Harts Hospital HMO Bill Fades

    LANSING — State Rep. Doug Hart, R-Rockford, has thrown in the towel for this year on a bill to force health care systems to divest their managed-care companies and has begun to lay the groundwork for possibly taking up the issue again in the next legislative session.

    Hart is unsure whether he will reintroduce the same measure or look to tackle the issue from another perspective after gaining new insight during a series of public meetings he’s holding this month and next.

    “It’s not a given at this point. I’m tentatively planning on it, but I want to receive the input of patients, businesses and heath care professionals,” said Hart, who believes health systems’ ownership of managed-care companies represents an inherent conflict of interests.

    His bill would have given hospitals five years to divest their controlling interest in a managed-care organization.

    “Perhaps there are other remedies I should be exploring or maybe there are ways I could modify this,” he said.

    Hart has organized the meetings to gauge opinions on his proposal, first introduced in September in the wake of the Spectrum Health-Blue Cross Blue Shield of Michigan dispute over reimbursement payments. Spectrum Health is the majority owner of Priority Health, one of the largest managed-care companies in Michigan with nearly 370,000 members.

    Priority Health is decidedly against Hart’s proposal, which never gained the political backing needed to move during the current legislative session that’s coming to a close.

    The five hospital-owned HMOs in Michigan that provide health benefits to more than 1 million people deliver exceptional quality, are cost competitive and locally controlled, and have a proven track record of financial stability, contends a position statement on Priority Health’s Web site (www.priority-health.com).

    This bill would have a disastrous effect on health care coverage for Michigan consumers. Provider-owned HMOs must be allowed to continue to exist because they offer much needed health care coverage to Michigan residents who rely on our exceptional care and service,” the HMO stated.“The provider-sponsored HMOs in Michigan have an impressive track record that must be protected, not divested.”

    Other opponents to Hart’s proposal say the integration of hospitals and HMOs help to generate continuity in care for patients and efficiencies in how care is delivered. Forcing hospitals to sell off their HMOs would hurt that continuity, they say.

    “It’s a very simplistic approach to a very complicated issue,” said Sherry Mirasola, corporate communications officer for the Michigan Health and Hospital Association. “If you’ve got something that’s working, you might not want to ‘fix’ it.”

    Hart believes that an ownership tie between HMOs and health systems “compromises the HMO’s ability to move outside the system to find the best deal for their customers.” He worries that hospitals’ ownership of managed-care organizations undermines rate negotiations with other HMOs, or between the hospital-owned HMO and other care providers.

    “I’m working under the premise that hospitals that own managed-care organizations have an unfair advantage to dominate the market,” Hart said. “My concern is that it raises costs and diminishes, ultimately, the quality of health care.”

    Mirasola doesn’t dismiss the potential for conflicts to occur. But simply requiring hospitals to sell off their HMOs isn’t the answer to those concerns, she said. If there are problems with conflicts of interests, then regulators can tighten controls to deal with it, she added.

    “Those are legitimate overall questions. That’s a larger issue and perhaps it should be advanced,” Mirasola said. “If they need to be tightened up, let’s look at that from a regulatory point of view. The last thing we want to do is drive out good health plans.”

    Hart wants to go beyond requiring health systems to divest of their managed-care companies. He also plans to pursue legislation that would force hospitals to adhere to the Michigan Freedom of Information and Open Meetings acts that now only apply to public governmental bodies. The series of public meetings will help further shape what he ultimately introduces next year.

    “I’m willing to listen, to learn and to grow,” Hart said.    

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