HEALTHCARE NEWS FLASH April 01, 2014
Table of Contents Sales & Marketing ................................................................................................................. 3 Finance ................................................................................................................................. 6 Technology ............................................................................................................................ 9 Strategy .............................................................................................................................. 13
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Sales & Marketing Community Medical Center to Partner With Billings Clinic, RegionalCare Hospital Partners March 31, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/communitymedical-center-to-partner-with-billings-clinic-regionalcare-hospital-partners.html Community Medical Center in Missoula, Mont., has decided to partner with Billings Clinic RegionalCare LLC, a joint venture between Billings (Mont.) Clinic and RegionalCare Hospital Partners, based in Brentwood, Tenn. The new partnership will help the organizations continue to improve financial strength, position the community to offer new models of care and create a statewide approach to care focused on quality and safety, among other key objectives, according to a news release. Last year, Billings Clinic and RegionalCare formed their joint venture to offer expanded clinical services, integrate and recruit physicians and create access to capital. Under the agreement, Billings Clinic has remained independent.
UW Medicine, Capital Medical Center Announce Partnership March 28, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/uw-medicinecapital-medical-center-announce-partnership.html Seattle-based UW Medicine and Capital Medical Center in Olympia, Wash., have announced a strategic partnership agreement, effective April 1. The collaboration will give Capital Medical Center's patients access to high-level care for advanced services, according to a news release. The agreement doesn't involve a change in ownership or governance of either UW Medicine or Capital Medical Center. "This collaboration will support UW Medicine's mission to improve the health of the public by providing seamless access to the world-class clinical services UW Medicine is known for," Paul Ramsey, MD, CEO of UW Medicine, said in the release. "Such collaborations are vital in the process of achieving healthcare reform's triple aim — improving healthcare for individuals, improving health for populations, and reducing the per-capita costs of healthcare."
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Half Of Uninsured Not Planning On Getting Coverage, Poll Finds March 26, 2014 | Kaiser Health News http://capsules.kaiserhealthnews.org/index.php/2014/03/half-of-uninsured-not-planning-ongetting-coverage-poll-finds With less than a week left for customers to apply for insurance through the health care marketplaces, a poll released Wednesday finds that half of the people still without health coverage intend to remain uninsured. Five million people have signed up for insurance since the marketplaces created by the federal health law opened in October. The official deadline to sign up without facing a financial penalty is March 31, although federal officials told news organizations Tuesday that consumers who begin the process before then and have had trouble with the technology will an extension of several weeks to finish the process. The Congressional Budget Office estimates by the year’s end, 6 million people will have obtained insurance on the marketplaces. The Kaiser Family Foundation’s latest poll, conducted in mid-March, found that 50 percent of adults under age 65 who still lack coverage plan to remain without insurance, while 40 percent aim to sign up by the deadline at month’s end. (KHN is an editorially independent program of the foundation.) The other 10 percent said they did not know what they would do or refused to talk about it. Of the uninsured, two out of three said they have not tried to get coverage yet. The rest said they attempted to get it through an online marketplace such as healthcare.gov, the state-federal Medicaid program, their employer or a private insurance company. Only four in 10 of the uninsured knew the March 31 deadline to sign up for coverage, the poll found. A third of the uninsured didn’t know they are subject to a fine if they don’t obtain coverage, absent a few permitted exclusions such as financial hardship. The poll found that direct outreach efforts have had limited success: only 11 percent of uninsured people said they had been contacted about the health law by phone call, email, text message or a home visit. According to the poll, the majority of the public still holds unfavorable views of the health care law, although that gap has narrowed from the beginning of the year. Forty-six percent of people said they disliked the law, while 38 percent approved. That gap of eight percentage points is half of what it was in November and January. The views of people without insurance also have improved since earlier this year and now essentially mirror the overall public’s opinion. The pollsters noted that it is tricky to compare the views of the uninsured over time since the composition of that group changes as more people get coverage. A majority of the public, 53 percent, is tired of hearing fights over the health law. Forty-two percent believe the debate should continue. The poll was conducted among 1,504 adults between March 11 through March 17. The margin of error for questions of the overall public is +/- 3 percentage points. The margin of error for questions of just the uninsured population is +/- 9 percentage points.
