The Palm Beach Post from West Palm Beach, Florida • Page 75

The Palm Beach Post SUNDAY, MARCH 3, 1996 SECTION COMING MONDAY A preview of business issues coming up in Tallahassee: Who will win and who will lose? Complete mutual fund lists, 3.5-7E fcrf.3"ii.-t-H4- Federal audits point to the trouble spots at HMOs 181 HMO For instance, federal investigators found 29 quality problems at CAC-United Health Care Plans, but just four deficiencies at Humana Medical Plan, Health Options and PCA. Federal officials sav thft nrnhlpms ran frontier for health maintenance organizations. With only 10 percent of the nation's 37 million Medicare recipients enrolled in the managed care plans, experts consider the market ripe for explosive growth. In Florida, about one of every four people receiving Medicare is in an HMO. HMOs appeal to Medicare recipients with a richer set of benefits than traditional Medicare, including coverage for prescriptions, no deductibles and few co-payments.

In traditional Medicare, where only the doctor monitors the patient's care, physicians have an economic incentive to order too many services. With HMOs, physicians are paid a set fee per member per month and thus, have an economic incentive to do less. HMOs say they closely monitor the care to make sure it is appropriate, as well Please see HMO2E By PHIL GALEWITZ Palm Beach Post Staff Writer CareFlorida, one of South Florida's Iniallest Medicare HMOs, has had to fcontend with plenty of problems. lh According to its federal audit, the tHMO operated without an active board of fli(ectors and failed to pay claims on time. PeVhaps even more significant, the HMO's quality assurance committee rarely met, did not review patient charts and did not adequately oversee the plan's doctors.

In all, the federal government uncovered 47 deficiencies at CareFlorida during its latest inspection, more than any other Medicare HMO in South Florida. 1 A review of the federal audits conduct-' ed in 1994 and 1995 shows a big gap exists in how well South Florida's Medicare 'HMOs monitor care provided by their i doctors and hospitals, pay claims and han-" die member complaints. Medicare HMO Deficiencies THE TOTAL of quality problems uncovered at South Florida's Medicare HMOs, according to the latest federal inspection reports: CareFlorida 47 total deficiencies CAC-United Health Care Corp 29 total deficiencies AV-Med 8 total deficiencies Physician Corporation of America 4 total deficiencies Health Options (also Medicare More) 4 total deficiencies Humana 4 total deficiencies THE MOST COMMON HMO deficiencies involved health plans failing to: Collect data with enough precision to make sure subscribers received appropriate services. Give physicians feedback about quality assurance evaluations. Examine physician payment incentives' affect on patient care.

Process claims and appeals in a timely fashion. Prudential and other new Medicare HMOs have not been evaluated yet. SOURCE: U.S. Health Care Financing Administration's inspection reports. An occasional series signal trouble for subscribers.

"There are any number of reasons why plans can be out of compliance," explained Al Ward, an HMO specialist with the U.S. Health Care Financing Administration in Atlanta, which oversees Medicare. "For a plan to say, 'This is all just record keeping' is not accurate." he said. "Some deficiencies can show real serious problems." Medicare is considered the last great LES CORLEY Gan anything less the man on the moon but still a shining star han a hurricane unify this region? Nothing brings South Florida together like the threat of a hurricane. When a storm is brewing at sea, and it's too early to know where it will come ashore, people from Key West to Jupiter are drawn together by a sense of vulnerability.

And when a storm hits one part of the region, as Andrew did in 1992, there is an outpouring of goodwill from neighbors up and down the coast Once he wanted to be an astronaut. Then he became a businessman. Now Les Corley rockets into the Top 10 list of the largest black-owned businesses in the United States. who have been spared. We become a community.

When the crisis passes, however, we return to our parochial ways. On the northern fringe that is Palm Beach County, we actively try to differentiate ourselves from Dade and Broward. For purposes of state-sanctioned regional planning, for example, we have gone so far as to cast the county's lot in with our Treasure Coast neighbors to the north. Robert Douglas BUSINESS EDITOR By STEPHEN POUNDS Palm Beach Post Staff Writer usiness isn't rocket science, but if it was, Les Corley could man age that too. iS An honor student at a Chicago vocational school and the son of a former jazz guitar player, Corley studied aeronautical engineering and hoped to become an astronaut.

He opted, however, for the MBA program at Harvard University, and then for Wall Street. "I went from a discipline where there is one regularly right answer to a business where there are a number of right answers," the trim, pinstriped executive said. Now Corley, 49, president of LM Capital has thrust himself into the spotlight by buying Contemporary Industries the nation's second-largest licensee of 7-Eleven convenience stores. From his office on the 17th floor of the Northbridge Center, he commands a management team that directs 700 employees at 146 stores in 11 states. The stores had revenues of $130 million last year.

The purchase also vaulted Corley's firm into the top 10 of the nation's African-American businesses. It's a distinction Corley is proud of but one which has little to do with how he chooses his investments. "It is a coincidence that I'm black. But it hasn't colored how I analyze companies," Corley said. "It's a happy coincidence.

