By Thea Jarvis

St. Joseph’s Hospital in Atlanta is one of four U.S. hospitals chosen to participate in a three-year federal program designed to reduce Medicare costs for coronary bypass surgery.

The pilot project, sponsored by the Health Care Financing Administration (HCFA), sets surgery costs based on a discounted fee structure negotiated with participating hospitals. It also combines charges for hospital and physician services, thereby reducing administrative overhead caused by separate billing and reimbursement procedures.

St. Joseph’s submitted a proposal to the HCFA cutting approximately five percent from standard hospital and physician fees for a coronary bypass operation. It was one of 206 hospitals competing to qualify as a Medicare heart bypass center.

“If the cost can be contained, then everybody wins,” said Joane Goodroe, M.B.A., R.N., director of St. Joseph’s Heart Institute and assistant vice-president for the hospital’s cardiac services unit. She estimated that HCFA will save about $1.4 million in Medicare payout over the three-year period the program will be in effect at St. Joseph’s Hospital alone.

“It’s a unique challenge. Health care costs are so high, it’s important that we take an active role in addressing them,” Ms. Goodroe said.

Asked how staff physicians felt about the discounted fees, she suggested that their attitude reflected concern and a willingness to adapt.

“They are taking a significant cut,” she explained, but “they realize if physicians aren’t going to adjust the problems in health care, someone else will do it for them.”

There are over 500 hospitals in the U.S. currently performing coronary bypass surgeries. In Atlanta, this operation is available at Emory, Georgia Baptist, Piedmont and Crawford Long hospitals, as well as St. Joseph’s.

U.S. Secretary of Health and Human Services Louis W. Sullivan announced January 30 that St. Joseph’s Hospital had been selected as a program site, along with St. Joseph Mercy Hospital in Ann Arbor, Mich., Ohio State University in Columbus, Ohio, and Uiversity Hospital in Boston.

“The purpose of the (three-year) demonstration is to assess the advantages of a negotiated price to cover hospital and physician services for coronary artery bypass surgery while maintaining high quality care,” Secretary Sullivan said.

Hospitals were chosen after a year-long screening process which judged the hospitals’ years of open heart surgery experience, volume of bypass procedures performed, pre-admission review and quality assurance programs, information system for tracking and evaluating patient care, marketing capabilities and strategies, discharge planning, post-discharge patient follow-up and package price.

Hospitals not chosen for the pilot program will continue to provide services for heart bypass and other surgeries under traditional Medicare guidelines. At the four hospitals that have been selected for the program, participation by physicians and Medicare beneficiaries is entirely voluntary.

According to the U.S. Department of Health and Human Services, heart bypass surgery is one of the most expensive procedures performed on an inpatient basis. The department estimates that this year, over 135,000 Medicare recipients will undergo heart bypass surgery. The cost to the Medicare program will run to $3 billion.

St. Joseph’s Hospital was the first Southeastern hospital to perform open heart surgery and angioplasty and has been a center for heart transplant operations in the U.S. In 1989, St. Joseph’s began the Heart Network of North Georgia which seeks to improve emergency medical response to heart attacks. The network links 17 participating North Georgia hospitals with St. Joseph’s cardiovascular team and technology.