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St. Joseph's Hospital Health Center, Lewis County General to Partner March 21, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/st-joseph-s-hospitalhealth-center-lewis-county-general-to-partner.html St. Joseph's Hospital Health Center in Syracuse, N.Y., and Lewis County General Hospital in Lowville, N.Y., have agreed to enter exclusive negotiations for a potential affiliation, according to a Watertown Daily Times report. Lewis County General received affiliation offers from five total organizations before choosing St. Joseph's, according to the report. Terms of the transaction with St. Joseph's were not disclosed. Both parties will now work toward a definitive agreement, which is expected to take at least six months. The deal would also require regulatory approval. Last October, St. Joseph's, a 431-bed independent hospital, ended affiliation discussions with Livonia, Mich.-based CHE Trinity Health for undisclosed reasons.
WellPoint inks Medicare Advantage partnership March 19, 2014 | Fierce Health Payer http://www.fiercehealthpayer.com/story/wellpoint-inks-medicare-advantage-partnership/201403-19 WellPoint's CareMore unit is teaming up with Emory Healthcare, a large health system in Atlanta, to jointly manage about 7,500 Medicare Advantage patients. The deal involves CareMore collaborating with Emory to help overhaul the care provided to those consumers, who are covered by WellPoint's Blue Cross Blue Shield of Georgia as well as other insurers, the Wall Street Journal reported. Executives from CareMore, which operates clinics across the country, will help Emory implement a version of its clinical model, including boosting preventive care. Emory CEO John Fox said the deal helps the health system move away from fee-for-service payments toward quality-based reimbursements. "We are getting a one-way ticket to value-based contracting," he said about the agreement with CareMore. Meanwhile, CareMore is planning to have "dozens" of similar deals with other providers, Leeba Lessin, CareMore's CEO, told the WSJ.
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Finance IU Health's Revenue, Operating Profit Fall in 2013 March 31, 2014 | Becker’s Hospital Review http://www.beckershospitalreview.com/finance/iu-health-s-revenue-operating-profit-fall-in2013.html In 2013, sizable declines in utilization negatively impacted Indiana University Health, the largest hospital system in the state, as its operating revenue, operating income and overall profit were down across the board. The Indianapolis-based health system posted $5.25 billion in revenue, a 6 percent drop from $5.58 billion in 2012. Operating income plummeted 41 percent to $323.6 million — giving IU Health a stillhealthy 6.2 percent operating margin — while total profit, including investments, dropped 31 percent to $448 million. Last year, the 19-hospital IU Health laid off 900 employees, 100 more than it initially proposed, as part of the system's plan to cut $1 billion from its budget. According to IU Health's audited financial statement, it had paid $6.3 million in severance costs related to the workforce reduction, as of Dec. 31, 2013. In addition, IU Health posted more than $9 million related to costs associated with an early retirement buyout. Other key financial data IU Health reported in fiscal year 2013: •
Medicare electronic health record incentives totaled $22.2 million.
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About 58 percent of IU Health's net patient service revenue came from managed care and private insurers. Medicare and Medicaid comprised 24 percent and 6 percent, respectively, of the system's revenue.
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IU Health recorded $156.6 million in revenue from its health plan arm.
Report: Healthcare Expense Growth Hits Record High March 31, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/finance/report-healthcare-expense-growth-hits-recordhigh.html Healthcare expenses grew 5.6 percent year-over-year in the fourth quarter of 2013, the highest growth rate recorded in the past decade, according to a report from the Bureau of Economic Analysis.
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The acceleration was largely because of an $8 billion increase in hospital revenue in the fourth quarter, according to a USA Today report. Avalere Health CEO Dan Mendelson told USA Today the rise may be the result of drivers such as increasing use of expensive, high-tech healthcare services. Additionally, American Hospital Association spokeswoman Jennifer Schleman said the economy is picking up, meaning people have more resources to spend on healthcare services, according to the report. Furthermore, the Patient Protection and Affordable Care Act's mandate that all Americans get health insurance or pay a penalty could also lead to more spending. CMS expects healthcare spending to increase by 6.1 percent this year, compared with a 4 percent increase in 2013, as millions of Americans gain insurance coverage, according to the report.
