HEALTHCARE NEWS FLASH January 31, 2014
Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 6 Technology ............................................................................................................................ 9 Strategy .............................................................................................................................. 13
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Sales & Marketing Big name, expensive hospitals don’t necessarily provide best care January 30, 2014 | Fierce Healthcare http://www.fiercehealthcare.com/story/big-name-expensive-hospitals-dont-necessarily-providebest-care/2014-01-30 Hospitals’ reputations and prices have little bearing on their care quality, according to a new study published in Health Affairs. For the study, researchers analyzed almost 25,000 insurance claims from current and retired autoworkers in 10 metropolitan areas: Cleveland; Detroit; Indianapolis; Kansas City; St. Louis; Flint, Mich.; Warren, Mich.; Toledo, Ohio; Youngstown, Ohio and Buffalo, N.Y. The workers visited 110 hospitals, divided into three categories: Thirty “low-price” hospitals, where prices were at least 10 percent below average; Fifty “medium-price” hospitals, which were not defined in the study; and Thirty “high-price” hospitals, where prices were 10 percent or more above average. High-priced hospitals were twice the size of low-priced ones, and had three times their market share, according to the researchers, led by Chapin White of the RAND Corporation. The expensive hospitals were also much more likely to be included in U.S. News & World Report’s national hospital rankings, which are based heavily on doctor surveys. Twenty-five percent of high-priced hospitals appeared in the U.S. News rankings, while none of the low-priced ones appeared on any of the publication’s lists, according to the study. More qualitative data, however, painted a somewhat different picture, according to the researchers. For example, high-priced hospitals did no better than their lower-priced counterparts in keeping pneumonia and heart attack patients alive. However, low-priced hospitals did better in other areas-such as 30-day readmissions and preventing blood clots or death among surgical patients, according to the study. White and his team noted that while more expensive hospitals might provide higher-quality specialized care, existing quality measures focus on routine patient experience. At the surface level, expensive hospitals’ prices seemed justified, according to researchers. They were more likely to treat sicker, lower-income patients and offer specialized services, and operated at an average loss of 2.8 percent, compared to a 1.5 percent profit margin for lower-priced ones. However, when researchers factored in other income sources, such as investments and donations, there was no significant difference in operating margins.
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Omaha Providers Form Health Plan Network, Move Toward Value-Based Pay January 29, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/payer-issues/omaha-providers-form-health-plannetwork-move-toward-value-based-pay.html The Nebraska Medical Center and Methodist Health System, both based in Omaha, Neb., have joined forces to create a health plan network, according to an Omaha World-Herald report. The Affordable Care Alliance, a corporation formed by the two healthcare organizations, manages the Joint Employee Health Plan Network, which will test ways of paying for care that link reimbursement to the overall health of the nearly 17,000 people (NMC and Methodist employees and their family members) who use the network, according to the report. Previously, Methodist employees paid out-of-network rates for care at NMC hospitals and vice versa. Now, although the two organizations’ health plans remain separate, both NMC and Methodist will be in-network providers for employees. The network will aim to gradually transition the providers from fee-for-service to value-based payments, according to the report. Overall, the initiative aims to make care better, more efficient and less costly through population health management.
Johns Hopkins Medicine Launches Joint Venture With Saudi Arabian Oil Company January 28, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/strategic-planning/johns-hopkins-medicine-launchesjoint-venture-with-saudi-arabian-oil-company.html Baltimore-based Johns Hopkins Medicine is launching a joint venture in Saudi Arabia with Saudi Aramco, an oil and natural gas company owned by the Saudi Arabian government, according to a JHM news release. Together, the organizations will deliver high-quality healthcare to Saudi Aramco’s employees and their families, according to a news release. The joint venture, called the Johns Hopkins Aramco Healthcare Company, will begin operations in February 2014. Throughout more than 80 years, Saudi Aramco has established comprehensive healthcare system for its employees and their beneficiaries, and it was also instrumental in building one of the first hospitals in Saudi Arabia, according to the release. “Together, we will be greater than the sum of our parts, because this joint venture combines Saudi Aramco’s existing health system with the transformative science, clinical care and education that Johns Hopkins is known for,” Paul B. Rothman, MD, dean of the medical faculty and CEO of Johns Hopkins Medicine, said in the release.
