HealthLeaders Media Finance - April 13, 2009 | Can Safety Nets Climb up the Stimulus Heap? View as a Webpage | Subscribe for Free
Can Safety Nets Climb
Up the Stimulus Heap?

Michelle Ponte, Senior Editor-Finance

As the new finance editor here at HealthLeaders Media, I'm on the scent of money wherever I can find it. I perked up the other night when a story ran on TV about Nashville General, the city's only safety net hospital, which was hit with $70 million in expenses for uncompensated care in 2008. It seems the case is even more hopeless for safety net hospitals that are now contending with larger numbers of uninsured due to bad economic times. With local and state funds all dried up, this beleaguered group has its eyes on stimulus funds, but will relief come soon enough? [Read More]
  April 13, 2009

Editor's Picks
ASCs—friends or foes?
Hospitals and ambulatory surgery centers have been naturally at odds with one another as they scrapped for the same patient pool. Despite hospital and regulatory challenges to the business model, ASCs, have withstood market pressures and continued to gain ground with cash infusions from private equity firms and an 8.7% compounded annual growth rate between 2002 and 2008. Not surprisingly, hospitals are warming up to their former competitors and even starting to do more joint venture arrangements with physicians and ASC operators. While cherry picking and quality may no longer be key concerns for hospitals entering into these deals, can the two former foes survive the typical relationship challenges that come from sharing a business? [Read More]
Cleveland-area nonprofit hospitals say they write off about 2% of revenues on charity care
For years tax-exempt hospitals have been pressured to be more transparent in the community benefits they offer. Specifically, government and consumer groups want to know the costs of actual charity care, not how much patients are billed for services performed. Now, three Cleveland hospitals and health systems, including the Cleveland Clinic, are baring all and publicly stating that they spent roughly $157.9 million providing free patient care in 2007. With IRS 990 taking hold this year, it's not surprising to see this level of transparency. [Read More]
Nashville General Hospital asks mayor to preserve services
Nashville General Hospital, like most safety nets, is experiencing significant cash shortfalls and not getting any relief locally. City Mayor Karl Dean is asking the Metropolitan Nashville Hospital Authority, which runs the hospital, to plan for 10% cuts. With even higher numbers of uninsured patients using the hospital in recent months, the budget cuts are not sitting well with the hospital's administration and local officials. If the matter does not get resolved the hospital may be forced to cut vital services in oncology and cardiology, according to Reginald Coopwood, MD, the hospital authority's CEO. [Read More]
Judges block California from cutting Medi-Cal rates
300 public and private hospitals in California just got a big break from the Ninth U.S. Circuit Court of Appeals in San Francisco, which halted 5% cuts to the state's Medicaid plan known as Medi-Cal. The state legislators' cuts would have translated to $200 million a year in costs and federal aid to hospitals. More than 90 hospitals have closed in the state since 1996 and critics draw a direct link to reimbursement rates. [Read More]
Finance Forum
Options and Opportunities: Section 363 Transactions for Distressed Healthcare Companies
A recent report issued by Alvarez & Marsal found that more than half of the 4,500 hospitals analyzed are "technically insolvent or at risk of insolvency." As market turmoil makes capital elusive, most markets, including various sectors of the healthcare industry, will likely see an accelerated rate and number of business failures, restructurings, and, in some cases, closures. But between distress and liquidation lies opportunity. This week, J. William Morrow and Eric Schultenover, partners with Waller Lansden Dortch & Davis, describe the basics of a bankruptcy filing process, as well as the process of selling a healthcare facility that's in bankruptcy. [Read More]
Finance Headlines
IL case questions how much charity care is needed to land millions in subsidies
Chicago Tribune - April 10, 2009
Seattle Children's could see $60 million in Medicaid cuts
Seattle Post-Intelligencer - April 9, 2009
Consolidation of insurers a concern for medical providers
Chicago Tribune - April 8, 2009
Los Angeles County health system again facing major deficits
Los Angeles Times - April 8, 2009
Report: Massachusetts mandate not driving health coverage costs
Boston Globe - April 7, 2009
No room for patience: Hospitals seeking payments up front
Philadelphia Inquirer - April 7, 2009
Live from HIMSS: Take Advantage of Stimulus Money
HealthLeaders Media - April 7, 2009
Physician leaders earn more in nonhospital groups
Medical Group Management Association - April 13, 2009
Minnesota-based Fairview Health Services' net loss was $114 million last year
Minneapolis Star Tribune - April 6, 2009
Gender's Impact on the Bottom Line
HealthLeaders Media - April 3, 2009
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Mayo Clinic, Rochester, MN
Rating: AA-/A-1+
Outlook: Stable
Affected Debt: $130 million
Agency: Standard & Poor's
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Audio Feature

Are Hospital Acquisitions Making a Comeback? Hospital acquisitions have been on a downhill slide in the last couple of years, starting with the failure of the subprime mortgage market. I spoke with John Reiboldt, vice president of financial services for the Coker Group, who says he is starting to see a shift in the market with smaller hospital companies starting to complete deals. In our interview, Reiboldt discusses the market conditions and what it takes to make a purchase these days. [Listen Now]

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