By Tom Embrey

Senior Writer

As the debate over the recently enacted federal health-care reform continues to rage, officials with FirstHealth of the Carolinas are taking a wait-and-see approach.

FirstHealth CEO Charles Frock called the new reform legislation "large and far reaching" and said that it is too early to tell exactly what the effect on the hospital will be because it will be phased in over a number of years.

"Most of the things affecting FirstHealth and the hospital community are five to six years out," Frock said in an interview. "We have time to understand where things are going and the likely impact, and, therefore, how we adjust how we do business to accommodate the new reality."

Frock said that based on projected estimates, the gains or new money that the hospital will receive from newly insured patients will likely be offset by the decrease in Medicare payments from all the patients the hospital traditionally sees.

"It is not exactly dollar for dollar," Frock said, "and it's a slight negative for the hospital community, but it's small. I'm not overly alarmed."

Dr. George Bussey, chief medical officer at Pinehurst-based FirstHealth of the Carolinas, shares that view.

"In the grand scheme of things, there is nothing really radical or out on the edge in there," he said.

Bussey believes those on Medicare, senior citizens and folks who have "doughnut-hole" issues will have those holes in coverage closed. He added that raising the Medicaid threshold will increase the care received by lower-income individuals.

But he said he doesn't expect to see an increase in patients visiting primary care physicians right away.

"People are creatures of habit, and there will be an education process," he said. "Over time, there will be an influx of patients to primary care physicians, but I don't think that is a switch that is turned on right away."

Bussey said one interesting aspect to the new reform concerns the numerous pilot or experimental projects that, depending on the outcomes, could be beneficial to the medical community down the road.

One larger concern expressed by Frock and Bussey is the lack of a fix in the legislation regarding physicians' pay reimbursements.

"There is no over-arching payment reform in here," Bussey said. "That is a large unfinished piece to the puzzle."

While many questions remain about how the final pieces will shake out, Frock said the two main things he sees that the reform accomplishes are the expansion of insurance coverage and insurance reform. Because of this, one thing he anticipates is short-term in-creases in insurance premiums.

"This is mostly a health insurance reform bill, more than it is health reform," Frock said. "The net effect is that it will, in the short run, drive up premiums for some folks."

The reason, Frock said, is that the business of insurance is to manage risk, and the current reform has introduced so many unknowns that private insurance companies will build in compensation for that risk into their pricing.

Ken Lewis, of First-CarolinaCare, an insurance subsidiary of FirstHealth of the Carolinas, agrees.

He said an imbalance of risks versus rewards in the legislation combined with the numerous taxes will cause an increase in costs that will be passed on to customers.

"I don't see much if anything in this bill that will lower costs," Lewis said.

Lewis said there were some positives in the reform. He cited the provision that allows individuals to stay on their parents' insurance plan until age 26 and the uninsured targeted loss ratio, which is something that FirstCarolina-Care has been doing for years.

"As far as FirstCarolinaCare goes, the federal regulations are just catching up to us," Lewis said. "We've been doing these things for the last few years.

"I think another good piece is that the discussion itself was a good outcome within the legislation, because I think it got more people to understand some of the issues that are out there."

As for the future, Lewis said the bill could force insurance companies to change their focus.

"We have to look at this bill and say what does it mean for the way we do business today," Lewis said. "And even more importantly, what is our relevance to the system and to the community.

"Today, we keep it (premiums) down for businesses so they can have a predictable cost.

"In four years, I would say to you our goal will have to be to keep them (premiums) down for individuals."

Contact Tom Embrey by e-mail at tembrey@thepilot.com.