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Unity Health System, Rochester General to Form New Health System January 24, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/unity-healthsystem-rochester-general-to-form-new-health-system.html Unity Health System, based in Rochester, N.Y., and Rochester (N.Y.) General Health System have jointly filed a certificate of need application to create a new health system. The two organizations — which reportedly sent memos to staff members this past summer concerning their intent to merge — submitted the CON to the New York State Department of Health, the New York State Office of Mental Health and the Office of Alcohol and Substance Abuse Services, according to a news release. The new system’s parent company will oversee state-licensed and regulated healthcare affiliates of Unity and Rochester General. After regulatory approvals, Unity and Rochester General will determine the system’s name and how to identify the affiliates that it will include. Meanwhile, the working title for the new system is “RU System.” The submission is expected to be reviewed at a state public health and health planning council meeting in April.
Allegheny Health, Johns Hopkins Cancer Center to Affiliate January 23, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/allegheny-healthjohns-hopkins-cancer-center-to-affiliate.html Allegheny Health Network in Pittsburgh and Baltimore-based Johns Hopkins Medicine have signed a memorandum of understanding to create a formal affiliation between Allegheny and the Johns Hopkins Kimmel Cancer Center. The two organizations expect to finalize the details of the five-year affiliation within the next few months, according to a news release. Under the agreement, it’s anticipated the Kimmel Cancer Center will provide continuing medical education opportunities to Allegheny physicians and nurses. Furthermore, Johns Hopkins expects to offer physician-to-physician consulting concerning rare cancer cases and novel treatments. The two organizations plan to collaborate on projects to improve the quality and safety of cancer care. The affiliation would also include the establishment of a fund for cancer care research at both Johns Hopkins and Allegheny. “This collaboration would provide us with new opportunities for cancer research within a broadbased western Pennsylvania health system that already has strength in a wide range of cancer treatments and research programs,” William Nelson, MD, PhD, director of the Johns Hopkins Kimmel Cancer Center, said in the release. “In the changing landscape of healthcare services, innovative initiatives like this will keep us at the forefront of discovery and patient-centered care.”
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Finance WellPoint Q4 Profit Down 68% January 29, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/payer-issues/wellpoint-q4-profit-down-68.html Fourth-quarter net income at health insurer WellPoint plummeted 68 percent, from $464.2 million in 2012 to $148.2 million in 2013. For the three months ended Dec. 31, 2013, WellPoint reported total revenues of approximately $17.6 billion, up 16.3 percent from $15.2 billion in the fourth quarter of 2012. However, total expenses also increased by 16.5 percent to $17.4 billion. The company also reported a $160.7 million loss on the sale of two eyewear subsidiaries, 1-800 CONTACTS and Glasses.com, as well as higher income taxes. Furthermore, higher utilization in advance of the Patient Protection and Affordable Care Act health plans taking effect Jan. 1 drove the insurer’s benefit expense ratio up to 87.8 percent from 87.3 percent in the fourth quarter of 2012. For the full year of 2013, WellPoint reported $2.5 billion in net income, down 6.2 percent from $2.7 billion the previous year. Total revenue increased 16 percent to $70.2 billion in 2013, but expenses also went up by 16.6 percent to $67.2 billion.
ACOs Take $4M of Startup Capital, Survey Finds January 27, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/accountable-care-organizations/acos-need-4m-ofstartup-capital-survey-finds.html A new survey has found the average startup costs of accountable care organizations in the first 12 months of operation hit $2 million, but ACOs will likely need twice as much since any shared savings can take another year to flow. The National Association of ACOs has released its National ACO Survey, which examines first-year startup costs and expected financial gains or losses after the first year of operation. The survey was designed to capture information from the April 1, 2012, and July 1, 2012, CMS Medicare Shared Savings Program ACOs after they completed their first year of operation. Findings are based on responses from 35 ACOs that range from 5,100 to 78,000 assigned Medicare beneficiaries. The average (mean) startup costs of ACO respondents in the first 12 months of operation totaled $2 million. Startup costs ranged from $300,000 to $6.7 million.
