Healthcare Finance

Healthcare lending leader Citigroup acquires Wachovia

Anne Zieger — Wed, 01 Oct 2008 10:03:44 -0400

The market turmoil has wreaked yet another change in the financial landscape for healthcare financial managers with the acquisition of banking company Wachovia by healthcare lending colossus Citigroup for $2.16 billion. The acquisition, part of an industry reorganization that could expand substantially, consolidates the healthcare lending market just a bit further. It leaves untouched Wachovia's brokerage operations, however, which weren't part of the deal.

Citigroup, at present, ranks as the largest manager of tax-exempt bonds, with a full one-fifth of the market, according to Thomson Reuters. The buyout comes one week after Bank of America agreed to pick up Merrill Lynch in a $50 billion stock deal. Stay tuned for more consolidation to come--we'll keep you posted.

To learn more about the acquisition:
- read this Modern Healthcare piece (reg. req.)
- read this piece from FierceFinance

Union activity, bill could push up salaries

Anne Zieger — Wed, 24 Sep 2008 09:35:30 -0400

Think you've got enough to worry about already? Add new levels of unionization--and possibly, a new law that changes the playing field--to your list of concerns. Particularly given the changes that could sweep through with the election of a new president and members of Congress, it's time to pay special attention to unionization at your facility, observers say. Union leaders have a number of goals, but raising salaries is key, and you'll need to be prepared for those demands, experts say.

One major issue that could bring union activity into the forefront is the possible passage of the federal Employee Free Choice Act, introduced last year, which would, among other things, let employees form unions by signing cards authorizing union representation. Employers would no longer have the ability to call for a secret ballot election when a majority of employees have signed union cards. The measure would also give either the employer or union the right to request federal mediation after 90 days of bargaining.

With this measure in the works, union organizers have more leverage to raise wages and benefits, according to attorney Barry Elson, partner at Thorp Reed & Armstrong. Just how much leverage will depend, in particular, on the outcome of Congressional races even more than the presidential race, he suggests.

To learn more about this issue:
- read this Healthcare Finance News article

Related Articles:
Union targets Boston teaching hospital
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Healthcare finance firms aren't sweating Wall Street crisis

Anne Zieger — Wed, 24 Sep 2008 05:42:19 -0400

In theory, the tsunami of financial problems that's hit Wall Street in recent weeks is enough to scare anyone, even in a business like healthcare that enjoys steady demand. But if a recent analysis by Modern Healthcare is any indication, healthcare finance types aren't sweating things. In fact, they're just waiting for the waters to calm a bit, it seems.

It's not that the supply of healthcare capital hasn't been affected at all, mind you. For example, when Lehman Brothers filed for Chapter 11 bankruptcy, and Merrill Lynch sold out to Bank of America, it definitely created ripples in healthcare investment and financing, as both Lehman and Merrill have large healthcare investment banking units--and they're also some of the top managers of tax-exempt healthcare bonds. Still, Lehman and Merrill's problems haven't slowed trading in variable rate bonds, a popular instrument for hospitals and health systems, as there are still plenty of underwriters out there who can pick up the slack.

Sure, hospitals continue to be worried about the interest rates on their bonds, which, in the case of auction-rate debt can hit the high double-digits. Hospital leaders interviewed by Modern Healthcare seem pretty confident things will settle down again in the markets. The million-dollar question is when, as hospital finance managers worry about the paper they're holding and struggle to determine what mix of debt they should carry.

In the meantime, even with the market meltdown proceeding, stronger health systems and hospitals are still getting financing, particularly if they want to acquire smaller hospitals, observers say. And private equity investors are likely to keep doing deals with hospitals and healths systems at full tilt. After all, healthcare is an asset-based business, which gives it more stable value than, say financial services, no?

To learn more about this trend:
- read this Modern Healthcare piece

TX hospitals reinvest medical liability savings

Anne Zieger — Mon, 15 Sep 2008 22:14:26 -0400

Five years after the state of Texas approved a constitutional amendment capping non-economic damages for medical malpractice at $250,000, the state's hospitals are reporting major cuts in liability costs. The hospitals have been investing the savings in new patient-related programs, according to a new survey released by the Texas Hospital Association (THA). The THA surveyed 10 healthcare systems and 10 independent hospitals, which represented 176 facilities, or about 55 percent of the private med-surg hospital population in the state.

The 109 hospitals providing premium information told the THA that they'd seen a collective decrease in annual medical malpractice premiums of more than $100 million between 2003 and the largest years reported, which were 2008 and 2009. In some cases, the drop happened despite the fact that hospital coverage limits doubled, and in some cases tripled.

THA researchers found that 85 percent of hospitals have found it easier to recruit medical specialists and subspecialists since the state's reforms were enacted. It also found that 69 percent of respondents had maintained or expanded one or more of their services because of falling hospital liability insurance costs. For example, one Victoria hospital was able to improve ED coverage and keep its Level III trauma center designation, and a Houston children's hospital was able to rollout a new high-risk obstetrics program and used millions of dollars in liability premium savings to expand patient safety and quality improvement programs.

