America, America!

James R. Teeter
President and CEO
Arkansas Hospital Association

A lot has been said about the American public's growing perception that American healthcare isn't what it used to be. You've heard it all: quality of care is declining; nurses are being replaced by aides; insurance companies control patient care; hospitals are disorganized and impersonal; the cost of healthcare is too high; and the system is riddled with waste.

Many foreigners suspect that Americans don't recognize high quality healthcare when they see it. USA Today reports that people from abroad who can afford it are streaming into the United States for medical care. They believe it is far superior to what they can get at home. An El Salvador man, for example, traveled to Baptist Hospital in Miami for two operations on an arm severely mangled in an auto accident. "I would never have gotten the level of care there that I did here. They saved my arm," said the 42-year-old chemical engineer whose employer picked up the $140,000 tab.

This case is indicative of foreigners coming here by the tens of thousands for hospital care, a trend being driven by the steady growth of a middle class throughout the Mid-East, Asia, and Latin America; and the emergence of employer-based insurance in those nations.

Squeezed financially by cost conscious insurance companies, Medicare, and Medicaid, many of the nation's premiere hospitals have begun marketing to well-heeled foreigners who are willing and able to pay top dollar for U.S. healthcare. Last year, Johns Hopkins treated 6,000 foreigners; up from 600 the year before. The Mayo Clinic will treat about 7,200 foreigners in 1997. M.D. Anderson has doubled its foreign patients since 1994. The UCLA Medical Center has tripled the number of its foreign patients.

Most of these visitors pay full fees for their care--20% higher than HMOs or Medicare will pay. This could mean the difference between profitability and being in the red for hospitals operating close to the edge. Here's how some highly respected institutions are trying to attract their market share of foreign patients:

-- Johns Hopkins is networking with hospitals and physicians in the Mid-East and Asia, to offer package deals for some surgeries.

-- The Mayo Clinic is pursuing contracts with businesses in the Mid-East, and has even set up a Muslim prayer room to make foreign patients feel more comfortable.

-- Massachusetts General is negotiating deals with foreign governments and companies, and hopes to boost its percentage of foreign patients from 2% now to 6% over the next five years.

-- M.D. Anderson has joined a consortium of 11 other Texas hospitals to cultivate foreign business, and last year had a booth at the Arab Health Expo in Dubai, United Arab Emirates.

-- Baptist in Miami has begun marketing internationally, and has already won a $3.5 million healthcare contract with the Cayman Islands for government employees.

The growth of health insurance abroad, and the fact that insurers there don't discourage treatment in the United States would seem to ensure that foreign patients will continue coming here in growing numbers. Manuel Arias-Mulla, for example, buys comprehensive coverage for his Dominican Republic shipping firm. "I bought it knowing everyone would travel, and mostly to the United States, to get surgeries and things like that," he said.

Maybe too many Americans--unlike people from afar--simply take for granted the excellent healthcare that's available in Arkansas and throughout the United States.

Bebow Named Chairman-elect

Gary L. Bebow, chief executive officer of White River Medical Center in Batesville, was elected chairman-elect of the Arkansas Hospital Association board of directors during the association's House of Delegates meeting October 13.

Directors elected to four-year terms were: Frank Wise, administrator of Fulton County Hospital in Salem, as the AHA's at-large representative; and Terry Amstutz, chief executive officer of the Medical Center of Calico Rock, representing the North Central District. Robert Bash, administrator of Booneville Community Hospital, will complete an unexpired term representing the Arkansas Valley District; Randall Fale, president of St. Joseph's Regional Health Center in Hot Springs, was elected to represent the Arkansas Foundation for Medical Care; and Judy Fraleigh of Fort Smith, president of the Arkansas Hospital Auxiliary Association, will serve a one-year term.

Patrick W. Flynn to Chair 1997-98 AHA Board

Patrick W. Flynn, president and chief executive officer of Washington Regional Medical System in Fayetteville, was installed as chairman of the Arkansas Hospital Association's board of directors during the AHA's 67th annual meeting October 12-15 in Little Rock. He succeeds Dan Gathright, senior vice president and administrator of Baptist Medical Center Arkadelphia.

