HEALTHCARE NEWS FLASH March 3, 2014
Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 6 Technology ............................................................................................................................ 9 Strategy .............................................................................................................................. 15
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Sales & Marketing Rochester General Health System, United Memorial Medical Center to Partner February 28, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/rochester-generalhealth-system-united-memorial-medical-center-to-partner.html Rochester (N.Y.) General Health System and United Memorial Medical Center in Batvia, N.Y., have confirmed their intent to affiliate. Under the agreement, United Memorial will retain its name and a local board. The hospital will continue to provide a full range of medical and acute-care services after the affiliation is formalized, according to a news release. "Even given our sound financial position today, changes in healthcare will continue to negatively impact independent rural healthcare providers," said Mark Schoell, CEO of United Memorial, in the release. "The leadership of United Memorial remains committed to providing the best for our patients, and this expanded relationship will strengthen the future of healthcare in Genesee County." The affiliation will build on the existing relationship between United Memorial and Rochester General. Since 2008, the two organizations have collaborated in the areas of cardiology, pathology, surgery, urology and gastroenterology. They also partnered to open a cancer and infusion center at United Memorial. Leadership teams from both organizations will work to create a formal affiliation and integration plan. The regulatory approval process is expected to take three to six months. The affiliation complements Rochester General's recent agreement with Rochester-based Unity Health System. Last month, Unity and Rochester General jointly filed a certificate of need application to create a new health system.
South County Hospital to Explore Alliance With Southcoast Health System February 27, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/south-countyhospital-to-explore-alliance-with-southcoast-health-system.html South County Hospital in Wakefield, R.I., plans to enter into exclusive affiliation talks with New Bedford, Mass.-based Southcoast Health System, according to a Rhode Island Public Radio report. South County is Rhode Island's only remaining independent nonprofit hospital, serving patients in southern Rhode Island, according to the report. The hospital will hold open forums on the possible affiliation, although specific dates were not disclosed.
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Southcoast is a nonprofit system that includes three Massachusetts hospitals: Charlton Memorial Hospital in Fall River, St. Luke's Hospital in New Bedford and Tobey Hospital in Wareham.
Advocate Health Care Adds Silver Cross Hospital as Affiliate February 27, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/advocate-healthcare-adds-silver-cross-hospital-as-affiliate.html Silver Cross Hospital, a 289-bed facility located in New Lenox, Ill., has signed a clinical affiliation agreement with Downers Grove, Ill.-based Advocate Health Care. Under the deal, Silver Cross will integrate with Advocate Physician Partners, which is Advocate's physician-led care management group. More than 4,400 physicians are part of APP, which holds the triple aim goal of population health management, better care and reduced costs. The partnership is not a merger or acquisition. Advocate President and CEO Jim Skogsbergh said in a news release the deal is an "opportunity to share our experience with another healthcare system while extending access to our evidence-based programs."
UCSF Medical Center, Walgreens Launch Joint Pharmacy February 26, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/strategic-planning/ucsf-medical-center-walgreenslaunch-joint-pharmacy.html UCSF Medical Center has partnered with Walgreen Co., the nation's largest drugstore chain, to open a pharmacy on the University of California, San Francisco's campus. The UCSF School of Pharmacy will also be a key player within the Walgreens at UCSF. Financial terms of the partnership were not disclosed. Officials said they wanted to pilot the pharmacy to help improve medication safety, decrease healthcare costs and help patients use medicines more effectively. According to the Centers for Disease Control and Prevention, 82 percent of American adults take at least one medicine every day, and 29 percent take five or more medications. In addition, every year, 700,000 emergency department visits and 120,000 hospitalizations stem from medicine problems. "Every time a patient is readmitted to the hospital because they did not take their medications, it has a direct impact on both their health and their healthcare costs," said Daniel Wandres, PharmD, chief pharmacy officer of UCSF Medical Center, in a news release. "By creating this three-way collaboration, we hope to create a national model for eliminating medication-related readmissions and reducing medication errors nationwide."
