The Heart and Vascular Institute at Englewood Hospital and Medical Center Exemplary Cardiac Care and an Enduring Vision for Continued Advancements in Excellence Also in this Issue
• Legal Update-Selling Your Practice to Wall Street • Practical Considerations in Merging Your Practice in Today’s Healthcare Environment • Governor Christie Signs First in the Nation Legislation to Monitor Newborns
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Publisher’s Letter Dear Readers, It’s been quite awhile since you last heard from me. Other projects and other issues kept me quite busy for the past year and a half, but now I’m back. Iris and I are now co-publishers of New Jersey Physician. She will be concentrating on cover stories and her famous “Food for Thought” reviews, while I will be dealing with the political, legal and financial climate so unique to the New Jersey medical community. I must say, it is good to be home again. The acquisition of numerous smaller specialty practices by publicly traded or venture capital backed physician practice groups is a rapidly growing occurrence in the business of medicine. We’ve seen numerous instances of practices joining together to share operating expenses while pooling resources to invest in high end specialty equipment such as state of the art tomography. Judging whether this is the right move for your practice is crucial. John Fanburg and his team share their insights into the process of determining whether this is a beneficial move for your group.
Published by Montdor Medical Media, LLC Co-Publisher and Managing Editors Iris and Michael Goldberg Contributing Writers Iris Goldberg Michael Goldberg John D. Fanburg, Esq. Mark Taffet, Esq. Leonard Lipsky, Esq Brian Kern, Esq. Steven Mizrach, CPA Deidre Hartmann, CPA Robert Pear New Jersey Physician is published monthly by Montdor Medical Media, LLC., PO Box 257 Livingston NJ 07039 Tel: 973.994.0068 Fax: 973.994.2063
The still unclearly defined formation of new business models falling under the term “ACOs” is the topic of conversation when physicians gather together. Before acting upon one of these new entities, there are practical considerations that must be examined. Steve Mizrach shares his insights into this changing
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Governor Christie sometimes gets it right. He recently signed the first in the
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health care facilities licensed by DHSS to perform pulse oximetry screenings within 24 hours on all newborns. Good move, Governor! This month’s cover story is on the Heart and Vascular Institute at Englewood Hospital and Medical Center. Eleven years ago, EHMC committed to create a comprehensive program for cardiac care unlike any in the surrounding region.
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They kept their commitment throughout these years and now have one of the best and most comprehensive departments available, with state of the art equipment, a dedication to reduction of blood loss in all procedures, and a most respected, dedicated staff of physicians and surgeons available to their patients. With data showing rates of success consistently among the highest in both New Jersey and the nation.
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Contents
The Heart and Vascular Institute at Englewood Hospital and Medical Center
Exemplary Cardiac Care and an Enduring Vision for Continued Advancements in Excellence CONTENTS
9 10 12
Insurance
Legal Issues
Legal Update: Selling your practice to Wall Street
Finance
Considering an ACO? Financial advantages or consequences, you decide. Practical Considerations in Merging a Practice in Today’s Healthcare Environment
14 16 18
Statehouse
Frome the office of the Govenor: Govenor Christie signs first in the nation legislation to monitor newborns
Hospital Rounds
Food for Thought
Cocco Bello CafĂŠ Livingston, New Jersey
COVER STORY 2
New Jersey Physician
20
In The News
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New Jersey Physician Magazine invites all medical practices to submit nominations for cover stories. Practices should include a brief description of what makes the practice special. Please contact the publisher Iris Goldberg at igoldberg@NJPhysician.Org New Jersey Physician
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Cover Story
The Heart and Vascular Institute at Englewood Hospital and Medical Center Exemplary Cardiac Care and an Enduring Vision for Continued Advancements in Excellence By Iris Goldberg
When it opened its doors in July of 2000, the Heart and Vascular Institute at Englewood Hospital and Medical Center was the realization of a vision to create a comprehensive program for cardiac care unlike any in the surrounding region. Cardiac services including invasive and non-invasive cardiology, cardiac surgery and cardiac electrophysiology were offered to area patients who previously had to travel elsewhere to receive comparable care. In the years since, data has continued to show rates of success that are consistently among the highest in New Jersey and in the nation at large. Also, Englewood Hospital has a track record of accepting the most complex cardiac cases. Englewood Hospital and Medical Center has received numerous accolades for its highly successful and well recognized cardiac program: • New Jersey Department of Health and Senior Services Cardiac Surgery Report lists a 100% survival rate for Englewood Hospital in isolated coronary artery bypass surgery – a perfect record in the past four reports. • CareChex® presented Englewood Hospital and Medical Center with its prestigious Medical Excellence Award for cardiac care, ranking it as the #3 hospital for cardiac care in the state of New Jersey (20092011). • HealthGrades recognized Englewood Hospital with a Five-Star rating for Treatment of Heart Attack and Coronary Artery Bypass Surgery (2010-2011). • J.D. Power and Associates recognized Englewood Hospital and Medical Center for providing an “Outstanding Cardiovascular Patient Experience” (2010). • The Center for Medicare and Medicaid Services (CMS) ranked Englewood Hospital and Medical Center #1 in New Jersey and # 3 nationwide for heart attack survival (based on CMS data for Medicare patients discharged between July 2006 and June 2007).
p Englewood Hospital and Medical Center offers a comprehensive program for Cardiac Care unlike any in the surrounding region.
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Emphasizing individualized patient care and a multi-disciplinary team approach, the specialized cardiac experts at Englewood Hospital and Medical Center diagnose and treat all manifestations of cardiovascular disease. Additionally, recognition by the team of the cardiac needs of
specific populations within the community and reaching out to those groups with a variety of educational and support services further enhances the dramatic role Englewood Hospital and Medical Center has in preserving heart health for so many New Jersey residents. Jeffrey S. Matican, MD, Section Chief of Cardiology at Englewood Hospital and Medical Center discusses some of the important factors that set the Heart and Vascular Institute apart from other facilities. “There is a very collegial relationship amongst all of the doctors – the cardiologists from various groups, the electrophysiologists and the cardiac surgeons. It is common practice here for doctors in these various disciplines to engage in a group-think consultation about how to best handle a particular patient,” Dr. Matican states. Another source of pride for Dr. Matican is Englewood Hospital’s dedicated nursing staff, which has earned Magnet status for excellence in nursing for the third time – a distinction shared by only 6% of hospitals, nationwide. “In addition to their clinical experience, the nurses here are interested, energetic and committed to staying informed about medical advances to help their patients,” he notes. In addition to the informal sharing of ideas, Dr. Matican proudly points to the weekly cardiology conference at the Heart and Vascular Institute as a crucial component of the well-established success of the cardiac program at Englewood Hospital. Originally started to discuss the various issues regarding patients undergoing cardiac catheterization, the meeting – still informally called a “Cath Conference” – has now evolved into a valuable forum for the entire cardiology team. “At these meetings, we review cardiac-related articles in the medical literature and even in the lay press. We discuss new developments in cardiology and cardiac programs,” Dr.
p Englewood Hospital’s state-of-the-art Cardiac Catheterization laboratory
Matican shares. “Whether it’s a new treatment or modality for acute coronary syndromes, or one of our cardiac electrophysiologists talking about something new in arrhythmias, or perhaps the cardiac surgeons speaking about the latest advances in aortic aneurysm surgery, there’s a wealth of information shared amongst the cardiac team at these weekly meetings,” he adds. The weekly conference is led by Richard S. Goldweit, MD, Director of the Cardiac Catheterization Laboratory and Director of Interventional Cardiology at Englewood Hospital and Medical Center. “Our dynamic weekly cardiology conference is unique in that all cardiology-related disciplines attend - cardiac surgeons, the entire array of cardiologists, including the electrophysiologists, non-invasive cardiology and invasive cardiologists, nurses and cath lab technologists. Everyone finds value in these meetings,” Dr. Goldweit states. “That interdisciplinary cooperation carries over into how we practice here. We pride ourselves on having an interactive program where a team of specialists in various disciplines work together,” he adds.