Presumably, this study was released in part to counter opponents to the state's med mal damage caps, who have recently gone to the courts with an argument that imposing the caps is unconstitutional. These opponents note that prior to the 2003 caps, many carriers had increased rates by as much as 150 percent, a rise that hasn't even been covered yet by the drops described here.

To learn more about these survey results:
- read this Healthcare Finance News piece

Related Articles:
TX may change medical malpractice limits
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NC will limit some medical malpractice awards

SPOTLIGHT: PwC says world health leaders want to change payment systems

Anne Zieger — Tue, 01 Jul 2008 09:16:49 -0400

A new report by PricewaterhouseCoopers has concluded that it's not only the U.S. that is struggling with its healthcare finance system. The report, by PwC's Health Research Institute, found that two-thirds of health leaders from 20 different countries have concerns about their health payment system. The systems face many similar issues, including meeting demand for an aging population, imposing adequate cost controls, facing the rise of healthcare consumerism and answering the need to better coordinate care. Article

Hospital group says some quality reporting too pricey

Wed, 11 Jun 2008 06:59:56 -0400

A group representing 2,000 hospitals across the U.S. is arguing that quality reporting relying on proprietary tools, methods or information is too expensive to be sustainable. The Premier Healthcare Alliance's Quality Improvement Committee has since sent a letter to CMS objecting to the inclusion of quality measures that require such proprietary tools and data. The letter, signed by a CEO representing 17 hospitals and healthcare systems, says the use of such sources available only through private organizations would be expensive and slow electronic medical record rollouts, while giving such vendors monopolistic pricing power. The Premier execs have also made a similar request to the National Quality Forum.

To learn more about the Premier alliance's quality data concerns:
- read this Healthcare Finance News piece

Tenet Healthcare offers patients ability to pay bills online

Wed, 28 May 2008 06:59:56 -0400

For-profit hospital chain Tenet Healthcare has begun offering patients at its hospitals the ability to pay their bills online. To access the online payment system, patients treated at any of its 53 facilities will need to complete an enrollment process from their hospital's website. Once enrolled, they'll be able to make payments, update their profiles, set up recurring payment plans, access a glossary of billing terms and view answers to frequently asked billing questions. The application supporting the billing functions is NCR Corp.'s Online Bill Pay, which Tenet pilot-tested earlier this year.

To learn more about this application
- read this Healthcare Finance News article

Related Articles:
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Providers want another NPI implementation delay

Wed, 23 Apr 2008 06:59:58 -0400

Groups representing a cross-section of providers have formally asked the government to delay enforcing use of the national provider identifier on claims forms, concerned that technical problems will interfere with their ability to collect on claims. Groups like the American Hospital Association say that if CMS begins enforcement, many providers will end up snarled in procedural problems and suffer significant cash flow pains.

Among the key worries for many providers is an announcement by CMS that it couldn't match a healthcare organization's NPI with multiple legacy numbers. To fix the problem, CMS has advised providers to get NPIs for each of their subparts. But providers are worried that this additional layer of complexity will lead to a flood of problems--and will result in high claims rejection rates. This particularly is the case given that Medicaid programs typically want providers to use only one NPI.

If the government agrees to grant the groups' request, it would be the second such delay, as CMS already has delayed enforcing NPI use by one year. As things stand, providers face a May 23 deadline.

To learn more about the NPI deadline challenge:
- read this Healthcare Finance News article

Related Articles:
Smaller providers not ready for NPI
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Blues say new financial incentives needed for reform

Wed, 23 Apr 2008 06:59:55 -0400

The Blue Cross and Blue Shield Association has made what may be its strongest statement in favor of pay-for-performance schemes, telling Capitol Hill officials that any reforms they discuss should include financial incentives to provide high-quality care. BCBSA officials said that the current system wastes a great deal of money, with 30 percent of healthcare spending going to ineffective, redundant or inappropriate care. To address these issues, BCBSA has established a program that recognizes 800 specialty centers in 42 states for providing care that meets evidence-based thresholds. Meanwhile, several individual Blue plans have rolled out P4P plans, executives noted.

To learn more about P4P in Blue plans:
- read this Healthcare Finance News article

Related Articles:
Medicare P4P results show care improvements
Case study: MI groups make P4P dollars through IT
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Medicaid billing errors coming under fire

Wed, 26 Mar 2008 07:59:54 -0400

Expect states to look more closely for Medicaid billing errors starting now. Healthcare Finance News reports that because "states are facing tougher times [financially]," now more than ever they're going to put their best efforts forward to not lose anymore money than they have to. Robert Holster, CEO of New York City-based Health Management Systems, which checks Medicaid claims for 40 states, believes that states will expand their efforts exponentially "because CMS has led the way." According to the article, Holster's company has recovered more than $1 billion for it's clients, with 10 percent of that coming from finding mistakes in billing.

To read more on the increased scrutiny of Medicaid:
- check out this Healthcare Finance News article