Category Archives: Health System

6 months in: What will the new normal look like for hospitals?

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https://www.healthcaredive.com/news/6-months-in-new-normal-hospitals-covid/581524/

Experts say a sustained state of emergency is likely until there is a cure or vaccine for COVID-19.

The first U.S. hospital to knowingly treat a COVID-19 patient was Providence Regional Medical Center in Everett, Washington, on Jan. 20. Since then, every aspect of healthcare has been upended, and it’s becoming increasingly clear all parts of society will have to adapt to a new baseline for the foreseeable future.

For hospitals and doctors’ offices, that means building on a major shift to telemedicine, new workflows to allow for more infection control and revamping the supply chain for pharmaceuticals, personal protective equipment and other supplies. That’s on top of ongoing challenges of burned out workers and staff shortages further exacerbated by the pandemic.

Looking out even further, the industry will have to figure out how to treat potential chronic conditions in COVID-19 survivors and, until an effective vaccine is developed, how to manage new outbreaks of the disease.

Experts say U.S. hospitals are generally in a much better position for dealing with COVID-19 now than they were in March, and providers are learning more every week about the best treatments and care practices.

A June survey of healthcare executives conducted by consultancy firm Advis found that 65% of respondents said the industry is prepared for a fall or winter surge, about the inverse of what an earlier survey with that question showed.

“We’ve evolved. We’re in a much better state now than we were in the beginning of the pandemic,” Michael Calderwood, associate chief quality officer at Dartmouth-Hitchcock Medical Center, told Healthcare Dive. “There’s been a lot of learning.”

But the number of positively identified cases has now topped 4 million, and little political will exists to reinstitute widespread shutdowns even in areas where surges have filled ICUs to capacity. No treatment or vaccine for the disease exists or appears imminent. Testing and contract tracing efforts are too few and remain scattered and uncoordinated.

Whether there is a clear nationwide second wave or smaller surges in various parts of the country at different times, hospitals will need to remain in an effective state of emergency that requires constant vigilance until there is a cure or vaccine.

“Until we’re armed with that, we’re always going to have to be working like this. I don’t see any other way,” Diane Alonso, director of Intermountain Healthcare’s abdominal transplant program, told Healthcare Dive.

The fall will bring additional challenges. Flu season usually begins to ramp up in October, and if the strains in wide circulation this year are severe, that will further stress the health system. While some schools have announced they will be virtual-only for the rest of 2020, others are committed to in-person classes. That could mean increased community spread, especially in college towns. Colder weather that forces people indoors — where the novel coronavirus is far more likely to spread — will also be a complicating factor.

So far, hospitals have been reluctant to once again halt elective procedures, though some have had to, arguing that the care is still necessary and can be done safely when the proper protections are in place. But that doesn’t mean volume will rebound to pre-pandemic levels.

“While we think demand will come back, we’ve seen some flattening on demand in certain aspects that may be the new indicator of the new norm in terms of how people seek care,” Dion Sheidy, a partner and healthcare advisory leader at advisory firm KPMG, told Healthcare Dive.

Accelerating trends to provide care outside hospitals

When the number of COVID-19 cases first surged in the U.S. and stay-at-home orders were implemented nationwide, telehealth became a necessary way for urgent care to continue.

Virtual visits skyrocketed in March and April as CMS and private payers relaxed regulations and expanded coverage. Some of that will be rolled back, but much may persist as patients and providers grow more used to using telehealth and platforms become smoother.

Virtual care can’t replace in-person care, of course, and some patients and doctors will prefer face-to-face visits. The middle- to long-term result is likely to be that telehealth thrives for some specialties like psychiatry, but drops substantially from the highest levels during shutdowns throughout the country.

Other care settings outside of the hospital may see upticks as well, including at-home and retail-based primary and urgent care.

Renee Dua, the CMO of home healthcare and telemedicine startup Heal, said the company has seen virtual visits increase eight fold since the pandemic began in the U.S. and a 33% increase in home visits as people seek to continue care while reducing their risk of exposure to the coronavirus.

“The idea that you do not use an office building to get care — that’s why we started Heal — we bet on the fact that the best doctors come to you,” Dua told Healthcare Dive.

And care does need to continue, particularly vital services like vaccinations and pediatric checkups.

“You cannot ignore preventive screenings and primary care because you can get sick with cancer or with infectious diseases that are treatable and preventable,” Dua said.

Movements toward non-traditional settings existed before anyone had heard of COVID-19, but the realities of the pandemic have shifted resources and spurred investment that will have lasting effects, Ross Nelson, healthcare strategy leader at KPMG, told Healthcare Dive.

“What we’re going to see is there going to be an acceleration of the underlying trends toward home and away from the hospital,” he said.

Some of this was already underway. Multiple large health systems have established programs to provide hospital-level care at home and major employers have inked contracts to have primary care delivered to employees at on-site clinics.

PPE, staff shortages lingering

A key problem for hospitals in the first COVID-19 hotspots, such as Washington state and New York City, was a lack of necessary personal protective equipment, including N95 masks, gowns, face shields and gloves.

Also running low were supplies like ventilators and some drugs necessary for putting people on those machines.

While advances have certainly been made, the country did not have enough time to build up those supply stores before new surges in the South and West. The result has been renewed worries that not enough PPE is available to keep healthcare workers safe.

Chaun Powell, group vice president of strategic supplier engagement at group purchasing organization Premier, said “conservation practices continue to be the key to this” as COVID-19 surges roll through the country. The longer those dire situations continue, the more stress is put on the supply chain before it has a chance to recover.

Premier’s most recent hospital survey found that more than half of respondents said N95s were heavily backordered. Almost half reported the same for isolation gowns and shoe covers.

Calderwood said there has been improvement, however. “We have a much longer days-on-hand PPE supply at this point and the other thing is, we’ve begun to manufacture some of our own PPE,” he said. “That’s something a number of hospitals have done in working with local companies.”

But the ability to manufacture new PPE in the U.S. also depends on the availability of raw materials, which are limited. That means significant advancements in domestic production are likely several months away, Powell said.

Health systems have stepped up the ability to coordinate and attempt to get equipment where it’s needed most, especially for big-ticket items like ventilators. Providers are more hesitant, however, to let go of PPE without the virus being better contained.

The backstop supposed to help hospitals during a crisis is the national stockpile, which the federal government is attempting to resupply. It doesn’t appear to be enough, though, at least not yet, Calderwood said.

“One thing that concerns me is we did have a national stockpile of PPE, and I get the sense that we’ve kind of burned through that supply,” he said. “And now we’re relying on private industry to meet the need.”

Another problem hospitals face as the pandemic drags on is maintaining adequate staffing levels. Doctors, nurses and other front-line employees are in incredibly stressful work environments. The great potential for burnout will exacerbate existing shortages, just as medical schools are still trying to figure out how to continue with training and education.

