HEALTHCARE NEWS FLASH May 02, 2014
Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 6 Technology ............................................................................................................................ 9 Strategy .............................................................................................................................. 13
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Sales & Marketing Alameda Hospital Joins Alameda Health System May 01, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/alameda-hospitaljoins-alameda-health-system.html Alameda (Calif.) Hospital has officially become a part of Oakland, Calif.-based Alameda Health System. The affiliation will give Alameda residents access to specialty care that was previously limited or unavailable at the hospital, according to a news release. The health system now has operational and governance responsibility for the hospital, although the City of Alameda Health Care District has retained ownership of Alameda Hospital’s real property and lease holds. “With the support of AHS, Alameda Hospital solidifies its position as the hospital of choice for Alameda residents,” Alameda Hospital’s Interim Chief Administrative Officer Deborah E. Stebbins said in the release. “We will strengthen current services including the emergency department, and enhance our campus for the future.” Under the affiliation agreement, the health system will fund facility improvements, new technology and state-mandated seismic upgrades at the hospital, according to the release. Financial terms of the deal were not disclosed. Alameda Hospital board members signed a letter of intent last June to merge with AHS, and the health system’s board of trustees and the Alameda Health Care District board of directors approved the transaction this past November.
University of Utah Health, Community Hospital Announce Partnership April 30, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/university-of-utahhealth-community-hospital-announce-partnership.html University of Utah Health Care, based in Salt Lake City, and Community Hospital in Grand Junction, Colo., have reached a partnership agreement. The agreement aims to give the hospital the ability to provide enhanced access and additional treatment options for its patients in areas such as cancer care, advanced cardiovascular care, neurosciences, trauma, transplant services, and high-risk obstetrics and neonatology. The enhanced care delivery may include expanded use of telehealth service and satellite clinics staffed by University of Utah specialists, according to a news release.
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“This partnership will provide greater access to one of the top academic medical centers in the country and give our patients the ability to participate in leading-edge treatments that otherwise wouldn’t be available in a community our size,” Don Nicolay, MD, CMO at Community Hospital, said in the release. The affiliation doesn’t involve a change in ownership, local control or governance, according to the release.
Mount St. Mary’s Hospital to Join Catholic Health April 30, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/mount-st-mary-shospital-to-join-catholic-health.html Mount St. Mary’s Hospital and Health Center, a 175-bed hospital in Lewiston, N.Y., has agreed to become a full member of Catholic Health. Mount St. Mary’s is currently an affiliate of St. Louis-based Ascension Health. Catholic Health is a joint venture between Ascension, Livonia, Mich.-based CHE Trinity Health and the Diocese of Buffalo. As part of the deal, Mount St. Mary’s will join Catholic Health, but its 250-bed skilled nursing and rehab facility will remain as a solely-operated entity of Ascension. The transaction requires approval from the boards of Ascension and Catholic Health. If approved, Catholic Health will submit a certificate of need application to the New York State Department of Health. Executives expect the deal will close by 2015. Mount St. Mary’s and Catholic Health have had a “collaborative services agreement” since 2012. Mount St. Mary’s executives said the hospital will be able to take advantage of Catholic Health’s centralized administrative services and physician recruiting. According to a Buffalo News report, Mount St. Mary’s recorded $1.8 million of profit on about $89 million in revenue in 2012.
ValleyCare Health System Eyes Affiliation Plans April 25, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/valleycare-healthsystem-eyes-affiliation-plans.html ValleyCare Health System, based in Livermore, Calif., has started the process of finding a potential affiliation partner, according to a San Francisco Business Times report. A system spokeswoman provided no other details about the situation. ValleyCare is comprised of two acute-care hospitals with a combined 242 licensed beds. The system has about $280 million in annual revenue. In 2012, ValleyCare posted a $2.1 million operating loss, a year after it posted $4.7 million in operating losses.
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In March, ValleyCare named Scott Gregerson its new CEO. Mr. Gregerson took over for Marcy Feit, who resigned from her position in early February.