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CMS Estimates PPACA Could Raise Premiums for 11M Employees February 25, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/payer-issues/cms-estimates-ppaca-could-raisepremiums-for-11m-employees.html The Patient Protection and Affordable Care Act could lead to higher health insurance premiums for 11 million employees at small businesses, although it might also reduce rates for about 6 million others, according to a CMS report. The report — issued to Congress last week — notes insurers could set lower premiums for small employers with younger and healthier employees before 2014. However, the PPACA prohibits insurance companies from using gender, health status and claims history as premium rating factors. It also stops insurers from charging older adults more than three times what younger adults pay in premiums. Because of these new rules, premiums for younger and healthier adults could increase, according to the report. Previously, small companies (defined by CMS as those with 50 or fewer workers) that offered health insurance tended to be those whose employees had better-than-average health and therefore had lower premium rates. Roughly 65 percent of small employers offering health insurance have premium rates below average, according to the report. With the new PPACA premium rating requirements, that 65 percent is expected to experience increases in premium rates, while the remaining 35 percent will see rate reductions. However, the report also notes there is "considerable uncertainty" of whether employers with fewer than 50 employees will decide to stop offering health insurance coverage and send their employees to the PPACA individual exchanges. Under the PPACA's employer mandate, starting in 2015, businesses and companies with 100 or more employees are mandated to offer health insurance to those employees or pay a penalty of $2,000 per employee. The Obama administration recently delayed the mandate to 2016 for companies that have between 50 and 99 employees.
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Finance Profit at UHS Drops in Q4, Up in FY 2013 February 28, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/finance/profit-at-uhs-drops-in-q4-up-in-fy-2013.html In the fourth quarter of fiscal year 2013, Universal Health Services posted $124.5 million of net profit — an 8 percent drop from the same period in 2012. Executives at UHS, based in King of Prussia, Pa., attributed the dip in fourth-quarter profit to slow revenue growth and higher operating expenses. UHS' net revenue in the quarter rose only 2 percent to $1.8 billion, while expenses rose almost 4.6 percent. However, volumes did not suffer too heavily in the fourth quarter: adjusted admissions at UHS' acute-care hospital stayed flat, while adjusted admissions at behavioral healt hospitals rose 2.4 percent. For the entire 2013 fiscal year, UHS' net profit increased 15.2 percent to $510.7 million, while operating income topped $1 billion. Net revenue climbed 4.6 percent to $7.28 billion, giving the company an overall operating margin of 13.9 percent. UHS is projecting another strong year in 2014. Executives said they expect revenue to be between $7.89 billion and $7.94 billion, or about an 8 percent increase from 2013. As of Dec. 31, UHS owned 24 acute-care hospitals and 174 behavioral health hospitals. Its newest acute-care hospital, 140-bed Temecula (Calif.) Valley Hospital, officially opened in October. The average operating margin at a UHS acute-care hospital is 14.8 percent, which is far above the national average of all U.S. hospitals.
Mayo Clinic's Operating Profit Soars to $612M in 2013 February 27, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/finance/mayo-clinic-operating-profit-soars-to-612m-in2013.html Operating income at Rochester, Minn.-based Mayo Clinic rose 55 percent, from $395.4 million in fiscal year 2012 to $612.1 million in 2013. That figure comes as total revenue increased to $9.42 billion. Mayo's operating margin for 2013, therefore, stood at 6.5 percent. Mayo's earnings increased considerably as the academic health system received sizable gifts and federal health IT incentives. Last year, Mayo collected $54.7 million in Medicare and Medicaid dollars for continued meaningful use of electronic health records. Revenue was up across the board for Mayo's retail pharmacy sales, as well as its commercialization arm. Mayo kept operating expenses in check through some layoffs and general attrition.
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In 2012, Mayo's earnings dropped a bit after it completed two affiliations — one with Satilla Health Services in Waycross, Ga., and another with Fairview Red Wing (Minn.) Health Services. The organization completed no acquisitions in 2013, but it continued to expand the Mayo Clinic Care Network, which is a loose network of hospitals and health systems working to improve the quality and delivery of care in their regions. Executives have also been aggressively investing in capital projects, including the system's $5 billion economic development initiative called Destination Medical Center, which aims to keep Mayo as a global medical hub.