“Those areas are concerning to our hospitals because our hospitals depend on a whole myriad of medical staff,” Advis CEO Lyndean Brick said. “Whether it’s physicians, nurses, technicians, housekeepers — that whole staff complement is what’s at the core of healthcare. You can have all the technology in the world but if you don’t have somebody to run it that whole system falls apart.”

On top of that is the increase in labor strife as working conditions have deteriorated in some cases. Nurses have reported fearing for their safety among PPE shortages and alleged lapses in protocol. Brick said she expects strike threats and other actions to continue.

Changing workflows

When COVID-19 cases started ramping up for the first time in the U.S., hospitals throughout the country, acting on CMS advice, shut down elective procedures to prepare their facilities for a potential influx of critical patients with the disease. In some areas, hospitals did have to activate surge plans at that time. Others have done so more recently as the result of increases in the South and West.

But few have resorted to once again halting electives. Brick told Healthcare Dive she doesn’t expect that to change, mostly because hospitals have by and large figured out how to properly continue that care.

She trusts any that can’t do so safely, won’t try.

“For the majority of our providers, except in the occasional state where they’re having a real problem right now, I think that we’re going to see elective surgeries still continue,” Brick said. “Because most of our hospitals have capacity right now. They’re able to do this successfully and securely, and it’s really detrimental to patients to not get the care that they need.”

Hospitals rely on elective procedures to drive their revenue, an added motivation to find ways to keep them running even when COVID-19 is detected at greater levels in the community.

Intermountain, based in Salt Lake City, recently performed its 100th organ transplant of the year, ahead of last year’s pace despite the disruption of the COVID-19 crisis.

Alonso, the program director for abdominal transplants, said that while transplants are considered essential services, staff did pause some procedures when electives were halted and have re-evaluated workflow to be as safe as possible to patients, who are at higher risk after surgery because they are immunocompromised.

The hospital developed a triage system to help evaluate what services are necessary based on what level of COVID-19 spread is present in the community and how many beds and staffers are available to treat them.

The system’s main hospital has certain floors and employees designated for COVID-19 treatment. Staff have been reallocated for certain needs like testing and there are plans available if doctors and surgeons need to be deployed to the ICU.

As many outpatient visits as possible are being changed to virtual, but in the building, patients are screened for symptoms and required to wear masks and follow distancing protocols.

At the transplant center, doctors were at one point divided into teams in case someone got sick and coworkers had to self-isolate.

“We went through a dry run where, at the beginning, we shut down incredibly hard to see how we could do it operationally,” Alonso said. Intermountain hasn’t had to do that again, but is ready if such measures become necessary, she said.

Brick and others said that despite the genuinely frightening circumstance brought by the pandemic, hospitals’ responses have been admirable and providers have been quick to adapt. Slow or nonexistent leadership at the federal level, especially in sourcing and obtaining PPE, has been the bigger roadblock.

“Across the board, the whole healthcare industry has responded beautifully to this,” Brick said. “Where our country has fallen down is we don’t have a master plan to deal with this. Our federal leadership is reactionary, and we are not coordinating a master plan to deal with this in the long term. That’s where my concerns are at. My concerns are not at our local hospitals. They have their acts together.”

 

 

 

 

Houston, Miami, other cities face mounting health care worker shortages as infections climb

Posted on by • Posted in 2020 Election Issues, Clinical Testing, Contact Tracing, Coronavirus, Crisis, Crisis Management, Emergency Care, Evidence-based Leadership, Evidence-Based Plan, Evidence-Based Policy, Front Lines, Health System, Healthcare Providers, Healthcare Worker Shortages, Hospital, Hospital Capacity, Hospital Industry, Intensive Care (ICU), Leadership Decentralized, Mortality, National Strategy, Nurses, Out of Control, Pandemic, Pandemic Fatigue, Personal Protective Equipment (PPE), Physician, Physician Burnout, Supply Chain, Telemedicine, Triage • Leave a comment

https://www.washingtonpost.com/national/houston-miami-and-other-cities-face-mounting-health-care-worker-shortages-as-infections-climb/2020/07/25/45fd720c-ccf8-11ea-b0e3-d55bda07d66a_story.html?utm_campaign=wp_main&utm_medium=social&utm_source=facebook&fbclid=IwAR14P9OGxTOPU8pMgjsVof7YlOAPv-vfxq2MBm9RlpYFVVa3qvpmvyIjFyA

Shortages of health care workers are worsening in Houston, Miami, Baton Rouge and other cities battling sustained covid-19 outbreaks, exhausting staffers and straining hospitals’ ability to cope with spiking cases.

That need is especially dire for front-line nurses, respiratory therapists and others who play hands-on, bedside roles where one nurse is often required for each critically ill patient.

While many hospitals have devised ways to stretch material resources — converting surgery wards into specialized covid units and recycling masks and gowns — it is far more difficult to stretch the human workers needed to make the system function.

“At the end of the day, the capacity for critical care is a balance between the space, staff and stuff. And if you have a bottleneck in one, you can’t take additional patients,” said Mahshid Abir, a senior physician policy researcher at the RAND Corporation and director of the Acute Care Research Unit (ACRU) at the University of Michigan. “You have to have all three … You can’t have a ventilator, but not a respiratory therapist.”

“What this is going to do is it’s going to cost lives, not just for covid patients, but for everyone else in the hospital,” she warned.

The increasingly fraught situation reflects packed hospitals across large swaths of the country: More than 8,800 covid patients are hospitalized in Texas; Florida has more than 9,400; and at least 13 other states also have thousands of hospitalizations, according to data compiled by The Washington Post.

Facilities in several states, including Texas, South Carolina and Indiana, have in recent weeks reported shortages of such workers, according to federal planning documents viewed by The Post, pitting states and hospitals against one another to recruit staff.

On Thursday, Louisiana Gov. John Bel Edwards (D) said he asked the federal government to send in 700 health-care workers to assist besieged hospitals.

“Even if for some strange reason … you don’t care about covid-19, you should care about that hospital capacity when you have an automobile accident or when you have your heart attack or your stroke, or your mother or grandmother has that stroke,” Edwards said at a news conference.

In Florida, 39 hospitals have requested help from the state for respiratory therapists, nurses and nursing assistants. In South Carolina, the National Guard is sending 40 medical professionals to five hospitals in response to rising cases.

Many medical facilities anticipate their staffing problems will deteriorate, according to the planning documents: Texas is hardest hit, with South Carolina close behind. Needs range from pharmacists to physicians.

Hot spots stretch across the country, from Miami and Atlanta to Southern California and the Rio Grande Valley, and the demands for help are as diffuse as the suffering.

“What we have right now are essentially three New Yorks with these three major states,” White House coronavirus task force coordinator Deborah Birx said Friday during an appearance on NBC’s “Today” show.