It would be impossible to enumerate the ways in which Englewood Hospital’s cardiac program is distinctive without a discussion of Patient Blood Management (PBM), which has become the standard of care at the Medical Center, a world-renowned leader in PBM. A growing body of evidence points to an increased risk of infection, complications and death associated with blood transfusions. PBM is an initiative to improve patient outcomes that seeks to avoid unnecessary blood transfusions and reduce the risks and costs associated with blood and blood products. “By practicing Patient Blood Management, we have strategies and methods to help avoid unnecessary transfusions and the risks associated with them,” Dr. Matican explains. “We don’t transfuse ‘by the numbers’ but rather assess each patient’s individual situation.” Patient Blood Management is based on three main principles or “pillars”: optimizing hematopoiesis and appropriate management of anemia; minimizing bleeding and blood loss; and harnessing and optimizing physiological tolerance of anemia. As assistant director of Englewood Hospital’s renowned Institute of Patient Blood Management and New Jersey Physician
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Bloodless Medicine and Surgery, Dr. Goldweit emphasizes the importance of PBM in improving patient outcomes. “There is no question in my mind that if you look at the literature in general, bleeding is a horrible thing in the interventional cardiologist’s arena. In fact, in terms of all of us – cardiac surgeons, interventional cardiologists, electrophysiologogists – bleeding is associated with bad outcomes,” Dr. Goldweit maintains. “It’s not just the bleeding itself or the loss of blood but the changes that might have to be made to stem the excessive bleeding may not be best for the patient in other ways,” he adds. As an example of this he notes that if a patient with a cardiac stent bleeds excessively, that patient will have to stop antiplatelet therapy, which is key to keeping stents open and preventing another heart attack. “If you bleed, you might be told to stop those agents and then you become compromised,” Dr. Goldweit notes. Dr. Goldweit also points to evidence-based treatment decisions as another factor supporting positive patient outcomes. “At Englewood Hospital, we emphasize doing only what the data suggests will be effective. If the data suggests an option that is less complex, less fancy, or less high-tech but it delivers an equally good result, that’s the option we’ll choose,” Dr. Goldweit states. He shares that this option is preferable in terms of reducing excessive costs but most importantly in terms of doing the best for the patient, who, generally will do better with a simpler approach. “In the end it’s all about the patient. We want data-driven approaches that enhance quality and length of life,” Dr. Goldweit emphasizes. Dr. Goldweit’s point is well-illustrated in the impressive survival rate for heart attack patients brought to the Emergency Medicine Department at Englewood Hospital. With an interventional cardiologist on staff 24/7, an excellent ER team and vital patient information called in ahead by EMS transporters, Englewood Hospital has held one of the three
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p Since the inception of it’s cardiac surgery program 11 years ago, patient outcomes at Englewood Hospital have been consistently excellent.
best heart attack survival records in the nation. The time from patient arrival to the start of a cardiac interventional procedure, known as “door to balloon” time, has for the past five years been, on average, nearly 15 minutes below the limit set by national guidelines. Patient outcomes for cardiac surgery at Englewood Hospital are consistently excellent as well. Since the inception of its cardiac surgery program 11 years ago, the average mortality rate for isolated bypass surgery is 0.57% - a survival rate of 99.43% over the past 11 years, as defined by the State of New Jersey. James J. Klein, MD, Chief of the Department of Cardiothoracic Surgery at Englewood Hospital discusses the significantly successful outcomes the medical center’s cardiac surgery team has had for bypass surgery as well as for various other complex procedures such as multivalve repair, aneurysm/aortic dissection repair and endovascular thoracic aneurysm graft (TAG) repair. “In the 11 years since the inception of Englewood Hospital’s cardiac surgery program, we’ve submitted multiple pieces
of literature that have been accepted by peer reviewed journals, including two in the prestigious Annals of Thoracic Surgery. These articles explored our success with avoiding blood transfusions during cardiac surgery. I do believe this is certainly part of the reason that our cardiac surgery survival rates are so high and our complication rates are so low,” asserts Dr. Klein. With each passing year Dr. Klein relates that more and more hospitals come to Englewood Hospital to learn the blood management techniques that are so closely linked to its superb record of successful surgical outcomes. Nearly 80% of cardiac surgeries at Englewood Hospital are performed without blood transfusions. Dr. Klein points out that Jehovah’s Witnesses, who for religious reasons may not accept blood transfusions, comprise 13% of his practice. Close to 200 Jehovah’s Witnesses from areas across the United States have undergone cardiac surgery at Englewood Hospital since the start of its cardiac surgery program. At Englewood Hospital the Department of Cardiothoracic Surgery works in partnership with the Department of Vascular Surgery to perform innovative, minimally invasive thoracic endografting to an increasing number of patients with diseases of the thoracic aorta.
treatment of abnormal heart rhythms. “Most recently, for example, we’ve incorporated technology that significantly enhances our mapping systems, providing a high-resolution 3-D model on a graphic interface,” Dr. Simons shares. He reports that Englewood Hospital has just invested in one of the newest mapping systems available to most accurately visualize real-time images of electrical activity within the heart.
p Englewood Hospital recently invested in one of the newest mapping systems available to visualize real-time images of electrical activity within the heart
Herbert Dardik, MD, Chief of Surgery and Vascular Surgery at Englewood Hospital, relates how this collaboration has resulted in substantially improved outcomes over traditional approaches to repair an aneurysm in the chest. “Now instead of making a large incision in the chest, we can puncture an artery, remote from where the problem is and repair the problem with minimal impact on the patient, physiologically,” he explains. Dr. Dardik looks forward to the establishment of a Hybrid Angiographic OR Suite, which will further advance the ongoing collaborative work of cardiac and vascular patient care. This state-ofthe-art facility joins highly advanced equipment, technology and computer systems with skilled surgeons, interventional cardiologists, radiologists, anesthesiologists and specialized nursing and technical staff to perform complex cases. For example, Dr. Dardik reports, in the new hybrid suite, minimally invasive percutaneous (through needle puncture of a peripheral artery) aortic valve replacement can be performed for certain appropriate patients, rather than a more invasive open procedure. “This is another reflection of how cardiac surgery and vascular surgery will continue to
work together more and more in the years to come,” Dr. Dardik foresees. The continuous introduction of groundbreaking technology is also the driving force behind the renowned success of the Arrhythmia Center within the Heart and Vascular Institute at Englewood Hospital. Grant R. Simons, MD is Director of Cardiac Electrophysiology, which focuses on the detection, diagnosis and
Robotically guided catheter ablation for the treatment of atrial fibrillation (AF) is another innovative procedure performed by the cardiac electrophysiology team at Englewood Hospital. Instead of the physician manually manipulating the catheter during the curative ablation, as was traditionally the case, a robotic arm, integrated by computer with the mapping system, precisely guides the catheter while the physician operates the controls from a workstation located a few feet away from the patient. “This technology enables us to produce more durable lesions because we can achieve better contact and better stability,” asserts Dr. Simons. Looking towards the future, Dr. Simons is excited about a clinical trial presently being conducted at Englewood Hospital to dramatically alter the treatment for patients with AF who must remain on anti-coagulant
p The physician operates the controls of a robotic arm that is integrated with the mapping system to precisely guide the catheter during ablation for the treatment of atrial fibrillation.
New Jersey Physician
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medication to prevent blood clots and stroke. “We are one of the few sites in the country and the only one in New Jersey that is now involved in a trial of a device called the ‘Watchman’,” Dr. Simons shares. The device, which is delivered via catheter through a puncture in the groin, seals off a pouch in the left atrium to prevent clots from traveling to the brain and causing a stroke. The hope is that this technique will negate the need for blood thinners, which can cause dangerous bleeding and have therapeutic levels that are difficult to maintain, even with frequent blood testing. “In the trial that has been published, the atrial fibrillation patients with this device who stopped their medication had fewer strokes than those patients who did not have the device and were on blood thinners,” Dr. Simons reports. Therefore, if and when the device receives FDA approval, patients with AF will have a safer and more effective treatment option to prevent strokes. “Our Arrhythmia Center is at the forefront of advances in the treatment of arrhythmia so that we can deliver the best therapies to our patients,” he says. Englewood Hospital’s cardiac team recognizes that all cardiac patients benefit from effective follow-up care. “If someone already has heart disease, the best way to prevent a recurrence, in addition to
medications, is to help minimize the risk factors with exercise,” says Englewood Hospital’s Director of Cardiac Rehab, Samuel Suede, MD. The Cardiac Rehab Center at Englewood Hospital is equipped with treadmills, bicycles, elliptical machines, step machines and a rower. Also, the aerobic exercise is supplemented with resistance training. There is one registered nurse on site for every five patients and a staff of exercise specialists who assist patients with their work-out regime. Patients, who have recently had a significant event, such as heart attack, angioplasty or bypass surgery, are placed in a 12 week monitoring program. These individuals have their blood pressure and heart rate checked before they exercise. Diabetics will also have their glucose tested. While they exercise their heart rate is being continuously monitored in order to detect a possible arrhythmia that will then be reported to the patient’s physician. If an emergent problem occurs, the patient already in the hospital - is sent for immediate treatment. In addition to physical activity, those in the monitoring program attend weekly lectures which have a dedicated “topic of the week,” such as Smoking Cessation, Stress Reduction, Cholesterol Reduction, How to Read a Food Label, etc. At the inception of the monitoring program patients are administered Endurance Testing, a Quality of Life Test and an Educational Quiz. After their 12 week program is completed, patients are asked to re-take those tests and the two sets of scores are compared. “Patients see the benefit they derived in just 12 weeks and hopefully, this will be an incentive for them to continue,” Dr. Suede relates. After 12 weeks in the monitoring program many individuals do opt to continue at the Cardiac Rehab Center at Englewood Hospital in its maintenance program, even though insurance no longer covers this service at that point. A nominal fee is charged and Dr. Suede reports that many patients have been coming to the center for years, a testimony to the valuable contribution that Englewood Hospital continues to make towards the goal of restoring and maintaining cardiac health within the community. As the data shows, the comprehensive cardiac program at Englewood Hospital’s Heart and Vascular Institute has a long track record of accomplishing its goal of providing the highest quality care for patients with heart disease. With a consistent ranking amongst the top facilities in the nation for cardiac care and treatment and a determination to build on its record of excellence, Englewood Hospital and Medical Center continues its journey into another decade. Along the way, countless New Jersey patients with heart disease will have the opportunity to live a longer, healthier and more productive life. For more information, call (201) 894-3000 or visit www.BestHeartDocs.com
p The patient’s heart rate is continuously monitored during exercise.