Parkview Health, Wabash County Hospital Consider Affiliation April 17, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/parkview-healthwabash-county-hospital-consider-affiliation.html Parkview Health in Fort Wayne, Ind., and Wabash (Ind.) County Hospital have agreed to partner, according to a Journal Gazette report. Terms of the transaction were not disclosed. A key tenet of the deal is a new facility. Marilyn CusterMitchell, president and CEO of Wabash County Hospital, told The Journal Gazette the hospital needs to be rebuilt but could not afford it on its own. Parkview, which includes eight hospitals, and Wabash County Hospital, a 25-bed critical access hospital, are expected to sign a letter of intent soon, followed by full negotiations and a definitive agreement. Wabash County Hospital also held partnership talks with Indiana University Health in Indianapolis and Community Health Systems in Franklin, Tenn., before ultimately choosing Parkview, according to the report.
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Finance WellPoint Q1 Profit Falls 21% April 30, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/finance/wellpoint-q1-profit-falls-21.html First-quarter net income at health insurer WellPoint dropped nearly 21 percent, from $885.2 million in 2013 to $701 million this year. For the three months ended March 31, WellPoint reported total revenues of approximately $17.9 billion, up 1.6 percent from $17.6 billion in the first quarter of 2013. Total expenses also increased 2.7 percent, from $16.3 billion last year to $16.7 billion this year. The insurer’s SG&A expense ratio was 16.2 percent in the first quarter of this year, up from 13.4 percent in 2013. New fees related to healthcare reform, spending related to healthcare reformdriven market changes and higher administrative costs from membership growth contributed to the increase. However, WellPoint’s benefit expense ratio dropped to 82.7 percent in the first quarter of 2014, compared with 83.7 percent last year. That decline was primarily due to improvement in the insurer’s Medicaid business.
HCA’s Q1 Profit Inches Ahead 0.9% April 29, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/finance/hca-s-q1-profit-inches-ahead-0-9.html Net income at Nashville, Tenn.-based Hospital Corporation of America grew a modest 0.9 percent in the first quarter of fiscal year 2014, totaling $347 million. Total revenue increased 4.6 percent to more than $8.83 billion, compared with $8.44 billion in the first quarter last year. HCA’s same-hospital admissions dropped 0.6 percent, but revenue per equivalent admission increased 3.7 percent, indicating HCA treated more high-acuity patients. HCA President and CEO Milton Johnson said in a news release that despite the lower admissions and modest profit growth, HCA was well-positioned for a positive year. “We are pleased with results for the first quarter,” he said. “As expected, healthcare reform had minimal impact on the company’s first-quarter results; however, we remain optimistic regarding the potential long-term benefits.” While HCA downplayed the reforms of the Patient Protection and Affordable Care Act, like Medicaid expansion, two other for-profit chains recently said the healthcare law definitely boosted their most recent bottom lines. LifePoint Hospitals, based in Brentwood, Tenn., posted a 14.5 percent increase in net earnings in the first quarter, totaling $37.1 million. Universal Health Services in King of Prussia, Pa., recorded a 15.2 percent boost in first-quarter profit, and its acute-care hospitals alone had a 19.8 percent operating margin.
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HCA reaffirmed its guidance ranges for 2014, which included revenue of $35.5 billion and adjusted EBITDA of $6.6 billion on the low ends. As of March 31, HCA controlled 165 hospitals and 115 ambulatory surgery centers.
Aetna Q1 Net Income Up 36% April 25, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/finance/aetna-q1-net-income-up-36.html First-quarter net income at health insurer Aetna rose 36 percent year-over-year, from $490.1 million in 2013 to $665.5 million this year. For the three months ended March 31, Aetna reported approximately $14 billion in revenue, up 47 percent from $9.5 billion in the first quarter of 2013. The increase in revenue and net income was primarily driven by the insurer’s acquisition of Coventry Health Care, according to a news release. The Coventry merger was valued at $5.7 billion when announced in August 2012. Additionally, higher underwriting margins in the insurer’s underlying healthcare businesses — a range of medical, pharmacy, dental and behavioral health products and services — contributed to the increase in income.