But today’s diffuse transmission requires innovative thinking and a different response from months ago in New York, say experts. While some doctors have been able to share expertise online and nurses have teamed up to relieve pressures, the overall strains are growing.

“We missed the boat,” said Serena Bumpus, a leader of multiple Texas nursing organizations and regional director of nursing for the Austin Round Rock Region of Baylor Scott and White Health.

Bumpus blames a lack of coordination at national and state officials. “It feels like this free-for-all,” she said, “and each organization is just kind of left up to their own devices to try to figure this out.”

In a disaster, a hospital or local health system typically brings in help from neighboring communities. But that standard emergency protocol, which comes into play following a hurricane or tornado, “is predicated on the notion that you’ll have a concentrated area of impact,” said Christopher Nelson, a senior political scientist at the RAND Corporation and a professor at the Pardee RAND Graduate School.

That is how Texas has functioned in the past, said Jennifer Banda, vice president of advocacy and public policy at the Texas Hospital Association, recalling the influx of temporary help after Hurricane Harvey deluged Houston three years ago.

It is how the response took shape early in the outbreak, when health-care workers headed to hard-hit New York.

But the sustained and far-flung nature of the pandemic has made that approach unworkable. “The challenge right now,” Banda said, “is we are taxing the system all across the country.”

Theresa Q. Tran, an emergency medicine physician and assistant professor of emergency medicine at Houston’s Baylor College of Medicine, began to feel the crunch in June. Only a few weeks before, she had texted a friend to say how disheartening it was to see crowds of people reveling outdoors without masks on Memorial Day weekend.

Her fears were borne out when she found herself making call after call after call from her ER, unable to admit a critically ill patient because her hospital had run out of ICU space, but unable to find a hospital able to take them.

Under normal circumstances, the transfer of such patients — “where you’re afraid to look away, or to blink, because they may just crash on you,” as Tran describes them — happens quickly to ensure the close monitoring the ICU affords.

Those critical patients begin to stall in the ER, stretching the abilities of the nurses and doctors attending to them. “A lot of people, they come in, and they need attention immediately,” Tran said, noting that emergency physicians are constantly racing against time. “Time is brain, or time is heart.”

By mid-July, an influx of “surge” staff brought relief, Tran said. But that was short-lived as the crisis jumped from one locality to the next, with the emergency procedures to bring in more staff never quite keeping up with the rising infections.

An ER physician in the Rio Grande Valley said all three of the major trauma hospitals in the area have long since run out of the ability to absorb new ICU patients.

“We’ve been full for weeks,” said the physician, who spoke on the condition of anonymity because he feared retaliation for speaking out about the conditions.

“The truth is, the majority of our work now in the emergency department is ICU work,” he said. “Some of our patients down here, we’re now holding them for days.” And each one of those critically ill patients needs a nurse to stay with them.

When ICU space has opened up — maybe two, three, four beds — it never feels like relief, he said, because in the time it takes to move those patients out, 20 new ones arrive.

Even with help his hospital has received — masks and gowns were procured, and the staff more than doubled in the past few weeks with relief nurses and other health-care workers from outside — it still is not enough.

The local nurses are exhausted. Some quit. Even the relief nurses who helped out in New York in the spring seem horrified by the scale of the disaster in South Texas, he said.

“If no one comes and helps us out and gives us the ammo we need to fight this thing, we are not going to win,” the doctor said.

One of the root causes of the problem in the United States is that emergency departments and ICUs are often operating at or near capacity, Abir and Nelson said, putting them dangerously close to shortages before a crisis even hits.

Texas, along with 32 other states, has joined a licensure compact, allowing nurses to practice across state borders, but it is becoming increasingly difficult to recruit from other parts of the country.

Texas medical facilities can apply to the Department of State Health Services for staffers to fill a critical shortage, typically for a two-week period. But two weeks, which would allow time to respond to most disasters, hardly registers in a pandemic, so facilities have to ask for extensions or make new applications.

South Carolina last week issued an order that allows nursing graduates who have not yet completed their licensing exams to begin working under supervision. Prisma Health, the state’s biggest hospital system, said this week that the number of patients admitted to its hospitals has more than tripled in the past three weeks and is approaching 300 new patients a day.

“As the capacity increases, so does the need for additional staff,” Scott Sasser, the incident commander for Prisma Health’s covid-19 response said in a statement. Prisma has so far shifted nurses from one area to another, brought back furloughed nurses, hired more physicians and brought in temporary nurse hires, among other measures, Sasser said.

Bumpus has fielded calls from nurses all over the country — some as far afield as the United Kingdom — wanting to know how they can help. But Bumpus says she does not have an easy answer.

“I’ve had to kind of just do my own digging and use my connections,” she said. At first, she said, interested nurses were asked to register through the Texas Disaster Volunteer Registry; but then the system never seemed to be put to use.

Later she learned — “by happenstance … literally by social media” — that the state had contracted with private agencies to find nurses. So now she directs callers to those agencies.

Even rural parts of Texas that were spared initially are being ravaged by the virus, according to John Henderson, CEO of the Texas Organization of Rural and Community Hospitals.

“Unless things start getting better in short order, we don’t have enough staff,” he acknowledged. As for filling critical staffing gaps by moving people around, “even the state admits that they can’t continue to do that,” Henderson said.

The situation has become so dire in some rural parts of the state that Judge Eloy Vera implored people to stay home on the Starr County Facebook page, warning, “Unfortunately, Starr County Memorial Hospital has limited resources and our doctors are going to have to decide who receives treatment, and who is sent home to die.”

Steven Gularte, CEO of Chambers Health in Anahuac, Tex., 45 miles from Houston, said he had to bring in 10 nurses to help staff his 14-bed hospital after Houston facilities started appealing for help to care for patients who no longer needed intensive care but were not ready to go home.

“Normally, we are referring to them,” Gularte said. “Now, they are referring to us.”

Donald M. Yealy, chair of emergency medicine at the University of Pittsburgh Medical Center, said rather than sending staff to other states, his hospital has helped others virtually, particularly to support pulmonary and intensive care physicians.

“Covid has been catalytic in how we think about health care,” Yealy said, providing lessons that will outlast the pandemic.

But telehealth can do little to relieve the fatigue and fear that goes with front-line work in a prolonged pandemic. Donning and doffing masks, gowns and gloves is time consuming. Nurses worry about taking the virus home to their families.

“It is high energy work with a constant grind that is hard on people,” said Michael Sweat, director of the Center for Global Health at the Medical University of South Carolina.

Coronavirus has turned the regular staffing challenge at Harris Health in Houston into a daily life-or-death juggle for Pamela Russell, associate administrator of nursing operations, who helps provide supplemental workers for the system’s two public hospitals and 46 outpatient clinics.