Government Recovers $4.3B From Healthcare Fraud Investigations in 2013 February 26, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/legal-regulatory-issues/government-recovers-4-3b-fromhealthcare-fraud-investigations-in-2013.html The federal government set a new record for healthcare fraud recoveries in fiscal year 2013, recouping $4.3 billion. The FY 2013 total is $100 million more than total recoveries from FY 2012 and more than double the recoveries from FY 2008. The latest report from the government shows that for every dollar spent on healthcare-related fraud and abuse investigations in the past three years, the government recovered $8.10. That's the highest three-year average return on investment in the 17-year history of the Health Care Fraud and Abuse Control Program, which is under the joint direction of Attorney General Eric Holder and HHS Secretary Kathleen Sebelius. "With these extraordinary recoveries, and the record-high rate of return on investment we've achieved on our comprehensive healthcare fraud enforcement efforts, we're sending a strong message to those who would take advantage of their fellow citizens, target vulnerable populations, and commit fraud on federal health care programs," Mr. Holder said in the release.
Tenet Healthcare Posts Net Losses in 2013 After Vanguard Purchase February 25, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/finance/tenet-healthcare-posts-net-losses-in-2013-aftervanguard-purchase.html Dallas-based Tenet Healthcare Corp. posted a net loss of $24 million in the fourth quarter of fiscal year 2013 — compared with a $49 million profit last year — due mostly to acquisition-related costs and higher operating expenses. In October, Tenet bought Nashville, Tenn.-based Vanguard Health Systems for $1.8 billion in cash and assumed $2.5 billion of Vanguard's debt. The fourth-quarter loss included $73 million in increased pretax interest expenses, which stem from the added debt and acquisition costs.
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Despite the net loss, Tenet's net revenue increased heavily in the fourth quarter by adding on Vanguard's hospitals. Revenue soared from $2.33 billion in 2012 to $3.89 billion this past year. Same-hospital adjusted admissions fell 0.5 percent in the fourth quarter, including a 2.3 percent drop in inpatient admissions, but same-hospital surgeries increased 21.5 percent year-over-year. For all of FY 2013, Tenet's net losses totaled $134 million, compared with a $141 million profit in FY 2012. Net revenue topped $11.1 billion, but operating expenses rose at a rapid rate and chewed into the company's earnings. More than 58 percent of Tenet's net patient revenue came from managed care and private payers, while only 30.8 percent stemmed from Medicare and Medicaid. Tenet's adjusted EBITDA rose slightly from $1.2 billion in FY 2012 to $1.34 billion last year. This year, the for-profit hospital chain expects adjusted EBITDA will be between $1.8 billion to $1.9 billion. In a news release, Tenet President and CEO Trevor Fetter said he expects a full year of utilizing Vanguard hospitals, as well as newly insured patients under the Patient Protection and Affordable Care Act, will benefit the company most this year.
Kaiser Continues Steady Profit Gains in 2013 February 17, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/finance/kaiser-continues-steady-profit-gains-in2013.html Net income at Kaiser Foundation Hospitals, Kaiser Foundation Health Plan and all other subsidiaries within Oakland, Calif.-based Kaiser Permanente increased 3.4 percent to almost $2.7 billion in fiscal year 2013. The higher net income total comes as Kaiser boosted its total revenue 6 percent to $53.1 billion. Kaiser's operating income in FY 2013, which ended Dec. 31, totaled $1.8 billion, giving the integrated system an operating margin of 3.4 percent. "In 2013, we maintained a consistent operating income as a percent of revenue; it is at a level that allows us to continue making investments in the facilities, technology and care advances that meet the needs of our members, customers and communities," said Kaiser CFO Kathy Lancaster said in a news release. As of Dec. 31, Kaiser had 9.1 million health plan members, a vast majority residing in California, and encompassed almost 17,000 physicians. Kaiser also operates 38 acute-care hospitals and more than 600 medical offices and outpatient facilities.