Hospital M&A Deal Volume Declines in Q1 April 23, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/hospital-m-a-dealvolume-declines-in-q1.html Hospital merger and acquisition volume declined 42.9 percent year-over-year to 12 deals in the first quarter of 2014, according to a report from Irving Levin Associates. During the three months ended March 31, 12 hospital deals were announced, down from 17 in the fourth quarter of 2013 and 21 in the first quarter of last year. Healthcare merger and acquisition volume across all sectors, however, was up by nearly 13 percent year-over-year, with 239 deals announced in the first quarter of 2014. Overall deal value also increased 217 percent, from $15.6 billion in the first quarter of 2013 to $49.6 billion this year, according to the report.
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UnitedHealth Group Q1 Profit Down 7.8% April 17, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/finance/unitedhealth-group-q1-profit-down-7-8.html UnitedHealth Group’s net earnings in the first quarter of fiscal year 2014 fell 7.8 percent, from approximately $1.2 billion in 2013 to $1.1 billion this year. The health insurer reported $31.7 billion in total revenue for the three months ended March 31, a 4.5 percent increase from $30.3 billion in the first quarter of 2013. However, total operating costs also increased by about 5.2 percent, from $28.2 billion last year to nearly $29.7 billion in the first quarter of 2014. UnitedHealth President and CEO Stephen J. Hemsley said in a news release the company’s rising revenues were “offset by headwinds from new [PPACA] taxes and Medicare Advantage funding deficiencies.” Medicare Advantage cuts due to the healthcare reform law and sequestration led UnitedHealth Group to exit markets, adjust networks and reduce product offerings and benefits this year, according to the release. Additionally, the company’s first-quarter income tax rate increased more than five percentage points year-over-year to 42 percent because of nondeductible health insurance taxes and reinsurance fees under the PPACA.
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Technology New ICD-10 Transition Date Set for Oct. 1, 2015 May 01, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/icd-10/new-icd-10-transition-date-set-for-oct-12015.html CMS has announced the ICD-10 transition will take place Oct.1, 2015. A CMS spokesperson issued the following statement Thursday: “HHS expects to release an interim final rule in the near future that will include a new compliance date that would require the use of ICD-10 beginning Oct. 1, 2015. The rule will also require HIPAA covered entities to continue to use ICD-9-CM through Sept. 30, 2015.” The announcement resolves the uncertainty that followed the passage of the Protecting Access to Medicare Act of 2014, which stated HHS could not compel providers to switch to ICD-10 before Oct. 1, 2015, but gave no exact transition date.
EMR market surpasses $23 billion April 29, 2014 | Healthcare IT News http://www.healthcareitnews.com/news/emr-market-surpasses-23-billion The global market for electronic medical records has shot up to $23.2 billion in 2013, according to a new report from research firm Kalorama: EMR 2014: The Market for Electronic Medical Records. Government incentives and the increasing use of electronic medical records for quality of care and cost-saving reasons continue to drive the market, researchers found. They also noted that upgrading is also a factor in the booming market, in addition to new purchases. “We think adoption and upgrading activities will still be stimulating growth in 2014-2018,” said Mary Ann Crandall, Kalorama analyst and the author of the report, in a press statement. “As new systems are sold, companies will still earn revenues from existing clients in servicing and consulting services.” This is the seventh year Kalorama has studied the market for EMR. In its total, Kalorama includes revenues for EMR/EHR systems, CPOE systems and directly related services such as installation, training, servicing and consulting which are key profit areas for companies. It does not include PACS or hardware. The report notes that now that the EMR market is mature, customers have more vendor choices. Some hospitals and physician customers will boost the market through vendor switches as they seek the right EMR fit for their organization, according to Kalorama.
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“We estimate a quarter to a third of customers would like to switch EMRs and may look into replacing their current vendor,” added Crandall. “The main reasons for dissatisfaction with the system they have includes lack of key features, a cumbersome and complex interface, poor EHR usability and bad hardware.” The forecast assumes the trend of adoption will continue to move forward, although slowing somewhat. Hospital EMR adoption will supersede doctors’ EMR adoption; it is anticipated that existing EMR owners will upgrade and train on systems, and that the threat of penalties will force doctors and hospitals to make upgrade decisions.