Now, 162 staff members — including more than 50 nurses — are quarantined, either because they tested positive or are awaiting results. Many others need flexible schedules to accommodate child care, she said. Some cannot work in coronavirus units because of their own medical conditions. A few contract nurses left abruptly after learning their units would soon be taking covid-positive patients.

Russell has turned to the state and the international nonprofit Project Hope for resources, even as she acts as a morale booster, encouraging restaurants to send meals and supporting the hospital CEO in his cheerleading rounds.

“It’s hard to say how long we can do this. I just don’t know” said Russell, who praised the commitment of the nurses. “Like I said, it’s a calling. But I don’t see it being sustainable.”

 

 

 

 

Canceled elective procedures putting pressure on nation’s hospitals

Posted on by • Posted in 2020 Election Issues, American Hospital Association (AHA), Bankruptcy, Cash, Cash Reserves, Cash-Flow Improvements, Chronic Care Management, Chronic Conditions, Chronic Diseases, Clinical Testing, Contact Tracing, Coronavirus, Cost Management, Cost Reduction, Credit Quality, Credit Ratings, Crisis, Crisis Management, Deferred Healthcare, Economic Crisis, Economic Recovery, Economic Stimulus, Elective Procedures, Elective Surgery, Emergency Care, Employee Benefits, Employee Furlough, Employee Hiring Freeze, Employee Layoffs, Employee Pay Cuts, Employer-Based Health Insurance, Evidence-based Leadership, Evidence-Based Plan, Evidence-Based Policy, Financial Pressure, Financial Viability, Financially Distressed, Health Insurance Coverage Adequacy, Health Policy, Health System, Hospital, Hospital Industry, Infection Control, Infection Control Plan, Infectious Virus, Labor Spend Management, Liquidity, Market Consolidation, Market Power, Medicare Advance Payments, Mergers & Acquisitions, Mortality, National Strategy, Net Income, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Outpatient Care, Pandemic, Personal Protective Equipment (PPE), Reorganization, Supply Chain, The CARES Act • Leave a comment

https://www.healthcarefinancenews.com/news/canceled-elective-procedures-putting-pressure-nations-hospitals

U.S. Hospitals Brace for 'Tremendous Strain' from New Virus - JEMS

Even upticks in COVID-19 patients haven’t made up for the revenue losses, since reimbursement for those services is comparatively slim.

Elective procedures are in a strange place at the moment. When the COVID-19 pandemic started to ramp up in the U.S., many of the nation’s hospitals decided to temporarily cancel elective surgeries and procedures, instead dedicating the majority of their resources to treating coronavirus patients. Some hospitals have resumed these surgeries; others resumed them and re-cancelled them; and still others are wondering when they can resume them at all.

In a recent HIMSS20 digital presentation, Reenita Das, a senior vice president and partner at Frost and Sullivan, said that during the pandemic, plastic surgery activity declined by 100%, ENT surgeries declined by 79%, cardiovascular surgeries declined by 53% and neurosurgery surgeries declined by 57%.

It’s hard to overstate the financial impact this is likely to have on hospitals’ bottom lines. Just this week, American Hospital Association President and CEO Rick Pollack, pulling from Kaufman Hall data, said the cancellation of elective surgeries is among the factors contributing to a likely industry-wide loss of $120 billion from July to December alone. When including data from earlier in the pandemic, the losses are expected to be in the vicinity of $323 billion, and half of the nation’s hospitals are expected to be in the red by the end of the year.

Doug Wolfe, cofounder and managing partner of Miami-based law firm Wolfe Pincavage, said this has amounted to a “double-whammy” for hospitals, because on top of elective procedures being cancelled, the money healthcare facilities received from the federal Coronavirus Aid, Relief, and Economic Security Act was an advance on future Medicare payments – which is coming due. While hospitals perform fewer procedures, they will now have to start paying that money back.

All hospitals are hurting, but some are in a more precarious position than others.

“Some hospital systems have had more cash on hand and more liquidity to withstand some of the financial pressure some systems are facing,” said Wolfe. “Traditionally, the smaller hospital systems in the healthcare climate we face today have faced a lot more financial pressure. They’re not able to control costs the same way as a big system. The smaller hospitals and systems were hurting to begin with.”

LOWER REVENUE, HIGHER COSTS

Some hospitals, especially ones in hot spots, are seeing a surge in COVID-19 patients. While this has kept frontline healthcare workers scrambling to care for scores of sick Americans, COVID-19 treatments are not reimbursed at the same level as surgeries. Hospital capacity is being stretched with less lucrative services.

“Some hospitals may be filling up right now, but they’re filling up with lower-reimbursing volume,” said Wolfe. “Inpatient stuff is lower reimbursement. It’s really the perfect storm for hospitals.”

John Haupert, CEO of Grady Health in Atlanta, Georgia, said this week that COVID-19 has had about a $115 million negative impact on Grady’s bottom line. Some $70 million of that is related to the reduction in the number of elective surgeries performed, as well as dips in emergency department and ambulatory visits. 

During one week in March, Grady saw a 50% reduction in surgeries and a 38% reduction in ER visits. The system is almost back to even in terms of elective and essential surgeries, but due to a COVID-19 surge currently taking place in Georgia, it has had to suspend those services once again. ER visits have only come back about halfway from that initial 38% dip, and the system is currently operating at 105% occupancy.

“Part of what we’re seeing there is reluctance from patients to come to hospitals or seek services,” said Haupert. “Many have significantly exacerbated chronic disease conditions.”

Patient hesitation has been an ongoing problem, as has the associated cost of treating coronavirus patients, said Wolfe.

“When they were ramping up to resume the elective stuff, there was a problem getting patients comfortable,” he said. “And the other thing was that the cost of treating patients in this environment has gone up. They’ve put up plexiglass everywhere, they have more wiping-down procedures, and all of these things add cost and time. They need to add more time between procedures so they can clean everything … so they’re able to do less, and it costs more to do less. Even when elective procedures do resume, it’s not going back to the way it was.”

Most hospitals have adjusted their costs to mitigate some of the financial hit. Even some larger systems, such as 92-hospital nonprofit Trinity Health in Michigan, have taken to measures such as laying off and furloughing workers and scaling back working hours for some of its staff. At the top of the month, Trinity announced another round of layoffs and furloughs – in addition to the 2,500 furloughs it announced in April – citing a projected $2 billion in revenue losses in fiscal year 2021, which began on June 1.

Hospitals are at the mercy of the market at the moment, and Wolfe anticipates there could be an uptick in mergers and consolidation as organizations look to partner with less cash-strapped entities. 

“Whether reorganization will work remains to be seen, but there will definitely be a fallout from this,” he said.

