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'Due diligence': watchwords during provider selection.

by Tom johnson Skyrocketing medical costs plus the stifling vertigo felt by many people in the health care industry have thwarted efforts to come to grips with the health care crisis.

According to Richard Hinden of the Chicago-based law firm Altheimer & Gray, in the past decade $606 billion was spent on health care in the United States with an estimated $1.5 trillion to be spent by the end of the century. Roughly translated, that is a price tag of more than $6,000 for every person in America.

In a seminar on how to reduce liability in the managed health care environment, Mr. Hinden said fee for service arrangements as a method of paying these bills are history" in this country. "We're paying more and getting less all the time," he said. "My God, we have an infant mortality rate here that is higher than the one in Singapore."

Although managed care mechanisms, such as health maintenance organizations and preferred provider organizations, have proven valuable as cost-cutters, liabilities can sometimes attach, thus wiping out any benefit from the programs. The best way to guard against those liabilities is to practice due diligence before hiring a health care vendor.

"Whether or not it ever comes down to legal issues, you have a moral responsibility to your employees in the accreditation process of your HMO or PPO doctors," said Brant Kelch, president of MedStrategies, a Washington, DC-based consulting firm. "PPOs and HMOs are businesses and should be run like businesses. If you aren't providing a quality product, then you'll probably get sued. You must have good due diligence."

According to Mr. Kelch, hospitals must properly review and accredit their physicians by making sure that there are no malpractice claims against them and that they have the clearance to prescribe drugs.

"Many employers don't verify their provider's qualifications," Mr. Kelch said. "Do they have malpractice insurance? Have their drug dispensing privileges been revoked?"

Every good doctor has a bad day, Mr. Kelch said. "But if you have a bad doctor on staff who hasn't been properly screened, you are opening yourself to a world of trouble."

In addition to poor screening procedures, Mr. Kelch said other weaknesses that can crop up during the selection process include relying on hard-to-measure subjective written criteria on how doctors conduct their practice.

As far as the all-important credentialing process is concerned, some employers delegate that task to other parties. "Provider-sponsored PPOs especially rely on hospitals to credential doctors," Mr. Kelch said. "The problem is that often it isn't done."

In addition, Mr. Kelch believes that sanction programs should be instituted for doctors who are accepted into a PPO panel but who develop problems later on. "Such a program should consist of a number of steps," Mr. Kelch said. "As an initial warning, an education letter should be mailed, followed by a face to face meeting, a penalty and finally expulsion from the PPO."
COPYRIGHT 1991 Risk Management Society Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Author:Johnson, Tom
Publication:Risk Management
Date:Feb 1, 1991
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