May 22, 2002 11:00 pm

By Alice Perry Linker

Observer Staff Writer

One anesthesiologist receives less money from Medicare for his specialty than he did 25 years ago.

An internist is frustrated with the hours he must spend on the phone, trying to persuade insurance companies to pay for his patients' needed medical procedures.

Both La Grande doctors find more of their income going to malpractice insurance, as those rates have been recently increasing anywhere from 50 percent to 80 percent each year.

Such problems may make future recruitment of doctors difficult, especially for rural communities like La Grande, and some say physicians are leaving Oregon because of the high cost of malpractice insurance.

"I make less with Medicare doing anesthesiology than I did 25 years ago," said Dr. Timothy Gleeson, vice president for physician relations at Grande Ronde Hospital and an anesthesiologist in private practice.

Medicare reimbursement is lower in Oregon's rural areas than it is in Portland, but Gleeson said malpractice insurance premiums cost the same for rural and urban doctors.

Dr. Keith Graham, a La Grande internist who has been practicing for nearly 20 years, is convinced that patients are "getting short-changed" as public and private insurance companies make decisions about health care.

"I frequently have to deal with poorly educated people in the insurance industry who are the gatekeepers," he said. "You try to explain — they can't understand it. Then, you have to go up the line. It's a continuous battle.

"People are making life-and-death decisions who have no business doing that. The patients are getting left out of the loop."

Insurers for Medicare and the Oregon Health Plan, as well as certain private insurers, such as Blue Cross, set the amount they will pay to both hospitals and doctors for certain procedures.

For example, Medicare will pay a doctor in Eastern Oregon $108.61 for an outpatient visit, compared to $116.56 for the same visit in Portland.

Each Medicare-covered service is coded by number, and Graham said that if a doctor doesn't follow the code exactly, he or she will have a hard time collecting.

"I may say ‘numbness in legs' as a symptom; they'll say, ‘That's not correct,' " he said.

Medicare sets the trend for payments, and private insurers follow, Graham said.

Care Oregon, the HMO that administers the Oregon Health Plan in La Grande, is also reluctant to pay, Graham said, but Gleeson said that he has found most doctors say that negotiating with Care Oregon is easier than dealing directly with the state.

Graham said one patient suffering from a seizure disorder has been denied admission to special medical centers that monitor and treat seizures, because the patient is insured under the Oregon Health Plan, and the centers, all in Portland, have filled their quota of health plan patients.

The public insurers keep changing the rules, he said.

"Billing changes every year; the coding system changes," Graham said. "Something changes every year. The feeling you get is the insurers will use any pretense to avoid paying you."

Hospitals face similar difficulties in collecting from insurance companies. Grande Ronde Hospital President Jim Mattes has said that the hospital's net operating revenues have been declining in the wake of Medicare reductions.

In 1997, Medicare paid about 64 percent of the amount charged by the hospital. Last year, the amount had dropped to slightly more than 53 percent, and with additional cuts scheduled for October, the hospital expects Medicare to pay less than 50 percent of the amount charged per patient, Mattes said Wednesday.

Care Oregon's discounts are similar, he said.

Of the amount charged for hospital care, 78 percent covers the hospital's actual costs. Mattes said a bill before the U.S. House of Representatives would allow rural hospitals, such as Grande Ronde, the ability to collect their actual costs from Medicare.

"They're paying below our costs," Mattes said about the public insurers. "Everybody else is subsidizing the programs."

At the same time insurance dollars are hard to collect, doctors face rising medical malpractice costs — a situation that is driving some physicians from Oregon.

The cost of malpractice insurance also affects the ability of small communities to attract and keep doctors, he said. "They leave for bigger cities," where they can join large clinics and spread the risk to a greater number of doctors.

Graham is one doctor who runs counter to the trend. He said he left a "lucrative" practice in Seattle to move to Union County.

"The quality of life here is much more what I wanted for my family," he said. "We live more simply, but we have more debt. We take few vacations and we're not putting anything away for retirement."

Both Gleeson and Graham blame the high amounts awarded by juries to plaintiffs for the cost of malpractice insurance in Oregon, and they say it's cheaper in states that have a cap on awards insurance.

"We've seen awards of $2 million $10 million, $20 million," Gleeson said.

"Our insurance is up 50 percent, 60 percent," Graham said. "Internists don't have the kinds of problems that some others do."

According to Gleeson, the two primary malpractice insurers in Oregon are not writing policies for new obstetricians because of the high risk of lawsuits.

Family practitioners often provide prenatal and obstetric care, but in La Grande two of the four family practitioners are discontinuing obstetric care, partly because of malpractice insurance costs, Gleeson said. By 2003, malpractice insurance could climb to $15,000 for family practitioners to as high as $60,000 to $90,000 for doctors who practice orthopedics and obstetrics-gynecology.

Grande Ronde Hospital is now seeking an obstetrician to replace Dr. Ken Ross, who is retiring from the hospital's clinic. Mattes said the hospital, which will pay the doctor's malpractice premiums, has been successful in attracting candidates

Increasing costs, more Medicare cuts and higher overhead affect a doctor's attitude about practicing medicine, Graham said.

"The business part is such a headache; you're continually told, ‘You'll take this.' We're doing more uncompensated work — overhead is up," Graham said. "Every year the headache gets bigger. I wonder

how long can I afford to practice medicine."