HEALTHCARE NEWS FLASH February 17, 2014
Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 7 Technology .......................................................................................................................... 10 Strategy .............................................................................................................................. 15
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Sales & Marketing Recent PPACA Policy Changes Will Negatively Affect Insurers, Moody's Says February 14, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/payer-issues/recent-ppaca-policy-changes-willnegatively-affect-insurers-moody-s-says.html Recent Patient Protection and Affordable Care Act policy changes concerning provider networks, the extension of old health plans and the employer mandate will likely have a negative impact on health insurers selling policies through the exchanges, according to Moody's Investors Service. Last week, CMS issued guidance for insurers looking to sell health plans through the federally facilitated marketplace or federally run small business health options program in 2015. The guidance includes tougher certification requirements: CMS intends to propose that qualified health plan provider networks include at least 30 percent of available essential community providers, up from 20 percent in 2014. Essential community providers are those that serve predominantly low-income and medically underserved individuals, according to CMS. According to Moody's, "forcing insurers to expand their networks will result in higher premiums that will further discourage enrollment by the younger and healthier population; if the trend were to continue, these products would eventually become unsustainable." The Obama administration is also considering allowing people to remain enrolled in non-PPACA compliant plans until 2016. Late last year, President Obama initially decided to let health insurers continue offering plans that don't meet the reform law's requirements through the end of this year. Originally, non-grandfathered policies — plans that went into effect or underwent certain changes after the PPACA became law in March 2010 — had to meet new coverage requirements in 2014, and many insurers sent out cancellation notices to people in non-grandfathered plans that weren't compliant with the new criteria. In December, Moody's issued a report stating the extension of noncompliant plans could lead younger, healthier people to stay away from the exchanges in 2014, resulting in a negative effect on the risk profile of the exchange health risk-pool. According to the most recent Moody's report, extending those plans for another two years will "exacerbate the issue and will likely result in higher premiums for exchange policies with an insured population that will be less healthy and less profitable for insurers." Finally, the Obama administration's decision last week to delay the PPACA's employer mandate by another year for certain businesses will also affect payers. Under the PPACA, businesses and companies with 50 or more employees are mandated to offer health insurance to those employees or pay a penalty. The mandate will now take effect January 2016 instead of January 2015 for businesses with 50 to 99 employees. According to Moody's, employers that are now exempt from the mandate for another year could force insurers to "resurrect" non-PPACA compliant small group policies they had planned to discontinue, making what was already going to be a challenging selling season in the small group market more difficult.
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3.3 Million Enrolled on Health Marketplaces, Including More Young People, Government Says February 12, 2014 | New York Times http://www.nytimes.com/2014/02/13/us/3-3-million-enrolled-in-health-care-marketplaces-moreyoung-people-signing-up.html?emc=edit_tnt_20140212&tntemail0=y&_r=2 Nearly 3.3 million people have signed up for health insurance through the marketplaces established by President Obama’s health care law, and about one-fourth of them are young adults, the administration said Wednesday. The administration reported a modest uptick in the enrollment of young adults, a group avidly sought by insurers because they are usually healthier and need fewer costly medical services. In a new report on enrollment, the administration said that 1.9 million people had selected health plans in the federal marketplace from October through January, while 1.4 million chose plans in state-run insurance exchanges. In January alone, officials said, more than 1.1 million people signed up for insurance in the federal and state exchanges. Administration officials said they were pleased with the numbers. “These encouraging trends show that more Americans are enrolling every day, and finding quality, affordable coverage in the marketplace,” said Kathleen Sebelius, the secretary of health and human services. “The covered population is getting younger,” Ms. Sebelius said. In January, 318,000 people age 18 to 34 selected health plans, bringing the total in this age group to 807,500, officials said. The administration’s goal was to have 4.4 million people signed up by now, according to a memorandum prepared in September by the Department of Health and Human Services. But the federal insurance website, HealthCare.gov, got off to a rocky start, thwarting many people who tried to sign up in October and November. The new data show that people buying insurance on the exchanges still tend to be older and potentially less healthy. Of those who signed up in the last four months, administration officials said, 53 percent are age 45 to 64 -- down slightly from 55 percent in the first three months. About 25 percent of those choosing a health insurance plan are 18 to 34. This group accounted for 24 percent of those picking plans in the first three months. People 55 to 64 -- the range just below the age at which people qualify for Medicare -- represented the largest group, at 31 percent, down from 33 percent in the months from October through December. The open enrollment period continues until March 31, and White House officials predict a surge of applications just before the deadline. People who go without insurance after that may be subject to tax penalties, although the Internal Revenue Service has indicated that it prefers public education over aggressive enforcement in the first year of the “individual mandate.”