Total Number of ACOs Tops 520 April 24, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/accountable-care-organizations/total-number-of-acostops-520.html New research estimates 522 total accountable care organizations are serving 15 to 17 percent of the U.S. population. These figures are the latest from Oliver Wyman, which tracks ACO growth. The consulting firm’s latest report contains several key statistics on the model’s growth. The 522 total ACOs is an increase from 370 in September 2013 and 258 in February 2013. The majority of these are CMS ACOs — Pioneer ACOs, Medicare Shared Savings Program ACOs, Medicaid ACOs or participants in the Physician Group Practice Transition program. CMS’ latest round of ACO approvals in January brings the total number of Medicare ACOs to 368, up from 235 in July 2013. Despite their target populations, the Medicare ACOs are still serving an estimated 33 million nonMedicare patients, according to the report. According to the report, there are about 155 non-Medicare ACOs in operation across the country, a 14 percent increase from 135 in July 2013 and a 24 percent jump from 124 in January 2013. NonMedicare ACOs serve between 9 million and 16 million patients. These ACOs are hard to track since there is no official database or tracking mechanism for commercial ACOs. Of the U.S. population, 67 percent live in a primary care service area served by an ACO, according to Oliver Wyman. That figure was at 45 percent in September 2013 and 52 percent in February 2013. Also, about 40 percent of the populations lives in a PCSA served by two or more ACOs. “We regard this last number as extremely important,”Niyum Gandhi, Oliver Wyman partner and ACO expert, said in the report. “ACOs need to be treated as a triggering mechanism for a revolution in American healthcare. Their reach is at least as important a factor to watch as their current enrollments.” Mr. Gandhi said now that two-thirds of Americans have access to an ACO and more than half have access to two or more, he has a prediction: “Once the fire is lit, it’s going to spread quickly.”
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Report: 40% of EHR Buyers Replacing Current System April 22, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/healthcare-information-technology/report-40-of-ehrbuyers-replacing-current-system.html About 40 percent of providers shopping for a new electronic health record system during the first quarter of 2014 were seeking a replacement for their current EHR, according to a survey from EHR reviewer Software Advice. The percent of prospective buyers looking for a replacement EHR has grown 30 percent since the first quarter of 2013. The majority (85 percent) of those looking to replace their EHR system last quarter currently has a commercial system; the remaining 15 percent are looking to replace a hybrid EHR-paper chart system. The top reasons for wanting a replacement EHR system include: •
Current system is cumbersome
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Seeking integration with other systems
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Need for regulatory compliance
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Current system is outdated
Survey results are based on the responses from 385 providers looking for a new EHR system during Q1 2014.
mHealth still untapped resource for docs April 18, 2014 | Healthcare IT News http://www.healthcareitnews.com/news/mhealth-still-untapped-resource-docs For the most part, providers are still wary over the mHealth movement. And this caution just might be preventing them from big care improvement opportunities, say the findings of a new study. The study, commissioned by mobile professional services firm Mobiquity, finds some 70 percent of consumers use mobile apps every day to track physical activity and calorie intake, but only 40 percent share that information with their doctor. Privacy concerns and the need for a doctor’s recommendation are the two factors hindering the use of mobile and fitness apps for mHealth reasons, say officials with the Boston-based Mobiquity, which produced “Get Mobile, Get Healthy: The Appification of Health and Fitness.” That, officials said, means the healthcare community has to take a more active role in promoting these types of apps and uses.
