HCA asks union to abandon wage increases this year

https://www.beckershospitalreview.com/hr/hca-asks-union-to-abandon-wage-increases-this-year.html?utm_medium=email

HCA revenue beats the hospital chain's expectations in 2019

A union representing more than 150,000 registered nurses in hundreds of U.S. hospitals is disputing with Nashville, Tenn.-based HCA Healthcare regarding pay and benefits.

National Nurses United said HCA is demanding that the union choose between an undetermined number of layoffs and no 401(k) match for this year or no layoffs and no nurse pay increases for the rest of the year, according to ABC affiliate Kiii TV.

HCA Healthcare, which to date has avoided layoffs due to the pandemic, told Becker’s Hospital Review it is asking the union to give up their demand for wage increases this year, just as nonunion employees have. HCA executive leadership, corporate and division colleagues and hospital executives have also taken pay cuts.  

The union said it takes issue with having to make this choice given HCA’s profits in the last decade, the additional funding the for-profit hospital operator received from the federal government’s Coronavirus Aid, Relief and Economic Security Act, and additional Medicare loans.

“It is outrageous for HCA to use the cover of the pandemic to swell its massive profits at the expense of its dedicated caregivers and the patients who will also be harmed by cuts in nursing staff,” Malinda Markowitz, RN, California Nurses Association/National Nurses United president, said in a news release.

HCA pointed to the pandemic pay program it implemented and recently extended through at least the end of June that allows employees who are called off or affected by a facility closure and cannot be redeployed to receive 70 percent of their base pay.

“It is surprising and frankly disappointing that unions would demand pay raises for their members and may reject the continuation of a generous pay program that is providing continued paychecks for more the 100,000 colleagues,” HCA said in a statement. “The goal of HCA Healthcare’s pandemic pay program is to keep our caregivers employed and receiving paychecks at a time when hospitals throughout the country are experiencing significant declines in patient volume and there is not enough work for them.”

HCA said more than 16,000 union members have participated in the pandemic pay program, even though it is not part of their contract. 

 

 

 

 

Tenet receives $2B in grants, advance Medicare payments

https://www.beckershospitalreview.com/finance/tenet-receives-2b-in-grants-advance-medicare-payments.html?utm_medium=email

Tenet Healthcare CEO steps down after shareholder pressure

Tenet Healthcare, a 65-hospital network based in Dallas, received federal grants and loans to help offset financial damage caused by the COVID-19 pandemic, according to the company’s presentation at the UBS Global Healthcare Conference on May 19.

Like other hospital networks across the nation, Tenet took a financial hit from canceling non-emergent and elective procedures to save capacity and supplies to treat COVID-19 patients. The company estimates that COVID-19 negatively impacted its adjusted earnings before interest, taxes, depreciation and amortization by about $125 million in the last few weeks of March.

To help navigate the financial pressures, Tenet has received funds from the $175 billion in relief aid Congress has allocated to hospitals and other healthcare providers to cover expenses or lost revenues tied to the COVID-19 pandemic. As of May 19, Tenet said it had received about $517 million in federal grants, which do not have to be repaid as long as the company meets the terms and conditions of receiving the relief aid.

Tenet also applied for and received approximately $1.5 billion in advance Medicare payments, which it must begin repaying in August. 

For the first quarter of this year, which ended March 31, Tenet reported net income of $94 million on revenues of $4.52 billion. In the same period a year earlier, the company posted a net loss of $20 million on revenues of $4.55 billion. 

 

 

 

 

For-profit, higher-margin hospitals at advantage when it comes to CARES funding

https://www.healthcaredive.com/news/for-profit-higher-margin-hospitals-at-advantage-when-it-comes-to-cares-fun/577941/

Understanding the CARES Act student loan relief | Sanford Center ...

Dive Brief:

  • Hospitals that tend to have a higher mix of private payer revenue are likely to receive more novel coronavirus federal grant money compared to hospitals that rely on government payers such as Medicare and Medicaid, a new analysis from the Kaiser Family Foundation found.
  • The study aims to analyze the implications of tying the latest round of $50 billion in federal bailout money to providers’ net patient service revenue. It examined hospital financial data and used the HHS’ grant formula to determine the amount of grant money hospitals were likely to receive.
  • KFF found that hospitals with the highest share of private insurance revenue, or those in the top 10%, received $44,321 per hospital bed, or more than double the hospitals in the bottom 10%.