Flynn was named to his present position in Fayetteville in January 1994, after having served as assistant administrator and senior vice president/chief operating officer of the facility since 1988. Prior to his Fayetteville position, he was assistant hospital director at University Hospital, clinical teaching coordinator at the VA Medical Center in Little Rock, and held pharmacy positions in Texas facilities.

Through Flynn's leadership, Washington Regional Medical System completed and enhanced its heart program, constructed new clinics in surrounding communities, completed a dialysis joint venture, and included Eureka Springs Hospital as part of the system. WRMS is comprised of nine corporations including the operation of Washington Regional Medical Center, a 294-bed acute care facility; Fayetteville City Hospital and Geriatric Center; Eureka Springs Hospital; Washington Regional Medical Foundation; and Health Partners, a physician hospital organization.

Flynn has been active in the Arkansas Hospital Association for several years, serving on the budget committee, council on government relations, council on home health, council on auxiliaries, and as chairman of the annual meeting program committee. He is an associate member of the American College of Healthcare Executives.

Flynn, a native of Port Arthur, Texas, is a graduate of the University of Houston and holds a Master of Health Service Administration from the University of Arkansas at Little Rock, and a Master of Science in Pharmacy from the University of Houston. He and his wife, Kathy, are the parents of Bryan, a student at Fayetteville High School, and Kevin, who attends Woodland Jr. High School.

When asked about today's healthcare system, Flynn said:

One word sums up healthcare today: dynamic. We continue to evaluate the ever-changing healthcare landscape, anticipate new challenges and position ourselves to respond. The emphasis of healthcare continues to shift from more costly inpatient hospital treatment to less costly outpatient services. Healthcare is also undergoing dramatic changes in the way it is financed. Regardless of how we are paid, we must continue to focus on quality care and patient satisfaction. We must also provide convenient, outpatient health services closer to where people live and work. Health is a community issue which is best served by partnerships with business and industry, schools, governments and service agencies. Together we can accomplish more than any one organization can on its own. We all benefit from a healthy population, one which puts less of a financial burden on our nation's healthcare system.

AHA Services Endorses Companies

The board of directors of AHA Services, Inc., the for-profit subsidiary of the Arkansas Hospital Association (AHA), recently endorsed five companies as preferred vendors. The companies are Viaticus, a subsidiary of CNA Financial Corporation; Press Ganey Associates, a company that specializes in satisfaction measurement surveys; Accurate Communications Corporation (ACC), which provides on-hold telephone messaging; Compliance Concepts, Inc., a consulting firm which helps healthcare providers develop corporate compliance programs; and Compliance Solutions, Inc., a company that develops and markets software applications to assist in the monitoring of specific Medicare regulatory requirements. In addition, the board also expanded its marketing agreement with HCIA, one of the nation's largest healthcare information processing firms.

Under the endorsements, AHA Services will assist in marketing of the companies' products to AHA member hospitals. For additional information about these or other companies endorsed by AHA Services, please contact Tina Creel or Phil Matthews at the AHA at (501) 224-7878.

Arkansas Newsmakers and Newcomers

John Neal has assumed administrative duties at Mercy Hospital/Turner Memorial in Ozark, according to Michael Morgan, chief executive officer of St. Edward Mercy Medical Center in Fort Smith which operates the Ozark hospital. Neal has served as administrator of Haskell County Hospital in Stigler, Oklahoma, since June 1988.

Bob Atkinson, president and CEO of Jefferson Regional Medical Center in Pine Bluff, has been elected president of the Arkansas Hospital Administrators Forum for 1997-98. Forum members also elected Barry Davis, vice president of Arkansas Methodist Hospital in Paragould, as the organization's president-elect; and Bob Bash, administrator of Booneville Community Hospital, was elected secretary-treasurer.

Michael D. Helm has been named president of Sparks Regional Medical Center in Fort Smith. Helm, who has been associated with the medical center since 1977 and executive vice president and chief operating officer since 1980, will succeed Charles Shuffield.

Charles Shuffield, former president of Sparks Regional Medical Center in Fort Smith, was presented the ACHE Regent's "Senior Career Executive of the Year" award, and Terry Amstutz, CEO of the Medical Center of Calico Rock, received the "Early Career Executive of the Year" award during the AHA annual meeting in October.