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After reviewing the new report, Caroline F. Pearson, a vice president of Avalere Health, a research and consulting company, said: "Enrollment in the exchanges appears to be on track to reach roughly six million by the end of March. It is also important that the age mix of enrollees improved in January, relative to the first three months of open enrollment. That supports my hypothesis that the older, sicker enrollees will sign up first, and the younger, healthier people will enroll later.” After reviewing the new report, Caroline F. Pearson, a vice president of Avalere Health, a research and consulting company, said: “Enrollment in the exchanges appears to be on track to reach roughly six million by the end of March. It is also important that the age mix of enrollees improved in January, relative to the first three months of open enrollment. That supports my hypothesis that the older, sicker enrollees will sign up first, and the younger, healthier people will enroll later.” The administration and its allies are planning a big push to sign up more people, in the hope that total enrollment through the exchanges could reach the administration’s original goal of seven million by the end of March. About four-fifths of those choosing health plans to date qualified for financial assistance to help pay their premiums, administration officials said. Senator Mitch McConnell of Kentucky, the Republican leader, said Wednesday that many of “the new enrollees in Obamacare exchange plans are actually folks who were already insured” or eligible for Medicaid. Nearly four years after it was signed by Mr. Obama, the Affordable Care Act remains a divisive political issue, and administration officials say that Republican attacks on the law have made it more difficult for them to persuade people to enroll. Opinion polls show that people who are uninsured disapprove of the health care law at roughly the same rate as people who have insurance.
WellStar Health System Joins Mayo Clinic Care Network February 7, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/wellstar-healthsystem-joins-mayo-clinic-care-network.html WellStar Health System, based in Marietta, Ga., is joining the Mayo Clinic Care Network. The Mayo Clinic Care Network, established by Rochester, Minn.-based Mayo Clinic, is a network of hospitals and health systems that work to improve the quality and delivery of care in their regions. The collaboration gives providers around the nation access to Mayo Clinic's expertise. WellStar specialists can now leverage Mayo Clinic's knowledge using various electronic tools and services. For instance, physicians can use electronic consulting to directly connect with Mayo Clinic specialists on complex patient cases, according to a news release. The deal does not involve a change in ownership. The network launched in 2011 and has member organizations in Arizona, California, Colorado, Florida, Georgia, Illinois, Kentucky, Michigan, Minnesota, Missouri, Montana, New Hampshire, North Dakota and Wisconsin, as well as Puerto Rico and Mexico.
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Aetna partners with Mexico insurer to extend provider network access February 5, 2014 | Fierce Health Payer http://www.fiercehealthpayer.com/story/aetna-partners-mexico-insurer-extend-providernetwork-access/2014-02-05 Aetna has launched a new partnership with Mexico's largest health insurer to give about 30,000 people who buy high-end plans access to its provider network both in this country and abroad, Aetna announced Monday. As of Feb. 1, Grupo Nacional Provincial (GNP) customers can use Aetna's network, healthcare management services, mobile technology tools and wellness information. The deal will continue Aetna's goal of expanding its international business in Latin America. "GNP shares our deep commitment to excellence and focus on customer needs," Aetna International General Manager of the Americas Eugene Marks said in the announcement. GNP's CEO Alejandro Bailleres said the arrangement is beneficial for its members because they often have second homes in the United States and travel extensively
UNC Health Care Adds Johnston Health February 4, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/unc-health-careadds-johnston-health.html Chapel Hill, N.C.-based UNC Health Care and Johnston Health in Smithfield, N.C., have signed a definitive joint venture deal. Effective immediately, Johnston Health, formerly a public health system, is now an affiliate of UNC Health Care. According to terms of the deal, UNC Health Care will dole out $57.6 million in exchange for partial ownership of the new entity, Johnston Health Services Corp. The exact stake of UNC Health Care's ownership was not disclosed. The funds will be used to expand Johnston Medical Center in Clayton, N.C. A new three-story addition will convert the outpatient center into a full-service, 50-bed hospital, which will open in January 2015, according to a news release. In addition to capital expenditures, UNC Healthcare and Johnston Health will collaborate on service lines, including cardiovascular, oncology, obstetrics, pediatrics, orthopedics and rehabilitation. Under the joint venture, Johnston Health's board will be comprised of 17 members, including 11 current commissioners and six executives and physicians within UNC Health Care. The two systems entered into exclusive partnership talks last April.
