HealthLeaders Media Finance - March 10, 2008 | Board Members, Are You Paying Attention? View as a Webpage | Subscribe for Free
Board Members, Are You Paying Attention?
Philip Betbeze, Senior Editor-Finance

How does one read the tea leaves to know when a hospital is in trouble? I have six factors for you, courtesy of Moody's Investors Service. Nonprofit hospitals rarely default on their bond obligations (only 17 Moody's-rated credits have defaulted since 1970), but when they do, the revelation tends to catch people by surprise. Remember AHERF, anyone? In any case, since that implosion last century, hospitals have had to pay a risk premium above what they would have otherwise had to pay for the privilege of borrowing money, say many of the analysts I talk to. [Read More]

  March 10, 2008

Editor's Picks
The $34 trillion problem
News Flash! In their never-ending quest never to offend any potential voter, politicians won't make hard decisions unless they're forced to. Heck, they won't even talk about the need to make tough decisions. One so-called "third rail" is Medicare. Even the so-called "mainstream media" are weighing in on how big of a ticking time bomb Medicare cost inflation is. In this clever opinion piece, Fortune senior editor Geoff Colvin argues that no solution to Medicare's cost problem will be pain-free. Funny how politicians, who supposedly have their fingers on the pulse of things people care about, are the last to the party when discussing something that requires hard choices. [Read More]
Hospital bonds are latest credit casualty
I've written a good bit about this problem with auction-rate bonds, but it doesn't seem to be going away. This article looks at Ministry Health Care in Milwaukee, which will have to come up with an extra $700,000 a month in interest payments on a bond issue floated to build a new hospital, thanks to the credit market dislocation that has wormed its way into the world of super-safe municipal bonds. I've said it once and I'll say it again: If hospitals and municipalities are taking hits like this and can't refinance their debt, it only makes one wonder how far this rotten mess is going to take us as an economy. [Read More]
Private-market answer to rising costs has critics
This has got to be the winner of the "dumb headline of the week award." Of course HSAs and companion high-deductible health plans have critics. Every initiative has critics. If it didn't have some form of controversy associated with it, no one would be writing about it. OK, enough of my rant. Despite the headline, this article contains some interesting revelations about the users of such plans. Funny thing is, the people who have them seem to like the control, and they do seem to be taking an interest in the cost of their care, which is the whole point. There are problems with these plans, but they work for a large percentage of consumers. Anyone who says this one solution should either be a panacea to the problem of high healthcare costs and low quality or rejected wholesale is at best misguided, and at worst has a politically motivated agenda. Just my opinion. [Read More]
Finance Forum
ED Revenue Cycle Management
Emergency department revenue cycle management has never been more critical than in 2008. With the advent of evaluation and management visit guidelines in the 2008 OPPS final rule, composite APCs for observation services, new HCPCS and revenue codes for trauma activation, and the Centers for Medicare & Medicaid Services' recent clarification of critical care services, coding, billing, and coverage requirements continue to escalate. The skills of physicians, nurses, case managers, HIM, chargemaster staff members, and compliance staff members come into play for optimal revenue cycle management in the ED. [Read More]
Finance Headlines
Fidelity: Couple needs $225,000 to cover healthcare in retirement
AP/Boston Globe - March 5, 2008
New Iowa hospitals hope to draw business from outside traditional service areas
Des Moines Register - March 5, 2008
Maryland hospital system deal reached
Washington Post - March 6, 2008
Bill includes provision to crack down on doctor-owned hospitals
AP/Seattle Post-Intelligencer - March 6, 2008
Judge approves UAW-GM healthcare trust deal
AP/Yahoo! News - March 5, 2008
Medicaid cuts could shut some Georgia hospitals
Atlanta Journal-Constitution - March 5, 2008
Northern Kentucky hospital merger slow going
Cincinnati Enquirer - March 4, 2008
Upcoming Events
HealthLeaders Media News - March 10, 2008
Sponsored Headlines from IBM

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From HealthLeaders Magazine
Love Thy Vendor?
HealthLeaders February 2008 Providers and IT suppliers don't get along, right? You can build a partnership of trust with your vendor--and actually get what you pay for. Here's how. [Read More]
Money Talk

A look at one hospital's struggles to improve

Flagler Health Care System, St. Augustine, FL

Rating: A3
Outlook: Negative
Affected Debt: $84.2 million
Agency: Moody's Investors Service
Remarks: Outlook revised to negative because of declining operating performance over the past three years and the opening of Baptist South Hospital, only 26 miles away, among other challenges. [Read More]
Audio Feature

Across-the-Board Transparency: Mike Freed, CFO for Spectrum Health based in Grand Rapids, MI, recently took the bold step of listing not only its prices for a wide variety of healthcare services, but also what the hospital is paid by a variety of payers for those services. In this conversation, Freed talks about the strategy behind the plan, which he believes provides a much-needed window into the cost-subsidies insured patients pay to subsidize government payer sources, boosts hospital price transparency, and serves as a first step for developing better public policy regarding healthcare payment. [Listen Now]
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