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Since ACO savings flow slowly, due to the complexities of data collection and reconciliation, ACOs will have almost a second full year of operations until their cash flow is replenished from shared savings with CMS — if any, according to the survey. This means the average ACO will risk $3.5 million plus feasibility and pre-application costs. “We estimate that in total, ACOs on average will need $4 million of startup capital until there is a chance for any recoupment from savings,” according to the survey. About one-third of surveyed ACOs anticipate breaking even after their first year. Nine ACOs estimated gains with the average being $1.3 million, whereas six estimated losses with an average loss of $1.3 million. (These estimates were made before the ACOs had received interim reconciliation numbers from CMS.)
Moody’s Downgrades Outlook for Health Insurers to Negative January 24, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/payer-issues/moody-s-downgrades-outlook-for-healthinsurers-to-negative.html Moody’s Investors Service has revised the outlook for health insurers from stable to negative in light of the uncertainty created by the implementation of the Patient Protection and Affordable Care Act. Moody’s predicts reduced profit margins of 2 percent this year, compared with an average of 3 percent the previous year. Additionally, overall membership growth is expected to decline 1 percent from 3 percent in 2013. Overall, Moody’s expects larger and more diversified insurance companies will fare better. The demographics of the people enrolling in health plans through the PPACA exchanges was one of the main drivers of the outlook revision. As of Dec. 28, only 24 percent of the nearly 2.2 million people who had selected plans through the new marketplaces were between the ages of 18 and 34, according to HHS. The marketplaces need to enroll young adults in about the same proportion they represent in the pool of potential individual insurance market enrollees (40 percent) to counteract the higher claims costs of older, less healthy enrollees, according to a report from the Kaiser Family Foundation. Otherwise, insurers’ total costs for the exchanges will be higher than premium revenues. Furthermore, it’s unclear how an industry assessment tax that kicks in this year will affect health insurers, according to Moody’s. Although some insurers have factored the tax into their premium calculations, the resulting revenues may not be enough to cover their share of the assessment. Medicaid business is of particular concern, since insurers can’t pass additional costs on to consumers and it’s uncertain whether states will allow insurance companies to adjust Medicaid reimbursement rates in response to the tax. The outlook revision builds on a Moody’s report released late last year, which concluded last-minute PPPACA policy changes such as enrollment deadline extensions for the exchanges would create uncertainty for health insurers and ultimately have a negative effect.
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Hospital Prices Increase 1.5% in December January 21, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/hospital-prices-increase-1-5-indecember.html The producer price index for acute-care hospitals increased 1.5 percent between December 2012 and December 2013, according to figures from the Bureau of Labor Statistics. Hospital prices also went up by 0.4 percent from November to December 2013. The PPI for hospitals measures “changes in actual or expected reimbursement received for services across the full range of payer types,” according to the American Hospital Association. “This includes the negotiated contract rate from the payer plus any portion expected to be paid by the patient.”
UnitedHealth Q4 Profit Up 15% January 16, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/payer-issues/unitedhealth-q4-profit-up-15.html UnitedHealth Group’s earnings in the fourth quarter of fiscal year 2013 increased by nearly 15 percent, from approximately $1.24 billion in 2012 to $1.43 billion in 2013, and overall 2013 performance improved by 1.8 percent. The company reported $31.1 billion in total revenue in the last quarter of 2013, an 8.2 percent increase from $28.8 billion in 2012. UnitedHealthcare, the main subsidiary of UnitedHealth and the largest U.S. health insurer, accounted for most of the fourth-quarter revenue at $28.8 billion. The insurer’s enrollment grew by 170,000 people in the fourth quarter and 4.5 million during 2013 overall to more than 45 million people. For the entire 2013 fiscal year, UnitedHealth brought in $122.5 billion in revenue, up 10.7 percent from 2012, while earnings rose 1.8 percent to 5.63 billion.