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Finance Cigna Q4 Profit Falls February 7, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/payer-issues/cigna-q4-profit-falls.html Fourth-quarter net income at health insurer Cigna fell 11 percent, from $406 million in 2012 to $361 million in 2013. Cigna reported total revenue of approximately $8.15 billion in the fourth quarter, up nearly 7 percent from $7.62 billion the previous year. However, the health insurer experienced higher medical costs related to its Medicare Advantage plans. Its medical cost ratio for the quarter was 86.4 percent, up from 82.2 percent the previous year. For the year ended Dec. 31, Cigna reported $1.48 billion in net income, a 9 percent drop from $1.62 billion in 2012. The company posted $32.38 billion in revenue for 2013, an 11 percent year-over-year increase. However, the insurer experienced a decline in profit due toits $781 million transaction with Berkshire Hathaway to exit its reinsurance business, which it had been running in run-off mode seeking no new business since 2000. The insurer posted $488 million in losses in 2013 because of run-off reinsurance.
Aetna Q4 Profit Up 94% February 6, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/payer-issues/aetna-q4-profit-up-94.html Fourth-quarter net income at health insurer Aetna shot up 94 percent year-over-year, from $190.1 million in 2012 to $368.9 million in 2013. For the three months ended Dec. 31, Aetna reported approximately $13.2 billion in revenue, up nearly 33 percent from $9.9 billion the previous year. For the year ended Dec. 31, Aetna reported net income of $1.9 billion, a 15 percent increase from nearly $1.7 billion in 2012. The insurer reported $47.3 billion in revenue in 2013, a 29 percent increase from $36.6 billion in 2012. The rise in profit was partly driven by the insurer's acquisition of Coventry Health Care. The Coventry merger was valued at $5.7 billion when announced in August 2012.
Humana Reports $30M Loss in Q4 February 5, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/payer-issues/humana-reports-30m-loss-in-q4.html Health insurer Humana posted a fourth-quarter loss of $30 million, a nearly 116 percent drop from $192 million in profit in the fourth quarter of 2012.
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Humana reported total revenue of about $10.2 billion for the three months ended Dec. 31, a 6.6 percent increase from $9.6 billion in 2012. The insurer's operating expenses also went up by 10.3 percent year-over-year to $10.2 billion. Humana saw its consolidated benefit ratio rise to 85.8 percent, compared with 83.7 percent in 2012. The increase was primarily due to a $243 million charge to strengthen reserves for a block of long-term care policies the insurer no longer sells. For the year ended Dec. 31, Humana reported $1.23 billion in net income, up 0.7 percent from $1.22 billion in 2012. The company posted $41.3 billion in total revenue in 2013, a 5.6 percent increase from $39.1 billion in 2012. Total operating expenses also rose 5.8 percent to $39.3 billion in 2013.
HCA's Profit Up 35% in Q4, Down Slightly in 2013 February 4, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/hca-s-profit-up-35-in-q4-downslightly-in-2013.html Despite a 1.8 percent drop in same-hospital admissions in the fourth quarter, Nashville, Tenn.-based Hospital Corporation of America still managed to post a $424 million profit — up 35 percent from the fourth quarter in 2012. Milton Johnson, HCA's president and CEO, said the company was "extremely pleased" with the fourth-quarter and year-end results. Fourth-quarter revenue ticked upward by 4.8 percent to more than $8.8 billion. The higher earnings were due in part to a $175 million legal claim HCA had to mark on its 2012 earnings. For the entire 2013 fiscal year, HCA's profit slipped about 3.1 percent, from $1.61 billion in 2012 to $1.56 billion. Higher income taxes and fewer electronic health record incentive dollars from the federal government contributed to the decline. However, revenue increased 3.5 percent to $34.2 billion. Last month, HCA issued a preview of its earnings, estimating its year-end adjusted EBITDA would be higher than expected. Adjusted EBITDA in 2013 reached just shy of $6.6 billion. Although same-facility admissions and emergency room visits were down in the fourth quarter, HCA posted positive operating data — something few other hospital chains could say. Admissions for the year increased 0.1 percent, while ER visits climbed 0.7 percent. However, outpatient surgery cases dropped 0.5 percent. For 2014, HCA expects modest growth to continue. Year-end revenue is projected to be between $35.5 billion and $36.5 billion. Adjusted EBITDA is expected to be as high as $6.85 billion. HCA also expects to make about $2.2 billion in capital expenditures. As of Dec. 31, 2013, HCA operated 165 hospitals and 115 freestanding ambulatory surgery centers. It remains as the largest for-profit hospital operator by revenue and is the second-largest by hospital count, only behind Franklin, Tenn.-based Community Health Systems, which just acquired Naples, Fla.-based Health Management Associates