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Technology Obamacare draws younger consumers online as deadline nears, report says February 26, 2014 | Los Angeles Times http://www.latimes.com/business/money/la-fi-mo-obamacare-rate-comparisons-ehealth20140225,0,5549689.story#ixzz2uWMmdjdC The average premium paid for Obamacare coverage on a leading insurance website has dropped by nearly $100 a month since October as more young people sign up, a new industry report shows. The average age of people buying coverage at online broker EHealthInsurance.com dropped from 44 mid-October to 36 in late February, according to the company. The average premium for 2014 health plans sold through EHealth tumbled from $370 a month to $273 over that period, which the company said reflects a higher proportion of younger applicants. Attracting enough younger and healthier customers is crucial to help offset the higher medical costs of older, sicker policyholders in the overall insurance pool. EHealth said last week when it announced fourth-quarter results that 40% of its applicants in the fall were between the ages 18 to 34. The Mountain View, Calif.,-based company said its new price and age data released Wednesday is drawn from a moving 14-day average of its submitted applications. Consumers using EHealth, GetInsured.com and other Web brokers can purchase the same Affordable Care Act policies available in federal and state exchanges, but only the government sites can issue premium subsidies. The study issued Wednesday by EHealth also shows the sharp increase in rates many Americans have encountered after the overhaul required more comprehensive benefits and guaranteed coverage for all applicants. While rates are up, annual deductibles went down on average. Many consumers are eligible for federal premium subsidies based on their income, shielding them from the full cost. Nationally, the average price for 2013 individual plans sold on EHealth in the fourth quarter was $171 per month -- absent the healthcare law requirements. Policies for 2014 that were sold during that same period were $309 per month. EHealth said those numbers are based on more than 169,000 applications it received in the fourth quarter. The rates in California were slightly above the national average. The average California premium for individual plans sold through EHealth last fall was $193 a month. New 2014 policies cost $331 a month, on average. But the average deductible in California was $86 lower on 2014 plans at $3,396 annually.
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Nationwide, Minnesota had the lowest average premium for Obamacare individual plans, at $220 a month, and Oklahoma had the cheapest family plans at $500 per month. The highest 2014 rates were in Alaska for individuals ($496 a month) and in New Jersey for family plans ($1,004 per month). New family plans in California were $835 per month, on average, EHealth data show. That doesn't include any subsidies. The Obama administration announced Tuesday that 4 million Americans have enrolled in health plans on the federal website healthcare.gov and through state exchanges.
AP Exclusive: Health law cybersecurity challenges February 26, 2014 | The Washington Post http://www.washingtonpost.com/business/technology/states-face-health-law-cybersecuritychallenges/2014/02/25/be1b1d12-9e50-11e3-878c-65222df220eb_story.html WASHINGTON — As the Obama administration raced to meet its self-imposed deadline for online health insurance markets, security experts working for the government worried that state computer systems could become a back door for hackers. Documents provided to The Associated Press show that more than two-thirds of state systems that were supposed to tap into federal computers to verify sensitive personal information for coverage were initially rated as “high risk” for security problems. Back-door attacks have been in the news, since the hackers who stole millions of customers’ credit and debit card numbers from Target are believed to have gained access through a contractor’s network. The administration says the documents offer only a partial and “outdated” snapshot of an improving situation, and the security problems cited were either resolved or are being addressed through specific actions. No successful cyberattacks have taken place, officials say. However, the issues detailed in documents and emails provided by the House Oversight and Government Reform Committee reveal broader concerns than the federal Health and Human Services department has previously acknowledged. They show a frenzied behind-the-scenes juggling act by officials and contractors as the Oct. 1 deadline for new health insurance exchanges loomed. Instead of providing a showcase for President Barack Obama, the launch of his health care law became a case study in how big technology projects can go off the rails. In order to connect to federal computers, state and other outside systems must undergo a security review and receive an “authority to connect.” With the health care law, states needed approval to connect to a new federal data hub, an electronic back room that pings Social Security, the Internal Revenue Service, Homeland Security to verify personal details about people applying for government-subsidized insurance. The hub handles sensitive information, including income, immigration status and Social Security numbers.
