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Stanford Report, July 30, 1997

Letter from James Franklin about PPGS changes: 7/30/97

This letter is being sent to the 600 employees whose primary-care physicians are part of the Private Physicians Group at Stanford. Those employees will be affected by a change in the status of that group. If you are a Stanford employee enrolled in groups or programs other than Private Physicians Group at Stanford your coverage is not affected and will remain unchanged.

Dear Stanford Employee or Retiree:

This letter is directed to all Stanford employees, retirees and family members who are currently using primary care physicians (PCPs) from the Private Physicians Group at Stanford (PPGS) and who are enrolled with Blue Shield Triple Option Plan or FHP Health Care for medical coverage. As you may have recently heard, PPGS will discontinue contractual relationship with all HMOs as of September 1, 1997. In this letter, we hope to explain what this means to you.

Unfortunately, Stanford has no control over the management of any medical group. We are distressed that PPGS will not be maintaining its relationship with Stanford's medical plan options and that we did not receive greater advanced notice. As a consequence of the PPGS decision, you will also have some decisions to make. We in the Office of Total Compensation will try to provide whatever information we can so you can make an informed choice that is best for you.

Before you make any decisions, you may want to talk with your PCP in PPGS to see if he or she anticipates affiliating with any other clinic or group practice in the area. We have heard that several of the PPGS PCPs are considering affiliation with other medical groups. Last spring, five PPGS physicians became affiliated with Palo Alto Medical Foundation and one affiliated with Stanford Health Services.

If your medical plan choice for 1997 is the Blue Shield Triple Option Plan, you will have these choices:

The consequences of maintaining your relationship with a PPGS physician through Tier III of the Triple Option Plan are increased out-of-pocket costs. For example, there is a $500 deductible and Stanford then begins sharing costs with you by paying 60% of the Blue Shield Allowable Amount. You pay 40% of the Allowable Amount if your doctor is a Blue Shield Preferred Provider. If not, your out-of-pocket cost might be more, depending on the doctor's charges. Please also note that routine exams such as annual physical assessments are not covered under Tier III.

If your medical plan choice for 1997 is FHP Health Care, you will no longer have access to PPGS physicians as of September 1. You must:

To change your PCP, you may call your medical plan (1-800-873-3605 for Blue Shield or 1-800-635-2273 for FHP Health Care). Your medical plan may also be able to give you a list of physicians from those clinics or practices who are accepting new patients. In addition, you may call a medical group or clinic and ask for a list of physicians currently accepting new patients.

Our Stanford community is very fortunate to live in an area with excellent medical facilities such as Stanford Health Services, including Menlo Clinic, and Palo Alto Medical Foundation. All of these groups provide services through the Blue Shield Triple Option Plan and FHP Health Care. Many of their PCPs are accepting new patients.

As you may recall from last year's open enrollment materials, selection of a medical plan for health care coverage is binding for one year because of Internal REvenue regulations governing benefit programs such as Stanford's. Consequently, employees affected by the PPGS decision will not be able to change medical plans or drop out of Stanford's health care coverage until the next open enrollment period, to be effective January 1, 1998. Remember, however, that you may change your PCP or medical group in any month.

Once again, we regret the inconvenience and distress the PPGS decision has caused some of our employees. Stanford, of course, wishes to continue offering high-quality and cost-efficient medical plans with choices. Since we expect there to be several new affiliations made by PPGS physicians, we hope many of you will be able to maintain your doctor/patient relationship.

Sincerely yours,

James C. Franklin
Associate Vice President for Total Compensation