Report: Enrollees Have Qualified for $10B in PPACA Premium Subsidies March 28, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/news-analysis/report-enrollees-have-qualified-for-10bin-ppaca-premium-subsidies.html Through the end of February, approximately 3.5 million people qualified for about $10 billion in annual premium subsidies to help cover the cost of coverage purchased through the health insurance exchanges, according to a Kaiser Family Foundation report. As of March 1, 4.2 million people had applied for and selected health plans through the Patient Protection and Affordable Care Act exchanges. Kaiser analysts found 83 percent of those enrollees have qualified for premium subsidies, which are available for people who earn from 100 percent to 400 percent of the federal poverty level ($11,490 to $45,960 for single people and $23,550 to $94,200 for families of four). The average subsidy nationwide is about $2,890 a person, according to the report. Average subsidy amounts vary considerably from state to state, from $1,350 in the District of Columbia to $4,980 in Wyoming. These averages depend on the number of eligible residents who have enrolled in health plans, the level of premiums in the state and the age distribution of enrollees. As of yesterday, the PPACA exchanges had enrolled 6 million people, achieving the most recent Congressional Budget Office benchmark. The 2014 open enrollment period for the health insurance exchanges ends Monday, although the Obama administration recently announced it will extend the deadline for certain people who can demonstrate they weren't able to get health insurance because of errors on the part of HHS or HealthCare.gov.
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Study: Patient-Centered Medical Homes Cut Costs for High-Risk Patients March 25, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/accountable-care-organizations/study-patient-centeredmedical-homes-cut-costs-for-high-risk-patients.html High-risk patients within a patient-centered medical home model experienced lower costs and utilization rates, according to results of a three-year study published in The American Journal of Managed Care. The study followed about 700 Independence Blue Cross of Pennsylvania patients, many of whom had multiple illnesses such as congestive heart failure, chronic obstructive pulmonary disease, diabetes or asthma. The patients were treated in primary care practices that had converted to PCMHs. Patients cared for in the PCMHs had fewer hospital admissions than the control group: 10.8 percent fewer in 2009, 8.6 percent fewer in 2010 and 16.6 percent fewer in 2011. Additionally, compared to the control group, the high-risk PCMH group of patients saw total medical cost savings of 11.2 percent in 2009 and 7.9 percent in 2010. The cost reductions were driven by the lower hospitalization rates, according to the study. While the PCMH model did benefit high-risk patients, costs and utilization did not differ significantly between the PCMH and control groups among all patients, "suggesting that the benefits of the PCMH model are concentrated among high-risk, high-cost patients," the authors wrote. This study seems to refute a recently published RAND Corporation study, which found a PCMH pilot program led to few quality gains and had little effect on hospital utilization or cost of care.
Banner Health's Revenue Tops $5B in 2013 March 21, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/finance/banner-health-s-revenue-tops-5b-in-2013.html Total revenue at Phoenix-based Banner Health reached $5.09 billion in 2013, compared with $4.87 billion in 2012, thanks in part to increased premiums from the system's health plans. Banner's net patient service revenue barely increased year-over-year to $4.41 billion, but medical insurance premiums from Banner Health Plans soared 63 percent to $439.7 million. Despite the increase in revenue, Banner's operating income took a slight hit. Operating profit dropped more than 12 percent to $254.1 million on rising expenses, giving the 24-hospital system an operating margin of 5 percent last year. In 2012, Banner's operating margin was almost 6 percent. However, Banner's overall profit soared 40 percent to $815.5 million due to massive gains from investments and interest rate swaps. This past February, Banner acquired the 177-bed Casa Grande (Ariz.) Regional Medical Center. The hospital had to file for Chapter 11 bankruptcy to complete the sale, and Banner also agreed to provide interim funding to the financially struggling CGRMC until the deal closes.