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New Jersey Physician
Buyer Beware
Insurance
By Brian S. Kern, Esq.
A risk retention group (RRG) called
The company is taking the position that by
Therefore, a claims-made and reported
Obstetricians
Risk
operation of the policy form – a claims-made
policy that includes a written demand trigger
Retention Group of America (OGRRGA) is
and reported policy – its insureds must report
effectively gives a company the ability to
taking the unusual step of claiming that it
an incident during the same policy year that
deny virtually any claim, unless of course
should not have to cover medical malpractice
it occurred. Regardless of any “retroactive
an incident occurs, and a written demand
claims filed against an obstetrician that it
date,” (as the argument goes) once a policy
is made, and it is reported to the carrier,
insured, despite the fact that it provided a
expires, so does coverage for any incidents
all within the same policy year. So despite
policy for her both when the incidents that
that have not been reported, if reasonably
paying OGRRGA nearly $100,000 a year for
led to the claims occurred, and when the
expected to result in a claim - an argument
coverage, the physician at the center of
lawsuits were filed.
with support under NJ case law.
this action may not have purchased what
and
Gynecologists
she expected, and a judge could void the OGRRGA filed a declaratory judgment action
The matter gets more complicated though.
in an attempt to disclaim coverage because
language by relying on the “doctrine of reasonable expectations” if he/she finds it
the incidents occurred during one policy
According to court documents, OGRRGA
period, but were not reported until the next
also added language amounting to what
policy period.
is known as a “written demand reporting
too restrictive.
trigger” to its policy. According to the policy According to court documents, if the physician
had
“disclosed
either
language,
……
incident in connection with the 2009
A “Claim means:
Renewal Application, OGRRGA would have
1. a written notice received by an Insured ….
substantially
increased….
premiums
or
declined to issue the [new] Policy.”
demanding monetary damages…or 2. the filing of a civil lawsuit or arbitration proceeding seeking monetary damages.”
Interestingly though, OGRRGA did not appear to take either of these actions when it
According to an attorney familiar with
Unfortunately for the physician involved, just
learned of the claims, even at the time of the
the case, no coverage extends to medical
making this argument may cost in the tens
subsequent renewal several months later. In
incidents unless a “claim” is actually asserted
of thousands of dollars. And if a judge does
fact, an email sent by an agent for OGRRGA at
against a physician, and is reported to
decide in favor of OGRRGA, the obstetrician
that time suggested that the physician renew
OGRRGA. There is no provision that triggers
will likely be forced into bankruptcy court.
the policy for another year term. Moreover,
coverage if a physician merely renders notice
This case is just one more reminder that
even if the claims had been reported at the
of a medical incident that might lead to a
physicians should work with specialized
time OGRRGA is claiming that they should
claim, because the policy requires that an
consultants before purchasing professional
have been, OGRRGA seemingly would have
actual claim be asserted. Since a physician
liability insurance.
had to cover the claims anyway.
must report a potential claim at the time of renewal though, coverage for such a claim
But despite all of these facts, OGRRGA is
would be precluded under the renewal
relying on a highly technical argument to
policy.
Brian S. Kern, Esq. is a co-founder and partner with Argent Professional Insurance Agency, LLC. He can be reached at bsk@insuranceagent.com
win its case. New Jersey Physician
9
Legal Issues
LegalUpdate
Selling Your Practice to Wall Street Provided by John D. Fanburg, Esq., Mark Taffet and Leonard Lipsky, Esq.
As a follow-up to last month’s article, Selling your Practice to a Hospital, this month’s legal update focuses on issues surrounding the sale of a physician practice to a large publicly-traded or venture capital-backed physician practice group. These Wall Street practice groups are usually created by the merger or acquisition of numerous smaller specialty practices, which then seek to leverage their greater purchasing and negotiating power to spread the cost of IT upgrades over a larger revenue base and expand the range of services offered to their patients. To grow efficiently, institutionally financed practice groups will approach and negotiate with dozens or even hundreds of target physician practices at one time, with only 1% to 5% of targets actually being acquired. To assure that valuable time is not wasted, best terms are achieved, or if necessary, negotiations are terminated appropriately and efficiently, it is imperative for a selling group’s partners to be equipped to interface with a potential buyer’s transaction professionals. M&A specialists should be hired or contracted to run the acquisition program, providing an expertise that managing partners of most target practice groups do not have. For Wall Street practice groups, valuation ultimately drives transactions. As a result,
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New Jersey Physician
it is important for the target practice group to keep things in perspective on a potential transaction. This requires a target practice group to understand both its own motivations for selling and those of the potential purchaser for buying.
page prior to entering negotiations. Besides the significant costs associated with evaluating acquisition or merger proposals, the process will distract from running the practice and the practice of medicine itself.
Understanding each other’s goals also provides negotiation parameters for what the group can concede and where it must stay firm. Is a transaction right for the practice and its partners? There are many reasons why partners of a target practice group may want to sell. Health care economics are uncertain; competition with large multi-specialty groups and hospitals is increasing; IT and other infrastructure investments are large and financing often requires personal guarantees by the partners; and payors are increasingly reducing reimbursement. A merger or acquisition could result in cash to the partners, professional management of their practice, superior infrastructure, and greater negotiating power with third-party payors. Exploring an institutionally financed practice group’s good faith inquiry to purchase a practice takes a significant amount of time and effort. Accordingly, it is imperative that the target group’s partners be on the same
Understanding each other’s goals also provides negotiation parameters for what the group can concede and where it must stay firm. If the partners do think that they could benefit from a sale or merger, they are encouraged to pursue discussions efficiently and knowledgably. Being smart may not be enough Smart, analytical and seasoned physicians may feel that it is best to simply invite a potential purchaser to their office to negotiate a transaction. Such an approach may not be prudent. The issues involved are complex and outside the normal range of activity and experience of many physicians. Transactions often involve valuation, operational, governance, legal and regulatory issues with which even veteran physicians are not familiar. Enlisting the help of a CPA, investment banker and legal advisor may
Legal Issues be necessary to successfully complete the transaction. Determining valuation from the perspective of the purchaser Publicly-traded or venture capital-backed practice groups primarily seek a superior return on investment. The specific purchaser may have an interest in health care services and even more specifically in the target group’s specialty. Unlike, however, a sale of a physician practice to a hospital or another privately-held physician group, which may take into account community relations, professional expertise and certain other goodwill considerations, Wall Street acquisitions are typically driven by the valuation of the target practice and the financial return the transaction will provide to its investors. From the purchaser’s standpoint, there are three critical points of analysis, which are often intertwined, that help determine if they will complete a transaction and what they want to pay for the physician practice: Quality of Earnings, Synergy and Scalability. Quality of earnings focuses on how likely it is that the target practice’s profits will continue after its acquisition. Factors affecting quality of earnings include whether the target group has long-term referral arrangements in place, dominates its geographic market, and expects third-party payor reimbursement to increase. Synergy revolves around the degree to which costs and expenses can be eliminated, or revenues increased, in the target practice through a merger with the purchaser. Potential purchasers will analyze how administrative costs can be reduced, medical malpractice rates improved, and if a stronger negotiating position will impact reimbursements from third-party payors. Scalability addresses whether or not the revenues of the target practice will grow due to its acquisition by the institutionally financed practice group. For example, potential purchasers will analyze whether the
transaction would increase the likelihood for the target practice to acquire additional local practices, obtain new contracts, open additional office locations, offer a wider range of services or retain more referrals. If the stars line up, a purchaser will be able to cut the target practice’s costs, improve reimbursement and increase revenue. If all
groups to enter into management services agreements with third-parties that provide a host of services to their entire organization, such as general administrative services, billing and collection, staffing, and maintenance. Because such management companies are often owned in part by nonphysician entities or individuals, physicians should be careful not to run afoul of the cor-