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“Our study shows there’s a huge opportunity for medical professionals, pharmaceutical companies and health organizations to use mobile to drive positive behavior change and, as a result, better patient outcomes,” said Scott Snyder, Mobiquity’s president and chief strategy officer, in a press release. “The gap will be closed by those who design mobile health solutions that are indispensable and laser-focused on users’ goals, and that carefully balance data collection with user control and privacy.” The study, conducted between March 5 and 11, focused on 1,000 consumers who use or plan to use health and fitness mobile apps. According to the study: •
34 percent of mobile health and fitness app users say they would use their apps more often if their doctor recommended it
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61 percent say privacy concerns are hindering their adoption of mobile apps. Other concerns include time investment (24 percent), uncertainty on how to start (9 percent) and not wanting to know about health issues (6 percent).
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73 percent said they are more healthy because they use a smartphone and apps to track health and fitness
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53 percent discovered, through an app, that they were eating more calories than they realized
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63 percent intend to continue or increase their mobile health tracking over the next five years
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55 percent plan to try wearable devices like pedometers, wristbands or smartwatches
Using a smartphone to track health and fitness is more important than using the phone for social networking (69 percent), shopping (68 percent), listening to music (60 percent) or even making/receiving phone calls (30 percent). “We believe 2014 is the year that mobile health will make the leap from early adopters to mainstream,” Mobiquity officials said in their introduction to the survey. “The writing is on the wall: from early rumors about a native health-tracking app in the next version of Apple’s iPhone operating system to speculation that Apple will finally launch the much-anticipated iWatch, joining Google, Samsung and Pebble in the race to own the emerging wearables market.”
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Strategy CHS Pursues Acquisition of Natchez Regional Medical Center April 29, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/chs-pursuesacquisition-of-natchez-regional-medical-center.html Community Health Systems, based in Franklin, Tenn., has signed a letter of intent to buy Natchez (Miss.) Regional Medical Center, according to a Natchez Democrat report. Natchez Regional officials confirmed CHS was the potential buyer in a news release last Friday. The organizations had been operating under a confidentiality agreement and therefore previously could not disclose the name. CHS and Natchez Regional are now working to finalize an asset purchase agreement, which is expected to be worth $18 million total, according to the report. If CHS wins the bid to acquire Natchez Regional as the stalking horse buyer, CHS would effectively control the Natchez market, which sits on the Mississippi River just east of Louisiana. CHS owns Natchez Community Hospital, which became part of the for-profit hospital chain during the acquisition of Health Management Associates. However, once the asset purchase agreement is made public, other bidders can match CHS’ offer, and county residents can also petition to take the sale of the public-owned hospital to a vote. Natchez Regional filed for Chapter 9 bankruptcy in February. Natchez Regional CFO Charles Mock said the liabilities of the 179-bed hospital exceeded its assets by $3 million. Declining reimbursements from Medicare and Medicaid have contributed heavily to the hospital’s financial problems.
San Gorgonio Memorial Hospital Evaluates M&A Options April 29, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/san-gorgoniomemorial-hospital-evaluates-m-a-options.html San Gorgonio Memorial Hospital, a nonprofit hospital in Banning, Calif., is considering affiliation partners, according to a Press-Enterprise report. The hospital’s board hired MDS Consulting to study the options, and it will receive a report in the next month listing potential partners, according to the report. Last year, San Gorgonio officials said they wanted to affiliate with Loma Linda (Calif.) University Medical Center, but they backpedaled from that initial decision to cast a broader search net.
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San Gorgonio has plans to construct a six-story patient tower with 120 private rooms, a project that could be helped with an affiliation partner, according to the report. The board is also looking to add two new members to help with decision-making.