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The documents showed a high-stakes decision-making process playing out against a backdrop of tension and uncertainty as the clock ran out. For example: — In one email from Sept. 29, a Sunday two days before the launch, Teresa Fryer, chief information security officer for the federal Centers for Medicare and Medicaid Services, wrote of the state security approvals, “The front office is signing them whether or not they are a high risk.” Her agency, known as CMS, also administers the health care law. Two days earlier, in a separate document, CMS administrator Marilyn Tavenner approved nine states to connect although the approval document noted that “CMS views the October 1 connections to the nine states as a risk due to the fact that their documentation may not be submitted completely nor reviewed...by Oct. 1.” Approval was contingent on states submitting proper documentation. The states were Arkansas, Illinois, Iowa, Louisiana, Montana, Nebraska, Pennsylvania, Oklahoma, and South Dakota. — A CMS PowerPoint presentation from Sept. 23 revealed huge differences in states’ readiness. Some were already approved; others had security weaknesses that were well understood and being tackled. But there were also states where the federal government had little information on security preparations. “CMS views these connections to states as a high risk due to the unknown nature of their systems,” according to the presentation. CMS officials contemplated whether their agency would have to accept risk on behalf of other federal government entities, including Social Security and the IRS. —A federal contractor explicitly detailed the potential consequences of what he called an “elevated high risk.” Allowing states to connect without the appropriate review “introduces an unknown amount of risk” that could put the personal information of “potentially millions of users at risk of identity theft,” not to mention exposing the program to fraud, contractor Ryan Brewer wrote to CMS security in a Sept. 18 email. Brewer had formerly been in government, as top CMS information security officer. He is currently with the cybersecurity firm GrayScout. The administration says he had no direct knowledge of the status of state security information. In a Feb. 20 letter to the oversight panel’s chairman, Rep. Darrell Issa, R-Calif., the administration said many of the high-risk issues identified in the documents had a corrective action plan before states got approval to connect. Twelve states received temporary, 60-day permissions to connect before Oct. 1 because the administration had not completed full reviews. Currently, 46 states and Washington, D.C., have full three-year permissions to connect, wrote HHS assistant secretary Jim Esquea. “The administration has not been forthcoming with the American people about the serious security risks,” Issa said in a statement. “Despite repeated assurances from HHS, the department appears to still be struggling with security concerns.”
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Cybersecurity consultant and author Theresa Payton, who reviewed the materials for the AP, said it’s difficult to second-guess the administration’s decisions. A phased rollout of the health care markets would have been a prudent way to keep risks manageable. But Payton, who was chief White House information officer for President George W. Bush, said federal agencies can face unique deadline pressures. The administration should have found a way to let consumers know that the new online markets weren’t quite ready for prime time, she said. “A customer education campaign on how to avoid fraud would have gone a long way.” Even top-performing states are not immune to problems. In a Jan. 10 email exchange, officials and contractors wondered whether they might have to disconnect California from federal computers after a website publicly disclosed that state’s vulnerabilities. “There are many security issues with the states’ systems,” a contractor wrote to CMS supervisors. “I would expect many more of the ‘known’ flaws to be posted in the near future.” The administration says officials quickly contacted California, and after learning that the state was addressing the issues, and dropped any consideration of disconnecting.
Study: Half of U.S. Healthcare Providers 25% or Less Done With ICD-10 Implementation February 19, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/icd-10/study-half-of-u-s-healthcare-providers-25-or-lessdone-with-icd-10-implementation.html Nearly half of U.S. healthcare providers have completed only 25 percent of less of their ICD-10 implementation process, according to a study by Aloft Group, an international brand strategy and marketing execution firm. Nearly 200 healthcare providers — 75 percent of which were community hospitals — were surveyed. Of the providers studied, 35.4 percent reported they were 25 percent done with the conversion, while 15.3 percent said they hadn't started yet. In 2013, 40.8 percent of those surveyed said they were 25 percent done, and 33.8 percent hadn't gotten started. The study found 60 percent of providers cited physician buy-in as a conversion obstacle, and 46.1 percent identified lack of time as an issue. Additionally, 39 percent reported financial resources as an obstacle. Forty-five percent of those surveyed said they don't agree with the American Medical Association's stance that CMS should reconsider the Oct. 1 conversion deadline. Twenty-five percent said they agree with the AMA's position.