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Annual healthcare spending hits $3.8T February 3, 2014 | Fierce Health Finance http://www.fiercehealthfinance.com/story/annual-healthcare-spending-hits-38t/2014-02-03 Annual healthcare spending in the United States has hit $3.8 trillion, according to Forbes. The Centers for Medicare & Medicaid Services (CMS) found that the percentage of the economy in 2013 devoted to healthcare fell slightly in 2013. Although CMS projects National Health Expenditures (NHE) for 2014 at $3.09 trillion, the Deloitte Center for Health Solutions forecasts costs as much higher, according to Forbes' Dan Munro. In 2011, Deloitte issued a report, "The Hidden Costs of U.S. Health Care: Consumer Discretionary Health Care Spending," putting the spending projections substantially higher than CMS'. One of the biggest problems with trying to make NHE estimates, Munro writes, is that the "sandwich generation,' which falls between children and aging parents, is responsible for a great portion of healthcare expenditures that "the government simply has no way to calculate or include in their summaries." Also adding to uncertain cost growth is the prospect of repealing the sustainable growth rate (SGR) Medicare payment formula, according to Munro. The Congressional Budget Office (CBO) projects repealing the SGR will cost $116 billion, down from the original projection of $271 billion. Despite the lower projection, Munro notes, there is still no plan as to how to pay for repeal. "Whatever happens politically, the SGR is a healthcare budgetary dilemma and it is on the books," he writes. "The larger issue is simply that we're not making any headway on one of the most important healthcare measurements of all--cost," Munro writes. Based on annual gross domestic product (GDP) calculations by the United Nations, the International Monetary Fund, the World Bank and the CIA World Factbook, he states, "our annual healthcare spending is an economic unit larger than the GDP of Germany (which is itself the 4th or 5th largest GDP on the planet)." The rise in healthcare costs is largely driven by medical innovations and healthcare reform, FierceHealthcare previously reported.
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Technology Global EMR market to hit $17 billion by 2017 February 10, 2014 | Fierce EMR http://www.fierceemr.com/story/global-emr-market-hit-17-billion-2017/2014-02-10 The global EHR market is expected to grow "significantly" from $10.6 billion in 2012 to $17 billion by 2017, at a compounded annual growth rate (CAGR) of 9.8 percent, according to the latest report from research and consulting firm GlobalData. The report reveals that McKesson is the market leader with health IT software and services revenue at $3.3 billion. Cerner and Allscripts follow, with revenue at $2.6 billion and $1.4 billion, respectively. EMR vendors also are offering revenue cycle management so that providers can use the same platform for clinical and financial information, according to an announcement. The report predicts that the market will achieve greater profitability and efficiency, and attributes the growth in large part to the Meaningful Use Incentive program. The program has paid out more than $19 billion in incentive payments to providers since its inception. This report is almost as robust as a similar one on wireless EHRs, which expects the market to grow to nearly $23.5 billion by 2018. It also mirrors to some extent a new report from the government, which found that 93 percent of eligible hospitals and 82 percent of eligible professionals have registered to participate in the Meaningful Use program, which would certainly ramp up sales. However, it does not address how satisfied users are with their systems and whether some of this market growth is attributable to providers switching systems.
Survey: Less than 10% of physician practices ready for ICD-10 February 5, 2014 | Fierce Health IT http://www.fiercehealthit.com/story/survey-less-10-physician-practices-ready-icd-10/2014-02-05 Less than 10 percent of practices responding to a survey issued by the Medical Group Management Association are ready for the transition to ICD-10, the group announced this week. While the number is up from 4.7 percent who indicated readiness last summer, it adds to a growing chorus of providers and payers who indicate they aren't ready to switch from using ICD-9 coding. For instance, in a similar survey published by Medical claims clearinghouse last month, 74 percent of physician practice respondents said they had yet to begin implementation of their ICD-10 transition plan. The deadline to switch to ICD-10 is Oct. 1. "The critical coordination that must take place between practices and their software vendor, clearinghouse and health plan partners is not happening at the pace required for a seamless implementation," Susan Turney, MGMA president and CEO said in a statement. "Very simply, ICD-10 is behind schedule."
