Financial progress at Tenet Health Corp. provides a glimpse at how the hospital industry is faring. Tenet announced a 7.2% increase in revenues for fiscal second quarter, fueled primarily by an increase in patient admissions at its 113 hospitals. Tenet also reported an average increase of 3% to 6% in payments from managed care companies. One of its corporate priorities is to aggressively deal with unpaid bills or slow insurer payments. It has sued one managed care company over slow payments.
ADD TO: HMOS
Financial analysts expect the nation’s HMOs to report respectable earnings during fourth quarter 1999. Despite the spate of class action lawsuits alleging consumer fraud, analysts believe that HMOs will benefit from aggressive increases to health insurance premiums. It is believed that premiums are increasing faster than the cost of medical care and prescriptions.
UWE RHEINHARDT SURRENDERS TO MEDICARE REGS
Remember Uwe Rheinhardt? He’s the managed care guru and healthcare economist from Princeton University. In the January 21 edition of the Wall Street Journal, Rheinhardt wrote an opinion piece titled “How Medicare Can Turn Anyone Into a Crook.” In commenting on the latest fraud and abuse settlement (National Medical Care, Inc.’s civil settlement of $325 million and a criminal fine of $101 million), Rheinhardt asks “…what has happened to our renowned healthcare system? Has it become host to widespread malfeasance?”
His conclusion? No. It’s Medicare regulations that make any provider into a potential crook. But what is disappointing from one of the nation’s better known healthcare policy wonks is his conclusion: “Given the tangled web of Medicare legislation, more fraud investigations are inevitable. Rather than engaging in a long, protracted fight to set the record straight, throughout which share prices suffer and business slumps, a health company’s best bet may be to hand over the fines and get on with business.”
TDR ON RHEINHARDT:
Although THE DARK REPORT tries to stay away from things political, Uwe Rheinhardt’s willingness to sacrifice the constitutional rights of the healthcare industry on the altar of Congress and Medicare bureaucrats is shameful. Physicians and healthcare executives should consider this fair warning. Rheinhardt and other intellectuals certainly do not represent the best interests of patients. Unfortunately, too many intellectuals like Rheinhardt have the attention of Congress and the President. That is not a good thing for the future of the American healthcare system.
Despite problems with the FDA and a big fine, Abbott Laboratories, Inc. posted a revenue increase of 5.3% during 1999. Its diagnostics division showed a healthy 8.9% increase, with revenue of $3.038 billion. The FDA ban on diagnostic kit sales will cut into Abbott’s sales during 2000.