HealthLeaders Media Finance - October 22, 2007 | That Contract May Be Bleeding You Dry View as a Webpage | Subscribe for Free
That Contract May Be Bleeding You Dry
Philip Betbeze, Senior Editor-Finance

How can you make the case to doctors that medical device companies are taking bread out of their mouths--and their pockets? Show them a graph, for one thing. Over the past 10 years, medical device costs are up about 50 percent while physician reimbursements have shrunk nearly 10 percent. Seeing that graphic tell the macroeconomic story of how a largely static reimbursement pie is divided made me ask a hospital CEO how difficult it was to make the case to physicians that their choices to use the most expensive medical devices harm not only hospital margins, but their own personal margins as well. [Read More]
  Oct. 22, 2007

Editor's Picks
County may follow trend of outsourced hospital management
Cook County still operates Chicago's Stroger Hospital, but it may not continue to do so for long. It's considering outsourcing the management of the hospital to an outside firm or selling it outright. But there is another option. I'm writing a story about Erie County Hospital in the January issue of HealthLeaders magazine. The Buffalo, NY-area hospital was once managed by the county, but instead of selling or paying an outside company to manage the hospital, county leaders retained ownership and hired an employed management team to run the hospital--to great success. I'll have to remember to include a link in this space when that story runs. [Read More]
AT&T, Verizon may switch to union-run funds
Now that GM has offloaded its healthcare burden for retirees, the dominoes are starting to fall. Now AT&T and Verizon, two of the nation's largest telecommunications companies, are mulling funding a voluntary employee beneficiary association, or VEBA, to offload the burden of providing retiree healthcare benefits. The two companies had $71 billion of liabilities to retirees last year. [Read More]
Tax battle between Cleveland Clinic and school district stalls
This battle has taken place largely off the radar screen, and for good reason. Not much of substance has happened in the two years these two entities have been fighting over whether a medical office building owned by the Cleveland Clinic, a tax-exempt organization, should be tax-exempt as well. The local school district where the building is located argues that since the entity provides no charity care, it should be taxed. To be sure, other municipal and state entities are watching closely. If Cleveland Clinic loses, expect a raft of other attempts to tax offsite business arms of otherwise tax-exempt facilities. [Read More]
Kansas City healthcare providers lose bid to toss antitrust suit
Here's another battle between two powerful groups whose outcome could have big repercussions outside the Kansas City area. A physician-owned specialty hospital is suing the major full-service hospital in the area, claiming that they are conspiring to keep it out of insurance contracts in an attempt to drive it out of business. This case is a long way from resolution, but if successful, the lawsuit could remove a major tool hospitals use to discourage insurers from doing business with some limited-service competitors. Full-service hospitals accuse specialty facilities of cherry picking patients and the most profitable services from them, while not taking their fair share of the uninsured burden. [Read More]
Survey: Most accreditation pros earn $60K or more per year
Eighty percent of healthcare accreditation professionals earn at least $60,000 per year, according to the Association for Healthcare Accreditation Professionals' 2007 Survey Coordinator Salary Survey. But 75 percent oversee other hospital functions besides survey coordination. "The results are pretty consistent with salary ranges overall," says Missi Halvorsen, RN, BSN, member of the AHAP advisory board and senior consultant for accreditation and compliance at Baptist Health in Jacksonville, FL. [Read More]
Finance Forum
When a Win in Court Becomes a Loss to the Bottom Line
Parties to disputes all want the same thing: a fair and affordable way to win. When litigation costs exceed the expected recovery, taking a dispute to court becomes economically irrational. Mike Bjellos says arbitration can help shave costs and time associated with a dispute. [Read More]
Finance Headlines
Health trust to save GM about $3 billion annually
Detroit Free Press - October 22, 2007
DC attorney general probes insurer's practices
Washington Post - October 22, 2007
Dialysis clinic to stay open at Atlanta hospital
Atlanta Journal-Constitution - October 22, 2007
St. Luke's to pay KU $1 million annually in affiliation
Kansas City Star - October 22, 2007
Upcoming Events
HealthLeaders Media News - October 22, 2007
From HealthLeaders Magazine
Will There Be Enough Doctors?
HealthLeaders October 2007 With a multitude of baby boom physicians nearing retirement and an aging U.S. population needing ever more care, how bad will the physician shortage really get--and what can you do about it? [Read More]
Money Talk

A look at one hospital's struggles to improve

Meriter Hospital, Madison, WI

Rating: A1
Outlook: Stable
Affected Debt: $110 million
Agency: Moody's Investors Service
Remarks: Upgraded from A2 thanks to a material increase in cash flow generation in 2005, 2006 and the first half of 2007, as well as a track record of generating good operating margins. [Read More]
Audio Feature

Building Physician Alignment: Laurance Stuntz, a partner with CSC's Global Health Solutions consulting organization, discusses building physician alignment and patient volume through EMR and practice management assistance.
Evanston's Dilemma: Mark Neaman, CEO of Evanston Northwestern Healthcare in Chicago, discusses what a recent Federal Trade Commission ruling means for the health system and its immediate and long-term future.
Sponsor HealthLeaders Media Finance

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