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Technology Just 6% of Americans Enrolled in ACOs January 30, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/accountable-care-organizations/just-6-of-americansenrolled-in-acos.html The portion of lives covered by accountable care organizations fluctuates widely between states, according to a recent Health Affairs blog post. “Covered lives, which indicate how many people are covered by any ACO contract, are a better representation of the prevalence of the model,” wrote David Muhlestein, PhD, director of research at Leavitt Partners. Dr. Muhlestein and Leavitt Partners estimate that just 6 percent of the nation’s population is enrolled in an ACO. However, some states have a much greater population of citizens enrolled in ACOs than others. For instance, Oregon has 27 percent of its population in an ACO, thanks in part to its Medicaid ACO movement, according to the blog post. Additionally, eight other states — Alaska, Iowa, Massachusetts, Maine, New Hampshire, Rhode Island, Utah and Vermont — have more than 10 percent of their people in ACOs. On the other hand, some states — like Alabama, Georgia, South Dakota, Oklahoma and Wyoming — have 2 percent or less of their populations in the model.
Data sharing issues plague ACOs January 28, 2014 | Fierce Health IT http://www.fiercehealthit.com/story/data-sharing-issues-plague-acos/2014-01-28 Operational problems identified by Medicare accountable care organizations (ACOs) after their first full year in existence overwhelmingly involved the use and dissemination of data, according to a newly published survey from the National Association of ACOs. For the survey, NAACOS received responses from 35 ACOs started either in April or July of 2012. Forty percent of respondents said that the ability to access and process data from the Centers for Medicare & Medicaid Services was their biggest challenge in Year 1. Respondents said those issues stemmed from problems with: •
Suitable software
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Implementation schedules
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•
Claims data delays
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New skill sets to analyze data
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Slow stand-up of IT systems
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Data inconsistency from CMS
Eleven percent of the respondents identified IT operations alone as their biggest operational problem. Additionally, ACOs were asked about IT systems used to process claims data--in particular, whether those systems were internal or external-- the cost of technology used and satisfaction with IT services. Fifty-two percent said that they used a combination of internal IT and outside vendors to get the job done; 24 percent said they used external vendors only, while an additional 24 percent said they used internal IT only. The average total cost for technology use by the ACOs was $850,000. Satisfaction of IT services, on a 10-point scale, averaged a score of 6.4, with smaller ACOs less satisfied than larger ones. Starting with the right kind of data is critical to the success of an ACO, Naveen Srabu, product management director for Liaison Healthcare Technologies, told an audience at the American Health Information Management Association Convention in Atlanta last fall. Srabu outlined three building blocks he said are necessary to develop the analytics component of an ACO from the ground up: Start with practice-level information, including standardized lab results and detailed patient information, if available. Develop a repository of “longitudinal” patient records including claims data, information from electronic health records and practice management systems, and data from related forms. Harmonize information that comes in from different practices, all of which have different interfaces, and determine what analytics you want to run to produce meaningful results.
Digital divide’ persists in health IT adoption January 26, 2014 | Fierce Health IT http://www.fiercehealthit.com/story/digital-divide-persists-health-it-adoption/2014-01-26 Adoption of electronic medical records by primary care physicians has grown substantially, but the “digital divide” between large and small physician practices persists, according to a new study from the Commonwealth Fund. Between 2009 and 2012, adoption grew from 46 percent to 69 percent. A majority of physicians use core health IT functions such as e-prescribing, electronic ordering of lab tests and certain types of clinical decision support.
