HealthLeaders Media Finance - October 13, 2008 | MRSA: Your Cost Problem View as a Webpage | Subscribe for Free
MRSA: Your Cost Problem

Philip Betbeze, Senior Editor-Finance

When you hospital finance types got your CPA or MBA or CFA designation, you probably never thought that your job might depend on your becoming well versed on the subject of methicillin-resistant staphylococcus aureus. But it's happening. And here's why. [Read More]
  October 13, 2008

Editor's Picks
Chicago's Lincoln Park Hospital up for sale
This could be the first of many challenges hospitals face in the fallout from the financial crisis, as Lincoln Park Hospital in Chicago, citing the difficulty it's having finding financing, is putting itself up for sale. A hospital in one of the city's high-dollar neighborhoods, Lincoln Park still has a large percentage of Medicaid patients, and sources told the reporters Becky Yerak and Bruce Japsen that the hospital is having trouble with day-to-day operations. That's a pretty tough situation, as it signals that the hospital is not in any position to wait things out and must sell into a weak market. We'll see if anyone shows interest, as cash preservation seems to be the order of the day among a multitude of potential acquirers. Top officials have even brought up the idea that if the hospital is not sold soon, it could be facing closure. [Read More]
A healthcare bailout not far-fetched
Cerner CEO Neal Patterson is warning that the healthcare system may be in need of a bailout before too long that will dwarf Wall Street's $700 billion (and climbing) bailout price tag. At his company's annual Health Conference, Patterson told a group of about 4,000 healthcare executives that he can see the day when healthcare organizations stop seeing patients who rely on government payers like Medicaid and Medicare because they don't cover the costs of care. Perhaps that will happen, but I'm not sure "bailout" is the proper term for a coordinated effort to force the government to increase reimbursement. I'm willing to concede that the effect on the national budget might be similar, however. If it seems like a self-serving speech, of course it is, but I've got news for you Mr. Patterson—the public coffers simply aren't that deep. Isn't spending more than we have, not only as a government, but as a people, what has gotten us into this mess in the first place? Patterson also called for the abolishment of health insurers as we know them. Now that could be a popular proposal. [Read More]
University of Kansas Hospital's independent path leads to success
This second major story from Kansas City is a close look at how the establishment of an independent board to run KU Hospital 10 years ago has paid huge dividends. Most agree that the hospital has been transformed from a bureaucratic boondoggle into a modern, margin-making nonprofit hospital where families are happy to bring their loved ones. The big change goes back to that vote in 1998 that freed the hospital from archaic one-size-fits-all state government bureaucratic requirements and allowed it to be more nimble with its business and clinical processes. [Read More]
High-tech interventions deliver huge childbirth bill
Perhaps this is interesting me more than most because of the impending birth of my twin girls, but this story about a study that found most high-tech interventions associated with childbirth lack scientific evidence of benefit for most women. Meanwhile, U.S. hospital charges for maternal and newborn care jumped from $79 billion in 2005 to $86 billion in 2006. It also claims that more than $2.5 billion a year is spent on unnecessary c-sections due to fear from physicians about malpractice exposure associated with natural births. [Read More]
Finance Forum
Putting Your Resources Where Your Priorities Are
So far in 2008 we have endured turmoil in the credit markets, a sea change in regulations and payments affecting physician-hospital relations, and dare we mention the "R" word? If yours is not one of the growing number of healthcare organizations that has formally integrated its strategic and financial planning processes, now is the time. Beyond arguing for the necessity for integrating strategic and financial planning, Francine Machisko and Scott Clay, senior principals at the Noblis Center for Health Innovation in Atlanta, GA, have come up with a practical approach for achieving the necessary integration. [Read More]
Finance Headlines
UAW healthcare trust needs automakers' cash
AP/Yahoo! News - October 7, 2008
Universal Health CEO: Not seeing big economic effects yet
Wall Street Journal (subscription required) - October 8, 2008
Birmingham's St. Vincent's opens new $36 million orthopedic center
Birmingham News - October 8, 2008
New Jersey political races focus on cutting healthcare costs
Philadelphia Inquirer - October 9, 2008
Sutter hospital's solar panels will supply 50% of power needs
Sacramento Bee - October 8, 2008
Maryland's Holy Cross to move ahead with expansion plans
Washington Business Journal - October 7, 2008
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From HealthLeaders Magazine
10 Events That Could Change Healthcare
HealthLeaders September 2008 No one knows what the future holds, but several scenarios could significantly alter the healthcare landscape and pose formidable strategic, financial, and clinical challenges for senior leaders. Get ready. [Read More]
Money Talk

Clarian Health, Indianapolis, IN
Rating: AAA
Outlook: Stable
Affected Debt: $74.825 million
Agency: Moody's Investors Service
Remarks: Upgraded rating from A2 based on letter of credit from Branch Banking & Trust Co., which means the bonds would default only in the event of a default by both entities. [Read More]
Audio Feature

Deep Impact: Today's audio file is my interview with Scott Clay, a senior principal with the Noblis Center for Health Innovation, about the effect of the deepening financial crisis on healthcare organizations, an important issue all of our audience is dealing with in some form. Scott and I talk about access to capital, reimbursement issues and investment challenges associated with the crisis—so take a few minutes to listen. [Listen Now]

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