Dive Insight:

This latest analysis reveals some hospitals may be at a disadvantage when it comes to receiving federal funding that is meant to serve as a lifeline for them during the COVID-19 pandemic.

The study found that hospitals with the highest share of private insurance revenue — and those set to receive more in bailout money — were less likely to be teaching hospitals and more likely to be for-profit. Also, they were more likely to have higher operating margins and provided less uncompensated care as a share of operating expenses.

In short, KFF explains that the funding package is skewed toward hospitals with higher revenue from private payers.

“These hospitals’ large share of private reimbursement may be due either to having more patients with private insurance or charging relatively high rates to private insurers or a combination of those two factors. All things being equal, hospitals with more market power can command higher reimbursement rates from private insurers and therefore received a larger share of the grant funds under the formula HHS used,” according to the analysis.

The study points out that a community health center that sees a small portion of patients with private pay would receive less funding than a private physician office that sees the same total number of patients but treats more with private pay.

“With HHS expected to release additional relief fund grants and Congress considering additional stimulus, this analysis demonstrates that the formula used to distribute funding has significant consequences for how funding is allocated among providers,” according to KFF.

Hospitals have been battered by the outbreak of the novel coronavirus. They’ve halted elective procedures and routine care in an effort to preserve needed medical supplies and in an attempt to snuff out the spreading virus.

That has caused hospital volumes and revenues to plummet as care is deferred, so the federal government has sent financial aid in response as part of the Coronavirus Aid, Relief, and Economic Security Act.

This latest round of funding was designed to be a more targeted approach than the initial wave. The first $30 billion released was distributed based on a facility’s share of Medicare fee-for-service. That put facilities with a small slice of Medicare fee-for service business, such as children’s hospitals, at a disadvantage. However, the first round was one way to get money out the door quickly, which officials have acknowledged, knowing a more targeted approach would follow.

 

 

 

 

BIG PHARMA PREPARES TO PROFIT FROM THE CORONAVIRUS

https://theintercept.com/2020/03/13/big-pharma-drug-pricing-coronavirus-profits/?fbclid=IwAR3GaO3iDDuiIKbx2UUaYzU3_3fIfYlwvd6II3neLfK67IcmZpJ_acEv_2k

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AS THE NEW CORONAVIRUS spreads illness, death, and catastrophe around the world, virtually no economic sector has been spared from harm. Yet amid the mayhem from the global pandemic, one industry is not only surviving, it is profiting handsomely.

“Pharmaceutical companies view Covid-19 as a once-in-a-lifetime business opportunity,” said Gerald Posner, author of “Pharma: Greed, Lies, and the Poisoning of America.” The world needs pharmaceutical products, of course. For the new coronavirus outbreak, in particular, we need treatments and vaccines and, in the U.S., tests. Dozens of companies are now vying to make them.

“They’re all in that race,” said Posner, who described the potential payoffs for winning the race as huge. The global crisis “will potentially be a blockbuster for the industry in terms of sales and profits,” he said, adding that “the worse the pandemic gets, the higher their eventual profit.”

The ability to make money off of pharmaceuticals is already uniquely large in the U.S., which lacks the basic price controls other countries have, giving drug companies more freedom over setting prices for their products than anywhere else in the world. During the current crisis, pharmaceutical makers may have even more leeway than usual because of language industry lobbyists inserted into an $8.3 billion coronavirus spending package, passed last week, to maximize their profits from the pandemic.

Initially, some lawmakers had tried to ensure that the federal government would limit how much pharmaceutical companies could reap from vaccines and treatments for the new coronavirus that they developed with the use of public funding. In February, Rep. Jan Schakowsky, D-Ill., and other House members wrote to Trump pleading that he “ensure that any vaccine or treatment developed with U.S. taxpayer dollars be accessible, available and affordable,” a goal they said couldn’t be met “if pharmaceutical corporations are given authority to set prices and determine distribution, putting profit-making interests ahead of health priorities.”

When the coronavirus funding was being negotiated, Schakowsky tried again, writing to Health and Human Services Secretary Alex Azar on March 2 that it would be “unacceptable if the rights to produce and market that vaccine were subsequently handed over to a pharmaceutical manufacturer through an exclusive license with no conditions on pricing or access, allowing the company to charge whatever it would like and essentially selling the vaccine back to the public who paid for its development.”