 

 

 

 

Hackensack Meridian Health, Maimonides Medical Center pilot sensor-embedded clothes to remotely monitor COVID-19 patients

Posted on by • Posted in Cloth-Based Wearable Tech, Health System, Hospital, Hospital Industry, Information Technology, Nanosensors, Triage • Leave a comment

https://www.beckershospitalreview.com/digital-transformation/hackensack-meridian-health-maimonides-medical-center-pilot-sensor-embedded-clothes-to-remotely-monitor-covid-19-patients.html?utm_medium=email

Transforming Congestive Heart Failure Management with cloth-based ...

Hackensack (N.J.) Meridian Health and New York City-based Maimonides Medical Center are partnering with remote monitoring platform Nanowear to pilot cloth-based wearable tech that monitors coronavirus patients.

Nanowear’s undergarment wearable comprises nanosensors, which detect physiological and biomarker changes that indicate when a patient’s condition is worsening and the hospitals need to further intervene. When a patient wears the garment, physicians can remotely capture and assess vitals including real-time ECH, systolic and diastolic blood pressure, temperature trends, respiration and lung volume.

The garment can collect 120 million data points per patient per day across cardiac, pulmonary and circulatory biomarker data, which is then transmitted to clinical staff.

“Nanowear’s SimpleSENSE is giving us an exponential amount of relevant data metrics about the heart and lungs from an all-in-one product that should ultimately enable us to triage lower risk patients and stratify high risk patients,” said Sameer Jamal, MD, principal investigator of the collaboration and cardiologist at Hackensack Meridian Health, according to the July 22 news release.

 

 

 

COVID care as a model for care redesign

Posted on by • Posted in Care Redesign, Consumer Preferences, Consumer-Centered Care Pathway, Consumerism, Coronavirus, Health System, Hospital, Hospital Industry, Pandemic, Physician, Virtual Care Strategy, Virtual Healthcare, Virtual Hospital, Virtual Visit • Leave a comment

https://mailchi.mp/9075526b5806/the-weekly-gist-july-24-2020?e=d1e747d2d8

We got an update from the chief medical information officer of one of our member systems about their ongoing progress in expanding telemedicine. Their rate of virtual visits peaked in late April, accounting for over half of all physician encounters. But like most systems, they’ve seen telemedicine visits drop to less than 20 percent of all appointments as physician offices have reopened.

In thinking about how the system will move telemedicine forward, she said, “We’re trying to be intentional and really design a top-notch consumer experience, with quality as the foundation.” They are going specialty-by-specialty, condition-by-condition, to redesign care pathways to optimally blend virtual and in-person care. It’s daunting, but she believes COVID-19 provided a model for how to do this quickly and effectively.

In just a few weeks, many systems stood up COVID management programs in the following way: algorithm-driven, online symptom triage triggers a virtual visit with a doctor. Testing is conducted at new, dedicated locations, to keep doctors’ offices as COVID-free as possible. Patients with concerning symptoms are monitored at home with pulse oximetry and regular check-ins; the same resources are used to ensure discharged patients are recovering well.

It’s the perfect example of how to design a safe, consumer-centered care pathway, using the whole of a health system’s resources. Now the challenge facing doctors and hospitals is: can this process be scaled across the hundreds of conditions that could benefit from a blend of virtual and traditional care?  

 

 

 

“We’ve jumped past burnout to anger”

Posted on by • Posted in Angry, Coronavirus, Health System, Hospital, Hospital Industry, Nurses, Pandemic, Personal Protective Equipment (PPE), Physician, Physician Burnout, Stress, Stress Management, Supply Chain, Trauma, Workforce - Clinical • Leave a comment

https://mailchi.mp/9075526b5806/the-weekly-gist-july-24-2020?e=d1e747d2d8

What coronavirus is doing to stressed US health workers – and why ...

Last week we wrote about an observation from some physician leaders that, paradoxically, physician burnout seemed to have waned a bit during the COVID crisis. They felt that, as clinicians rallied to provide care for patients during the pandemic, many found new purpose in the work, despite great challenges. Bureaucratic hurdles yielded to the need to make critical decisions quickly, as did regulatory barriers to telemedicine.

The piece sparked a number of doctors, most from regions now experiencing surges, to share their alternative viewpoints with us.

One employed physician wrote that, across specialties, he and his colleagues are angry. They don’t feel protected, either financially, or even for their own physical safety.

A nurse practitioner working long shifts in an emergency department overloaded with COVID patients wrote, “In April, I would have never believed that we would be scrounging for PPE at the end of July. How could this happen?” And a nephrologist redeployed to a COVID ICU shared: “With the surge in New York, it felt like the entire country was behind their doctors and nurses. I drive home past restaurants and stores filled with people refusing to wear masks. It’s so demoralizing.”

Several expressed that their employers, both health systems and payers, are “counting on our goodwill that we’ll just keep showing up.” But once the crisis passes, there may be “drastic and irrational physician revolts. Someone should be watching for it.”

These comments reveal a marked difference in physician sentiment in different parts of the country, based both on the severity of the pandemic, and the nature of the local response.  Regardless, we’d agree that the clinical workforce, both doctors and nurses, is working through a period of unprecedented stress, and for some, emotional trauma. Ensuring their stability and safety must be a top priority for every health system and medical group.

 

 

Increasing unemployment alters national payer mix

Posted on by • Posted in 2020 Election Issues, ACA, Bad Debt Expense, Coronavirus, Crisis, Crisis Management, Economic Crisis, Economic Recovery, Economy Reopening, Employee Benefits, Employee Furlough, Employee Hiring Freeze, Employee Layoffs, Employee Pay Cuts, Employee Protections, Employer-Based Health Insurance, Health Insurance Coverage Adequacy, Health System, Hospital, Hospital Industry, Job, Job Loss, Job Market, Job Search, Job Security, Medicaid, Medicaid Expansion, Out of Pocket Expenses, Pandemic, Payor Mix, Rev Cycle Management, Revenue Cycle, Uncompensated Care, Underinsured, Unemployment, Unemployment Insurance, Uninsured • Leave a comment

https://mailchi.mp/9075526b5806/the-weekly-gist-july-24-2020?e=d1e747d2d8

 

One in every five workers is now collecting unemployment benefits as the country struggles to get the COVID-19 outbreak under control. A recent Families USA study estimates a quarter of the 21.9M workers that were furloughed or laid off between February and May lost their health insurance. And the payer mix will continue to change as the pandemic wears on.

The graphic below highlights a study from consultancy Oliver Wyman, looking at the impact of rising unemployment (at 15, 20 and 30 percent) on insurance coverage. With each five to ten percent rise in unemployment, the commercially insured population decreases by three to five percent. Those who lose employer-sponsored insurance either remain uninsured, buy coverage on the Obamacare marketplaces, or qualify for Medicaid.

Surprisingly, Washington State and California are reporting little to no enrollment growth in Medicaid programs thus far. Experts point to lack of outreach and consumer awareness as key contributors to the slow growth—but Medicaid enrollment will likely begin to rise quickly in coming months as temporary furloughs convert to more permanent layoffs.

