Category Archives: Health System

CEO Kevin Spiegel Leaves Erlanger Amid Physicians’ Rancor

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https://www.healthleadersmedia.com/strategy/ceo-kevin-spiegel-leaves-erlanger-amid-physicians-rancor

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The exiting president and CEO has been credited with leading the nonprofit system’s financial turnaround. But he has also seen his share of controversy.

The top executive of Erlanger Health System, based in Chattanooga, Tennessee, has left the organization after months of smoldering conflict with some of the nonprofit’s physicians.

President and CEO Kevin Spiegel’s departure was immediate, according to a statement released Wednesday by board chairman Mike Griffin, who offered his well-wishes to the departing leader.

Spiegel, who had been on the job more than six years, reportedly said his separation from the organization was a mutual decision.

“We’re still working out the details, and hopefully that’ll be complete by the board meeting in two weeks,” Spiegel told the Times Free Press‘ Elizabeth Fite. “This is a great hospital, and it’s a great organization, and it’s only going to do better and better things.”

Erlanger’s board is expected to pick Spiegel’s successor in two weeks, at its regularly scheduled board meeting, according to Griffin’s statement.

Spiegel’s exit comes less than two weeks after the board held a special public meeting to talk about physicians’ concerns and criticism of Erlanger’s senior leadership team.

Spiegel is the third high-ranking Erlanger executive to leave since Fite reported in June on a letter from the Medical Executive Committee explaining its reasons for a unanimous vote of “no confidence” in the current executive leadership team. The other two were Executive Vice President and Chief Operating Officer Rob Brooks and Vice President of Patient Safety and Quality Pam Gordon.

Spiegel has been credited with leading Erlanger out of choppy financial waters, but he has also been caught up in a number of controversies, as the Times Free Press reported.

 

 

The U.S. has fantastic health care, the problem is….

Posted on by • Posted in Access, Affordability, Chief Executive Officer (CEO), Consumer Preferences, Health Insurance Industry, Health Plan, Health Policy, Health System, Hospital, Hospital Industry, Leadership, Payment Models, Physician, Physician Practice Management, Social Determinants of Health, Strategy • Leave a comment

Click to access wf1341834-cmo-campaign-wyatt-decker-article-part1.pdf

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In part 1 of an executive interview series, CEO and physician Wyatt Decker discusses his perspectives on today’s challenges and opportunities for reinventing health care.

IMAGINE THIS SCENARIO: there are 200 people in a room and each person has a serious health condition. Cost is not a barrier to each of these people receiving their prescribed treatment. A question is asked — how many of you would book a flight to a different country to get your care? You guessed it. No hands go up.

Dr. Wyatt Decker is chief executive officer of OptumHealth and an emergency medicine physician who brings more than two decades of service within the Mayo Clinic. He held dual roles as chief medical information officer for Mayo Clinic and CEO of Mayo Clinic in Arizona. Dr. Decker often conducts this experiment with audiences to underscore the quality of care delivered in the United States. We often hear about the problems of health care. No doubt, there are deep and serious problems. However, in scenarios like the one above, we understand that the quality of care delivered by our nation’s physicians is among the finest available. So why do we hear so much about what’s wrong?

According to Dr. Decker, the real opportunities for reinventing health care lie in improving system access, increasing affordability and meeting consumer preferences. “ All of these things really require us to think deeply about how health care is delivered and how can we do it better,” he says.  In part 1 of a recent conversation, Dr. Decker shares lessons learned and offers his perspective on where today’s health care executives and clinical leaders should focus.


What is your take on the state of the health care industry today? What challenges are driving the need to rethink health care systems and delivery?


THE CHALLENGE OF HEALTH CARE ACCESS:  “ People want to get to a doctor or a health care team and they can’t. Either because they are underinsured or they don’t have the financial resources. They don’t know where to go or sometimes there just aren’t enough doctors or the right type of doctor, whether it’s primary care or a specialist available in their area to see.”