From the purchaser’s standpoint, there are three critical points of analysis, which are often intertwined, that help determine if they will complete a transaction and what they want to pay for the physician practice: Quality of Earnings, Synergy and Scalability. of these things happen, the purchaser is in a position to pay more for the practice in the form of cash, salaries, bonuses and stock. Often, however, all of the stars do not align and a valuation compromise must be reached. It is also important to understand that, after a transaction is closed, if profits do not meet an institutional buyer’s requirements, it is likely that cost cutting measures may be taken in an attempt to maintain a financial return on the investment. A buyer may not be as sensitive to non-financial issues as are the partners of a privately-owned practice, nor will they be sentimental toward former partners or staff in seeking their financial goals. Target practices are encouraged to retain the services of an experienced investment banker that can assist them in countering the expertise of M&A professionals employed by a potential purchaser and who will work to maximize value and minimize risk in a transaction. Regulatory framework Besides the valuation issues pervasive in transactions, the target practice should also be aware of the applicable regulatory issues. It is common for publicly-traded or venture capital-backed physician practice
porate practice of medicine rules and feesplitting prohibitions in certain states. For example, New York has stringent corporate practice of medicine and fee-splitting statutes that do not permit physicians to share professional fees with non-healthcare professionals. Obtaining the advice of counsel knowledgeable in such transactions is crucial to appropriately structure any merger or acquisition to comply with all applicable state and federal laws. Entering into an agreement to sell or merge one’s practice with a publicly-traded or venture capital-backed physician practice group is not an easy decision to make, nor one that should be undertaken without careful reflection and analysis. Understanding the nuances of such transactions, particularly the valuation and regulatory considerations that drive such transactions, are critical to negotiating favorable terms and getting back to what matters – practicing good medicine. John D. Fanburg chairs the health law practice, and Leonard Lipsky is an associate in the health law practice of Brach Eichler L.L.C., a Roseland, NJbased law firm. Contact Mr. Fanburg at jfanburg@ bracheichler.com or at 973-403-3107. Mark Taffet is the President and CEO of Mast Advisors and can be reached at mtaffet@mastadvisors.com or at 973-718-7341. New Jersey Physician
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Finance
Considering an ACO? Financial Advantages or Consequences, You Decide. By Deirdre Hartmann, CPA and Manager – Nisivoccia & Company, LLP
Have you been approached to join an Accountable Care Organization
savings or losses. Under Track 1 (One Sided Model), the ACO can share
(ACO), or have you considered forming your own? By now, most of
in up to 50% of the savings based upon quality performance, with no
us should have heard the term ACO, whose concept was introduced in
downside risk for years one and two, but in year three the ACO would
Section 3022 of the Affordable Care Act (ACA). The goal of an Accountable
be responsible for losses, essentially converting to Track 2. Under Track
Care Organization as stated by Dr. Donald M. Berwick, Administrator
2 ( Two Sided Model), the ACO can share in up to 60% of the savings
for the Center for Medicare and Medicaid Series, is “Triple Aim” which
based upon quality performance, however the ACO would be subject to
means better care for individuals, better health for populations, and lower
losses startingin year one.Shared savings under both tracks are limited to
growth in expenditures. These goals should be achieved by groups of
7.5% of the benchmark for Track 1 and 10% of the benchmark for Track
providers of services and suppliers (i.e. physician groups, individual
2. Losses for Track 2 are limited and phased in as a percentage of the
physicians, hospitals, etc.) working together to manage and coordinate
benchmark starting at 5% for year 1, 7.5% for year 2 and 10% in year 3. Any
care for Medicare beneficiaries, increasing the quality of patient care
savings realized by an ACO would be subject to a 25% withholding, in case
while decreasing patient care costs. Much of the talk to date has been
they were losses in future years. Those considering Track 2 may also be
very conceptual. However, recently proposed rules were issued that
required to obtain reinsurance or surety bonds, place funds in escrow,
give us some additional detail as to how Medicare intends to implement
or establish a line of credit to cover any losses that may exceed the 25%
this program. Being a CPA this article’s objective is to illustrate a basic
withholding.
calculation of how savings or losses are determined, so those considering participation in an ACO can determine if this is a financial arrangement that should be considered.
Calculation of Shared Savings Year 1
Track 1
Track 2
Assumed benchmark per Medicare ACO beneficiary
8,000
8,000
Minimum savings rate
3.2%
2.0%
In the ACO model, the third prong of the “Triple Aim” is lowering the
Minimum savings adjustment
256
160
growth of expenditures for Medicare beneficiaries. Medicare’s objective
Benchmark less minimum savings adjustment
7,744
7,840
isto reduce the per capita expenditures per Medicare beneficiary for Part
Acutal costs per Medicare ACO benficiary
6,500
6,500
A (hospitals and facilities) and Part B services (physicians and other
Shared savings
1,244
1,340
providers). Savings will be achieved by the ACO if the expenditures per
ACO shared savings rate
50%
60%
their assigned beneficiaries are less than the benchmark set by Medicare.
Calculated Savings
622
804
Maximum Savings Cap as % of Benchmark
7.5%
10% 8,000
The benchmark will be calculated by using the most recently available three years per beneficiary expenditures for Medicare Part A and Part B services. This benchmark will be adjusted to reflect risk factors (i.e. diabetes or other chronic illness), geographical area, and growth factors.
Benchmark
8,000
Maximum savings cap
600
800
Payment from CMS to ACO, lesser of calculated savings or
600
800
Track 1
Track 2
8,000
8,000
0%
2%
-
160
maximum savings cap
In addition the benchmark would be adjusted for a minimum savings rate, which means the ACO would have to beat the benchmark, plus
Calculation of Shared Losses Year 1
obtain savings of a minimal amount. The minimum savings rate for a
Assumed benchmark per Medicare ACO beneficiary
Track 1 ACO is based upon the number of beneficiaries assigned to the
Minimum loss rate
ACO and ranges from 3.9% down to 2%, where as the Track 2 minimum
Minimum loss adjustment
savings rate is a flat 2%. The actual costs per the Medicare beneficiaries
Benchmark plus minimum loss adjustment
8,000
8,160
assigned to the ACO would then be compared to the adjusted benchmark
Acutal costs per Medicare ACO benficiary
8,800
8,800
Shared losses
(800)
(640)
ACO shared loss rate
N/A
40%
to calculate the shared savings or losses. Participants in an ACO (i.e. physician groups, individual physicians, hospitals, etc) would still be paid on a fee for service basis for the services they rendered under their own business entity. The ACO would only receive the savings achieved, or be responsible for the losses incurred.
Calculated losses Maximum Loss Cap as % of Benchmark, increases to
(256) N/A
Benchmark
8,000
Maximum loss cap
Under the proposed rules participation in an ACO is a three year
Payment from ACO to CMS, lesser of calculated losses or
agreement with a choice of two “tracks” for participation in the shared
maximum loss cap
12
New Jersey Physician
-5%
7.5% in Yr 2, and 10% in Yr 3 (400) -
(256)
Finance As you can see, the proposed rules are very
the total savings or losses per beneficiary would
of Nisivoccia & Company, LLP, a multi-
complex and confusing.I have prepared an
be multiplied by the number of participants in
dimensional CPA firm with offices in Mt.
illustration comparing Track 1 and Track 2 in
your ACO. This illustration doesn’t take into
Arlington and Newton, New Jersey. The firm
a year with savings, and another illustration
account the costs to establish an ACO, the plan
offers traditional tax, accounting and audit
comparing Track 1 and Track 2 in a year
for how savings will be distributed among the
services, and maintains practice specialties
with losses.
participants, and other related costs. Stayed
in sectors including healthcare, technology,
tuned, I am sure there will be more to come.
municipal government, education, nonprofit
This illustration demonstrates
the savings or losses per ACO beneficiary, depending on the number of beneficiaries assigned to your ACO (the minimum is 5,000)
and Deirdre M. Hartmann is CPA and Manager
financial
services.
Contact
her
at
Dhartmann@nisivoccia.com.
Practical Considerations in Merging a Practice in Today’s Healthcare Environment By Steven Mizrach, CPA
As we all know it is more difficult than ever
practice it is important to clearly define the
Succession Plan
to practice medicine in today’s ever changing
goals that a practice would hope to achieve
A common concern among many smaller
environment.
as a result of the combination as well as the
practices is a lack of future leaders within their
likelihood of success.
practice that can carry on when the founders
Not only are practices facing a shortage of physicians as today’s generation places a greater priority on lifestyle issues, the demand for certain specialties has never been higher. Coupling this with an increased emphasis on regulatory compliance and healthcare reform as well as the formation of new business models such as Accountable Care Organizations (ACOs), some practices have evolved from relatively small businesses into sophisticated organizations. By now you must be wondering when I would finally mention the impact of the reduction in reimbursement rates for services and the pressure organizations face having built their business models around the out of network market. Practices are running an obstacle course that would make a Marine proud. As a result of these developments many practices are considering joining forces, swimming upstream or selling out.