The right side of the graphic spotlights the growing number of uninsured individuals in those states with the highest uninsured rates. The previous record for the largest increase in uninsured adults was between 2008 and 2009, when nearly 4M lost coverage. The current pandemic-driven increase has crushed that record by 39 percent.

On average, states are seeing uninsured populations increase by two percent, with some as high as five percent. And the two states with the highest uninsured rates, Florida and Texas, are also dealing with the largest surge in COVID-19 cases and deaths. The ranks of the uninsured will continue to climb as states reimpose shutdowns, government assistance ends, and layoffs grow.

 

 

‘The virus doesn’t care about excuses’: US faces terrifying autumn as Covid-19 surges

Posted on by • Posted in 2020 Election Issues, Asymptomatic Transmission, Blame, Centers for Disease Control & Prevention (CDC), Clinical Testing, Contact Tracing, Coronavirus, Credibility, Crisis, Crisis Management, Economic Crisis, Economy Reopening, Evidence-based Leadership, Evidence-Based Plan, Evidence-Based Policy, Expert Opinion, False Hope, False Narrative, False Reassurance, Health Policy, Health System, Herd Immunity, Hospital, Hospital Industry, Infection Control, Infection Control Plan, Infectious Virus, Job, Job Loss, Job Market, Job Search, Job Security, Leadership Decentralized, Misinformation, Mislead, Misleading, Mistake, Mistrust, Mixed Message, Mortality, National Strategy, Pandemic, Partisanship, Personal Protective Equipment (PPE), Preexisting Conditions, Public Health, Public Safety, Quarantine, School Reopening, Scientists, Social Distancing, Trust, Truth, Uncertainty, Underinsured, Unemployment, Unemployment Insurance, Uninsured, Vulnerable Populations, Wishful Thinking • Leave a comment

https://www.theguardian.com/world/2020/jul/18/us-coronavirus-fall-second-wave-autumn

The breathing space afforded by lockdowns in the spring has been squandered, with new cases running at five times the rate of the whole of Europe. Things will only get worse, experts warn.

In early June, the United States awoke from a months-long nightmare.

Coronavirus had brutalized the north-east, with New York City alone recording more than 20,000 deaths, the bodies piling up in refrigerated trucks. Thousands sheltered at home. Rice, flour and toilet paper ran out. Millions of jobs disappeared.

But then the national curve flattened, governors declared success and patrons returned to restaurants, bars and beaches. “We are winning the fight against the invisible enemy,” vice-president Mike Pence wrote in a 16 June op-ed, titled, “There isn’t a coronavirus ‘second wave’.”

Except, in truth, the nightmare was not over – the country was not awake – and a new wave of cases was gathering with terrifying force.

As Pence was writing, the virus was spreading across the American south and interior, finding thousands of untouched communities and infecting millions of new bodies. Except for the precipitous drop in New York cases, the curve was not flat at all. It was surging, in line with epidemiological predictions.

Now, four months into the pandemic, with test results delayed, contact tracing scarce, protective equipment dwindling and emergency rooms once again filling, the United States finds itself in a fight for its life: swamped by partisanship, mistrustful of science, engulfed in mask wars and led by a president whose incompetence is rivaled only by his indifference to Americans’ suffering.

With flu season on the horizon and Donald Trump demanding that millions of students return to school in the fall – not to mention a presidential election quickly approaching – the country appears at risk of being torn apart.

“I feel like it’s March all over again,” said William Hanage, a professor of epidemiology at the Harvard TH Chan School of Public Health. “There is no way in which a large number of cases of disease, and indeed a large number of deaths, are going to be avoided.”

The problem facing the United States is plain. New cases nationally are up a remarkable 50% over the last two weeks and the daily death toll is up 42% over the same period. Cases are on the rise in 40 out of 50 states, Washington DC and Puerto Rico. Last week America recorded more than 75,000 new cases daily – five times the rate of all Europe.

“We are unfortunately seeing more higher daily case numbers than we’ve ever seen, even exceeding pre-lockdown times,” said Jennifer Nuzzo, an epidemiologist at the Johns Hopkins Center for Health Security. “The number of new cases that occur each day in the US are greater than we’ve yet experienced. So this is obviously a very worrisome direction that we’re headed in.”

The mayor of Houston, Texas, proposed a “two-week shutdown” last week after cases in the state climbed by tens of thousands. The governor of California reclosed restaurants, churches and bars, while the governors of Louisiana, Alabama and Montana made mask-wearing in public compulsory.

“Today I am sounding the alarm,” Governor Kate Brown said. “We are at risk of Covid-19 getting out of control in Oregon.”

As dire as the current position seems, the months ahead look even worse. The country anticipates hundred of thousands of hospitalizations, if the annual averages hold, during the upcoming flu season. Those hospitalizations will further strain the capacity of overstretched clinics.

But a flu outbreak could also hamper the country’s ability to fight coronavirus in other ways. Because the two viruses have similar symptoms – fever, chills, diarrhea, fatigue – mistaken diagnoses could delay care for some patients until it’s too late, and make outbreaks harder to catch, one of the country’s top health officials has warned.

“I am worried,” Dr Robert Redfield, the director of the Centers for Disease Control (CDC), said last week. “I do think the fall and the winter of 2020 and 2021 are probably going to be one of the most difficult times that we have experienced in American public health because of … the co-occurrence of Covid and influenza.”

Other factors will be in play. A precipitous reopening of schools in the fall, as demanded by Trump and the education secretary, Betsy DeVos, without safety measures recommended by the CDC, could create new superspreader events, with unknown consequences for children.

“We would expect that to be throwing fuel on the fire,” said Hanage of blanket school reopenings. “So it’s going to be bad over the next month or so. You can pretty much expect it to be getting worse in the fall.”

The list of aggravating circumstances goes on and on. A federal unemployment assistance program that gave each claimant an extra $600 a week is set to expire at the end of July. A new coronavirus relief package is being held up in Congress by Republicans’ accusations that states are wasting money, and their insistence that any new legislation include liability protections for businesses that reopen during the pandemic.

Cable broadcasts and social media have been filled, meanwhile, with video clips of furious confrontations on sidewalks, in stores and streets over wearing facial masks. In Michigan, a sheriff’s deputy shot dead a man who had stabbed another man for challenging him about not wearing a mask at a convenience store. In Georgia, the Republican governor sued the Democratic mayor of Atlanta for issuing a city-wide mask mandate.

The partisan divide on masks is slowly closing as the outbreaks intensify. The share of Republicans saying they wear masks whenever they leave home rose 10 points to 45% in the first two weeks of July, while 78% of Democrats reported doing so, according to an Axios-Ipsos poll.

