FHP Heath Care, Utah's largest health-maintenance organization, has discovered that the close relationship between Primary Children's Medical Center and the University of Utah Hospital is costing the company a lot of money - costs FHP will pass on to its members next summer.
FHP officials said they won't be able to attach a dollar figure to the cost increase for two or three months. The company has 124,000 members in Utah.FHP pays approximately 36 percent more for one day of care at Primary Children's than a day of care at the U. Hospital, said Elden Mitchell, FHP regional vice president.
Besides paying more for hospitalization at Primary Children's, FHP has trouble controlling its patients' care and length of stay at Primary Children's. "At Primary Children's, it has been very difficult to maintain involvement in managing our patients. They are managed by Primary's staff," Mitchell said. "We have seen that patients with similar diagnosis are staying longer at Primary Children's than at the U."
Primary Children's staff performs more tests on its patients than the U. does without checking with FHP or FHP contract physicians, Mitchell said. In addition, FHP "pays more for procedures and materials of all kinds at Primary Children's than for the same procedures and materials at the U."
That wasn't a concern when FHP was allowed to decide to which of the two hospitals its patients were admitted. But when the U. department of pediatrics moved its neonatal medical residents and some of its pediatric medical residents over to Primary Children's, the pediatricians at the U. began telling FHP that most of the children and babies insured by the company must be admitted to the more costly Primary Children's.
The reason: The doctors said they didn't have the residents they needed to care for the youngsters, Mitchell said.
Monday, the Utah attorney general's office confirmed its antitrust investigation into the relationship between the U. and Primary Children's and the negative effect that relationship may have on health-care costs.
FHP's pediatric costs began going up when Intermountain Health Care built a new Primary Children's hospital next door to the U. Hospital and the two hospitals began combining services, Mitchell said.
Previously, only FHP children requiring critical pediatric care that could not be given at the U. were admitted to Primary Children's.
"But since the construction of Primary Children's and the transfer of pediatric residents from the U. to Primary Children's, the bulk of the admissions have been to Primary Children's irrespective of diagnosis," Mitchell said. "For a period of time it was extremely difficult to admit a pediatric patient to the U."
Most youngsters were sent to Primary Children's, he said.
That cost FHP a lot of money. Primary Children's officials have acknowledged that some costs are higher but say that's because Primary Children's patients are sicker than children admitted to the U.
FHP statistics challenge that contention.
FHP compared what the two hospitals billed it for two-day stays of asthma patients during the first three quarters of 1990. Primary Children's charge was 122 percent higher than the U.'s charge, Mitchell said. Primary Children's billed FHP $1,734 more than the U. did for each asthma patient's two-day stay.
The U. has attempted to open its doors once again to pediatric admissions by replacing the pediatric residents it lost to Primary Children's with nurse practitioners who have advanced education in pediatric care, Mitchell said.
U. Hospital spokesman John Dwan said the hospital is also considering bringing one of its pediatric residents back from Primary Children's.
After those practitioners were brought on board, FHP pediatricians began trying to direct more of their pediatric patients back to the less-expensive U.
"It's probably too early to tell if we are successful in directing those admissions," Mitchell said.
The increasing closeness between the U. and Primary Children's troubles Mitchell.
"In the past, we were able to negotiate better rates for our members because of the competition between the two hospitals," he said. "We are obviously worried that as the two facilities become one, our ability to negotiate a discount will be hampered."
The two hospitals have been mingling some services in recent months. The U.'s neonatal transport system went out of business when Primary Children's announced plans to start its own system.
However, Primary Children's charges more to fly sick babies to its doors than the U. charged to fly them to either hospital. Primary Children's officials say that even though their flight fees are higher than the U.'s, they plan to transport more babies by ambulance than the U. did, cutting the costs to parents and insurance companies.
Tuesday, Primary Children's announced another mingling of services. It consolidated its general pediatric outpatient clinic with a similar clinic at the U. and moved both clinics to the U.
"When we were apart, it seemed reasonable to have both clinics because we were in different parts of town," said Bonnie Midget, spokeswoman for Primary Children's. "But when we moved, the doctors wanted to have it all in one place."
Such unification could be costly to the public. "It's hard to negotiate a discount for our members when there's only one game in town," Mitchell said.