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For the survey, MGMA received responses from more than 570 medical groups comprised of more than 21,000 physicians. MGMA called on the Centers for Medicare & Medicaid Services to offer end-to-end testing for providers, in addition to: Releasing all Medicare & Medicaid payment edits Consistently publishing and updating the readiness levels of Medicare contractors and Medicaid agencies Assessing vendor readiness Expanding education efforts Local Medicare Administrative Contractors will, in fact, offer ICD-10 testing for providers from March 3-7, but only front-end testing. In conjunction with the Massachusetts eHealth Collaborative and a vendor partner, the Massachusetts Health Data Consortium recently announced that it would offer ICD-10 testing to providers and payers in the Bay State to try to reduce time and money spent on the transition. The Workgroup for Electronic Data Interchange in January urged the federal government to conduct additional Medicare testing prior to the implementation of ICD-10 in a letter to U.S. Department of Health & Human Services Secretary Kathleen Sebelius. The American Hospital Association also has pushed for the federal government to conduct ICD-10 testing. The World Health Organization recently postponed rollout of ICD-11 by two years, from 2015 to 2017.
EHR incentives climb to $19B February 5, 2014 | Healthcare IT News http://www.healthcareitnews.com/news/ehr-incentives-climb-19b Strong momentum continues for the meaningful use program as CMS revealed that it has disbursed more than $19 billion in reimbursement incentives. There were 440, 998 registered providers participating in the federal electronic health record incentive program as of the end of 2013, with $19.2 billion paid out in incentives, according to the Centers for Medicare & Medicaid Services. Approximately 88 percent of all eligible hospitals have received an EHR incentive payment so far, said Robert Anthony, deputy director at the CMS Office of E-Health Standards and Service at Tuesday's Health Information Technology Policy Committee Meeting. In addition, Anthony reported as of Dec. 31, 2013: Nearly 9 out of 10 eligible hospitals have made a financial commitment to an EHR
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Approximately 60 percent, or 3 out of every 5 Medicare eligible providers (EPs) are meaningful users of EHRs Approximately 78 percent, or nearly 4 out of every 5 Medicaid EPs have received an EHR incentive payment; Twenty percent of Medicaid EPs are meaningful users; Almost 63 percent, or 3 out of every 5 Medicare and Medicaid EPs have made a financial commitment to an EHR; More than 340,000 Medicare and Medicaid EPs have received an EHR incentive payment. CMS also released the results of a 2013 National Electronic Health Records Survey, which revealed that of the physicians who intend to participate in the meaningful use program, 19 percent had adopted all 14 of the 17 Stage 2 Core objectives. In September 2012, Farzad Mostashari, National Coordinator for Health Information Technology at that time, predicted the federal government would pay out $20 billion in incentives before 2015. The HITECH Act, which mandated the program, did not set a cap on how much the federal government can spend on meaningful use incentives.
Total cost of U.S. health IT security breaches estimated at $1.6B annually February 4, 2014 | Government Health IT http://www.govhealthit.com/news/total-cost-us-health-it-security-breaches-estimated-16bannually Most healthcare organizations nationwide, some 61 percent to be exact, reported a security related incident in the form of security breach, data loss or unplanned downtime at least once this past year, according to a new health IT report by MeriTalk, a public-private organization working to improve government information technology. These security events cost U.S. hospitals an estimated $1.6 billion each year. Breaking it down by incident, hospitals should expect to hand over on average $810,000 per security breach, which occurs at nearly one in five healthcare organizations nationwide. The bulk of those security breaches, 58 percent, result from malware and viruses; outsider attacks account for 42 percent; and physical security, which includes equipment loss or theft, accounts for 38 percent. It's not just the breaches, however, that are costing healthcare organizations some serious cash. It's also hardware and software failures that can result in big time data loss and unplanned outages. Data loss has affected nearly one in three healthcare organizations this past year, costing on average $807,571 per incident. The biggest culprits? Hardware failure at 51 percent; loss of power at 49 percent and loss of backup power at 27 percent.