THE CHALLENGE OF HEALTH CARE AFFORDABILITY:
“ We hear a lot about affordability of health care and outof-pocket cost can be very high, but also the health care system itself is very expensive. So how do we make it more affordable for large employers, individuals, consumers and even the government itself? Can we get on a more sustainable path?”

THE CHALLENGE OF CONSUMER PREFERENCES:  “ Most people who’ve experienced the health care system feel that it isn’t focused around their needs, schedules or preferences. We’re entering an era where in most other industries there’s lots of personalization and consumer focus. Health care has been very slow to evolve. We need to make it an experience where people feel appreciated, valued and respected. Not just that they’re getting great quality care, but also that their preferences and needs are being met.”

“ Our nation’s care providers are deeply committed and among the best-trained in the world. But I also see them in a system that is struggling. Emergency departments are, at times, the last resort for people who lack resources and access to care. I’ve seen patients struggle to manage chronic conditions without the right support and how the absence of good guidance can create confusion.”

Clearly, the need to reinvent in all aspects of health care is top of mind for many. But it can be difficult to figure out where to start. Can you discuss where you think it’s smart for leaders to focus?


“ We should all be thinking about how we drive towards a health care system that really creates and adds value to people’s lives,” says Dr. Decker. Here’s his advice on key areas of focus.


PAYMENT MODELS:  “ Move towards payment models that actually reward the correct behaviors in health care. What do I mean by that? The pay-per-value model — rewarding groups of providers to keep people well and healthy — is far more powerful than the traditional fee-for-service model.”


LOCAL ECOSYSTEMS:  “ Recognize that health care is local. It’s important to create ecosystems that deliver great, connected care for individuals throughout the health spectrum. This means the patient and their health data move seamlessly between specialists, hospitals, ambulatory care centers, and so on. These kinds of networks and interoperability of data is crucial to create a successful health care system.”

SOCIAL DETERMINANTS OF HEALTH:  “ Health care outcomes are driven not only by the quality and capabilities of the health care provider, but also by social determinants of health. Good health care addresses things like access to good nutrition, social connections, transportation and more that can limit the ability for a person to get and stay healthy. For example, in-home health visits to help patients who have difficulty traveling or easily obtained referrals to social and community services can really enable success.”


From your perspective, what could health  care reinvention mean to a patient, provider  or health plan?


TO PATIENTS:  “ It means a health care system where instead of waiting for something to go wrong, there is a team helping you proactively flourish and be healthy. It means a simple phone call or an app or a video chat could advise you on when you might be at risk of developing a serious condition before you develop it. It means a system that  is always there for you, almost like a guardian angel. It helps you navigate the system and your journey towards health and wellness. It means all of this in a health care system that is easy to access, affordable, high-quality  and compassionate.”


TO PROVIDERS:  “ Providers have high rates of frustration and even burnout with their own profession. Reinvention looks to reduce the very heavy clerical burden driving these trends. Doctors today spend about two hours of clerical and non-visit care for every hour of direct patient care that they provide. However, when you talk to doctors, they find the most fulfillment in engaging directly with patients and making a difference in their care. Reinvention means relieving exhausted providers of administrative and clerical duties that don’t bring enjoyment or result in improved care  and outcomes.”


TO HEALTH PLANS:  “ Health plans are frustrated because they pay for a lot of care that evidence shows doesn’t improve outcomes or help patients on their journey to health and wellness. Payers are happy to pay for health care if it’s necessary. But it doesn’t make sense to pay for care that doesn’t add value. Reinvention means reducing this financial waste to bring down the cost of coverage for everyone.”

“ We have an opportunity now to make the health care system work better for everyone. Improve access and affordability for patients, allow doctors to spend more time with patients, and increase efficiencies within health plans. There’s an opportunity to help people connect the dots and get everyone working together.”

