September, 2003
Volume I, Issue 11

News

Healthcare marketing and PR people need to monitor the ongoing drama over the October 16 HIPAA electronic transaction deadlines. If, as some experts predict, thousands of physicians suddenly see all their claims rejected, this could turn into a national news story.

Already, the Wall Street Journal has covered the issue (9/12), noting that the federal CMS launched a print-ad campaign aimed at physicians picturing a faucet gushing money. "Get compliant. Your cash flow depends on it," the ad warns.

As the October 16 HIPAA deadline nears, many small physician practices (and 60% of all physicians are in groups of six or less) are growing increasingly nervous about their ability to successfully file electronic claims. Anticipating a claims logjam, some have taken out a line of credit to protect their financial stability.

On September 15, a coalition of 58 provider associations, including the AMA and AHA sent a letter to payer associations asking them to adopt contingency plans to accept noncompliant claims after the deadline.

To date, the only public response from the payer side was from BlueCross BlueShield of South Carolina. In a September 18 news release, it stated it would "temporarily" continue to accept electronic transactions from "current submitters" in HCFA 1500 and UB92 formats (see PR Newswire for the release).

Ominously, the BCBS release noted that of the 9,000 providers and vendors it contracts with, less than five percent have successfully tested sending claims according to the new formats.

Trends

Two recent stories in The New York Times about Kodak and General Electric highlighted a growing trend - Fortune 500 companies moving aggressively into the healthcare market. In one story on Kodak's "reinvention", the paper said that in the future, the "bulk" of the firm's profits will come from healthcare. Kodak spent $500 million to acquire PracticeWorks in July and has launched new initiatives in medical imaging and image-sensor chips.

In a separate story on General Electric's strategy, the Times reported that GE has targeted healthcare and information technology as its leading growth areas.

Industry observer Jane Sarasohn-Kahn has dubbed this trend "the blue-chipping" of healthcare IT. She attributes it to several factors including risk management, vendor viability, and making sound investment choices.

She notes that most healthcare organizations are now "in an operating environment of purchasing security to minimize risk...The safe bet is to work with a known, proven vendor with deep pockets, in case something goes awry. "

There is an old marketing saying that "water flowing downhill gains momentum," meaning that it is easier to affect a trend earlier rather then later. The big companies are just now opening their marketing spigots. Their spending will only increase. Smaller companies that keep postponing their own marketing and PR efforts may soon find themselves swept under.

To see Sarasohn-Kahn's entire article and other iHealthBeat opinion articles, go to iHealthbeat's opinion page.

Industry Insight

"When I started in this business in 1971, we were spending 7.5% of our GNP on health care...people were asking how we would ever be able to sustain it if it hit 8%, and 10% was totally unheard of. We now spend 14.5%...can we afford more? The answer is yes. Not only that, but will we pay more? I think the answer is also yes."

"The relationship between doctors and hospitals is very complicated, and in some respects very hostile. Most patients don't realize that...From the hospital point of view, the doctors don't bear any of the costs of these new technologies. They order what they want. Many times, it costs the hospital more than they get paid. Doctors...see the hospital as a fat cash cow generating all this money, while they are being squeezed by rising malpractice costs."

"The physicians and hospitals have gained much of the upper hand over the insurance companies... They can pretty much ask for what they want. Ideally, doctors are only asking for what is best for the patient. Critics believe they are pushing for their own financial gain, of course."

--from an interview with Stuart Altman, professor of national health policy at Brandeis University, in the September 12 Wall Street Journal, which has been running a series of articles on health care rationing.

Resources

The Mobile Healthcare Alliance (MOHCA), based in Washington D.C. is dedicated to "promoting and preparing the healthcare industry for the effective adoption and use of mobile technology."

According to Executive Director Claudia Tessier, the organization's top priority now is to create a "road map" or series of guidelines that will help hospitals and other organizations in selecting and installing technology. The document will have recommendations on how to avoid electromagnetic interference, which is one of the main problems facing the industry now.

Tessier said MOHCA is not trying to come up with technical standards, just "best practices and model policies" on mobile technologies.

While many industry leaders such as HP, MercuryMD, Motorola and RIM serve as association sponsors, anyone is welcome to join and participate in meetings. Individual membership is $450.

The web site is mohca.org. Particularly helpful for marketers is the association's "Presentations" page, which contains 24 PDF and PowerPoint documents on industry issues.

You are welcome to forward this publication to other public relations professionals for noncommercial use.

© 2003 Westside Public Relations. All Rights Reserved.