Target Practice’s Objectives In order for a group to consider changing their business model by merging with another
Some of the objectives that should be considered are as follows: Relief of Management Overload Many practices are ill equipped to face the issues discussed above as many doctors “just want to practice medicine” and might welcome being relieved of these administrative responsibilities.
Recruitment and Greater Access to Resources Given the shortage of physicians, many practices are facing the challenge of recruiting others to join their practice. The question that I often ask our clients is whether they would want to join their practice if they had just completed their residency. This in effect becomes the practice’s “gut check”. In addition to staff many practices are limited from purchasing the “latest and greatest” in medical equipment, software systems and other technology that enable practices to perform at its highest level as these expenditures
retire or have an illness.
This causes various levels of concern The founders would like to realize a retirement benefit from the sale of their interests. The founders would like to preserve the legacy of their practice. How will the practice survive if one of the physicians is temporarily incapacitated and just as importantly how will the rest of the employees can maintain their positions? If these objectives are met and things go according to plan one should expect to increase their earnings as well as improve the overall quality of patient care delivered while also providing insulation from the risks referred to above. I would like to point out that as most things in life there will often be a need to compromise between having security while relinquishing autonomy.
cannot be cost justified based on its projected
In our next article we will discuss the acquirer’s
utilization.
objectives as well as identify certain precautions that one should consider in finding the right match. New Jersey Physician
13
Statehouse
New Jersey Statehouse From the Office of the Governor:
Governor Christie Signs First in the Nation Legislation to Monitor Newborns Governor Chris Christie signed first-in-the-nation legislation today to protect the health of newborns from potentially life-threatening congenital birth defects by requiring all inpatient or ambulatory health care facilities licensed by the Department of Health and Senior Services to perform pulse oximetry screenings. The screenings must be completed a minimum of 24 hours after birth and on every newborn at a facility. The legislation makes New Jersey the first state to mandate pulse oximetry testing on newborns statewide. “As the father of four, I know the birth of a child should be a joyous occasion for parents and family,” said Governor Christie. “There are times when an infant does not readily exhibit symptoms of a potential defect and the condition may not be detected in a routine exam. This legislation will help identify infants who may have hidden, serious heart problems before they leave the hospital, making a significant difference in the lives of these babies, their families and their treating physicians.” Pulse oximetry is a non-invasive, low-cost test used to identify congenital birth defects in newborns. It measures the percent of oxygen in the blood of an infant and whether a baby’s heart and lungs are healthy. The screening involves taping a sensor to the newborn’s foot that beams red light through the foot to measure blood oxygen content. “Before they leave the hospital, the 102,000 babies born in our state each year will now have a simple, painless screening test to ensure that any hidden, but potentially life-threatening heart defects will be detected,” said Health and Senior Services Commissioner Mary O’Dowd, who is expecting her first child in a few weeks.
14
New Jersey Physician
“We expect the pulse oximetry test to detect about 100 congenital heart defects in infants each year, enabling early treatment and preventing life-threatening injury or death,” O’Dowd said. According to the United States Secretary of Health and Human Services’ Advisory Committee on Heritable Disorders in Newborns and Children, congenital heart disease affects approximately seven to nine of every 1,000 live births in the United States and Europe. About 100 heart defects a year are detected in newborns in New Jersey. The federal Centers for Disease Control and Prevention report that congenital heart defects are the leading cause of infant death due to birth defects. When left untreated, congenital birth defects may cause physical and mental disabilities, or even death. Sponsors of the legislation in the Assembly include Assemblypersons Jason O’Donnell (D-Hudson), Connie Wagner (D-Bergen) and Ruben J. Ramos, Jr. (D-Hudson). Senate version sponsors are Senators Richard J. Codey (D-Essex) and Joseph F. Vitale (D—Middlesex).
New J ersey Statehouse
State Hospital Funding 2011-2012 State of New Jersey
Department of Health and Senior Services / Department of Human Services Hospital Funding
As of 02/25/2011
Hospital Name Atlanticare Regional Medical Center Bayonne Medical Center Bayshore Community Hosp Bergen Regional Medical Center Cape Regional Medical Center Capital Health System at Fuld Capital Health System at Mercer CentraState Medical Center Chilton Memorial Hospital Christ Hospital Clara Maass Medical Center Community Medical Center Cooper Hospital / Univ Med Ctr Deborah Heart and Lung Center East Orange General Hospital Englewood Hospital and Medical Center Hackensack University Medical Center Hackettstown Regional Medical Center Hoboken University Medical Center Holy Name Hospital Hunterdon Medical Center Jersey City Medical Center Jersey Shore University Medical Center JFK Medical Center / Anthony M. Yelencsics Kennedy Hospitals / UMC Kimball Medical Center Lourdes Medical Center of Burlington County Meadowlands Hospital Medical Center Memorial Hosp of Salem County Monmouth Medical Center Morristown Memorial Hospital Mountainside Hospital Newark Beth Israel Medical Center Newton Memorial Hospital Ocean Medical Center Our Lady of Lourdes Medical Center Overlook Hospital Palisades Medical Center Raritan Bay Medical Center Riverview Medical Center RWJ University Hospital RWJUH at Hamilton RWJUH at Rahway Saint Barnabas Medical Center Saint Clare's Hospital / Denville Saint Clare's Hospital / Sussex Saint Francis Medical Center (T) Saint Joseph's Regional Medical Center Saint Joseph's Wayne Hospital Hospital Funding Saint Mary's Hospital (P) As of 02/25/2011 Saint Michael's Medical Center Saint Peter's University Hospital Shore Memorial Hospital Somerset Medical Center
SFY 2012
$ $
Charity Care 665,000,000 $ 675,000,000 $ $10,000,000
SFY 2011 HRSF GME 7,611,734 $ 1,084,783 $ $ 13,020,588 $ $ 4,906,980 $ 473,602 2,403,061 $ 47,262 $ 143,388 $ 1,963,712 $ 210,181 2,256,399 $ $ 7,757,211 $ 7,586,681 $ 3,901,771 $ $ $ 3,198,497 $ $ 285,454 $ $ 8,906,357 $ 2,059,140 $ 1,867,509 $ 7,550,486 $ 3,516,270 5,263,629 $ 2,212,838 $ 71,256 $ $ 9,222,535 $ 2,251,276 $ $ 15,750,774 $ 9,770,435 $ $ 2,918,647 $ 658,420 $ $ 2,238,016 $ 397,706 $ 5,898,678 $ 7,825,417 $ $ $ 5,350,245 $ $ 1,797,990 $ 235,571 11,026,618 $ 7,384,309 $ 1,976,958 $ 7,990,679 $ 1,797,770 6,718,773 $ 2,254,273 $ $ -
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
TOTAL 32,685,479 2,903,745 259,330 50,559,448 912,022 26,037,849 10,038,630 2,256,260 609,609 14,578,908 6,848,362 2,644,564 50,887,492 6,880,595 15,376,487 1,422,994 11,771,401 166,996 15,339,783 934,175 1,590,677 59,029,627 6,659,277 3,792,747 21,910,309 15,465,957 4,854,673 542,138 261,687 20,491,936 3,276,312 1,287,806 58,861,479 914,546 1,359,148 6,171,483 1,523,635 7,106,905 13,569,828 2,770,892 22,432,244 606,142 1,687,759 1,296,793 16,374,057 334,318 16,740,853 91,680,690 351,906 12,436,087 35,218,870 15,523,776 785,942 SFY 2011 3,351,870
CC 167,298 1,863,184 320,265 43,174,408 1,324,443 99,298,190 1,031,756 745,118 2,026,639 2,496,703 877,176 62,200 665,000,000