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Cloud technology to propel growth in healthcare IT market February 18, 2014 | Fierce Health IT http://www.fiercehealthit.com/story/cloud-technology-propel-growth-healthcare-itmarket/2014-02-18 An increase in healthcare provider use of cloud technology combined with a decrease in the cost of IT implementation could propel big changes for the U.S. healthcare IT market in the next few years, according to a new report. The analysis, by market research consulting firm RNCOS, predicts that between now and 2018, the health IT market will grow at a compound annual growth rate of close to 10 percent. Continued innovation and government suppport for such tools will factor into the market's success, according to the report's authors. The report examines five trends, including an increase in: Wireless and cloud technology
Government initiatives Strategic consolidations Reduced operating expenses "Technological upgradation" Technologies examined include, but are not limited to, electronic medical records, clinical decision support systems, medical imaging information systems, picture archiving, communication systems and laboratory information systems. Potential growth areas identified by the report's authors include personal health records, ICD-10 systems and telemedicine technology. In a recent post to her Health Populi blog, health economist and management consultant Jane Sarasohn-Kahn wrote about specific drivers of value in health IT, concluding that it will take a village comprised of providers, payers, plan sponsors, the pharmaceutical industry, device companies, pharmacy and people to drive return-on-investment. "The full value of health IT is realized when all parties come to the table to ensure data liquidity and ultimately, information and support flowing to people and patients," Sarasohn-Kahn writes. "More value can be derived when technologies don't add costs, but conserve costs and resources."
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Study: HIE could save $1.3 milion in repeat CT scans February 18, 2014 | Fierce Health IT http://www.fiercehealthit.com/story/study-hie-could-save-13-milion-repeat-ct-scans/2014-02-18 Failure to use clinical data available in the health information exchange HEALTHeLINK in Western New York led to 2,763 potentially duplicate CT scans at a cost of approximately $1.3 million, according to the HIE's new study. The researchers took a very conservative approach, Daniel E. Porreca, HEALTHeLINK's executive director, said in an announcement, "so we believe that the potential unnecessary radiation exposure to patients and cost savings to the health system could be significantly more." HEALTHeLINK serves hospitals, physicians, health plans and other healthcare providers to serve across eight Western New York counties. The researchers looked at data in the system on CT scans ordered over 18 months and analyzed those done on a patient's same body part within six months. Those that clearly had been accessed before a new scan was ordered were thrown out of the study. Among the findings: Approximately 90 percent of the potentially unnecessary scans were ordered by physicians who either never or infrequently used HEALTHeLINK. About 50 percent of the patients who had a duplicative scan had consented to have their information accessed through HEALTHeLINK by their treating providers. More than 95 percent of the potentially unnecessary CT scans were done in a hospital setting. Porreca said the study reaffirms the HIE's ability to improve care and cut unnecessary costs. "We believe this study shows that we are on the right track and renews our resolve to ensure doctors can efficiently and in a user-friendly way use the information that is available to them in order to better treat their patients," he said. With federal funding drying up to support HIEs, Black Book recently sounded the alarm that 83 percent of the nation's public HIEs are stalling. The report found payers snubbing the bureaucracy, fees and complex architecture of government-sponsored HIEs and instead investing in private efforts. Meanwhile, Hackensack University Medical Center CIO Shafiq Rab says care coordination takes more than EHRs and HIEs. Accountable care organizations also need software to "fill in the gaps" between other systems and services to provide active care coordination management.
