HealthLeaders Media Finance - April 20, 2009 | Healthcare Lending Returns to Sanity . . . Maybe View as a Webpage | Subscribe for Free
Healthcare Lending Returns
To Sanity . . . Maybe

Michelle Ponte, Senior Editor-Finance

Healthcare borrowers—logically skeptical about their ability to access capital—are questioning whether it really is flowing again. It is, bankers assured the audience of healthcare execs at the recent Nashville Health Care Council meeting. To sum up the hour-long meeting, banks are bullish on healthcare, deals are getting done, and healthcare is a true growth engine for banks. [Read More]
  April 20, 2009

Editor's Picks
White House wants to use RBMs to control Medicare spending on imaging
Imaging businesses may take a big hit. President Obama's proposed 2010 budget includes a line item recommending that Medicare preauthorization of imaging studies be done by radiology benefit management firms. This could save Medicare $70 million over five years and $260 million over the next 10. The consensus is that RBMs have been a valuable tool in slashing medical imaging costs. On the other hand, this move isn't going to go over well with patient advocacy groups. [Read More]
HCA completes $1.5 billion bond sale
Giant for-profit hospital chain HCA, Inc. has sold $1.5 billion of 10-year notes in the biggest high-yield bond offering this year. Six months ago with a locked-door credit market such a deal would have been difficult, if not impossible, to underwrite. The bond issue signals that doors may be opening again. David Anderson, HCA's senior vice president, finance and treasurer, spoke recently before an industry panel on healthcare lending and said that while the deal means the company is trading off low interest rates for high interest rates, it really comes down to managing risk in 2012 and 2013. [Read More]
More than one payment model makes sense in the big picture
James Roosevelt Jr., president and CEO of Tufts Health Plan, says quality incentives have always existed in provider contracts. He notes, though, that there hasn't been enough dialogue on provider contracts and the fact that they do not fit neatly into a single template. Tufts uses different payment models that vary by type of business, including full-insured commercial, self-insured commercial, and Medicare. Ultimately, during negotiation it comes down to having common goals around patient health and satisfaction, quality, and a payment system that accounts for waste reduction. [Read More]
Allina Hospitals and Clinics to refund $1.1 million to patients
Allina Hospitals and Clinics received a $1.1 million spanking from Minnesota Attorney General Lori Swanson for charging high interest rates on medical debt. The terms call for Allina to refund the money back to patients who paid interest rates in excess of 8% over the past two years. Rates apparently went as high as 18%. Given that we are entering a period of "revised" hospital payment policies, it will be interesting to see how hospitals continue to approach collections and rate setting. Will they set rates at the legal cap or go lower to reduce public scrutiny? [Read More]
Finance Forum
How to Convert a Nonprofit Hospital to a Physician Joint Venture
Many nonprofit hospitals have filed for bankruptcy protection in the last two years. Hospitals that align incentives with physicians have a greater chance of survival. In some cases a whole hospital joint venture, one of the most powerful ways to align with physicians, offers an alternative to bankruptcy. The first step in determining if a conversion to a physician joint venture is even viable is to measure the level of physician interest and quantify the impact such a deal might have on the economic performance of the hospital. [Read More]
Finance Headlines
Wide Pay Gap Between Medical Directors in Hospital-owned v. Nonhospital-owned Facilities
HealthLeaders Media - April 17, 2009
Business leader promises Grady Memorial Hospital $20 million
Atlanta Journal-Constitution - April 17, 2009
CMS Moves Permanent RAC Process Forward
HCPro - April 15, 2009
Lawsuit Demands Geographic Parity in Medicare Physician Pay
HealthLeaders Media - April 15, 2009
Under pressure, Illinois pays overdue Medicaid bills
AP/Chicago Tribune - April 14, 2009
Medicare eyes costs in Miami
Miami Herald - April 14, 2009
Plan to close Philadelphia hospital stirs anger
Philadelphia Inquirer - April 13, 2009
Medical helicopter service faces big Connecticut budget cuts
New York Times - April 13, 2009
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From HealthLeaders Magazine
Jump . . . or Get Pushed
HealthLeaders August 2008 The tough decisions you don't want to make now—but may have to. [Read More]
Service Lines Management
Redefining Cardio
The cardiovascular service line remains a dependable revenue generator for many hospitals. But a shifting market full of new options for patients means organizations must find ways to differentiate themselves. [Read More]
Money Talk

All Children's Hospital, St. Petersburg, FL
Rating: A1
Outlook: Positive
Affected Debt: $63 million
Agency: Moody's Investors Service
Remarks: Outlook has been revised from stable due to consistent and significant operating margins, and less risk from a replacement facility project that is now in its final construction phase. [Read More]
Audio Feature

Lenders Trace a Solid Line to Washington: There's much angst wrapped around healthcare reform. Even so, Kevin Lavender, the head of Fifth Third Bank's national healthcare practice, says banks are bullish on healthcare in 2009 and he has $3 billion in commitments to prove it. But he warns that while capital is available, there will be losers in the short run. In our interview, he says lenders are paying close attention to hospital management teams and how well they follow and respond to Washington's changing pulse. [Listen Now]

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