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Technology Combat EHR system cost soars by 2,233 percent March 31, 2014 | Fierce EMR http://www.fierceemr.com/story/combat-ehr-system-cost-soars-2233-percent/2014-03-31 The Defense Health Agency's electronic health record for combat troops--costing 2,233 percent more than originally estimated--topped the list of Defense information systems projects gone off track in a report from the Government Accountability Office. Cost for the system, the Theater Medical Information Program - Joint (TMIP-J), Increment 2, soared from $67.7 million in November 2002 to $1.58 billion by December 2013. Reasons attributed to the increase were the addition of capabilities originally intended to be included in a future increment, new requirements necessary to meet the needs of soldiers and the inclusion of operations and maintenance costs. The cost rivals that proposed for the support operations and maintenance of health information management systems for its array of hospitals and clinics, reports Nextgov. The DHA, which opened last Oct. 1, is intended to streamline healthcare among the Army, Navy and Air Force medical departments. With costs 302 percent more than expected, the Marine Corps version of the Global Combat Support System ranked second on the GAO list, and the Defense Logistics Agency's "Defense Agencies Initiative"--designed to modernize the financial systems of all the defense agencies--ranked third with an increase of 159 percent. The DHA's proposed 2015 budget would more than triple funding for its work on an integrated EHR with the Department of Veterans Affairs, increasing from $19.9 million in 2014 to $68.3 million next year. The DoD began the procurement process for a new EHR system in January with a draft request for proposals that would rely on off-the-shelf technologies and industry standards supported by the Office of the National Coordinator of Health IT. Around the same time, the DHA also issued a solicitation for a contractor to sustain its legacy electronic health record system for possibly as long as another four years.
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Medical Device Recalls Increased 97% Over Past 10 Years March 25, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/supply-chain/medical-device-recalls-increase-97-overpast-10-years.html The U.S. Food and Drug Administration's Center for Devices and Radiological Health released its Medical Device Recall Report for FY 2003 to FY 2012, showing device recalls have nearly doubled in the past 10 years. The number of medical device recalls jumped from 604 in FY 2003 to 1,190 in FY 2012. Additionally, the number of Class I and Class II recalls increased over the same time period. Class I recalls accounted for one percent of all recalls in FY 2003 and grew to 5 percent of all recalls in FY 2012. Class II recalls made up 76 percent of recalls in FY 2003 and 87.6 percent of recalls in FY 2012. Part of the increase in Class I recalls can be attributed to the CDRH's increased efforts to improve quality and safety of radiological devices, according to the report. The CDRH focused on devices with high-volume adverse event reports, such as automated external defibrillators, ventilators and infusion pumps. These devices accounted for approximately 30 percent of all Class I recalls in the study period. The most common cause of recalls from FY 2010 to FY 2012 was device and software design failures (36 percent), followed by faulty material or component (26 percent), errors in process control (17 percent) and errors in packaging and labeling (13 percent). The report notes the increase in recalls is also in part be due to improved awareness and reporting by device manufacturers.
Patient monitoring technology market to reach $5.1B by 2020 March 19, 2014 | Fierce Health IT http://www.fiercehealthit.com/story/patient-monitoring-technology-market-reach-51b2020/2014-03-19 The U.S. market for patient monitoring technology--increasingly moving outside the hospital--is expected to grow to more than $5.1 billion by 2020, according to a new report by iData Research. The report points to the growth of multi-parameter vital sign monitors, electroencephalograms (EEG), electromyograms (EMG), cerebral oximeters and pulse oximetry devices in particular for fueling that growth. The pulse oximetry-monitoring market alone is expected to exceed $1 billion by 2020, it according to an announcement. Updated pacemakers, implantable cardioverter defibrillators (ICDs) and hemodynamic monitors are growing in use. In addition, new products with smartphone integration and Bluetooth capabilities will further drive sales.