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Strategy Providence Completes Acquisition of Saint John's Health Center February 28, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/providencecompletes-acquisition-of-saint-john-s-health-center.html Effective March 1, Providence Health & Services based in Renton, Wash., will own and operate Saint John's Health Center in Santa Monica, Calif. The Catholic-based Providence received clearance from California Attorney General Kamala Harris as well as the Vatican. The hospital, which will be renamed Providence Saint John's Health Center, will be Providence's sixth in the Los Angeles area. The system will have 33 hospitals altogether. California initially approved the deal in January. This past September, Providence Health & Services, Southern California — a five-hospital division of Providence — agreed to acquire Saint John's from Catholic competitor SCL Health System in Denver. Providence expects to make $100 million in capital investments at Saint John's, including the implementation of an electronic health records system. The AG's office also mandated Providence to keep Saint John's open as an acute-care hospital for five years and maintain certain levels of charity care, among several provisions.
Catholic Health Partners Subsidiary, River Valley Health Partners to Merge February 24, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/catholic-healthpartners-subsidiary-river-valley-health-partners-to-merge.html Humility of Mary Health Partners, a three-hospital system based in Youngstown, Ohio, and River Valley Health Partners in East Liverpool, Ohio, have signed a letter of intent to merge. RVHP, which operates East Liverpool City Hospital, has been searching for a partner for several months. The secular RVHP chose HMHP, which is a subsidiary of Cincinnati-based Catholic Health Partners, due to the organization's core values and financial stability. Pete Wicks, board of trustees chair for RVHP, said although the hospital does not have a religious sponsor, officials are "committed to sharing and managing the [operational] changes as effectively as possible," according to a news release. Both parties will now conduct due diligence, with the hopes of signing a definitive merger deal by this summer. In October, East Liverpool City Hospital reduced its workforce through early retirement packages and administrative cuts in an effort to reduce operating costs.
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Moody's: For-profit hospitals' prospects on rise February 23, 2014 | Fierce Health Finance http://www.fiercehealthfinance.com/story/moodys-profit-hospitals-prospects-rise/2014-02-23 In recent years rating agencies projected negative outlooks for hospitals due to the lingering fallout from the Great Recession and the large number of uninsured patients treated at hospitals. But looks like that is about to change, at least in regards to for-profit hospitlas. Moody's Investor's Service recently announced the for-profit hospital outlook is now positiive. The reason? The rising number of insured due to the Affordable Care Act will bolster for-profits' bottom lines to some extent, Moody's said in a new report. "For-profit hospitals will benefit from a reduction in bad debt expense as the uninsured population declines under the Affordable Care Act," Moody's Senior Vice President Dean Diaz said in the statement. "The impact will vary among institutions based on factors including their location, since only 26 states and the District of Columbia have expanded their Medicaid programs under the act." In addition to the encouraging outlook for for-profits, Moody's last month also said that academic medical centers were in a strong financial position, citing their size relative to other hospitals and their overall market position. However, the ratings agency remains pessimistic about not-for-profit hospitals because of disproportionate share payment cuts and the fact that expenses outpace revenues. Although some for-profit operators reported relatively weak numbers for 2013, Moody's noted, they have made operational adjustments to compensate for lower patient volumes and a 2 percent cut to Medicare reimbursements as part of the sequester. Moreover, continuing mergers and acquisitions among for-profit hospital chains could also go a long way toward reducing operating expenses. Moody's cited in particular Community Health Systems Inc.'s purchase of Health Management Associates and Tenet Healthcare Corp.'s purchase of Vanguard Health Systems. And some headwinds also remain, including the erosion of inpatient volumes, uncertainty regarding the outcome of the two-midnight rule on observation care patients and slower growth in Medicare payments.
3M to acquire Treo Solutions February 21, 2014 | Healthcare Payer News http://www.healthcarepayernews.com/content/3m-acquire-treo-solutions 3M Health Information Systems will acquire Treo Solutions, which develops healthcare data analytics and business intelligence technology, for an undisclosed sum.
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Founded in 2002, Treo's analytics tools are used by payers and providers as they work to redesign payment structures and transition to value-based care. As part of 3M, Treo will further its plans for integrating clinical data with that from more than 60 payers, developing real-time and predictive analytics. 3M Health Information Systems offers software and consulting services for hospitals and health systems, commercial payers, and federal and state agencies to compile and analyze health information. Its computer-assisted coding, clinical documentation improvement, data interoperability and quality outcomes reporting tools help improve clinical and financial performance. "Our mission has always been to provide valuable, sustainable solutions in payment and health system transformation," said William Kelly, president, Treo Solutions, in a press statement. "Combining with 3M will bring the opportunity to scale our offerings to help clients manage healthcare change and solve the most complex problems." The acquisition is expected to close in the second quarter, subject to customary closing conditions and regulatory approvals.