You’ve been a practicing physician and a business leader. Tell us the lessons learned from this unique vantage point.
“ I have spent most of my career as a practicing physician in busy, level 1 trauma centers and emergency departments. In that environment, you see health care at its finest and also how the health system can be challenging. I think in amazement of the times I’ve seen teams of people —  multiple physicians, nurses and technicians — come together as one unit to save someone from a major trauma. I also have great admiration for the persistence of doctors who save lives by diagnosing life-threatening conditions through nuanced symptoms.
I’m a deep believer that in health care, we need to place the patient at the center of everything we do. I always remind young doctors and medical students…imagine for a moment that your patient is you or a loved one. You’d want the doctor to listen and explain things in a compassionate and thoughtful manner. You’d want them to be focused. You’d want them to recognize your unique history and what’s important to you. The notion of putting the patient at the center of everything is something that I have carried with me throughout my career. I have also dedicated myself to developing better models of care and systems that allow doctors and care teams to function seamlessly, be high-performing and deliver great outcomes for patients.”

“ I have an appreciation for how powerful it can be when you work to reduce waste, create care that’s efficient and care that is patient-focused. Today I’m focused on an interesting juxtaposition — creating the right mix of scalable innovations that help our whole nation succeed in health care while also improving the personal and individual patient health care experience.”

STAY TUNED FOR PART 2  of this executive interview series to learn more about Dr. Wyatt Decker’s perspectives on the intersection of technology and health care, the human impact of transformation and physician burn-out.

 

 

 

 

 

 

Sutter Health faces class-action lawsuit over pricing: 4 things to know

Posted on by • Posted in Attorney General, Class Action Lawsuit, Health System, Lawsuit, Monopoly Behavior, Narrow Network, Out of Pocket Expenses, Out-of-Network • Leave a comment

https://www.beckershospitalreview.com/finance/sutter-health-faces-class-action-lawsuit-over-pricing-4-things-to-know.html?oly_enc_id=2893H2397267F7G

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A class-action lawsuit alleging Sutter Health violated California’s antitrust laws by using its market power to overcharge patients is slated to open Sept. 23, according to the Los Angeles Times.

Four things to know:

1. The lawsuit dates back to 2014. Self-funded employers and union trusts initially filed the case, which was later joined with a lawsuit brought in 2018 by California’s attorney general.

2. In March, California Attorney General Xavier Becerra said a six-year investigation revealed Sutter restricted health insurers from providing consumers with more low-cost health plan options, and the health system set excessively high out-of-network prices. Sutter also allegedly restricted publication of provider cost information, which impeded transparency.

3. Sutter could be liable for as much as $2.7 billion. The plaintiffs are seeking up to $900 million in damages, and that amount can be tripled under California’s antitrust law, according to the Los Angeles Times.

4. Sutter denies the allegations. Regarding the lawsuit, a health system spokesperson released the following statement to the Los Angeles Times:

“This lawsuit irresponsibly targets Sutter’s integrated system of hospitals, clinics, urgent care centers and affiliated doctors serving millions of patients throughout Northern California. While insurance companies want to sell narrow networks to employers, integrated networks like Sutter’s benefit patient care and experience, which leads to greater patient choice and reduces surprise out-of-network bills to our patients.”

Access the full Los Angeles Times article here.

 

 

 

7 health systems with strong finances

Posted on by • Posted in Credit Quality, Credit Ratings, Health System, Hospital, Net Income, Nonoperating Income, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue • Leave a comment

https://www.beckershospitalreview.com/finance/7-health-systems-with-strong-finances-090919.html?oly_enc_id=2893H2397267F7G

Here are seven health systems with strong operational metrics and solid financial positions, according to recent reports from Moody’s Investors Service, Fitch Ratings and S&P Global Ratings.

Note: This is not an exhaustive list. Hospital and health system names were compiled from recent credit rating reports and are listed in alphabetical order.

1. St. Louis-based BJC Health System has an “Aa2” rating and stable outlook with Moody’s. The health system has good margins and a favorable market position, according to Moody’s.