I hope it will provide more opportunities for blacks. It's also an unhappy coincidence. With a relatively small fund, we've made our first investment. It's Please see CORLEY3E BILL INGRAMStaff Photographer wmmmmmmmmmmmm But we can't deny our affinity to the rest of South Florida. Or at least we shouldn't, advise advocates of a coordinated response to nonmeteorological storms that are brewing.

We breathe the same air and drink the same water. But incessant growth has put the quality of these shared resources at risk. We are a preferred destination for waves of immigrants the federal government lets in. But all our school districts are denied the money they need to assimilate the newcomers. We owe our livelihood to a marketplace that is becoming more global.

But we all continue to uphold boundaries that commerce ignores. It's hard to get worked up about hurricanes when they're not in season. 1 And it's hard to muster enthusiasm for regional approaches to common problems when the prevailing public preference is for empowering communities at the most local level possible. But that doesn't stop those who see South Florida as more than the sum of its counties. And credit should go to two current initiatives for raising awareness of the risks and opportunities posed by socioeconomic changes that are "gathering on the regional horizon.

There's lots of room for co-operation Southeast Florida 2025 is a planning project approved by Florida's Legislature and led by Sen. Ken Jenne. Its mandate is to identify regional goals and plot strategies for achieving them. It met last week to review proposals that have emerged from more than a year of research and discussion, nl Joint Venture South Florida is a forum for promoting awareness of ways the region can flourish in the information age. The brainchild of Roger Ueltzen, a Hewlett-Packard retiree, it held an organizational meeting last week.

The main thrust of Jenne's group is to coordinate a plethora of efforts already under way on fronts that include education, transportation, public health, economic development and the environment. Its intent is to eliminate duplication and enhance efficiency certainly a noble mission in areas such as Everglades restoration where about 50 entities are active. Ueltzen's mission is less ambitious. Instead of renovating a vast bureaucratic legacy, he wants to develop the region's unrealized technological potential. While IBM may be all but gone, good work in electronic technology is still being done in South Florida.

But it's not always visible, Ueltzen says, because it's often done locally and in isolation. We need to promote an awareness of what we have and build on it, he says. Gear education to the heeds of high-tech companies and their ethpjoyees, for one thing. And promote concepts such as telecommuting, for another. Creating what might be characterized as a virtual South Florida a region unified by an approach to economic development seems an enlightened way to prepare for a shared future.

And it complements efforts by Jenne's group to respond to existing risks. Don't expect too much from either initiative, however. Vision and leadership may foster greater cooperation on many fronts. And progress may result from it. But it still takes a hurricane to make South Florida a community.

4 It is a coincidence that I'm black. But it hasn't colored how I analyze companies. Its a happy coicidence. I hope it will provide more opportunities for blacks. Its also an unhappy coincidence.

With a relatively small fund, we've made our first investment. It's not large by any stretch, and its somewhat sad that African-Americans haven't made more progress. )) Les Corley, President, LM Capital of West Palm Beach Paxson stock gets a boost in wake of telecom laws Paxson Communications 2-month performance, dosing prices 7 -22 High $21.25 By MITCH McKENNEY Palm Beach Post Staff Writer Paxson Communications Corp. took over the ABC affiliate in Akron, Ohio, last week and immediately fired the entire news department. That's more than 30 people, with the Paxson-installed management saying the only TV station in town, WAKC, won't have news again unless the company decides to hire a new staff.

It wasn't a typical stroke for Paxson, based in West Palm Beach. When he bought local ABC affiliate WPBF-Chan-nel 25, the personnel changes that followed were gradual and no one mentioned canceling the last-place newscasts. Instead, Paxson spent $4.2 million to give them a new look. But while Lowell "Bud" Paxson isn't a popular guy around Akroi right now, investors are loving him. Since Feb.

8, when President Clinton signed telecommunications reform into law, Paxson Communications stock is up nearly a third better than the wave most radio and TV companies felt. Paxson stock was moving fast enough for the American Stock Exchange to briefly halt Paxson trades on Feb. 23. In three weeks, the price moved from about $15, where it had hovered for two months, to a 52-week high of more than $22. It closed Friday at $19.50.

Wednesday's high coincided with word breaking on a pair of Paxson TV and radio moves: closing on the $40 million purchase of WAKC and WHAI-TV in Bridgeport, and agreeing to pay $115 million for WRMA-FM in Fort Lauderdale and WXDJ-FM in Homestead. That gives Paxson, ajjseady Florida's largest broadcaster, the biggest audience share of any radio owner in the Miami Fort Lauderdale market and command of the market's top two Spanish stations. "The passage of the telecommunications bill is driving a lot of the broadcasters," said analyst Phelps Hoyt of Duff and Phelps Fixed Income. But Paxson's info-mercial network and its founder's background as Home Shopping Network co-creator changes the equation. "He's sort of a generic broadcaster with the radio and TV, but it's the home shopping element that makes him more interesting," Phelps said.

He said a stock sale Paxson filed to do last week should net $160 million to $165 million enough to cover the latest purchases, though "with the deals he's announced, he's used up a lot of his financial flexibility." Low $13.88 ipA- 12 117 22 220 31 199 SOURCE: Bloomberg Business News STAFF GjWHIC.