But many Republicans opposed adding language to the bill that would restrict the industry’s ability to profit, arguing that it would stifle research and innovation. And although Azar, who served as the top lobbyist and head of U.S. operations for the pharmaceutical giant Eli Lilly before joining the Trump administration, assured Schakowsky that he shared her concerns, the bill went on to enshrine drug companies’ ability to set potentially exorbitant prices for vaccines and drugs they develop with taxpayer dollars.

The final aid package not only omitted language that would have limited drug makers’ intellectual property rights, it specifically prohibited the federal government from taking any action if it has concerns that the treatments or vaccines developed with public funds are priced too high.

“Those lobbyists deserve a medal from their pharma clients because they killed that intellectual property provision,” said Posner, who added that the language prohibiting the government from responding to price gouging was even worse. “To allow them to have this power during a pandemic is outrageous.”

The truth is that profiting off public investment is also business as usual for the pharmaceutical industry. Since the 1930s, the National Institutes of Health has put some $900 billion into research that drug companies then used to patent brand-name medications, according to Posner’s calculations. Every single drug approved by the Food and Drug Administration between 2010 and 2016 involved science funded with tax dollars through the NIH, according to the advocacy group Patients for Affordable Drugs. Taxpayers spent more than $100 billion on that research.

Among the drugs that were developed with some public funding and went on to be huge earners for private companies are the HIV drug AZT and the cancer treatment Kymriah, which Novartis now sells for $475,000.

In his book “Pharma,” Posner points to another example of private companies making exorbitant profits from drugs produced with public funding. The antiviral drug sofosbuvir, which is used to treat hepatitis C, stemmed from key research funded by the National Institutes of Health. That drug is now owned by Gilead Sciences, which charges $1,000 per pill — more than many people with hepatitis C can afford; Gilead earned $44 billion from the drug during its first three years on the market.

“Wouldn’t it be great to have some of the profits from those drugs go back into public research at the NIH?” asked Posner.

Instead, the profits have funded huge bonuses for drug company executives and aggressive marketing of drugs to consumers. They have also been used to further boost the profitability of the pharmaceutical sector. According to calculations by Axios, drug companies make 63 percent of total health care profits in the U.S. That’s in part because of the success of their lobbying efforts. In 2019, the pharmaceutical industry spent $295 million on lobbying, far more than any other sector in the U.S. That’s almost twice as much as the next biggest spender — the electronics, manufacturing, and equipment sector — and well more than double what oil and gas companies spent on lobbying. The industry also spends lavishly on campaign contributions to both Democratic and Republican lawmakers. Throughout the Democratic primary, Joe Biden has led the pack among recipients of contributions from the health care and pharmaceutical industries.

Big Pharma’s spending has positioned the industry well for the current pandemic. While stock markets have plummeted in reaction to the Trump administration’s bungling of the crisis, more than 20 companies working on a vaccine and other products related to the new SARS-CoV-2 virus have largely been spared. Stock prices for the biotech company Moderna, which began recruiting participants for a clinical trial of its new candidate for a coronavirus vaccine two weeks ago, have shot up during that time.

On Thursday, a day of general carnage in the stock markets, Eli Lilly’s stock also enjoyed a boost after the company announced that it, too, is joining the effort to come up with a therapy for the new coronavirus. And Gilead Sciences, which is at work on a potential treatment as well, is also thriving. Gilead’s stock price was already up since news that its antiviral drug remdesivir, which was created to treat Ebola, was being given to Covid-19 patients. Today, after Wall Street Journal reported that the drug had a positive effect on a small number of infected cruise ship passengers, the price went up further.

Several companies, including Johnson & Johnson, DiaSorin Molecular, and QIAGEN have made it clear that they are receiving funding from the Department of Health and Human Services for efforts related to the pandemic, but it is unclear whether Eli Lilly and Gilead Sciences are using government money for their work on the virus. To date, HHS has not issued a list of grant recipients. And according to Reuters, the Trump administration has told top health officials to treat their coronavirus discussions as classified and excluded staffers without security clearances from discussions about the virus.

Former top lobbyists of both Eli Lilly and Gilead now serve on the White House Coronavirus Task Force. Azar served as director of U.S. operations for Eli Lilly and lobbied for the company, while Joe Grogan, now serving as director of the Domestic Policy Council, was the top lobbyist for Gilead Sciences.