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Practice size, however, is the major factor affecting adoption. Ninety percent in practices of 20 or more physicians use EMRs, compared to just half of those in solo practices. In 2012, 33 percent of primary care physicians could exchange clinical summaries with other doctors, and 35 percent could share lab or diagnostic tests with doctors outside their practice. Roughly onethird offered electronic access to patients. Physicians who are part of an integrated delivery system, such as Kaiser Permanente or the Veterans Administration, practices that share resources or those eligible for financial incentives have higher rates of health IT adoption. The report’s authors suggest that technical assistance programs and financial incentives can help close this “digital divide.” In addition, they say, physician practices remain behind schedule in their preparation for ICD-10. In a recent survey of physician practices, 75 percent of respondents said they still haven’t started implementation of their ICD-10 transition plan, but still think they’ll be ready by the Oct. 1 deadline. Meanwhile, new National Coordinator for Health IT Karen DeSalvo says the “next chapter” of the ONC’s work will focus on harnessing health IT for, among other things, population health: “[T]o see the promise of health information technology in the clinical interface for the health systems and the population and community at large to come to fruition,” she said at a recent Health IT Policy Committee meeting. ONC and the U.S. Department of Health & Human Services Office for Civil Rights are developing a risk assessment tool due out later this year to help small providers navigate the privacy and security requirements suggested for Meaningful Use.
U.S., U.K. collaborate on health IT sharing initiative January 24, 2014 | Fierce Health IT http://www.fiercehealthit.com/story/us-uk-collaborate-health-it-sharing-initiative/2014-01-24 With an eye on improving healthcare quality and efficiency, the U.S. Department of Health & Human Services and the U.K.’s National Health Service will share health IT information and tools with one another after signing an agreement Thursday at the Office of the National Coordinator for Health IT’s annual meeting in Washington, D.C. HHS Secretary Kathleen Sebelius and her British counterpart Jeremy Hunt signed the memorandum of understanding, the latter of whom was broadcast via a live feed from the U.K. The agreement focuses on four key areas, according to an HHS announcement, including: Sharing quality indicators: The collaboration now is identifying alignments across existing British and American repositories to identify best practices in the design and use of quality indicators. Future work will include mutually leveraging technical experts and data, and working on a standardized approach to quality indicator development.
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Liberating data and putting it to work: HHS and NHS will discuss and find areas of collaboration around open data and safe and secure data transparency of secondary stored data, as well as interoperability standards for improvement of data sharing and clinical care with a focus on patients accessing and sharing data. Adopting digital health record systems: Both organizations will work to maximize successful adoption of digital records across the health care spectrum and support the development of a robust health IT workforce. Priming the health IT market: Both organizations will work to support the Health IT Marketplace by identifying barriers to innovation, sharing individual certification approaches for patients and clinician-facing applications, and strategies to support small and medium enterprises/start-ups.
Patients using telehealth services to hit 7 million by 2018 January 17, 2014 | Fierce Health IT http://www.fiercehealthit.com/story/patients-using-telehealth-services-hit-7-million-2018/201401-17 The number of patients worldwide using telehealth services will rise from less than 350,000 in 2013 to roughly seven million in 2018, according to a new report published by IHS Technology. Additionally, the report estimates that revenue for telehealth services will balloon tenfold, from $440.6 million in 2013 to $4.5 billion in 2018. The report’s authors point to the introduction of mobile health hubs and projected growth in wearable technology as catalysts for such growth. “Amid rising expenses, an aging population and the increasing prevalence of chronic diseases, the healthcare industry must change the way it operates,” Roeen Roashan, a medical devices and digital health analyst at IHS, said in an announcement. “Telehealth represents an attractive solution to these challenges, increasing the quality of care while reducing overall healthcare expenditures.” A report published last month by Research and Markets estimated that the global telemedicine market will have a compound annual growth rate of 18.5 percent through 2018. Legislation introduced to Congress in December seeks to establish a federal definition of telehealth and clear up the confusion from myriad state policies. The bill, according to Reps. Doris Matsui (DCalif.) and Bill Johnson (R-Ohio), is based on legislation passed previously in California. In late November, the Centers for Medicare & Medicaid Services announced changes to Medicare’s 2014 physician fee schedule to incrementally expand coverage for telehealth services. Reimbursement has been a primary barrier to the widespread use of telehealth. In a recent commentary, Stanford medical student Akhilesh Pathipati wrote that telemedicine is “natural” for the next generation of physicians. “Students currently in the medical education pipeline started using smartphones and Skype in high school,” Pathipati said. “The same can be said for many patients. Telemedicine can translate that familiarity with communications technology into a meaningful doctor-patient relationship.”