2. Hollywood, Fla.-based Memorial Healthcare System has an “Aa3” rating and stable outlook with Moody’s. The health system has a dominant market position in the southern portion of South Broward County and above average balance sheet liquidity, according to Moody’s.

3. Broomfield, Colo.-based SCL Health has an “Aa3” rating and stable outlook with Moody’s and an “AA-” rating and stable outlook with S&P. The health system has strong operating performance and solid balance sheet measures, according to Moody’s. The credit rating agency expects the health system’s cash flow to continue to grow.

4. Seattle Children’s Healthcare System has an “Aa2” rating and stable outlook with Moody’s. The health system has consistently strong operating performance, solid liquidity measures, and a favorable reputation within a broad service area, according to Moody’s.

5 Norfolk, Va.-based Sentara Healthcare has an “Aa2” rating and stable outlook with Moody’s. The health system has a leading market position in its service area, robust balance sheet metrics and solid margins, according to Moody’s.

6. St. Louis-based SSM Health has an “AA-” rating and stable outlook with Fitch. The health system has a strong financial profile and a growing health plan, according to Fitch. The credit rating agency expects SSM to continue to grow unrestricted liquidity and sustain improved operating performance.

7. Arlington-based Texas Health Resources has an “Aa2” rating and stable outlook with Moody’s. The health system has solid financial performance, a leading market position, good coverage of moderate debt levels, and a strong cash position, according to Moody’s.

 

A Wave of Layoffs Loom for Wall Street

Posted on by • Posted in 2020 Election Issues, Health Policy, Health System, Hospital, Hospital Industry, Leadership, Net Income, Nonoperating Income, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Strategic Leadership, Strategy • Leave a comment

https://www.crainsnewyork.com/markets/wave-layoffs-looms-wall-street?utm_source=breaking-news&utm_medium=email&utm_campaign=20190909&utm_content=hero-readmore

 

It’s been reported that up to 15% of Goldman Sachs partners are preparing to leave by year’s end. Truth is, firms across Wall Street are having a crummy year and lots of personnel are going to be purged soon.

Investment-banking revenues had their worst first half since 2006, according to a report last week by Coalition, a London-based research firm. The weakest performance is in bond, currency and commodity trading, which accounts for 42% of revenue, down from almost two-thirds before the financial crisis. When bankers complain about regulation tying them down, this is what they mean. Shed a tear?

Because revenues have fallen faster than expenses, the industry’s return on capital has dropped to 6.7%. Its cost of capital, however, is in the 10% to 12% neighborhood.

For Goldman, Morgan Stanley and the like, the encouraging news is they remain highly profitable and have fewer problems than Deutsche Bank or UBS and their never-ending restructuring. The grimmer news is shares of Goldman and Morgan Stanley are 21% and 27% lower, respectively, than 18 month ago. President Donald Trump’s trade wars and sluggish economic conditions overseas are taking a toll.

What could turn things around? If recession fears abated there could be a jump in corporate mergers, which produce a ton of fees. It would also help if WeWork went public at a hefty price, but right now WeWork isn’t working well as a possible initial public offering. Help could come from a Trump administration eager to ease the banks’ regulatory burden by reducing the amount of capital they must hold.

Still, making money in the markets figures to get harder in the years ahead. Late last month the $210 billion New York state pension fund dropped the long-term assumed rate of return on its investments to 6.8% from 7%. It was the third time the pension fund has cut its expected return since 2010, when it was 8%.

“The long-term outlook for investors is changing and requires a more conservative approach,” state Comptroller Thomas DiNapoli said in a statement.

If big buyers of investments are dialing down expectations, their dealers will have little choice but to follow.

A business I know well—journalism—has been permanently altered by the same technological upheaval attacking the livelihoods of traders, dealmakers and number-crunchers. Staffers at BuzzFeed and other news organizations have responded by unionizing so their owners will collectively bargain with them. It would be odd indeed for the Wall Street crowd to spend some of their bonus money casting their lot with organized labor. But given how precarious their jobs look, maybe they should.