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What's more is providers know they're not prepared. Most are even confident they won't be able to restore 100 percent of the data required by SLAs following an emergency. The majority -- 82 percent - say their technology infrastructure is not fully prepared for a disaster recovery incident. Resultantly, some are working to change that. "Healthcare organizations are making significant IT investments to transform IT infrastructure and ensure that patient information is secure, protected and highly available," said Scott Filion, general manager, global healthcare at EMC Corporation -- the report underwriter -- in a Feb. 3 statement. "Healthcare organizations have always focused on information security, but today they must do more to protect data and ensure accessibility to meet ARRA HITECH HIPPA requirements." Despite these report findings, only a moderate number of healthcare organizations indicated they are taking the necessary steps to prepare and prevent security events in the future. For instance, only 42 percent said they were moving forward with encryption initiatives, and 44 percent said they were getting single sign-on and authentication for Web-based applications and portals. Moreover, despite the uptick in HIPAA privacy and security breaches this past year in addition to HHS' Office for Civil Rights Director Leon Rodriguez promising a comprehensive audit program in 2014, only 32 percent are moving forward with security analytics to help with breach prevention.
Most health IT execs unprepared for a data breach February 3, 2014 | Fierce Health IT http://www.fiercehealthit.com/story/most-health-it-execs-unprepared-data-breach/2014-02-03 Health IT executives aren't exactly prepared to weather any storm--most don't feel prepared for security breaches or unplanned outages, according to a new survey. More than half (56 percent) of the survey's respondents said they would need eight hours or more to restore 100 percent of data lost in a breach. The majority of the 283 health IT executives surveyed--82 percent--said that their technology infrastructure is "not fully prepared for a disaster recovery incident." The following incidents cost U.S. hospitals an estimated $1.6 billion a year, according to an announcement of the MeriTalk survey results: Security Breaches: Nearly one in five (19 percent) global healthcare organizations experienced a security breach in the last 12 months at a cost of $810,189 per incident. Health IT executives said the most common causes for breaches included malware and viruses (58 percent); outsider attacks (42 percent); physical security--loss/theft of equipment (38 percent); and user error (35 percent). Data Loss: Nearly one in three (28 percent) global healthcare organizations experienced data loss in the past 12 months at a total cost of $807,571 per incident. And, of those, more than one-third (39 percent) had experienced five or more incidences of data loss in the past 12 months. Common causes of data loss included hardware failure (51 percent); loss of power (49 percent); and loss of backup power (27 percent).
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Unplanned Outages: Close to 40 percent of all global healthcare organizations experienced an unplanned outage in the past 12 months at a cost of $432,000 per incident. On average, healthcare organizations lost 57 hours to unplanned downtime over the past 12 months. The most common causes of outages included hardware failure (65 percent); loss of power (49 percent); software failure (31 percent); and data corruption (24 percent). What are organizations doing to prepare for breaches? Many groups are preparing HIPAA security risk analyses as part of the Meaningful Use incentive program. Additionally, organizations are turning to single-sign-on and authentication for Web-based applications and portals, auditing tools and log management and encryption for protected health information. As FierceHealthIT recently reported--of late, the "wall of shame" for health data breaches at the U.S. Department of Health & Human Services has seen a lot of action. In the month of January alone, more than 70 health data breach incidents affecting more than 500 individuals were added. A report published in December 2012 by the Ponemon Institute determined that data breaches cost health organizations close to $7 billion annually. Still, privacy experts speaking last summer at the Healthcare Privacy Summit in Washington, D.C., called current efforts to deal with health data security too reactive.
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Strategy Kaiser, VHA form partnership February 11, 2014 | Government Health IT http://www.govhealthit.com/news/kaiser-vha-form-partnership Kaiser Permanente and the Veterans Health Administration have partnered to research and share best practices. Officials for the two organizations say they will focus on four areas of healthcare: connected health and virtual care, genomics, the care of veterans who are also Kaiser members, and analytics. The goal is to leverage innovative uses of big data and population management. Jed Weissberg, MD, Kaiser Permanente's senior vice president said in a prepared statement that part of the agreement calls for "looking at partnerships and investing in new ideas and technologies" to improve care, patient engagement and outcomes. The VA has long made use of mHealth tools and services for everything from treating service members oversees to connecting with them and veterans when they get back home. This includes an ongoing, yearlong pilot in which roughly 1,000 seriously injured veterans from Iraq and Afghanistan are using iPads pre-loaded with healthcare apps to connect to caregivers and the VA network. Kaiser Permanente, a California-based integrated healthcare network – the nation's largest – serves some 9 million members in eight states. Those nine million members can access Kaiser services on mobile devices thanks to KP Locator, one of several apps in a growing mHealth program. "The Department of Veterans Affairs continuously seeks opportunities for collaboration with the private sector and the Department of Defense to enhance care for veterans," said Madhulika Agarwal, MD, the VA's deputy undersecretary for health for policy and services, in the release. "Together we will focus on enhanced coordination of care for our veteran patients, connected healthcare as well as analytics and genomic medicine." The two organizations joined forces in 2010 to exchange medical data through the then-year-old Nationwide Health Information Network. That collaboration has morphed into the VA Exchange, which s now available at 121 VA hospitals around the country and through 14 private partners.
