HealthLeaders Media Finance - July 14, 2008 | Writing so a 4-Year-Old Can Understand View as a Webpage | Subscribe for Free
Writing So a 4-Year-Old
Can Understand

Philip Betbeze, Senior Editor-Finance

Much of my recent reader mail has come from a column I wrote a few weeks ago on hospital pricing and how consumers will or won't make use of it. Looks like you all have some strong opinions out there. Many of you think any attempt to bring transparency or a retail flavor to healthcare is some kind of scam or conspiracy, but just as many seem determined to prove that while healthcare may be more complicated than many other businesses, it is just as bound by the laws of economics. [Read More]
  July 14, 2008

Editor's Picks
Medicare billings used dead doctors' names
Medicare apparently paid up to $92 million since 2000 for durable medical equipment supposedly prescribed by doctors who were dead at the time, according to a Congressional investigation. In Florida, perhaps the Russia of Medicare fraud, up to a quarter of deceased Medicare doctors there still have active Medicare ID numbers. I'll write more on this next week, but this kind of stuff seems to happen with regularity. Medicare has been touted by many as a blueprint for a nationalized healthcare system. If so, the blueprint should be shredded. [Read More]
Drug association bans physician gifts, but look closely
What a sham. The pens, mugs, and other tidbits that drug companies give out to physicians apparently are going the way of the dodo. However, the new policy sets no limits on the millions of dollars drug companies shell out for consulting arrangements with thousands of doctors. Nor does it ban the routine provision of office breakfasts and lunches, or the occasional invitation to educational dinners at fancy restaurants. This, apparently, is what "self-regulation" gets you in the graft wars. [Read More]
Officials furious over Atlanta hospital CEO's deal
Always nice to see a hospital that loses millions annually set off a new direction on the right foot, with a fiscally irresponsible board's final kiss-off to a new nonprofit corporation that was formed to relieve them of oversight for Atlanta's Grady Memorial Hospital. After weeks of prodding, the old board's two-year, $1.2 million contract for new CEO Pam Stephenson finally came to light, with local officials shocked to learn of a "sweetheart deal done in secret." Some are calling for her resignation and a state investigation. Oh, and by the way, the chairperson of the old board that awarded the contract: Pam Stephenson. The hospital has suffered years of multimillion-dollar losses. Wonder why? [Read More]
Financial troubles force HPA to put all its hospitals on the market
It looks like the credit crunch has claimed another victim, or set of victims, depending on how you look at this situation. Hospital Partners of America, the Charlotte, NC-based operator of hospitals and outpatient facilities, is facing crushing debt that requires it to put all its facilities up for sale, including St. Joseph, a Houston landmark bought from nonprofit Christus Health for $125 million only two years ago. That hospital's CEO says it is on solid footing financially but the parent company's troubles with debt are forcing the sale. [Read More]
Finance Forum
The Myth of Length of Stay
When Medicare introduced its prospective payment system in 1983, the flat fee reimbursement method suggested that shorter length of stay would increase hospital profits. But the logic was flawed. Resource consumption did not decline, and physicians continued to practice exactly the way they did pre-DRG—but they did it in fewer days. Author Stefani Daniels says hospitals now have the tools available to dig deeper into solutions for these problems. If only they would use them. [Read More]
Finance Headlines
Massachusetts health regulators erect barriers to protect smaller hospitals from AMCs
Boston Globe - July 9, 2008
Children's Hospital of Alabama seeks $500M expansion
Birmingham News - July 10, 2008
Authority set to begin sale efforts for Maryland's Prince George's Hospital Center
Washington Post - July 10, 2008
Blue Cross to disclose prices in Wisconsin
Milwaukee Journal-Sentinel - July 9, 2008
Pennsylvania insurer merger hearings focus on competition
Philadelphia Inquirer - July 11, 2008
WellPoint settles with California hospitals over rescissions
Los Angeles Times - July 8, 2008
Texas doctors increasingly opting out of Medicare
Houston Chronicle - July 8, 2008
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Money Talk

A look at one hospital's struggles to improve

Jewish Hospital & St. Mary's HealthCare Inc., Louisville, KY
Rating: A+
Outlook: Negative
Affected Debt: $330 million
Agency: Standard & Poor's
Remarks: Outlook reduced to negative from stable because of challenged operations over the past three years, including a negative operating margin of 1.32 for the unaudited 2007 fiscal year. [Read More]
Audio Feature

Cardio Payment Changes: Steve Blades, president of the Cardiovascular Outpatient Center Alliance, says his membership is concerned about proposed Medicare reimbursement changes that he says will force the closure of many outpatient cardiac cath labs and result in long wait times for Medicare beneficiaries. Under proposed changes from CMS, reimbursement for cardiac catheterization procedures performed in non-hospital outpatient labs would be reduced 47% by 2010, meaning non-hospital cath labs would receive reimbursements several hundred dollars below the cost of performing the procedure. [Listen Now]

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