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Strategy Atlantic Health System to Assume Ownership of Hackettstown Regional Medical Center January 29, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/atlantic-healthsystem-to-assume-ownership-of-hackettstown-regional-medical-center.html Atlantic Health System, based in Morristown, N.J., has agreed to acquire Hackettstown (N.J.) Regional Medical Center from Gaithersburg, Md.-based Adventist HealthCare. The sale of the 111-bed acute care hospital is subject to state regulatory review, which could take several months, according to a news release. Financial terms of the transaction were not disclosed. The deal will result in expanded outpatient and preventive medicine services, increased patient access to specialty care, improved quality and increased cost savings, among other benefits. “Our patients are familiar with the excellent caliber of care and extensive services offered by Atlantic Health System hospitals,” said Jason Coe, president of Hackettstown Regional Medical Center, in the release. “Joining the Atlantic Health System family will give the Hackettstown community access to more specialists and services throughout the system, from cardiovascular to neonatal, to oncology, neuroscience and more.” News of the transaction follows Atlantic’s completion of its merger with Chilton Hospital in Pompton Plains, N.J. Under the agreement, Atlantic will assume $43 million of debt from the 260-bed hospital’s parent company, Chilton Health Network. Atlantic has also agreed to make capital investments and let the hospital keep its name, staff and acute-care hospital status.
M&A strong in ‘hyper competitive’ market January 28, 2014 | Healthcare IT News http://www.healthcareitnews.com/news/ma-strong-hyper-competitive-market A dynamic health IT marketplace is rewarding robust and scalable companies – especially those whose products focus on revenue cycle and clinical decision making, according to a trend report from investment bank Berkery Noyes. The report tracks merger and acquisition activity for the healthcare and pharmaceutical IT industries for 2013, comparing it with the previous two years. While total transaction volume decreased 16 percent on a yearly basis, the report found, when compared to 2011, volume saw a 3 percent uptick. Aggregate deal value rose 2 percent throughout the last dozen months, from $11.63 billion in 2012 to $11.81 billion in 2013, according to Berkery Noyes.
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Health IT as a percentage of total deal volume stayed roughly the same, at almost 40 percent, according to the report. Constellation Software was the segment’s most active acquirer with five transactions in 2013. The largest healthcare IT transaction was Experian’s $850 million November acquisition of revenue cycle company Passport Health Communications. Despite the overall industry’s downward movement in volume during 2013, the outlook for M&A remains positive, analysts said. “Many healthcare IT companies are experiencing operating momentum as the industry adopts technologies at unprecedented rates,” said Jonathan Krieger, managing director at Berkery Noyes, in a press statement. As ICD-10 and Stage 2 meaningful use bear down on the industry – to say nothing of pay-forperformance and accountable care – “software is becoming increasingly necessary to achieve operating efficiencies when dealing with a $3 trillion complex, rapidly evolving landscape,” he added. “Private, middle-market, tech-enabled companies are at the forefront of developing these emerging, niche technologies and are in high demand by strategic and financial acquirers,” said Krieger. Mobile technology is also starting to make its presence felt in a big way, of course. “The technological advancements in mobile healthcare are fostering conditions favorable to increased patient engagement and adherence,” said Jeffrey Smith, managing director at Berkery Noyes, in a statement. “For instance, new diagnostic tools that allow for easier interaction with physicians can help with wellness and preventive health. Medical professionals who use mobile technology to collect data from their patients and improve point of care documentation efforts are also benefitting.” “In today’s hyper competitive HIT marketplace, companies with good scale, recurring revenue and high growth rates, whether they are revenue cycle management, point-of-care information solutions, or one of many other attractive niches, are receiving high interest from both private equity and strategic buyers,” said Tom O’Connor, managing director at Berkery Noyes.
