is all true, then why the fuss? Shouldn't free-market forces be allowed to flourish? Critics point out that:"

"Hospitals traditionally have been much more than businesses. Their responsibility is to the community and the patient. But investor-oriented institutions have no room for the idea of 'the public good.' "

"Free markets didn't create these hospitals. Communities and church groups nurtured them - giving free land, endowments, philanthropic gifts, tax free status and the sweat of underpaid staff. The purpose was charity. A hard-nosed entrepreneur can turn these assets into piles of cash in a few weeks."

"In health care, the "seller" has vast advantages of power and knowledge over the "consumer." Professional ethics helped protect the patient. The new systems draw doctors deeper into money-grubbing - using loopholes in conflict-of-interest laws, for example, to let them own stock and still refer patients."

"Although non-profit hospitals must break even, they have "embraced a social ethic, service uninsured patients, taking Medicaid losses, not insisting that every mission or procedure be profitable." Teaching, research and public health don't turn a profit, and often don't survive the takeover."

"The cost-cutting that makes a newly acquired hospital profitable may endanger the patient. Columbia vehemently denies this (and, as proof, says that a disproportionate number of Columbia hospitals have received accreditation with commendation from the Joint Commission on Accreditation of Healthcare Organizations). But [what happens] when there are cuts in staff, administration and quality of supplies too deep for safety and good care?"

OHCI To DHFS Drops User Policy Board?

The following news item is from the Wisconsin Health & Hospital Association:

"The Thompson Administration has made a decision to shift the office of Healthcare Information (OHCI) to the new Department of Health and Family Services (DHFS). According to Department of Administration Secretary Jim Klauser, the shift is made to allow better coordination of all health related data. The shift will be made in the near future through an executive order, but will ultimately require statutory modification in Wisconsin's 97/98 biennial budget."

In conversation with Bob Taylor, WHA President/CEO, we both understand that our organizations want to see the continuation of an independent decision making board comprised of users as Wisconsin moves forward with an integrated approach for market based and population based data.

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