SFY 2011 HRSF GME Page 1 of 2 $ $ $ 2,532,124 $ $ $ $ 6,374,168 $ 1,328,460 $ $ $ 19,049,028 $ 5,298,079 $ $ 254,261 $ $ $ $ $ $ $ $ $ $ $ 166,600,000 $ 60,000,000
$ $ $ $ $ $ $ $ $ $ $ $ $
TOTAL 167,298 4,395,307 320,265 50,877,036 1,324,443 123,645,298 1,286,017 745,118 2,026,639 2,496,703 877,176 62,200 891,600,000
$ $ $ $ $ $ $ $ $ $ $ $ $
CC 305,066 2,422,113 434,831 44,015,815 1,663,569 101,012,076 1,094,389 610,058 2,132,881 2,382,691 1,126,408 675,000,000
CC 4,799,947 23,988,962 166,996 28,245,574 45,302,709 10,843,553 48,064,130 9,501,403 1,287,806 10,934,106 11,002,050 61,094,042 11,358,130 3,792,747 2,030,482 73,621,668 4,523,342 350,557,648
SFY 2011 HRSF GME $ $ $ $ 7,611,734 $ 1,084,783 $ $ $ $ $ 7,310,041 $ 520,864 $ $ 14,920,154 $ 2,763,017 $ $ 7,550,486 $ 3,516,270 $ $ 8,906,357 $ 2,059,140 $ $ $ 1,867,509 $ $ $ $ $ 2,238,016 $ 397,706 $ $ 5,898,678 $ 7,825,417 $ $ 32,493,337 $ 12,021,711 $ $ 5,350,245 $ $ $ $ $ $ 2,532,124 $ $ $ 11,026,618 $ 7,384,309 $ $ $ $ $ 105,837,790 $ 39,440,726 $
Total 4,799,947 32,685,479 166,996 36,076,479 62,985,880 21,910,309 59,029,627 11,368,912 1,287,806 13,569,828 24,726,145 105,609,090 16,708,375 3,792,747 4,562,605 92,032,596 4,523,342 495,836,164
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
CC 4,062,161 24,514,139 298,061 28,923,595 46,309,196 10,413,583 48,905,236 9,613,179 1,193,612 11,508,623 10,714,275 61,834,451 11,530,282 4,350,397 2,727,179 73,956,184 4,515,572 355,369,726
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
CC 23,988,962 2,903,745 259,330 37,538,860 912,022 20,657,267 7,588,307 2,112,872 609,609 12,405,014 4,591,963 2,644,564 35,543,600 6,880,595 11,474,716 1,422,994 8,572,904 166,996 15,054,329 934,175 1,590,677 48,064,130 4,791,768 3,792,747 10,843,553 10,202,328 2,570,579 542,138 261,687 9,018,124 3,276,312 1,287,806 33,340,270 914,546 1,359,148 2,594,416 1,523,635 7,106,905 10,934,106 2,770,892 8,708,149 606,142 1,687,759 1,296,793 11,023,812 334,318 14,707,292 73,269,763 351,906 10,459,129 25,430,422 6,550,730 785,942 3,351,870
Hospital Name s:\hsp\nos\GME\Hospital Funding Gov SFY12 Budget Impact Summary 2-25-11.xls: Summary South Jersey Healthcare / Elmer $ South Jersey Healthcare Regional MC $ Southern Ocean Cty Hosp $ Trinitas Hospital $ Underwood Memorial Hosp $ University Hospital - UMDNJ $ University Medical Center at Princeton $ Valley Hospital $ Virtua - Mem Hsp of Burlington County $ Virtua - West Jersey Health System $ Warren Hospital $ Wm. B. Kessler Mem Hosp $ TOTALS: $
Hospital Systems Atlantic Health System AtlantiCare Health System Adventist HealthCare Inc. Capital Health System Catholic Health East Kennedy Health System Liberty HealthCare Systems, Inc. Meridian Health Systems Merit Health Systems Raritan Bay Health Services Robert Wood Johnson Health System Saint Barnabas Health Care System Saint Clare's Health Services Solaris Health System South Jersey Healthcare System St. Joseph's Healthcare System Virtua Health System Total
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
SFY 2011
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
SFY 2012
CC $ 24,514,139 $ 3,072,956 $ 386,800 $ 37,238,107 $ 1,024,183 $ 21,111,364 $ 7,812,232 $ 2,317,777 $ 611,992 $ 12,763,158 $ 4,424,661 $ 2,836,177 $ 35,881,989 $ 6,856,916 $ 11,328,636 $ 1,350,122 $ 9,409,011 $ 298,061 $ 15,464,202 $ 964,209 $ 1,660,072 $ 48,905,236 $ 5,089,296 $ 4,350,397 $ 10,413,583 $ 10,102,200 $ 2,640,992 $ 743,876 $ 480,840 $ 8,655,034 $ 2,696,923 $ 1,193,612 $ 34,787,887 $ 1,050,254 $ 1,210,126 $ 3,042,958 $ 1,365,238 $ 7,081,675 $ 11,508,623 $ 2,492,126 $ 8,264,328 $ 622,666 $ 1,827,281 $ 1,028,493 $ 11,143,641 $ 386,641 $ 14,383,534 $ 73,610,785 $ 345,399 $ 10,778,375 $ 26,241,712 $ 5,819,520 Care $ Charity930,368 665,000,000 $$ 3,279,722 $ 675,000,000 $10,000,000
SFY 2012 HRSF 166,600,000 $ - $
SFY2012 HRSF $ 6,790,083 $ $ 9,723 $ $ 25,164 $ $ 14,277,423 $ $ 328,278 $ $ 3,612,185 $ $ 2,004,479 $ $ 470,112 $ $ 133,256 $ $ 2,241,729 $ $ 2,877,028 $ $ 464,965 $ $ 6,218,870 $ $ 572 $ $ 2,749,701 $ $ 426,075 $ $ 1,462,953 $ $ 176,721 $ $ 1,078,602 $ $ 299,682 $ $ 126,393 $ $ 7,700,781 $ $ 3,578,428 $ $ 423,787 $ $ 6,182,034 $ $ 5,132,827 $ $ 2,058,510 $ $ 224,762 $ $ 192,735 $ $ 7,915,215 $ $ 464,965 $ $ 274,518 $ $ 12,508,535 $ $ 150,985 $ $ 285,384 $ $ 2,413,287 $ $ 281,953 $ $ 946,516 $ $ 2,465,839 $ $ 285,384 $ $ 4,008,967 $ $ 218,471 $ $ 1,716 $ $ 491,845 $ $ 5,650,378 $ $ 4,003 $ $ 1,277,220 $ $ 10,876,963 $ $ $ $ 2,315,861 $ $ 6,757,836 $ 2012 $ SFY4,564,176 $ HRSF $ 366,596 $ $ 166,600,000 $ 336,857 $$ $ - $
GME 60,000,000 90,000,000 $30,000,000
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
TOTAL 32,925,964 3,082,679 411,964 51,886,627 1,352,461 25,673,692 9,892,322 2,931,908 745,248 15,345,371 7,301,689 3,301,142 51,810,318 6,953,899 14,078,337 1,932,774 13,988,533 474,782 17,037,445 1,263,891 1,817,835 60,486,536 11,216,720 4,877,140 20,976,905 15,235,027 4,823,825 968,637 673,574 19,878,475 3,823,685 1,595,155 59,260,097 1,201,239 1,495,511 6,505,219 1,825,998 8,028,190 14,602,248 2,777,511 22,866,224 841,137 1,828,997 1,992,184 16,794,019 390,644 16,043,494 93,713,229 345,399 13,097,360 35,909,920 13,053,348 1,296,964 3,688,141
Diff SFY 12 vs. 11 Difference $ 240,485 $ 178,933 $ 152,634 $ 1,327,179 $ 440,439 $ (364,157) $ (146,308) $ 675,648 $ 135,639 $ 766,464 $ 453,327 $ 656,578 $ 922,826 $ 73,304 $ (1,298,150) $ 509,780 $ 2,217,132 $ 307,787 $ 1,697,662 $ 329,716 $ 227,157 $ 1,456,908 $ 4,557,444 $ 1,084,392 $ (933,403) $ (230,930) $ (30,848) $ 426,500 $ 411,887 $ (613,460) $ 547,373 $ 307,349 $ 398,618 $ 286,692 $ 136,362 $ 333,736 $ 302,363 $ 921,286 $ 1,032,420 $ 6,619 $ 433,979 $ 234,994 $ 141,238 $ 695,391 $ 419,962 $ 56,327 $ (697,359) $ 2,032,539 $ (6,507) $ 661,273 $ 691,050 $ (2,470,428) $ 511,022 $ 336,272
$ $ $ $ $ $ $ $ $ $ $ $ $
SFY2012 HRSF GME 64,626 $ $ 4,439,774 $ 29,135 $ 145,838 $ $ 9,682,060 $ 2,187,794 $ 768,438 $ 56,805 $ 13,797,463 $ 14,804,084 $ 332,281 $ 337,888 $ 152,701 $ $ 712,031 $ 45,231 $ 346,579 $ 109,959 $ 26,880 $ 38,901 $ $ $ 166,600,000 $ 90,000,000 $
TOTAL 369,692 6,891,022 580,669 55,885,669 2,488,812 129,613,624 1,764,558 762,759 2,890,144 2,839,228 1,192,189 931,600,000
Diff SFY 12 vs. 11 Difference 1/17/08 $ 202,394 $ 2,495,715 $ 260,404 $ 5,008,633 $ 1,164,369 $ 5,968,326 $ 478,541 $ 17,641 $ 863,505 $ 342,525 $ 315,013 $ (62,200) $ 40,000,000
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
SFY2012 HRSF GME 746,918 $ 840,604 6,790,083 $ 1,621,741 176,721 $ 5,616,664 $ 1,025,754 12,506,852 $ 4,466,411 6,182,034 $ 4,381,288 7,700,781 $ 3,880,519 4,320,199 $ 2,548,996 274,518 $ 127,025 2,465,839 $ 627,785 4,229,153 $ 10,592,929 29,390,415 $ 15,743,748 5,654,382 $ 423,787 $ 102,956 4,504,400 $ 29,135 10,876,963 $ 9,225,481 1,058,610 $ 155,189 102,918,322 $ 55,369,561
Total 5,649,683 32,925,964 474,782 35,566,014 63,282,459 20,976,905 60,486,536 16,482,374 1,595,155 14,602,248 25,536,357 106,968,614 17,184,663 4,877,140 7,260,715 94,058,628 5,729,372 513,657,609
Diff SFY 12 vs. 11 Difference $ 849,736 $ 240,485 $ 307,787 $ (510,465) $ 296,579 $ (933,403) $ 1,456,908 $ 5,113,462 $ 307,349 $ 1,032,420 $ 810,212 $ 1,359,523 $ 476,288 $ 1,084,392 $ 2,698,110 $ 2,026,032 $ 1,206,030 $ 17,821,445
GME 1,621,741 371,097 950,143 75,611 144,019 340,484 9,709,459 96,411 156,577 3,116,569 494,640 31,371 3,880,519 2,548,996 102,956 4,381,288 124,324 3,308,226 661,797 127,025 11,963,675 1,048,975 178,807 627,785 10,592,929 471,846 382,740 9,225,481 3,125 2,910,372 2,669,652 GME 60,000,000 71,563 90,000,000 $30,000,000
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
2008 Closed Hospitals
Muhlenberg Regional Medical Center Columbus Hospital St. James Hospital Greenville Hospital
New Jersey Physician
15
Hospital Rounds
Call for Applications for New Bergen County General Hospital On June 1, 2011, in response to the New Jersey
In 2007, Pascack Valley Hospital (PVH) closed
new hospital as outlined in the call issued on
Department of Health and Senior Services’ call
due to poor management and overexpansion
February 18, 2011.
