HealthLeaders Media Finance - August 24, 2009 | Hospitals Still Not Over the Hump View as a Webpage | Subscribe for Free
Hospitals Still Not Over the Hump
Michelle Ponte, Senior Editor-Finance

Despite the positive news from a Thomson Reuters study last week, which found that hospital margins had rebounded in the first quarter of 2009, the troubles of the past 12 months may not be behind anyone just yet. In a report released last week from Moody’s Investors Service, analysts say the outlook for both the for-profit and nonprofit hospital sectors is expected to remain negative over the next 12 to 18 months. [Read More]
  August 24, 2009

Editor's Picks
Key senators discuss trimming health bill
Unruly town hall meetings and constituents angered at the prospect of having government take over the healthcare system has Republican and Democratic senators coming back to the table to write up a bill that will have broad appeal in both parties. In a Senate Finance Committee conference call last week, senators also agreed to draw up a bill that will further reduce their nearly $900 billion healthcare tab over the next decade. Meanwhile, as President Obama backs down from a public health option, House Speaker Nancy Pelosi says a government run insurance program is mandatory in any House healthcare reform bill. [Read More]
In New Jersey, testing a new doctor-pay method
Hospitals in New Jersey began a gainsharing program with physicians to see if a new payment method will improve quality and efficiency of care. The goal is to bridge the gap between how hospitals are usually paid, which is a flat fee, and how physicians are normally compensated, which is fee for service. The three-year Medicare pilot involves 12 hospitals. While participating physicians will still be paid on a fee-for-service basis from Medicare, they will also receive $100 to $300 bonuses per patient if they meet cost and quality goals. [Read More]
Whistleblower files $90 million fraud lawsuit against hospital corporation
For-profit hospital giant Community Health Systems Inc. of Franklin, TN, is facing a $90 million fraud lawsuit. A 2005 whistleblower lawsuit filed by former employee, Robert C. Baker, claims that the hospital system allegedly made illegal donations to New Mexico counties, where three CHS hospitals do business. Baker claims that the money was donated to subsidize the state’s Medicaid contributions. The idea was to boost federal Medicaid funds paid to the state. [Read More]
Hospital finances rebounding
Are hospitals still reeling from the effects of the recession? According to a Thomson Reuters study released last week, many hospitals and health systems made financial and operational turnarounds in Q1 2009. Gary Pickens, a co-author of the study, which included 439 hospitals, says the organization’s last report from several months ago showed that hospitals’ total margins had taken a big hit because of the poor performance of the stock market. Today, he says, total margins have recovered substantially. Hospital total operating margins were at zero in the third quarter of 2008. In the first quarter of 2009, hospitals operating margins averaged 3.1%. Still, the report estimates that more than one-quarter of the hospitals lost money in the first quarter of 2009. [Read More]
Finance Forum
Private Payer Class Action Lawsuits
Over the past five years, a series of settlements in class action suits brought by physicians against the nation's major managed care companies have led to insurers discontinuing practices that systematically denied physicians' reimbursement for services rendered to patients. Despite the success of the settlement agreements in changing the behavior of managed care companies, Ed Gaines, vice president and chief compliance officer for MMP, warns that physicians must not let down their guard, particularly as the settlement agreements expire. [Read More]
Finance Headlines
Public Plan is Being Swiftboated
Cheryl Clark, for HealthLeaders Media - August 21, 2009
HCA proposes building hospital in Virginia
Washington Post - August 20, 2009
U.S. grants $1.2 billion for electronic health records
Reuters - August 20, 2009
Physician groups earn more than $25 million for quality improvements
Janice Simmons, for HealthLeaders Media - August 19, 2009
The next healthcare battle: Cutting Medicare Advantage
Los Angeles Times - August 19, 2009
OIG audits find more providers overcharging Medicare
Cheryl Clark, for HealthLeaders Media - August 19, 2009
Tackling the mystery of how much healthcare costs
New York Times - August 19, 2009
Chicago-based Northwestern Memorial seeks OK for $73 million project
Chicago Tribune - August 18, 2009
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From HealthLeaders Magazine
Hang On
HealthLeaders August 2009 Get ready for the failure of the HIT stimulus dream, episode of care contracting, the end of easy credit, and a public plan. [Read More]
Service Line Management
Making Wellness Work
Wellness and weight loss programs aren't major revenue generators, but healthcare reformers know they cannot effectively control costs without focusing more on prevention. [Read More]
Money Talk

A look at one hospital's struggles to improve

Sarasota County Public Hospital (FL)
Rating: A1
Outlook: Stable
Affected Debt: $472 million
Agency: Moody's Investors Service
Remarks: Rating upgraded from A2 following continued improvement in financial performance, including a return to profitability and increased liquidity.
[Read More]
Audio Feature

Making the Business Case for Electronic Swipe Cards: With new national standards paving the way for broad deployment of electronic swipe cards, insurers are doing a massive rollout. Dr. Leonard Wilkerson, UnitedHealthcare's chief medical officer for the Central Region, says the insurer has rolled out 20 million cards to members this year and estimates the technology could save hospitals and physicians more than $1 billion a year. [Listen Now]