CHS Completes HMA Acquisition January 27, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/chs-completes-hmaacquisition.html After several months of negotiations and fine-tuning, Franklin, Tenn.-based Community Health Systems has closed on its acquisition of Health Management Associates in Naples, Fla. Last July, CHS said it would buy Health Management for $3.9 billion in cash and the assumption of $3.7 billion of debt. The deal gives CHS 206 hospitals across 29 states, making it the largest for-profit hospital chain and one of the biggest hospital systems overall. CHS’ net revenue for this year is expected to exceed $21 billion, putting it behind only Nashville, Tenn.-based Hospital Corporation of
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America. “This transaction provides us with increased scale and broader geographic reach as we work to create strong healthcare networks across the nation,” CHS Chairman and CEO Wayne Smith said in a news release. “Our larger organization is well-positioned to address the changing dynamics in our industry and dedicated to providing quality care for millions of patients and all the communities we serve. We look forward to effectively integrating this acquisition and generating significant value for our shareholders.” Health Management’s website now redirects to a revamped CHS website, and it has consequently ceased trading on the New York Stock Exchange. Its shareholders, who approved the merger earlier this month, will receive $10.50 per share in cash, a small stake in CHS common stock and one contingent value right for every share of Health Management they own. The merger still must clear one final hurdle. Last week, the Federal Trade Commission approved the deal, but it said CHS must sell two hospitals to pass antitrust scrutiny. According to the settlement with the FTC, CHS must divest 281-bed Riverview Regional Medical Center in Gadsden, Ala., and 116bed Carolina Pines Regional Medical Center in Hartsville, S.C. The hospitals must be sold to FTCapproved buyers within six months after the government issues the order. Many unions and healthcare advocacy groups have condemned the merger, arguing the new mega system could result in higher prices. The American Federation of Teachers has also said CHS’ takeover of Health Management is a conflict of interest. Larry Robbins, founder of New York Citybased hedge fund Glenview Capital Management, owns significant shares of both CHS and Health Management, and he spearheaded a campaign last year to overhaul the top management at the financially struggling Health Management.
Novant Health, Morehead Memorial Announce Shared Services Agreement January 24, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/novant-healthmorehead-memorial-announce-shared-services-agreement.html Novant Health in Winston-Salem, N.C., has struck an agreement with Morehead Memorial Hospital in Eden, N.C., to work together within Novant Health Shared Services. Under the agreement, Novant and Morehead will work together on strategic planning, corporate resources and supply chain, according to a news release. The hospital will also work closely with Novant’s Winston-Salem market team to identify opportunities for improving efficiency and collaborating on best practices. Since this past fall, Novant has been steadily adding hospitals to Novant Health Shared Services, a group that focuses on supply chain management and other operational collaborations. Other recently added members include Spartanburg (S.C.) Regional Healthcare System and Liberty Regional Medical Center in Hinesville, Ga.
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Memorial Health System Partners With SIU Healthcare January 16, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/memorial-healthsystem-partners-with-siu-healthcare.html Memorial Health System and Southern Illinois University HealthCare, both based in Springfield, Ill., have formed a new partnership focused on improving healthcare access, quality, safety and outcomes. The Midwest Healthcare Alliance, a nonprofit limited liability corporation also based in Springfield, will leverage the strengths of both organizations, according to a news release. The alliance will be governed by a 10-member board, including five leaders each from Memorial and SIU HealthCare. Charles Callahan, PhD, senior vice president and chief quality officer for Memorial, and Eric Brown, MD, PhD, CMO of SIU HealthCare, will serve as co-executive directors of the alliance. “This alliance will foster innovative new methods and partnerships for delivering care across our region in ways not possible today,” Dr. Callahan said in a news release. “The alliance will bring together the best thinking in emerging areas, like population science, big data, Lean Six Sigma, high reliability safety systems, chronic disease management and patient activation, all focused on improving the health of the people and communities across central Illinois.”
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