for applications for a new general hospital in
precipitated a bankruptcy. Since 2008, HUMC
Bergen County, Hackensack University Medical
has operated a satellite emergency department
In addition, there is continued, widespread
Center (HUMC) submitted a Certificate of Need
at Pascack Valley, but the healthcare needs of
community support to open a hospital in
application for review. HUMC’s application
this community extend far beyond the limited
Westwood. During a November 2009 general
strongly demonstrates the need for a proposed
services currently available at this facility.
election, a referendum appeared on the public
128-bed, acute care community hospital in
Access to convenient, comprehensive hospital
ballot with an overwhelming 75% supporting
Westwood; restoring much needed hospital
services is essential.
the reopening of a hospital in Westwood.
Valley communities formerly served by the
The application to open HUMC at Pascack
Hackensack University Medical Center looks
Pascack Valley Hospital.
Valley, provides a strong, in depth, need-
forward to a constructive application process,
based analysis addressing the criteria for a
and is focused on opening Hackensack
services to the Pascack Valley and Northern
University Medical Center at Pascack Valley.
LHP and Hackensack University Medical Center Announce CEO of Hackensack University Medical Center at Pascack Valley Richard Freeman Named to Reopen Former Pascack Valley Hospital LHP
Hospital
Group,
Inc.
(LHP)
and
and Northern Valley,” said Robert C. Garrett,
the Tenet Louisiana Operations, and CEO of
Hackensack University Medical Center (HUMC)
president and chief executive officer of
Delray Community Hospital. Freeman began
today announced that Richard S. Freeman has
Hackensack University Medical Center. “His
his healthcare career with National Medical
been named CEO of Hackensack University
proven leadership experience will help us to
Enterprises (now Tenet) and held regional
Medical Center at Pascack Valley (HUMC-PV).
bring high quality care to Westwood, while
positions in California in addition to several
HUMC and LHP formed a joint venture in 2009
maintaining the close-knit community once
CEO and COO positions in Florida and
to reopen the former Pascack Valley Hospital in
familiar at Pascack Valley Hospital.”
Louisiana.
This announcement follows yesterday’s filing
Freeman recently served as the COO of Beth
“Rich Freeman is an outstanding, experienced
of the Certificate of Need application on behalf
Israel Medical Center in New York City, where
hospital administrator, and we are fortunate
of LHP and HUMC, doing business as Pascack
he was responsible for the ongoing operations
to have him join the LHP team in this critical
Valley Health System, LLC.
of the two campus, 1,200-bed major academic
leadership role. Rich has had a very successful
community hospital. Prior to his tenure at Beth
career of working with physicians and
“I am thrilled to have Rich Freeman come
Israel, Freeman held a number of positions
employees to deliver high quality patient care
aboard as we work to restore the much
with Tenet Healthcare as the CEO of Medical
to the communities we serve,” said Dan Moen,
needed hospital services to Pascack Valley
College of Pennsylvania, Vice President of
LHP CEO.
Westwood, NJ, which was closed in April 2008.
16
New Jersey Physician
Hospital Rounds “I am honored to join the teams at LHP
in our nation based on any quality measure.
the overwhelming support this project has
and Hackensack University Medical Center.
They have been recognized regularly for care
enjoyed,” Freeman went on to say.
LHP is recognized nationally as a leader in
quality, outcomes, and clinical research-both
collaborating with physicians and employees.
locally and nationally, and we are fortunate
Freeman holds an MBA from Temple University,
LHP’s strategy of forming joint ventures with
to benefit from their clinical expertise and
where he was awarded the Kellogg Grant for
not-for-profit hospitals is unique and well-
standards. The people of Westwood and the
Hospital Administration, and completed his BS
respected throughout the healthcare industry,”
surrounding communities deserve to have
degree at LaSalle College in Philadelphia. He
said Freeman. “Hackensack University Medical
their local hospital reopened. It is a privilege
and his wife, Lisa, have three children: Michael,
Center is one of the most outstanding systems
for me to be on the team that will respond to
30; Lauren, 28 and Nick, 19.
Amyloidosis Treatment at Newark Beth Israel Medical Center Gives Union City Man a Second Life When Ricardo Negron, 52 of Union City, NJ,
of amyloidosis which can be hereditary or
The husband and father of three received a heart
rides his stationary bike he leaves the memory
acquired.
transplant in April, only a month after being
of heart failure further and further behind. After
listed as a heart transplant candidate. Today,
he was diagnosed with amyloidosis earlier this
“When I met Mr. Negron his heart was
Mr. Negron is walking his wife to work early in
year, specialists at Newark Beth Israel Medical
functioning at 15 percent of its normal
the morning, riding up to 12 miles a day on his
Center were able to arrest the production of
capacity,” said Mark J. Zucker, MD, JD, Director
stationary bike and taking the stairs whenever
amyloid protein that destroyed his heart and
of the Heart Failure Treatment and Transplant
he can. After he is fully recoverd from transplant
perform a heart transplant.
Program at Newark Beth Israel Medical Center.
surgery, the Newark Beth Israel specialists have
A biopsy was performed, the only definitive
recommended a stem cell transplant that could
Mr. Negron had felt his life waning for two years
test for amyloidosis. “The walls of his heart
completely cure his disease.
but doctors could not find the problem. “I used
were stiff from the deposit of starchy material,”
to walk a mile and a half to work but suddenly
explained Dr. Zucker.
About the Heart Center at Newark Beth Israel Medical Center
I was so exhausted that just taking a shower was a mission. None of the medications helped
The
me,” he remembers.
recognizes Newark Beth Israel Medical Center
national
Amyloidosis
Foundation
as experienced in diagnosing and treating Mr. Negron has primary AL amyloidosis, a rare
this condition that requires a symphony of
blood disorder that results in production of
amyloid specialists in cardiology, hematology,
abnormal protein (amyloid) that is deposited
gastroenterology,
as fibers on organs such as the heart, kidneys,
pulmonology and pathology. “Until recently,
nerves and intestines. Because the condition
AL amyloidosis was considered incurable,”
is uncommononly about 3,000 American are
said Dr. Sabnani. “Research studies in stem
diagnosed each yearmost physicians have
cell transplantation are showing good results
little experience diagnosing or treating the
and now offer hope to people with ‘stiff heart
condition.
syndrome.’”