Another divide has proven tragically resilient. As hotspots have shifted south, the virus continues to affect Black and Latinx communities disproportionately. Members of those communities are three times as likely to become infected and twice as likely to die from the virus as white people, according to data from early July.

The raging virus has prompted speculation in some corners that the only way out for the United States is through some kind of “herd immunity” achieved by simply giving up. But that grossly underestimates the human tragedy such a scenario would involve, epidemiologists say, in the form of tens of millions of new cases and unknown thousands of deaths.

“I think that every single serology study that’s been done to date suggests that the vast majority of Americans have not yet been exposed to this virus,” Nuzzo said. “So we’re still very much in the early stages.

“Which is good, that’s actually really good news. I don’t want to strive for herd immunity, because that means the vast majority of us will get sick and that will mean many, many more deaths. The point is to slow the spread as much as possible, protect ourselves as much as possible, until we have other tools.”

But the ability of the US to take that basic step – to slow the spread, as dozens of other countries have done – is in perilous doubt. After half a year, the Trump administration has made no effort to establish a national protocol for testing, contact tracing and supported isolation – the same proven three-pronged strategy by which other countries control their outbreaks.

Critics say that instead, Trump has dithered and denied as the national death toll climbed to almost 140,000. The Democratic presidential candidate, Joe Biden, who is hoping to unseat Trump in November, blasted the president for refusing until recently to wear a mask in public.

“He wasted four months that Americans have been making sacrifices by stoking divisions and actively discouraging people from taking a very basic step to protect each other,” Biden said in a statement last weekend.

Meanwhile the White House has attacked Dr Anthony Fauci, the country’s foremost expert on infectious diseases whose refusal to lie to the public has enraged Trump, by publishing an op-ed signed by one of the president’s top aides titled “Anthony Fauci has been wrong about everything I have interacted with him on” and by releasing a file of opposition research to the Washington Post.

Trump claimed the number of cases was a function of unusually robust testing, though experts said that positivity rates of 20% in multiple states suggested that the United States is testing too little – and that in any case closing one’s eyes to the problem by testing less would not make it go away.

“We’ve done 45 million tests,” Trump said this week, padding the figure only slightly. “If we did half that number, you’d have half the cases, probably around that number. If we did another half of that, you’d have half the numbers. Everyone would be saying we’re doing well on cases.”

Such statements by Trump have encouraged unfavorable comparisons of the US pandemic response with those in countries such as Italy, which recorded just 169 new cases on Monday after a horrific spring, and South Korea, which has kept cases in the low double-digits since April.

But the United States could also look to many African countries for lessons in pandemic response, said Amanda McClelland, who runs a global epidemic prevention program at Resolve to Save Lives.

“We’ve seen some good success in countries like Ghana, who have really focused on contact tracing, and being able to follow up superspreading events,” said McClelland. “We see Ethiopia: they kept their borders open for a lot longer than other countries, but they have really aggressive testing and active case-finding to make sure that they’re not missing cases.

“I think what we’ve seen is that you need not just a strong health system but strong leadership and governance to be able to manage the outbreak, and we’ve seen countries that have all three do well.”

But in America, the large laboratories that process Covid-19 tests are unable to keep up with demand. Quest Diagnostics announced on Tuesday that the turnaround time for most non-emergency test results was at least seven days.

“We want patients and healthcare providers to know that we will not be in a position to reduce our turnaround times as long as cases of Covid-19 continue to increase dramatically,” the lab said.

“You can’t have unlimited lab capacity, and what we’ve done is allow, to some extent, cases to go beyond our capacity,” said McClelland. “We’re never going to be able to treat and track and trace uncontrolled transmission. This outbreak is just too infectious.”

Public health experts emphasize that the United States does not have to accept as its fate a cascade of tens of millions of new cases, and tens of thousands of deaths, in the months ahead. Focused leadership and individual resolve could yet help the country follow in the footsteps of other nations that have successfully faced serious outbreaks – and brought them under control.

But it is clear that the most vulnerable Americans, including the elderly and those with pre-existing conditions, face grave danger. Republicans have argued in recent weeks that while cases in the US have soared, death rates are not climbing so quickly, because the new cases are disproportionately affecting younger adults.

That is a false reassurance, health experts say, because deaths are a lagging indicator – cases necessarily rise before deaths do – and because large outbreaks among any demographic group speeds the virus’s ability to get inside nursing homes, care facilities and other places where residents are most vulnerable.

“If we don’t do anything to stop the virus, it’s going to be very difficult to prevent it from getting to people who will die,” said Nuzzo.

There is a question of whether the United States, for all its wealth and expertise – and its self-regard as an exceptional actor on the world stage – can summon the will to keep up the fight. People are tired of fighting the virus, and of fighting each other.

“I think unfortunately people are emotionally exhausted from having to think about and worry about this virus,” said Nuzzo. “They feel like they’ve already sacrificed a lot. So the worry that I have is, what willingness is there left, to do what it takes?”

It is as if the country is “treading water in the middle of the ocean”, Hanage said.

“People tend to be shuffling very quickly between denial and fatalism,” he said. “That’s really not helpful. There are a number of things that can be done.

“What I would hope is that this marks a point when the United States finally wakes up and realizes that this is a pandemic and starts taking it seriously.

“Folks tend to look at what has happened elsewhere and then they make up some kind of magical reason why it’s not going to happen to them.

“People keep making these excuses, and the virus doesn’t care about the excuses. The virus just keeps going. If you give it the opportunity, it will take it.”

 

 

 

 

Why COVID-19’s biggest impact on healthcare may not be until 2022

Posted on by • Posted in 2020 Election Issues, ACA, Business Model, Cost Management, Cost Reduction, Cost Shifting, Employer-Based Health Insurance, Financial Pressure, Financial Viability, Financially Distressed, Health Insurance Coverage Adequacy, Health Policy, Health System, Hospital, Hospital Industry, Job, Job Loss, Job Market, Medicaid, Medicare, Pandemic, Underinsured, Unemployment, Unemployment Insurance, Uninsured • Leave a comment

https://www.healthcaredive.com/news/why-covid-19s-biggest-impact-on-healthcare-may-not-be-until-2022/582129/

This perfect storm of a shift in payer mix, the impending insolvency of Medicare and the inability of states to absorb the growing costs of Medicaid represent a tsunami of challenges.

With COVID-19 there has been unprecedented stress placed upon the healthcare system. The human and financial toll of the current crisis has been extraordinary. Yet, little attention has been focused on the impact of this virus on the viability of our healthcare financing system.

Three significant shifts in healthcare financing are occurring as a result of the pandemic’s economic impact. First, as a result of job losses, there will be a shift in commercial insurance to government-funded insurance programs. Second, revenue for funding Medicare, based on payroll taxes, will be significantly decreased. Finally, states will have less tax revenue to pay for Medicaid, threatening the viability of this program as well.