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"There has been a surge of interest in implantable electronic devices," the president of iData Research writes in the announcement. "Remote monitoring of these devices by doctors and caregivers could significantly reduce in-office follow-up visits. Devices such as the cardioverter defibrillator that is controlled remotely could be lifesaving." The report foresees growth from monitoring in low-acuity areas of hospitals, alternate care and home settings, with many of the devices becoming increasingly relevant on a consumer retail level. A survey from the American Telemedicine Association's 2013 annual meeting also pointed to home monitoring as the driving force behind growth in telehealth. The home, including remote patient monitoring, is the area of biggest impact and opportunity in the telehealth market for device makers, it said. The global medical device connectivity (MDC) market--wired hardware plus wireless hardware and software--is expected to be worth $33.5 billion by 2019, according analysis from Transparency Market Research. Though wired hardware accounts for 40 percent of the market, wireless technology is growing as healthcare providers add Wi-Fi, Bluetooth and wireless medical telemetry services (WMTS). Eric Topol, M.D., a cardiologist at the Scripps Research Institute in San Diego, who is conducting a clinical trial involving high-risk patients being hooked up to personal data trackers, has called home monitoring, "the future," adding, "but we've got a long way for this to become routine."
Toshiba sees health tech for seniors as a $10 billion opportunity March 17, 2014 | Fierce Health IT http://www.fiercehealthit.com/story/toshiba-sees-health-tech-seniors-10-billionopportunity/2014-03-17 Toshiba sees healthcare technology for seniors as a $10 billion opportunity, according to an article in Senior Housing News. The company is using LED televisions and imaging displays to launch its latest series of mobile tech solutions available for older adults, clinicians and other healthcare providers via a subsidiary. "The healthcare industry is at an important transition, becoming increasingly digital and depending on technology more than ever," according to Wesley Smith, director of healthcare information systems at Toshiba America Information Systems, Inc. Technologies like digital medical imaging, IP telephone communication systems and portable computer devices for application in the senior care market all intend to help older adults age independently at home and assist healthcare organizations better provide quality care.
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Telehealth services market on steep upward trajectory March 17, 2014 | Fierce Health IT http://www.fiercehealthit.com/story/telehealth-services-market-steep-upward-trajectory/201403-17 Revenue in the telehealth services industry is expected to grow by an annualized 30.7 percent to $320.2 million in the next five years, including revenue growth of 23.1 percent in 2014, according to industry research firm IBISWorld. It defines telehealth services to include diagnosis, treatment, assessment, monitoring, communication and education delivered primarily through three kinds of technology: videoconferencing, remote patient monitoring and store-and-forward offerings, which transmit digital images between providers. Advances such as wearable self-monitoring devices and digitized medical scans are propelling the rapid growth, along with skyrocketing costs, a looming doctor shortage and an aging population, according to an announcement. "Over the next five years, the industry will continue to benefit from the demographic and structural factors affecting the healthcare industry as telehealth will emerge as a cost-effective solution to meeting the medical needs of an expanding and aging population," says IBISWorld industry analyst Stephen Morea in the announcement. Existing legislation, such as the Affordable Care Act, and pending legislation to expand federal reimbursement for telehealth services will further boost the industry, according to the report. Companies' difficulty in finding the talent they need for product and software development poses an impediment to the industry, Morea notes, as does the need to develop systems that do not violate existing patents. Nevertheless, he predicts growth in the number of enterprises entering the market. While Medicare's 2014 physician fee schedule expands coverage for telehealth services, the American Telemedicine Association (ATA) is pushing for further removal of what it calls "unnecessary" limitations on Medicare providers. A bill expanding coverage for members of the military passed in January and a similar bill allowing Medicare providers to practice across state lines passed the House last fall. Meanwhile, states are pushing adoption of telehealth through "parity" laws requiring equal coverage as that offered through in-person visits.
