HealthLeaders Media Finance - December 29, 2008 | Glad To See You Go View as a Webpage | Subscribe for Free
Glad To See You Go
Philip Betbeze, Senior Editor-Finance

The year 2008 was no fun for the folks who run finance operations at hospitals—or for much of anyone else. We're glad to see it go, but before we do, let's look back at some of the more provocative stuff we talked about here in this space in 2008. [Read More]

  December 29, 2008

Editor's Picks
Debt collection suits pit law firms against uninformed patients
Maryland hospitals have won at least $100 million in judgments against patients in the past five years and placed liens on at least 8,000 homes across the state, despite national hospital industry guidelines that caution against the wholesale use of that practice, according to an investigation by the Baltimore Sun. Despite Maryland's unique rate-setting environment that presumably pays hospitals unpaid claims through paid claims of other patients, it seems as though many hospitals have been particularly adept at exploiting a loophole in the system that nobody was really watching, until now. This is a thorough investigative piece that is certainly worth a read, and is, perhaps, a cautionary tale. [Read More]
Grim debt prognosis in nonprofit health
The financial derivatives that once were hospitals' friends have turned on them. Like many other issuers, nonprofits use a technique known as swaps to lower the overall interest cost on their variable-rate bonds. They pay a fixed rate to a counterparty and receive a floating rate in return. The floating rate they receive should cancel the floating rate they pay, ideally leaving them with a lower fixed rate. But the market moved against them as swap rates fell from the level at which they wrote the deal. They now have to post more collateral with the counterparty, or face larger payments to terminate the swap. I've written about this and many other unintended consequences of such vehicles, but this story is a confirmation that the problems hospitals have with debt financing didn't end with the auction-rate securities mess last spring. [Read More]
Cleveland Clinic institutes hiring, salary freeze
When the ultra-successful Cleveland Clinic institutes a hiring and salary freeze, you know the economy is in trouble. The freeze doesn't cover clinicians who are in high demand, but it's still a major step for the august institution. The credit crisis spares no one, it seems. [Read More]
Finance Forum
Preparation of a Proposal for a Federal Healthcare Contract
Bidding on a government contract for services your hospital already renders can be an attractive way to bring additional revenue into your organization. But first you have to get past the daunting rules and regulations in the government's RFP, says Scott Honiberg. In this article, Honiberg walks you through a bidding process that might be quite refreshing: instead of the government telling you what your organization will get for a procedure, you tell the government the price you're willing to accept. [Read More]
Finance Headlines
Budget office says many Obama health proposals won't save much
New York Times - December 18, 2008
Alabama nonprofit wins $7.7 million verdict against Tenet
Birmingham News - December 18, 2008
UnitedHealth settles SEC options case
Wall Street Journal (subscription required) - December 22, 2008
Boston healthcare giant takes aim at suburbs
Boston Globe - December 21, 2008
Louisiana voters to consider hospital's finances, future
New Orleans Times-Picayune - December 19, 2008
At more U.S. employers, the doctor is in
San Francisco Chronicle - December 21, 2008
Emory cuts Atlanta's Grady Hospital's debt by $20 million
Atlanta Journal-Constitution - December 19, 2008
Florida company buys St. Louis hospitals
St. Louis Post-Dispatch - December 18, 2008
From HealthLeaders Magazine
20 People Who Make Healthcare Better
HealthLeaders August 2008 In our annual HealthLeaders 20, we offer profiles of individuals who are making a difference in today's complex healthcare world. [Read More]
Service Line Management
Here Come the Seniors
The well-documented influx of baby boomer patients promises to increase the already high demand for senior services. But the prospect of expanding a service line that relies so heavily on Medicare has some hospital leaders jittery. [Read More]
Money Talk

Overlake Hospital Medical Center, Bellevue, WA
Rating: A1
Outlook: Not applicable
Affected Debt: $75 million
Agency: Moody's Investors Service
Remarks: Long-term rating upgraded from A3 based on combined ratings of Radian Asset Assurance Inc. (A3), Key Bank National Association (A1) and the hospital itself (Baa3). [Read More]
Audio Feature

Sea Change With Hospital Debt: As hospitals have lost insurance on their bonds due to failures at traditional bond insurers, investors are insisting that hospitals' debt be insured by their performance, says Thomas Royer, MD, president and CEO of Christus Health.
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