 

 

China trade war will hit hospitals in the wallet, medical supply company says

Posted on by • Posted in 2020 Election Issues, Health System, Hospital, Hospital Industry, Operating Expenses, Operating Margin, Operating Performance, Product Shortages, Supply Chain • Leave a comment

https://www.beckershospitalreview.com/supply-chain/china-trade-war-will-hit-hospitals-in-the-wallet-medical-supply-company-says.html?origin=cfoe&utm_source=cfoe

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The U.S. trade war with China threatens to hit hospitals and health systems as well as consumers in the form of higher prices and product shortages, the president of medical supply distributor DealMed told Yahoo Finance.

On Sept. 1, President Donald Trump imposed a 10 percent tariff on $300 billion in Chinese imports, tacking more medical supplies on the list. And the administration is threatening to hike the current 25 percent tariff on $250 billion in Chinese imports to a 30 percent tariff on Oct. 1.

The products affected by the tariffs are used daily in physician offices, hospitals, pharmacies and by consumers at home, according to DealMed President Michael Einhorn.

“Think of products like gauze that are in Band-Aids. Think of other products like medical gloves,” Mr. Einhorn told Yahoo Finance. “Those products will be somewhat affected, somewhere between 10 percent and 25 percent.

“When you throw tariffs into the mix, we’re talking about potential shortages, we’re talking about potential price increases — not only to hospitals and big healthcare systems, but also to the consumer at home,” Mr. Einhorn said.

Read the full report here. 

 

 

 

Hospital profitability up after significant declines in June, Kaufman Hall finds

Posted on by • Posted in Health System, Hospital, Hospital Industry, Key Performance Indicators, Net Income, Operating Income, Operating Margin, Operating Performance, Operating Revenue • Leave a comment

https://www.beckershospitalreview.com/finance/hospital-profitability-up-after-significant-declines-in-june-kaufman-hall-finds.html

Hospitals recorded profit improvements in July after posting significant year-over-year decreases in June, according to a report from financial advisory firm Kaufman Hall.

The firm found hospitals’ EBITDA margin rose 77.5 basis points month over month. Hospitals also saw their operating margins climb 105 basis points. Both measures marked the sixth month of improved hospital profitability out of the past seven months.

“While these trends generally are good news for the industry, the improvements do not necessarily mean that hospitals are achieving sufficient margins,” according to Kaufman Hall. “Also, margins of individual hospitals do not necessarily reflect those of overall health systems.”

Kaufman Hall noted that hospitals did see their volumes increase in July compared to June, which saw declines in patient volumes.

Read the full report here. 

 

Comeback or blip? Nonprofit hospital margins show gains in 2018

Posted on by • Posted in Health System, Hospital, Hospital Industry, Net Income, Non-Profit Healthcare Industry, Nonoperating Income, Operating Income, Operating Margin, Operating Performance, Operating Revenue • Leave a comment

https://www.healthcaredive.com/news/comeback-or-blip-nonprofit-hospital-margins-show-gains-in-2018/562131/

Dive Brief:

  • Nonprofit hospitals’ operating margins are improving after falling for the last two years, according to an annual report on hospital performance from Fitch Ratings.
  • Smaller hospitals are driving the turnaround and it’s a notable trend because they’re not able to command higher rates from payers like their peers the “must-have” hospitals, according to the report.
  • “The fact that [smaller hospitals] saw meaningful improvement is a good indicator that operational strength is returning to the sector, though the highs we saw in 2015 may be an unattainable highwater mark,” Kevin Holloran, senior director for Fitch, said in a statement.

Dive Insight:

The industry continues to experience pressures including slowing inpatient admissions and more patients covered by government-sponsored health insurance such as Medicare, which typically reimburses at a lower rate compared to commercial insurers.

Wages are also under pressure amid a tight labor market, and the need to shift to an environment that is increasingly reimbursing for quality — not quantity.