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Strategy Hospitals make major inroads in insurance biz March 31, 2014 | Fierce Health Payer http://www.fiercehealthpayer.com/story/hospitals-make-major-inroads-insurance-biz/2014-0331 More hospitals and health systems are getting into the insurance business, eliminating health insurers from the process, the Fiscal Times reported. For example, Mount Sinai Health System in New York City will offer its own Medicare Advantage plan starting next year as a way to keep premium payments inside the hospital system. "Inevitably, the large systems are going to move to take part of the premium dollar," Mount Sinai President and CEO Kenneth L. Davis, M.D., said at The Atlantic's Health Care Forum in Washington, D.C. Only last week, the CentraState Health System in Freehold, N.J., launched its own health plan for small- and medium-sized businesses, NJ.com reported. Meadowlands Hospital Medical Center in Secaucus has created a plan similar to CentraState's multiple employer welfare arrangement health plan (MEWA). As more healthcare providers enter the insurance market, health insurers as we know them may cease to exist. Ezekiel Emanuel, former White House healthcare adviser, predicts accountable care organizations will replace them, FierceHealthPayer previously reported. At The Atlantic's Health Care Forum, Emanuel warned of the "Kaiserification" of healthcare --Kaiser Permanente's integrated healthcare model that combines a health insurance company with subsidiary hospitals and medical practices. "[T]he wave of the future is integrated delivery systems-integrating insurance with delivery function," Emanuel said, according to the Fiscal Times. Kaiserification is well under way. For example, WellPoint recently acquired a healthcare company in California, Emanual noted. Moreover, WellPoint's CareMore unit teamed up with a large health system in Atlanta to jointly manage about 7,500 Medicare Advantage patients. New competition from providers launching their own health plans doesn't have to signal the end of insurance companies. MedStar Health, the largest health system in Baltimore-Washington, D.C., offers its own health plan called MedStar Select, but isn't trying to compete directly with insurers. "I think insurance companies have a role that extends well into the future and it's not that we're out there trying to put them out of business or minimize the role that they have in the American healthcare system," Eric R. Wagner, MedStar's executive vice president of external affairs, told FierceHealthPayer in an interview. "So we all just need to figure out how to work together better and more effectively to allow transformation to happen," he said.
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Report: Significant Hospital M&A Activity Likely to Continue This Year March 27, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/report-significanthospital-m-a-activity-likely-to-continue-this-year.html Hospital transaction activity is expected to continue at a high rate in 2014, spurred by various market and regulatory trends, according to a report from global consulting firm PwC. Hospital deal volume has been steadily rising since 2009, although it dipped by 5 percent in 2013, according to the report. There were 89 mergers and acquisitions announced in the sector last year, down from 94 in 2012. However, total hospital transaction value rose from $1.9 billion in 2012 to $18.6 billion in 2013 because of several multibillion-dollar deals. These deals included, among others, Franklin, Tenn.-based Community Health Systems' $7.6 billion acquisition of Naples, Fla.based Health Management Associates and Dallas-based Tenet Healthcare Corp.'s purchase of Nashville, Tenn.-based Vanguard Health Systems — a deal valued at $4.3 billion. PwC expects factors such as uncertainty surrounding healthcare reform, convergence within the payer and provider arenas and expanding physician alignment will continue to drive high levels of hospital deal activity in 2014, according to the report. "Health systems really need to rethink how and where they deliver care and how to best manage the patient populations," says Steven Elek III, partner and global healthcare deals leader at PwC. "That's impacting how they think about their missions. So I would expect to continue to see a heightened level of hospital deal activity." He says some notable trends prompting hospitals and health systems to consolidate are downward pressure on revenues driving the need for scale, health systems assessing new geographies and patient populations as well as competencies and the pursuit of greater negotiating leverage with non-government payers. He says other key drivers of consolidation include capital access challenges for financially stressed organizations, capacity management and providers looking to achieve cost synergies through the consolidation of administrative services, leveraging the supply chain and rationalizing capital projects. Based on what PwC has observed among its clients, Mr. Elek says it's quite likely deal volumes will rise again this year, and larger health systems will also continue to develop and acquire health plans. The report says hospital and health system consolidation plays into efforts to revamp care delivery and reduce spending. "Building the end-to-end continuum of care is a pathway to assist in controlling costs and improving the patient experience," the report states. "Many deals in the hospital, healthcare system and physician medical group sectors attempt to address these issues."
