HealthLeaders Media Finance - May 12, 2008 | Do Oil and Healthcare Mix? View as a Webpage | Subscribe for Free
Do Oil and Healthcare Mix?
Philip Betbeze, Senior Editor-Finance

At first glance, oil prices and healthcare don't seem to have much in common. But the premise of an article on last week got me thinking. Believe it or not, there are parallels between a shortage of oil and the shortage of doctors we're starting to face now, which seems likely to grow much worse over time. Before you start sending e-mails complaining that I'm equating a physician to a barrel of oil—I realize it's more complicated than that—hear me out. [Read More]
  May 12, 2008

Editor's Picks
Even the insured feel the strain of health costs
Stop me if you've heard this one before. Even people with health insurance are having a hard time with copays and coinsurance. Wonder how many of them are driving new cars and watching flat-screen TVs? But I sympathize. Since 2001, the annual average cost for the employee's share of the healthcare premium has nearly doubled. I've felt the pain in my wallet in my own physician's office, and all I have is a nagging case of tennis elbow. But the higher expenses—along with things like higher food and fuel prices—are eating into people's income. Yet inflation is contained, Ben Bernanke says. We regular folks know better. [Read More]
Health savings accounts growing in popularity
More than 6 million people are enrolled in health plans that allow them to open health savings accounts, an amount double to enrollment estimates of two years ago. Critics say the enrollees are predominantly those taxpayers with higher incomes, leading some to decry the accounts as tax shelters for the rich. But if an HSA is a tax shelter, it's apparently not a very lucrative one. The average enrollee deposited $2,100 in an HSA in 2005, the latest period for which this information is available, and withdrew $1,000 for expenses over the course of the year. [Read More]
Report boosts bipartisan health plan
The nonpartisan Congressional Budget Office is backing a bipartisan plan for universal healthcare coverage. The plan, called the Healthy Americans Act (isn't it fun how all bills have some sort of PR spin on them) calls for replacing the current employer-based health insurance system with a plan by which the government requires, subsidizes, and oversees a system of private healthcare plans selected by individuals. The CBO says the plan could be fully implemented by 2012 and could be budget-neutral by 2014. I don't want to be cynical, but I'm always wary of government solutions to big challenges like paying for healthcare, especially when all the major stakeholders find something they really like about a given plan. Nobody in 1966 envisioned that Medicare would be on the verge of insolvency by 2021, but it is. Nobody thought that healthcare could take up as much as 30% of GDP one day, but it's headed that way. The plan would be paid for by a tax of between 3% and 26% on employers. [Read More]
New CEO of Atlanta's Grady Hospital says she's run a hospital but won't say where
Looks like the reorganization of Atlanta's financially failing public hospital is off to a flying start, with its CEO stonewalling a reporter who simply wanted to know what experience she had running a hospital. The area's only Level I trauma center has been hemorrhaging money for years, and creating a new board to oversee operations and hiring a new, although temporary, CEO, Pam Stephenson, to run things was seen as a potential solution. Stephenson has expressed interest in running the hospital permanently. Given Grady's troubled situation, it would behoove county commissioners to find out what her experience is and disclose it publicly before appointing her permanently to run a publicly funded hospital. [Read More]
Finance Forum
Red Flags for Fraud
The American College of Healthcare Executives Code of Ethics states that the healthcare executive shall, within the scope of his or her authority, "prevent fraud and abuse and aggressive accounting practices that may result in disputable financial reports." But how can an executive even hope to detect this growing phenomenon, much less prevent it? HealthLeaders Media contributor Richard Gray outlines potential red flags that could indicate fraud and that may protect your organization from an expensive problem. [Read More]
Finance Headlines
Healthy finances prepare Chicago-area provider for growth
Chicago Tribune - May 1, 2008
Vanderbilt, HCA seek permits for cancer center
The Tennessean - May 1, 2008
Financial turnaround for SC-based Providence Hospitals
The State - April 30, 2008
Illinois health bill would cap costs for the uninsured
Chicago Tribune - May 2, 2008
Iowa lawmakers pass bill that would exempt hospitals
AP/Chicago Tribune - May 5, 2008
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From HealthLeaders Magazine
Faith in the Hospital
HealthLeaders April 2008 In a shifting healthcare world, faith-based systems face a new set of challenges in their quest to stay true to their mission. [Read More]
Money Talk

A look at one hospital's struggles to improve

Alexian Brothers Health System, Arlington Heights, IL

Rating: A3
Outlook: Negative
Affected Debt: $451.5 million
Agency: Moody's Investors Service
Remarks: Outlook revised to negative because of two years of declining operating performance, including a negative 4.5 percent margin in the 2007 fiscal year.
[Read More]
Audio Feature

Alternative Financing: The market for auction-rate debt dried up in February due to the credit crisis, sending scrambling many hospital CFOs who had been attracted to the low interest rates and purported low risk from such debt vehicles. Alternative financing is available to escape from the sky-high interest rates that came about as auctions failed and the auction-rate bonds reset, but finding the right solution can be problematic. Many of the hospitals caught in this vise wanted alternatives as quickly as possible, but the quickest option for frazzled CFOs might not always be the best solution. Randy Waring, hospital market leader for GE Healthcare Financial Services, talks about the options available to CFOs who are looking for lower risk, lower interest rates, or both. [Listen Now]
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