HealthLeaders Media Finance - June 16, 2008 | Sounding Board View as a Webpage | Subscribe for Free
Sounding Board
Philip Betbeze, Senior Editor-Finance

Sometimes leaders get wrapped up in the bizarro world of healthcare, an industry that depends on a super-complicated web of third-party payments and gaming the system. It's a survival strategy, according to CEOs and CFOs, and all that is necessary work. You should be working to improve your revenue cycle. You should be training your physicians and coders to make sure they get the reimbursement your hospital deserves. But sometimes we get so wrapped up in that rat race that we don't take the opportunity to take in new ideas—to listen to what other industries have to offer. [Read More]
  June 16, 2008

Editor's Picks
Boca Raton (FL) hospital still struggling, expects another loss
Boca Raton Community Hospital has come a long way—the wrong way. Six months after disclosing an unexpected $42 million 2007 loss that scuttled plans for a new $600 million academic medical center project, the hospital continues to lose money, and a turnaround isn't expected for at least two years. The new CEO has some interesting initiatives that should help the hospital recover some $23 million over last year, but this story continues to amaze me. Why? No hints of trouble. Everything was OK down there with finances and with expensive new projects—until it wasn't, sending the two universities that were going to cooperate in the new hospital scrambling. Reminds me of the repeated guarantees from investment banks that they don't need capital—until you read the next day that they're illiquid and essentially being bought out in a fire sale. Either people leading these institutions don't know the extent of their financial problems or they intentionally obfuscate until it's too late. I don't know which scenario is more scary. [Read More]
Aetna proposes insurance reform
And the cat is helping its owner design a new lock for the birdcage. Just kidding—a little. Actually there's a lot to like about what Aetna's proposing Congress do to help alleviate the crisis of the uninsured. I won't repeat the number here, because it's bogus in a lot of ways, but there is a crisis of coverage whether it's 20 million or 50 million. One big issue is the tax treatment of consumers regarding their health insurance premiums. Workers get favorable tax treatment if they buy insurance through their employers, but not if they buy individually. How about a tax write-off for health insurance, similar to the mortgage interest deduction? Bet that would increase the ranks of the insured. But don't look for anything to get done on this until at least after the election—and probably not then, if the past is any indication. [Read More]
Ranks of underinsured rising
More people are responsible for paying more of their healthcare bill themselves. With the rise in healthcare consumerism comes the accompanying increase in the customer's portion of the bill. We've been hearing this for a couple years now. Whether that means people are "underinsured," as the Times calls it, or not is another question. But regardless, what's important to hospital CFOs from this story can't be ignored: You are going to have to collect more of a patient's bill from individuals whether you like it or not. [Read More]
Finance Forum
Using Credit Scoring To Manage Hospital Bad Debt
Many hospitals have had stable performance over the past 20 years. But infrastructure demands and changes in reimbursement dynamics will create huge financial challenges over the next decade. Health system executives face aging physical plants, the need to invest in expensive new technologies, impending cuts in public reimbursement, and difficulties in recruiting allied health professionals, among other issues. HealthLeaders Media contributor Brian Klepper writes that using strategies such as credit scoring to try to reduce the amount of bad debt hospitals must deal with is essential in today's environment. [Read More]
Finance Headlines
Doctors say hospital falling victim to its own rising real estate value
New York Times - June 10, 2008
Medicare Advantage plans targeted in new bill
AP/Yahoo News - June 11, 2008
Pennsylvania hospitals' financial health improves
Philadelphia Inquirer - June 12, 2008
Atlanta's Emory plans new hospital, medical tower
Atlanta Journal-Constitution - June 12, 2008
State may shift hospital cash from New Orleans
New Orleans Times-Picayune - June 12, 2008
University of California may take over failed L.A. public hospital
AP/San Francisco Chronicle - June 11, 2008
$12.7 million dashes Atlanta hospital's hopes
Atlanta Journal-Constitution - June 10, 2008
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From HealthLeaders Magazine
Weaning Your Hospital Off of Medicare
HealthLeaders June 2008 A flood of baby boomers, reimbursement cuts, and increasingly ineffective cost-shifting solutions. How can your hospital maintain its level of service and its margin? It's time to get creative. [Read More]
Money Talk

A look at one hospital's struggles to improve

Sisters of Mercy Health System,
Chesterfield, MO

Rating: BBB+
Outlook: Negative
Affected Debt: $72.3 million
Agency: Standard & Poor's
Remarks: Downgrade from A- and revision in outlook from Stable thanks to an unexpectedly sharp drop in operating income, resulting in a sizable loss for the 2007 fiscal year.
Audio Feature

The High Cost of Obesity: HealthLeaders Media senior finance editor Philip Betbeze speaks with Joan Roberts, senior director at Novation, the contracting services arm of VHA, about the increasing costs to hospitals for treating the obese, who unfortunately are a growing portion of the patient mix at most hospitals. [Listen Now]

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