“In patients with unexplained heart failure,
The team at Newark Beth Israel fully evaluated
gastrointestinal symptoms or neuromuscular
Mr. Negron’s disease among the many types
disorders, a diagnosis of amyloidosis should
of amyloidosis and planned specific treatment
be considered,” said Indu Sabnani, MD,
aimed at reducing the abnormal cells that
hematologist/oncologist at Newark Beth Israel
produce the amyloid while managing the heart
Medical Center. There are many different kinds
failure it caused.
neurology,
nephrology,
The Heart Center at Newark Beth Israel Medical Center provides New Jersey residents with access to one of the nation’s finest and most comprehensive cardiovascular programs that was ranked among the nation’s 50 best in Heart and Heart Surgery by U.S .News & World Report’s America’s Best Hospitals for two consecutive years and top in New Jersey in 2010- 2011. The Heart Failure Treatment and Transplant Program is the fifth most active in the country, with long-term survival rates that consistently exceed national benchmarks. Highly specialized care includes minimally invasive and robotic-assisted cardiac procedures, state-of-the-art technology that provides astounding images of the heart for more precise diagnosis, and the latest generation of ventricular assist devices designed to take over the pumping action for a diseased heart. New Jersey Physician
17
Food for Thought
Cocco Bello Café Livingston, New Jersey By Iris Goldberg
This is not so much about the food, although I will gladly share some “tidbits.” For me, this is about enjoying the company of women friends. I’m not just talking about best friends, whom you see all the time and have known forever. I’m talking about those women you’ve met along the way, perhaps at work, or maybe through your children and it might have started with a cup of coffee or an extended phone conversation, then suddenly, a relationship is born. I am fortunate to be the member of a foursome of women who meet a few times during the year to share a meal and anything else that comes to mind. This has been going on for many years and we have seen each other through a lot. Since we all live in Livingston, we usually do try to stay local. Last week we met at Cocco Bello Café which is a popular spot for good
Italian cuisine with those who live in the area and it has actually developed a following of diners who travel from farther away, as I have been told. The proprietors know many of the regulars and the atmosphere is family-like and warm. There is nice greeting when you arrive and the service is always attentive. I won’t mention names but our group is an interesting mix. There’s a physician, an educator, a children’s textbook editor and a healthcare magazine publisher (that would be me, of course). We’ve been through the death of three parents, one divorce, two bouts of cancer, three career moves, marriages of children, divorce of children, anything and everything we need to vent about children, birth of grandchildren, husband’s illnesses, anything and everything we need to vent about husbands and menopause- to name
only some of the added spice that is served with the food. With the exception of one of these women, with whom I share a special relationship outside of the group, we don’t call each other regularly. Months can go by when we don’t see each other at all. Then the email comes.
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New Jersey Physician
“Ladies, it’s been too long!” One of us gets the ball rolling and a dinner date is made. This last time came after many months had passed. There was so much to catch up on. We began with two salads for the four of us. One, a salad of mixed greens, endive, radicchio and walnuts in an oil and vinegar dressing topped with imported gorgonzola cheese and the other, a “Della Casa” salad consisting of mixed baby greens with artichoke hearts, marinated black olives, hearts of palm, roasted peppers and fresh mozzarella in a balsamic vinaigrette. By the time our salads were eaten we had covered a home improvement project in one of the women’s home, my daughter Jenna’s upcoming wedding, an unfortunate health development with an encouraging treatment plan for another who, by the way, is leaving for a lovely European trip at the end of the month, despite her illness and an update on all grandchildren. It’s amazing how fast and how much you can communicate while your mouth is full. Okay, for those who actually read this column for the food, here’s what we had for the main course. I’m sorry to have to tell you but three of us ordered the same dish. We couldn’t resist. As a Special of the Day, Cocco Bello was serving soft shell crabs that are only available in season. They were large in size, fried and served on top of angel hair pasta in a zesty marinara sauce. The crabs were cooked perfectly and the marinara had quite a zing. I really enjoyed this dish. The fourth member of the group also had one of the Specials. I believe it was half a duckling served with a luscious black cherry glaze. I do remember that she thought it was superb. By the time our meal was over we had caught up on absolutely everything. What a relief to talk it all out and then file it back where it belonged. We always say that we won’t let too much time pass before our next dinner. But we always do. One thing’s for sure. When we meet again, there will be much more to discuss and wherever we decide to eat, the evening with my women friends will definitely not be about the food. As far as Cocco Bello goes, it’s a worthwhile BYO place for a casual Italian-style, moderately priced dinner that is well-prepared and attentively served in a comfortable setting. Perhaps I’ll write about it again when I go there with Michael. Although I do enjoy my dinners out with him, they usually aren’t cathartic experiences, so I will be able to pay more attention to my meal, his meal and the rest of the food on the menu.
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Cocco Bello Café is located at 155 South Livingston Avenue. (973) 992-1999 New Jersey Physician
19
In The News
Report Finds Inequities in Payments for Medicare Medicare uses inaccurate, unreliable data to pay doctors and hospitals, the National Academy of Sciences said. Although Medicare is a national program, it adjusts payments to health care providers to reflect regional differences in wages, rent and other costs. But in a new report, a panel of experts from the academy’s Institute of Medicine said the payment formulas were deeply flawed. The system of paying doctors has “fundamental conceptual problems,” and the method of paying hospitals is so unrealistic that almost 40 percent of them have been reclassified into higher-paying areas, the report said. White House officials agreed to commission the study in March 2010 — in the last tense days of Congressional debate over President Obama’s health care overhaul — as a way to secure the votes of lawmakers from Iowa, Minnesota, Wisconsin and other states who believed their doctors and hospitals had long been shortchanged by Medicare. As a result of such underpayments, the lawmakers said, many parts of their states have difficulty recruiting doctors, nurses and other practitioners, and consumers often have difficulty finding specialists. However, the new study says that geographic adjustments should be used to increase the accuracy of Medicare payments, not to address
shortages of providers in some places.
but Medicare’s payment formula gives too much weight to such differences.
The report criticizes the current arrangement under which Medicare distributes tens of billions of dollars based on regional variations in wages, rents and other costs in 441 hospital labor markets and 89 payment zones for doctors. Of the physician payment zones, 34 cover entire states.
Mr. Abrams said he was concerned that the panel’s recommendations could “make things worse” for many doctors and patients in his state. The panel will analyze the impact of its recommendations in a report next spring.
The panel said Medicare should recognize a single set of 441 payment areas for doctors and hospitals alike.
By the end of this year, under the new health care law, the secretary of health and human services must send Congress a plan to revise the way Medicare adjusts payments to reflect regional differences in hospital wages.
As a result of such a change, the panel said, “higher-cost areas would be separated from lower-cost areas,” and payments to doctors in metropolitan areas would generally increase, while payments to doctors in some rural areas could be expected to decrease. Michael D. Abrams, executive vice president of the Iowa Medical Society, said he was “a little surprised” and disappointed that the panel did not acknowledge that Medicare overemphasized the importance of geographic differences in office rents. “You could argue that it costs more to deliver health care in rural America, in sparsely populated areas, than in densely populated areas,” Mr. Abrams said. “Office space is a lot more expensive in Brooklyn, N.Y., than in Brooklyn, Iowa,” he said,
Any such plan could have major economic and political implications. Wages account for about two-thirds of hospital costs, the panel said, and regional differences are substantial, with a registered nurse paid almost twice as much per hour in San Francisco as in Springfield, Mo. Under the new health law, geographic adjustments may not increase total costs to Medicare, so that an increase in payments to one hospital or group of hospitals must generally be offset by decreases in payments to others. Frank A. Sloan, a professor of economics at Duke University and chairman of the study panel, said Medicare needed to find a new source of data on commercial office rents. The current measure, based on rent for a twobedroom apartment, does not accurately reflect the prices doctors face, he said.
Virtua Joins as an Owner of QualCare Virtua joined 12 other New Jersey hospital
Virtua, which has more than 8,000 employees,
Virtua, based in Marlton, NJ, operates four
systems and physician organizations as an
will have its health benefits become self-insured
hospitals with 1,073 beds, two health and
owner of QualCare, Inc., the state’s largest
through QualCare effective next January 1.
wellness centers, two rehab centers, two
provicer sponsored managed care company.
medically based fitness centers, and a variety “Having Virtua join our organization as a
Qualcare of Piscataway, NJ, has more than
partner anchors our expanding provider and
750,000 members enrolled in self-insured
customer base in southern New Jersey and
health, workers’ compensation and liability
Philadelphia,” said Annette Catiino, QualCare’s
insurance products.
president and CEO.
20
New Jersey Physician
of outpatient health services in South Jersey.
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