HealthLeaders Media Finance - March 2, 2009 | Budget Analysis: Does This Kind of Health Reform Work for You? View as a Webpage | Subscribe for Free
Budget Analysis: Does This Kind of Health Reform Work for You?
Philip Betbeze, Senior Editor-Finance

An interesting provision included in President Obama's proposed budget would switch to bundled payments for hospitalizations of Medicare patients. Under the model, providers would receive a single bundled payment to cover both a hospital stay and care for the patient for 30 days after release. The change intends to reduce the 18% of hospitalizations that result from readmissions. If this provision sticks, it'll be a big step toward eliminating some of the perverse incentives hospitals have to readmit patients who perhaps shouldn't have been discharged so early. [Read More]

  March 2, 2009

Editor's Picks
Philadelphia's Temple faces up to $50M in cutbacks
Temple University Health System is no different from many other hospitals and health systems that have had to make painful cuts over the past several months—except that it hasn't made them yet, and its new-ish CEO hasn't identified where those cuts will be made. Edmond Notebaert, Temple's CEO, says the cuts are necessary because the system hasn't made a profit on operations in five of the past six years. Perhaps he could be hired to teach our legislators some lessons? [Read More]
Plan to break up hospitals alarms county council
So the decision has been made to sell a financially failing hospital system that contains healthy and unhealthy parts. Not surprisingly, potential buyers appear to only want the best performing parts. Why does it matter how the system is sold? Well, it matters because the authority agreed to give the acquirer $174 million over five years to the winning bidder. It's a tangled web, no question. [Read More]
Massachusetts health system being tested by recession
With 72,000 more people out of work in the state, Massachusetts is about to face a tough decision on its controversial universal health insurance statute that requires all state residents to carry health insurance. At issue is whether the state will force many of the newly jobless to purchase health insurance and whether it will penalize those who don't, a key factor in getting buy-in from both business and consumer groups in crafting the legislation. If the state backtracks in that part of the legislation, it seems to me the whole sale of the program was built on false pretenses. [Read More]
Finance Forum
Protesting the Award of a Federal Healthcare Contract
A large organization solicits bids from three major hospitals for creation of an exclusive provider network. After a period of time, two hospitals learn that they were not selected. Not only do they wonder how their proposals were evaluated, but they have heard rumors that the contract was "wired" all along. What recourse do they have to learn about the process or challenge the decision? If the organization that issued the bid is a private entity—probably not much. If the bid was issued by the federal government—a lot! [Read More]
Finance Headlines
Recession likely to boost government outlays on healthcare by 7.4%
Wall Street Journal - February 24, 2009
Connecticut legislators: Just close Dempsey Hospital
Hartford Courant - February 22, 2009
Surgeon awarded $1.6M in Boston hospital sex bias suit
Boston Globe - February 25, 2009
Medicare halts funding to Sutter heart program
Sacramento Bee - February 21, 2009
Recession complicates healthcare recruiting
South Florida Sun-Sentinel - February 22, 2009
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From HealthLeaders Magazine
Back to Basics
HealthLeaders August 2008 The strategy for surviving the economic downturn? Invest in core strengths, scrutinize staffing and operations, seize partnership opportunities—and get down to work. [Read More]
Service Line Management
Essential and Expensive
Patient demand for intensive care services continues to rise—but ICUs cost a ton of money. Here's how some providers are making intensive care worth their financial while. [Read More]
Money Talk

Memorial Health University Medical Center, Savannah, GA
Rating: Baa2
Outlook: Stable
Affected Debt: $199 million
Agency: Moody's Investor's Service
Remarks: Outlook revised from negative because of significant operational improvement in 2008 compared with the 2007 fiscal year and an expectation of continuing improvement in 2009.
[Read More]
Audio Feature

Planning Through the Crisis: This week we visit with Jason Sussman, a partner at Kaufman-Hall, about the myriad challenges hospital CFOs are dealing with these days, from forced layoffs to an inability to borrow. Jason talks about how his clients are revising their financial planning, and we talk about the typical profile of healthcare organizations that are facing the most stress as the financial crisis mutates and matures.
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