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Partners HealthCare, South Shore Hospital Merger Postponed March 20, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/partnershealthcare-south-shore-hospital-merger-postponed.html Boston-based Partners HealthCare System has agreed to delay the closing of its proposed acquisition of South Shore Hospital in Weymouth, Mass., to allow for the extension of negotiations with the state attorney general's office, according to a report from The Boston Globe. Hospital officials will continue negotiations with regulators in Attorney General Martha Coakley’s office concerning Partners' takeover of the 378-bed hospital and an affiliated physicians group, Harbor Medical Associates, according to the report. In accordance with state law, Partners could have closed the deal today, according to the report. By striking an agreement with state regulators before the merger moves forward, Partners could potentially face added limitations on its ability to expand market power. However, closing the acquisition without such an agreement could leave Partners open to a lawsuit challenging the transaction, according to the report. The merger has received considerable scrutiny since it was first proposed in 2012. Last month, the Massachusetts Health Policy Commission released a report concluding the transaction would increase total medical spending by $23 million to $26 million annually because of increases in physician prices and increased utilization of Partners and South Shore facilities. The commission members also wrote that the resulting larger system would have more leverage to negotiate for higher prices from private payers. In addition to its conclusions that the deal would lead to higher costs and less competition, the panel said Partners and South Shore did not provide adequate evidence on how the merger would improve South Shore performance and how integration is necessary to achieve proposed care delivery reforms. Because the commission lacks the power to block mergers, it referred the case to Ms. Coakley's office for review. Partners has refuted the commission's findings, claiming the report ignores savings from improving the coordination and quality of care for privately insured patients and that the acquisition of South Shore and a related physicians' group would actually save approximately $27 million per year through population health management and care coordination efforts. Partners also says the watchdog agency misinterpreted physician contracts with insurers. Ms. Coakley and the U.S. Department of Justice have already been reviewing the proposed acquisition as part of a broader review regarding alleged anticompetitive behavior on behalf of Partners. The attorney general's office and the DOJ declined to comment on current negotiations with Partners, according to the Globe.
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Steward Health Care System to Merge Two Hospital Campuses March 20, 2014 | Becker's Hospital Review http://www.beckershospitalreview.com/hospital-transactions-and-valuation/steward-healthcare-system-to-merge-two-hospital-campuses.html Steward Health Care System, based in Boston, has announced plans to merge two of its hospitals, according to a Boston Business Journal report. The health system has said bringing Merrimack Valley Hospital in Haverhill, Mass., and Holy Family Hospital in Methuen, Mass., together will financially strengthen the two facilities, according to the report. Steward will maintain all current services at both locations. The boards of the two hospitals — which already share a CEO, Lester Shindell — will merge. Steward will now file an application with the Massachusetts Department of Public Health to add Merrimack to Holy Family's license. The approval process is expected to take several months, according to the report.
Study: Small business exchanges attract competition March 19, 2014 | Fierce Health Payer http://www.fiercehealthpayer.com/story/small-business-exchanges-are-competitive-studyfinds/2014-03-19 Health insurance exchanges for small business have been gaining traction as more insurers choose to sell plans on these marketplaces, according to a Commonwealth Fund study. Of the 18 state-based small business health options program (SHOP) exchanges, all but four have more than one insurer in each county participating. New York boasted the most insurers with 10 different companies, while the number of plans varied from 12 in Connecticut to 267 in the District of Columbia. "Nearly all state-based SHOP marketplaces attracted enough competition to offer small employers and employees a choice of insurers and plans, across a range of coverage levels and in nearly every county," the study found. The widespread acceptance by insurers is perhaps the best measure of success so far for the small business exchanges. "Most states were able to attract at least one of the three largest insurers (measured by market share) in the state," the Commonwealth Fund study states. Small businesses will be able to offer more health plan choices to their employees through the SHOP marketplace than off the exchange. That success comes despite a few delays to the SHOP marketplaces. The Obama administration, for example, postponed the availability of online applications for small businesses wanting to sign up for the SHOP marketplace, FierceHealthPayer previously reported.
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Going forward, most states are developing tools that will help compel businesses to use the SHOP exchanges, which will determine success. "The degree to which small employers find the SHOP marketplace user-friendly and cost-effective will be critical factors in determining whether they offer coverage through the SHOP, outside the SHOP, or not at all," the study states. Some states, however, have faced technical glitches akin to the ones plaguing other state and federal exchanges. In California, officials temporarily halted its small business exchange to implement a series of redesigns, FierceHealthPayer previously reported.
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