 

 

 

Financial updates from UnitedHealth, Anthem + 5 other for-profit payers

https://www.beckershospitalreview.com/payer-issues/financial-updates-from-unitedhealth-anthem-5-other-for-profit-payers.html?utm_medium=email

The following seven health insurers recently released their financial statements for the fourth quarter of fiscal year 2019:

1. Anthem saw its revenues and profits grow in the fourth quarter, but the insurer missed analysts’ earnings expectations.

2. Cigna continued to realize higher revenues and profits in the fourth quarter, thanks to its subsidiary Express Scripts.

3. Molina Healthcare ended the fourth quarter with lower net income than a year prior as premium revenues declined.

4. Humana saw total revenue and net income grow in the fourth quarter, thanks in part to growth in its Medicare Advantage business and health services segment.

5. Centene Corp. saw its revenues grow in the fourth quarter, but experienced higher-than-expected flu costs.

6. UnitedHealth Group saw its revenues just miss analysts’ expectations in the fourth quarter, but the health insurance giant’s Optum unit boosted profits.

7. Aetna‘s parent company, CVS Health, exceeded Wall Street’s expectations with its fourth-quarter results, boosted largely by its pharmacy benefit management business.

 

An ex-NFL player became a hospital CEO. Feds questioned his qualifications

https://www.beckershospitalreview.com/hospital-management-administration/an-ex-nfl-player-became-a-hospital-ceo-feds-questioned-his-qualifications.html

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The CEO of North Tampa Behavioral Health did not meet the requirements to lead the Wesley Chapel, Fla.-based psychiatric hospital, according to a report cited by the Tampa Bay Times.

Bryon Coleman Jr., the former CEO of North Tampa Behavioral, is no longer leading the hospital. Instead, he is in another position within Acadia Healthcare, the Franklin, Tenn.-based parent company of North Tampa Behavioral.

In October, lawmakers called on federal officials to look into North Tampa Behavioral after the Tampa Bay Times published an investigative report that found Mr. Coleman had no healthcare experience. The report also raised quality concerns, claiming North Tampa Behavioral boosted revenues by using a loophole in Florida’s mental health law to hold some patients longer than a 72-hour limit. The hospital rejected the claims.

In November, federal inspectors discovered serious problems at the psychiatric hospital, according to the Tampa Bay Times. Inspectors said medical staff hadn’t been held accountable for poor care. Inspectors also found “no evidence” that Mr. Coleman “met the education or experience requirements defined in the position description” for the CEO role. Officials threatened to end the facility’s federal funding if the issues aren’t addressed by Feb. 19.

Mr. Coleman became CEO of Tampa Behavioral Health in 2018. Prior to that, he quarterbacked for the Green Bay Packers practice squad, managed sales for a trucking company and oversaw employee benefits at an insurance firm, according to the Tampa Bay Times.

In a statement to the Tampa Bay Times, a spokesperson from Acadia denied that federal officials threatened to cut public funding from the hospital and said officials didn’t find Mr. Coleman lacked requirements for his job.

Read the full article here.

 

 

 

Prospect Medical Holdings can’t consider $50M acquisition offer

https://www.beckershospitalreview.com/hospital-transactions-and-valuation/prospect-medical-holdings-can-t-consider-50m-acquisition-offer.html

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Los Angeles-based Prospect Medical Holdings says it cannot consider a $50 million acquisition offer from Ontario, Calif.-based Prime Healthcare Services because it has already entered into another deal, according to the Journal Inquirer.

Prospect Medical Holdings is owned by certain funds of private equity firm Leonard Green & Partners and members of the company’s management team. In October, Prospect said its shareholders reached an agreement to purchase Leonard Green & Partners’ outstanding shares of the company, according to the report.

Leonard Green & Partners is considering selling its majority stake in Prospect for roughly $12 million, and Prime said it would pay $50 million for the company, according to an offer letter from Prime President and CEO Prem Reddy, MD, obtained by the Journal Inquirer

In a Nov. 24 statement to the Journal Inquirer, Prospect said it cannot consider Prime’s offer or other proposals because it signed a “binding agreement” with Leonard Green & Partners “several months ago.” Prospect said it is required to close the transaction, which is expected to take three to six months to complete, according to the report.

Access the full Journal Inquirer article here.