Arkansas' first lady Janet Huckabee, Ray E. Skelton, and Ross M. Whipple have been named to the Baptist Health Foundation board of trustees. Skelton is chairman and CEO of Mercantile Bank in Little Rock. Whipple is chairman and CEO of Horizon Bancorp Inc.

James Magee of Piggott, a former hospital board member and banker, has been named administrator of Piggott Community Hospital.

Col. Kirk Reamey has been named administrator of Magnolia Hospital. A colonel in the U.S. Army, Reamey is the former chief of staff of the Great Plains Regional Medical Command in Fort Sam Houston, Texas.

Greg K. Stock has been named president and chief executive officer of Northwest Health System in Springdale, according to chairman of the board Walter Turnbow. The system operates Northwest Medical Center in Springdale and Bates Medical Center in Bentonville. Stock has served as administrator or CEO at facilities in Louisiana, Oregon, Missouri and South Dakota.

Harold Mitchell has been named chief operating officer of Good Faith Medical Center in Pine Bluff. The facility was approved by the AHA board of directors for Type I-B membership in the association.

Donald Patrick, M.D., has joined NovaSys Health Network's Equity Board of Directors, according to NovaSys CEO Eric Paul. Patrick is president and CEO of Holt-Krock Clinic in Fort Smith and currently serves on the medical staffs of Crawford Memorial Hospital, St. Edward Mercy Medical Center, and Sparks Regional Medical Center.

Martha Carlson, CPA, has been named chief financial officer at Drew Memorial Hospital in Monticello. She succeeds Harold Mitchell. Carlson is the former compliance officer and business office director at Drew Memorial.

Marian Parson, RN, CICP, of Siloam Springs Memorial Hospital, was one of four persons selected from 275 U.S. hospitals managed or owned by Quorum Health Resources, Inc. and Quorum Health Group, Inc. for induction into the S. Douglas Smith Quorum of Excellence. The inductees were chosen because of their exceptional ability, talent, and dedication to their jobs and the people with whom they work. Parson received a $1,500 award and two plaques--one for personal use and one for display at the hospital.

CEO Retirements

W. D. "Bill" Hedden retired November 3. A former AHA chairman, he has served as administrator of the Magnolia Hospital for more than 40 years. Hedden said he "does not envy the young hospital administrators of today."

Betty Reams, administrator of Piggott Community Hospital, retired October 31 after being associated with the facility for 42 years. Reams reportedly went to work at the hospital "when our room and board charges were $9 a day."

Charles Shuffield, president of Sparks Regional Medical Center in Fort Smith since 1978 and former AHA chairman, retired November 30, bringing to a close a 30-year career in healthcare administration at Sparks.

Sister Mary Werner, RSM, administrator of Mercy Hospital/Turner Memorial in Ozark, retired November 3 after more than 30 years in hospital administration including many years as chief executive officer of St. Joseph's Regional Health Center in Hot Springs.

Arkansas Insurer Announces RBRVS

Arkansas Blue Cross Blue Shield (ABCBS) has announced plans to implement a new payment methodology for professional fee schedules patterned after Medicare's Resource-Based Relative Value Scale (RBRVS). According to Dr. James Adamson, medical director for ABCBS, the new methodology will initially use two conversion factors for establishing fees. One will apply to evaluation and management (E&M) services and the second to all other services. The conversion factors are being established at a level that will make total spending on E&M services slightly higher than current levels. Spending on non-E&M services will be slightly below current levels. Overall, the change is planned to be budget-neutral.

The conversion factors are as follows: evaluation and management codes ($44) and non-evaluation and management codes ($58.28). For physical medicine services included in the "Physical Medicine and Rehabilitation" section of the CPT Manual as published by the American Medical Association, the conversion factor will be $48.89. Payment allowances will be calculated based on the lesser of billed charges or the maximum allowance based on the conversion factor. Services having no established RVU's will continue to have allowances based upon the current methodology, including anesthesia which will be paid based upon anesthesia units. Subscriber benefits and medical policy guidelines will continue to apply to provider reimbursement calculations. Provider meetings are being planned across the state to introduce the new methodology. The changes will become effective for all claims processed on or after February 1, 1998.