UnitedHealth takes majority stake in wellness startup February 20, 2014 | Healthcare Payer News http://www.healthcarepayernews.com/content/unitedhealth-takes-majority-stake-wellnessstartup Eying unfilled parts of the consumer health market, UnitedHealth Group could end up owning a digital health company that's servicing its rivals' clients, and make another Ivy League dropout a millionaire before age 30 in the process. UnitedHealth announced that its Optum subsidiary is buying a majority stake in Audax Health Solutions, a Washington, D.C.-based maker of web- and mobile-based health risk assessment and engagement applications. United did not disclose the exact percentage of the majority stake or the financial terms of the deal, saying only that Audax will be a “freestanding investment of Optum” with the goal of expanding its offerings to “more broadly support consumers’ need for integrated benefit selection, wellness and health care administration.” Audax’s main product, made available to Cigna members in a five-year deal inked last year, is a webbased wellness app and platform called Zensey, described as “your guide to healthier living — one small step at a time.” The startup pitches the product as a “remagined” health risk assessment that’s “dynamic and graphical.” Under the deal with Optum, Audax will continue to be led by CEO Grant Verstandig, a 25-year-old former Brown student who dropped out to found the company in 2010, and president and COO David Ko, a former Yahoo executive who most recently oversaw operations at the online game company Zynga. “Joining with Optum, especially with its unmatched depth of experience and resources, accelerates our momentum, providing the additional reach and scale,” Verstandig said in a media release.
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David Wichmann, UnitedHealth Group CFO, argued that Audax will help Optum in the pursuit of “serving people across virtually every health care channel.” Verstandig started Audax after suffering a number of knee injuries while playing lacrosse at Brown University, ultimately receiving seven knee surgeries and a partial knee replacement. That experience and a hard-to-accept doctor’s prognosis of not being able to play again left Verstandig mulling a move into entrepreneurship, even though as a neurobiology major with a high school internship at the National Cancer Institute under his belt, he could have pursued a career in biotech or healthcare. After starting the company from his parent’s home in the greater Washington, D.C. area, he’s since managed to garner more than $55 million in backing from Florida Blue subsidiary Navigy Holdings, New Leaf Ventures, Cardinal Health, Cigna and former Aetna and Apple executives. He also got some direction from a family friend, Richard Klausner, MD, CMO at the genomics and molecular diagnostics company Illumina, who’s now Audax’s board chairman. The company’s app includes features to let employees or groups of friends compete against each other in exercise challenges such as walking, with the option to offer winning staffers prizes, as well as an online health forum that’s advertised as helping people “find your tribe and chat freely...because you pick an anonymous username, you can ask those touchy questions in a private, safe space.” The company is also partly banking on the quantified self movement, partnering with the companies BodyMedia, FitBit, Polar and Withins to offer employees in its customers’ wellness programs wearable devices that can track exercise, diet and more. Those clients include group members of Cigna, which in January 2013 signed a five-year “strategic alliance” with Audax to offer its apps in wellness programs. Cigna CIO Mark Boxer, who took a place on Audax’s board, argued at the time that the startup’s “digital personalization, social networking, gamification and analytics can turn a mundane or onerous task into something positive, fun and rewarding.” While Cigna was an early client of Audax and former Aetna CEO John Rowe was an early backer, the startup also has a number of UnitedHealth connections that may have hinted at its future in Optum’s portfolio. Audax chief customer solutions officer Brian Dolan is an insurance industry veteran who worked as business development senior vice president in United’s group insurance unit when it was called Uniprise, and Phil Harker, Audax’s senior vice president of client development, spent 10 years working on risk management and payer services at Optum, back to when it was called Ingenix.
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