More than 30 million Americans have filed for unemployment since the start of the COVID-19 pandemic. According to a recent report, about 27 million people may lose their employer-sponsored insurance. 

This will result in millions of people seeking coverage through Medicaid programs, the individual marketplace or simply becoming uninsured. Healthcare providers have relied upon margins from commercial insurance to offset costs from poorer reimbursing government funded programs and uncompensated care.

With more than 156 million Americans receiving employer sponsored insurance at the start of this year, and given recent projected job losses, providers may see a 17% shift in payer mix. The reliance on commercial insurance and cost shifting has become a necessary way for providers to financially sustain operations. 

With a 35% margin with commercial insurance compared to Medicare, a 17% shift in payer mix on a trillion dollar spend would result in a substantial reduction in financial resources available to hospitals.

Almost half of healthcare expenditures already come from government programs. Medicare, the largest of these programs, is principally supported by taxes on payroll and social security benefits. With COVID-related job losses there will be a corresponding reduction in payroll tax revenues to the Medicare system. Reports from the Congressional Research Service submitted to Congress in May, with data used prior to COVID-19, projected that Medicare would become insolvent in 2026.

Analyses performed show that there will be a gap in Medicare revenues during the next three years (from the pre-COVID projections) of close to $150 billion. The result is that Medicare will become insolvent as early as 2022. Even by applying more conservative projections, such as recovering all job losses by the end of 2020 and payroll tax revenue holding steady at pre-COVID levels, Medicare still becomes insolvent in 2023.

State revenues, too, will be under real pressure with reduced tax revenues resulting from the current economic downturn. Medicaid programs are supported in part by federal funds, but also from general funds from the state. 
On average, states are projecting about a 10% reduction in revenues in 2020, rising to almost a 25% reduction in 2021. Even without considering the growth in Medicaid enrollment hitting states, this reduced tax revenue will make sustaining current Medicaid program funding increasingly difficult.

This perfect storm of a shift in payer mix, the impending insolvency of Medicare by 2022 and the inability of states to absorb the growing costs of Medicaid represent a tsunami of challenges for the health system. Looking at this new reality, it is clear that our system for financing healthcare is severely broken and we must identify solutions to sustain access to medical care for our citizens.

This will be a challenge of a generation and we will need strength, courage and bold ideas to get through this. Pandemics have a way of changing a society’s political, economic and sociologic outlooks, and COVID-19 will be no different. 

 

 

 

California AG conditionally approves $350M sale of nonprofit to Prime Healthcare

Posted on by • Posted in Access & Quality of Healthcare, Asset Purchase Agreement, Bankruptcy, Collective Bargaining, Community, Community Benefit, Community Hospital, Financial Pressure, Financial Viability, Financially Distressed, For-Profit, Health System, Hospital, Hospital Industry, Labor Union, Market Consolidation, Market Power, Mergers & Acquisitions, State Attorney Generals (AG) • Leave a comment

https://www.healthcarefinancenews.com/news/california-ag-conditionally-approves-350m-sale-st-francis-medical-center-prime-healthcare

Prime Healthcare, CEO Prem Reddy settle false-claims suit for $65M

Prime will acquire St. Francis for a net of $350 million, with a $200 million base cash price and $60 million for accounts receivable.

California Attorney General Xavier Becerra has conditionally approved Verity Health’s application to transfer ownership of St. Francis Medical Center to Prime Healthcare. The Attorney General’s decision follows an earlier decision by the U.S. Bankruptcy Court of the Central District of California granting Verity’s request to reject the existing collective bargaining agreements which impose legacy cost structures that it said contributed to bankruptcy.

Becerra noted that his approval of the sale of St. Francis to Prime Healthcare “protect(s) access to care for the Los Angeles communities served” by St. Francis.

“The COVID-19 public health crisis has brought home the importance of having access to lifesaving hospital care nearby in our communities,” he said. “St. Francis Medical Center is not just an asset, it is an indispensable neighbor, it is the workers who serve the patients, and the doctors who save lives. We conditionally approve this sale to keep it that way.”

Prime Healthcare has built a reputation for saving financially distressed hospitals across the U.S., touting improved clinical quality. Healthgrades said Prime had hospitals named among the nation’s 100 best 53 times, and has been the recipient of several Patient Safety Excellence Awards.

The Attorney General’s office conducted an exhaustive review of the transaction for the past several months and carefully considered public input on the proposed transaction. The Attorney General’s approval includes conditions for the sale which Prime is currently reviewing. Pending a final ruling by the Bankruptcy Court, the transaction is expected to be completed this summer.

THE LARGER TREND

In early April, the U.S. Bankruptcy Court approved the Asset Purchase Agreement for the sale of St. Francis Medical Center to Prime. Under the agreement, Prime will acquire St. Francis for a net consideration of over $350 million, including a $200 million base cash price and $60 million for accounts receivable. In addition, Prime has committed to invest $47 million in capital improvements and extend offers of employment to nearly all staff.

The court also recently granted Verity’s request to reject the existing collective bargaining agreements with two unions that represent associates at St. Francis Medical Center, SEIU and UNAC. The court noted that Prime Healthcare was the only party to submit a qualifying bid for St. Francis and that without rejecting the existing CBAs, “St. Francis would not continue to operate as a going concern, and all of the UNAC (and SEIU) represented employees would lose their jobs.”

The court also noted that Prime and Verity had made multiple efforts to negotiate in good faith with the unions, and the parties devoted “hundreds of hours to negotiations,” but ultimately were unable to agree on new CBAs. Further, the court determined that one of the reasons for the hospital’s bankruptcy was the “legacy cost structure imposed by the existing CBAs.”

It then staid that the proposals were rejected “without good cause” by the unions. Prime said it negotiated in good faith and proposed increasingly generous offers to UNAC and SEIU with wages far above its existing agreements at its Los Angeles-area hospitals. Prime’s latest offer to SEIU maintained existing wages for roughly 90% of SEIU members, and increased wages for some of them. Prime said these wages would be substantially higher than those recently voted by SEIU members at three of Prime’s Los Angeles hospitals.

ON THE RECORD

“Receiving conditional approval is an important step in ensuring Prime is able to preserve the St. Francis mission for the benefit of associates, members of the medical staff and most importantly the patients and Southeast Los Angeles community that has relied on St. Francis for 75 years,” said Rich Adcock, CEO of Verity Health.

“We are honored to be selected to continue the St. Francis legacy and are working to review the conditions and finalize the sale as quickly as possible,” said Dr. Sunny Bhatia, CEO, Region I and chief medical officer of Prime Healthcare. “St. Francis’ mission is especially critical during this pandemic and we honor the service of all caregivers. Prime has already started investments at St. Francis that will enhance patient care as we commit to continue every service line, community benefit program, charity care and expand new services to the community.”