Health Plans Scramble To Calculate 2015 Rates April 28, 2014 | Kaiser Health News http://www.kaiserhealthnews.org/Stories/2014/April/28/2015-rate-calculations-healthinsurance.aspx With the results sure to affect politics as well as pocketbooks, health insurers are already preparing to raise rates next year for plans issued under the Affordable Care Act. But their calculation about how much depends on their ability to predict how newly enrolled customers – for whom little is known regarding health status and medical needs -- will affect 2015 costs. “We’re working with about a third of the information that we usually have,” said Brian Lobley, senior vice president of marketing and consumer business at Pennsylvania’s Independence Blue Cross. “We’ve really been combing the data to get a first look.” At stake are price increases that buyers on the federal exchange, healthcare.gov, and other online marketplaces will encounter when they get renewal notices later this year. Forecasting success or failure could also affect whether insurers stay on the exchanges, a key pillar of the health overhaul. The official 2014 enrollment period closed at the end of March for most consumers. But carriers selling medical plans on healthcare.gov must file initial 2015 rate requests with federal regulators in late May or June -- even though they have little idea about the health and potential costs of their newly enrolled members. Deadlines also loom for state-run exchange filings. WellPoint, the biggest player in the online exchanges, is already talking about double-digit rate hikes for 2015. Such increases would give ammunition to Republican critics of Obamacare before the November elections. Analysts’ expectations vary, but nobody is predicting decreases. “We’ll see rate increases in the marketplaces, but I think it’s anyone’s guess” about what the precise changes will be, said Sabrina Corlette, project director at the Georgetown University Center on Health Insurance Reforms. “It’s like nailing Jell-O to a wall.” The health law required insurers to accept all applicants this year for the first time without asking about existing illness. That reduces what they know about customers and raises chances they’ll sign sicker, more expensive members who were previously denied coverage. At CoOportunity Health, a nonprofit carrier in Iowa and Nebraska, many enrollees scheduled medical treatments -- including surgeries -- as soon as possible after their new coverage began Jan. 1, said Cliff Gold, its chief operating officer. Among the procedures were several expensive transplant operations including heart-lung procedures that can cost over $1 million each.
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But insurers tend to receive pharmaceutical claims long before hospital bills. They are poring over these early prescription records for clues about new members’ medical status. Pharmacy-benefit manager Express Scripts published data April 9 showing that marketplace enrollees in January and February were substantially more likely than average to have HIV infections, chronic pain, depression and other high-cost ailments. But that doesn’t necessarily mean average costs will soar. For one thing, insurers figured they would cover more sick patients this year and priced plans accordingly. Early pharmacy data at Independence Blue Cross, said Lobley, are “on par for what we expected.” Even if carriers signed more chronically ill customers this year than planned, the health law includes “reinsurance” and other safety valves designed to keep high-cost members from pushing up rates. A sign-up surge at the end of March is another reason not to rely on early claims information. Just as the first enrollees were more probably likely to need immediate care, insurers believe people who pushed the deadline may be healthier and younger. If so, they would balance the risk and help cover the cost of the early birds. “It’s clear that sick people were signing up” for January coverage, said David Axene, a fellow of the Society of Actuaries working with insurers to set 2015 rates. “The question now is, were the later people healthier?” Nobody knows. While March enrollees seem to have been younger on balance, their health status remains largely a mystery. Blue Shield of California signed more than 50,000 people the last two weeks in March. “It’s still too early to draw conclusions,” said Amy Yao, Blue Shield’s chief actuary. “I have the best actuarial team in the whole country. Even with that, it’s less than 50 percent confidence” that they’ll hit the rate-setting sweet spot for 2015, she said. It’s unclear how many of the 8 million who enrolled through the exchanges were previously uninsured. Many who did have coverage switched carriers this year, meaning their new insurers couldn’t see their health histories. At CoOportunity Health, a start-up created with funding from the health law, every one of the 74,000 customers is new. “It is an actuarial nightmare to try to guess what you’re going to get,” said Gold. It’s not just member health that insurers have to think about. President Barack Obama allowed many people to keep old plans that aren’t compliant with ACA rules. Carriers must calculate how that exception (people covered under old plans are thought to be healthier on average) affects average costs in their new policies.
