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ETHIX DEVELOPS UNIQUE EARLY WARNING SYSTEM WHICH ENABLES MANAGED CARE COMPANY TO PROJECT CLIENT HOSPITAL COSTS

 ETHIX DEVELOPS UNIQUE EARLY WARNING SYSTEM WHICH ENABLES
 MANAGED CARE COMPANY TO PROJECT CLIENT HOSPITAL COSTS
 PORTLAND, Ore., Sept. 23 /PRNewswire/ -- The Ethix Corporation, one of the nation's largest health care management companies, announced today that it has developed a unique computer-based "early warning system" which scans nationwide hospital admissions so that the firm can immediately project costs for its clients.
 By comparing the status of each case to the Ethix national database, the firm is able to make extremely accurate cost projections. The Ethix database consists of information from the firm's more than 10,000 clients and its preferred relationships with 220 hospitals and some 11,500 physicians.
 According to John Van Dyke, assistant vice president in the medical management division of Ethix Care Management, the company uses pooled claims information from its preferred provider organizations (PPOs) throughout the nation to prepare cost prediction models for high-cost procedures. All client hospital admissions are tracked, using a list of 750 illnesses identified through the diagnostic code (ICD-9).
 After getting client approval, Ethix steps in to negotiate with the hospital within 24-48 hours. Between 55 and 60 percent of such negotiations result in settlements averaging discounts of 4.15 percent, Mr. Van Dyke said.
 The new system is the result of a demand by private payers of health care costs (i.e. the self-funded employers, insurance companies, etc.) that measures be taken to curb the dramatic hospital cost shifting from payers such as Medicaid and Medicare, who are billed at a discount, to private payers.
 Hospitals have shown a remarkable ability to make this shift which amounted to $20.1 billion in 1989 and is expected to reach $34.6 billion this year. As a result of this cost shifting, private payers are pressed more than ever to control their healthcare costs.
 Specifically, it has prompted private payers to demand negotiated hospital costs at lower and lower levels. Five years ago, the national average hospital claim negotiated was $200,000. Today, it's all the way down to $7,000 which is close to the cost of the average hospital stay.
 Ethix, as a fast-growing health care management company, has seen the number of its negotiated claims rise from 123 in 1987-1988 to the current 1992 average of 410 per month.
 -0- 9/23/92
 /CONTACT: T.M. Hopkinson & Co., 212-682-6046, for the Ethix Corporation/ CO: Ethix Corporation ST: Oregon IN: HEA SU: PDT


SM-TS -- NY025 -- 2547 09/23/92 10:26 EDT
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Publication:PR Newswire
Date:Sep 23, 1992
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