CHS Finalizes Deal for Sharon Regional Health System February 5, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/chs-finalizes-dealfor-sharon-regional-health-system.html Community Health Systems, based in Franklin, Tenn., has signed a definitive agreement, acquiring all assets of Sharon (Pa.) Regional Health System.
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Financial details of the transaction were not disclosed. CHS and Sharon Regional inked the initial nonbinding letter of intent in August. Under those terms, CHS would purchase the nonprofit Sharon Regional, which includes a 251-bed hospital and several outpatient centers, and the for-profit CHS would also make several capital investments. Previously, CHS mentioned Cleveland Clinic would also be a strategic medical partner with Sharon Regional but would not own any stake in the hospital. CHS and Cleveland Clinic created a quality alliance last March. The transaction must now receive state and federal approval. The Pennsylvania Office of Attorney General will conduct a public hearing Feb. 6 on the proposed sale and will accept comments through Feb. 18.
Cumberland Medical Center Merges With Covenant Health February 5, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/cumberlandmedical-center-merges-with-covenant-health.html Cumberland Medical Center in Crossville, Tenn., has completed its merger with Covenant Health in Knoxville, Tenn., becoming the ninth hospital in the nonprofit health system. Since announcing the proposed merger last June, executives from the 189-bed community hospital and Covenant have performed needs assessments across various clinical and operational areas, according to a news release. The two organizations have prioritized developing an interventional cardiology program. “This is an important day for Covenant Health,� Anthony L. Spezia, president and CEO of the health system, said in a news release. "The outstanding physicians, caregivers, administration and support staff at Cumberland Medical Center have become part of a team of more than 10,000 healthcare professionals who share a commitment to provide the best possible patient care."
Houston Methodist Finalizes Acquisition of 2 Christus Hospitals February 4, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/houston-methodistfinalizes-acquisition-of-2-christus-hospitals.html Two hospitals within Irving, Texas-based Christus Health have officially joined the Houston Methodist system. Effective yesterday, Houston Methodist acquired majority ownership of Christus St. Catherine Hospital in Katy, Texas, and Christus St. John Hospital in Nassau Bay, Texas. They are now named Houston Methodist St. Catherine Hospital and Houston Methodist St. John Hospital. Houston Methodist and Christus Health signed a letter of intent in September. Financial terms of the deal were not disclosed. Christus employees will now fall under the Houston Methodist umbrella.
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Houston Methodist St. John Hospital will continue to serve as an acute-care hospital, but Houston Methodist St. Catherine will be converted into a long-term acute-care hospital, the system's first continuing care facility. The system now has seven hospitals, with its flagship, Houston Methodist Hospital, as one of the biggest academic medical centers in the country. Christus Health CEO Ernie Sadau said the deal was necessary to ensure "Gulf Coast residents will have access to a full continuum of care right in their own backyard."
Healthcare M&A Volume Down 9% in 4Q of 2013 February 3, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/healthcare-m-avolume-down-9-in-4q-of-2013.html Overall healthcare merger and acquisition volume decreased 9 percent year-over-year to 281 deals in the fourth quarter of 2013, according to a report from Irving Levin Associates. During the last quarter of 2013, 21 hospital deals were announced, down 43 percent from 37 deals in the fourth quarter of 2012. That's also a 13 percent decrease from 24 deals in the third quarter of 2013. Despite the decline in volume, overall healthcare M&A deal value increased 79 percent year-overyear to $43.6 billion. Pharmaceutical deals accounted for 44 percent ($19.3 billion) of that amount. For the entire year, deal value totaled about $163.5 billion, exceeding the 2012 total of $143.7 billion.
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