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Backup resources for plans with disproportionate shares of sick and expensive members will become a little weaker next year. Insurers have to factor that into their rates. And they need to look at the big picture. What economists call the cost trend -- how high prices rise per procedure and how many procedures Americans get this year -- may be the single biggest variable in setting prices for 2015, experts said. And the trend seems to be up. After several years of relatively tame increases that many tie to a sluggish economy, analysts saw medical spending accelerate late last year. Even so, the forces affecting 2015 premiums may not drive up Obamacare prices as much as some are forecasting. Finding that insurers have gotten discounts from select hospitals and doctors, the Congressional Budget Office recently lowered its estimate for the cost of premiums and taxpayer subsidies under the health law. “I’m not expecting double digits like some people have predicted” for 2015 rate increases, said Axene. “I’m expecting mid-to-high single digits” — somewhere from 6 percent to 8.5 percent. That would still be far higher than growth in the economy or family incomes. Given the uncertainties that come with a major new social law, Independence Blue Cross believes the picture won’t become fully clear until much later. “We always viewed this as a three-year plan,” said Lobley. “We always thought there would be a lot of volatility in years one and two. We really thought 2016 would [bring] market stability in the individual market.”
Truven Health acquires Fortel Analytics April 28, 2014 | Healthcare IT News http://www.healthcareitnews.com/news/truven-health-acquires-fortel-analytics Truven Health Analytics has acquired Fortel Analytics, whose fraud detection technology will be deployed to comb data for suspicious patterns in healthcare insurance claims. Fortel’s predictive analytics scour large data sets for statistical anomalies that are consistent with patterns of fraud and abuse. Claims are then flagged by the system for further investigation prior to payment. By pairing these analytics capabilities with its own payment integrity tools, Truven Health will be better positioned to offer pre- and post-payment fraud prevention to its healthcare clients, officials say. “Our research shows that somewhere between $125 billion and $175 billion is spent every year on fraudulent health insurance claims in the U.S.,” said Mike Boswood, Truven Health Analytics president and CEO, in a press statement.
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“We have built an enormously successful practice helping healthcare payers identify and reclaim much of those funds through our statistical modeling capabilities, and the next frontier is preventing the problem altogether,” he added. Fortel’s technology is able to quickly apply multi-dimensional scoring model to systematically review all pre-payment claims and immediately identify high-risk claims that should be denied for payment immediately or analyzed for further intervention and resolution, officials say. Its based on an approach that was pioneered in the financial services industry and traces its roots to credit card fraud prevention. Fortel’s fraud technologies will be integrated into Truven Health’s Payment Integrity Solutions product, which is deployed by large employers, health plans, the Centers for Medicare & Medicaid Services and state Medicaid agencies. The acquisition “will create an unequaled pre-payment enterprise offering for program integrity across the healthcare marketplace,” said Allan Klindworth, Fortel’s CEO, in a statement. “I am confident (Truven Health) will take our technology to new heights as they integrate it into their full suite of payment integrity solutions.”
Lahey Health, Winchester Hospital Merger Could Save $2.7M Annually April 17, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/report-lahey-healthwinchester-hospital-merger-could-save-2-7m-annually.html The Massachusetts Health Policy Commission has approved a preliminary report finding that Winchester (Mass.) Hospital’s proposed affiliation with Lahey Health in Burlington, Mass., could reduce healthcare spending by as much as $2.7 million per year, according to a report from The Boston Globe. The savings would come from shifts in use from higher-priced hospitals to Lahey and possible reductions in Winchester Hospital physician prices, according to the report. However, the commission also identified two concerns Lahey and the hospital must address before the commission votes on a final report in May. The first is the merger could allow the two organizations to raise prices and ask for higher reimbursement from private health insurers. Second, the commission is concerned Lahey could drive up medical spending by adding facility fees to the hospital’s service bills, according to the report. Howard R. Grant, MD, Lahey’s president and CEO, told the Globe his organization didn’t plan on adding facility fees or raising prices at Winchester Hospital. The Health Policy Commission announced last December it would conduct a cost and market impact study of the proposed transaction. David Seltz, the commission’s executive director, issued a statement saying the transaction raises the potential for Lahey to leverage for higher prices through joint contracting with Winchester Hospital. This past June, Lahey signed a letter of intent to affiliate with Winchester, and the two organizations reached a formal agreement in September. Under the agreement, which is not a full-scale merger or acquisition, leaders from the 229-bed Winchester will join Lahey’s board of trustees, and the hospital will become an affiliate of the system as part of a “shared governance” model.
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