The question now is whether these recent gains are a “temporary blip” or a major shift, Fitch analysts noted.

“Not-for-profit hospitals are by no means out of the woods yet with sector pressures likely to continue, but there appears to be light at the end of the tunnel in terms of longer-term stability,” Holloran said.

Still, despite the margin improvement, Fitch maintains a negative outlook for the sector.

Even still, “the not-for-profit healthcare sector has shown considerable resiliency over the years, weathering events like the 2008/2009 great recession, sequestration cuts to governmental funding, and a shifting payor mix,” Fitch analysts said.

Fitch believes consolidation among providers will continue. Providers will focus on increasing their size and scale to maintain leverage over insurance companies and allow them to invest in population health.

 

Another round of debate over hospital consolidation

Posted on by • Posted in 2020 Election Issues, Antitrust, Health Policy, Health System, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Hospital, Hospital Industry, Market Consolidation, Market Power, Mergers & Acquisitions, Monopoly, Monopoly Behavior, Out of Pocket Expenses, Quality, Quality of Care • Leave a comment

Image result for Another round of debate over hospital consolidation
 
Are hospital mergers a good thing or a bad thing?

Much of the answer to that question depends on what happens after the merger—does the combined organization provide better, more efficient care, or does it use its increased leverage to raise prices? Yet another round of back and forth on this issue took place this week, as the American Hospital Association (AHA) released the results of a study it commissioned from economic analysis firm Charles River Associates (CRA), while a group of academic antitrust specialists countered with their own briefing in response.

The AHA study, based on interviews with select health system leaders and econometric analysis by CRA, shows (surprise, surprise) that consolidation decreases hospital expenses by 2.3 percent, reduces mortality and readmissions, and reduces revenue per admission by 3.5 percent—indicating that the “savings” from consolidation are being passed along to purchasers. The economists, including Martin Gaynor at Carnegie Mellon, Zack Cooper at Yale, and Leemore Dafny at Harvard, countered in their briefing (surprise, surprise) that CRA’s research was biased in favor of hospitals, and cited numerous academic studies that indicate that hospital consolidation drives overall healthcare costs higher.

Beyond the predictable debate, our view is that consolidation can and should lead to better quality and lower prices—but that it largely hasn’t delivered on that promise. The prospect of “integrated care” that’s often touted by consolidation advocates hasn’t materialized in most places, both because hospital executives haven’t pushed hard enough on strategies to produce it, and because the market lacks sufficient incentives to encourage it.

Judge approves $55M sale of Hahnemann residency programs

Posted on by • Posted in Academic Medical Center, Bankruptcy, Chapter 11, Creditors, Health Policy, Health System, Hospital, Hospital Industry, Lawsuit, Residency Programs • Leave a comment

https://www.beckershospitalreview.com/hospital-transactions-and-valuation/judge-approves-55m-sale-of-hahnemann-residency-programs.html

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Bankruptcy judge approves sale of Hahnemann residency slots
 
This week a Federal judge ruled that the owner of Hahnemann University Hospital could move forward with the sale of the system’s more than 550 residency slots as part of a plan to pay off creditors. The training slots will be sold to a consortium of health systems led by Thomas Jefferson University Hospitals for $55M. Hahnemann had previously agreed to sell the positions to Reading, PA-based Tower Health before they were outbid by the Jefferson consortium, who will keep the majority of the positions—and new physician labor—in the Philadelphia area.

The judge noted the difficulty of the decision, saying it was the kind of case that would “cause a judge to lie awake at night”. The ruling is huge win for debtors, and a blow to the Federal government, which strongly opposed the sale and has seven days to appeal.

Should it stand, the case could set the precedent that residents and the positions they hold are an asset that can be negotiated for and sold. Interns and residents provide low-cost labor that is essential for 24/7 coverage in many large hospitals, and the complex system of allocating and funding of residency training slots is a funds transfer from the Federal government to health systems.

Allowing hospitals to sell those slots to the highest bidder could undermine the stability of urban hospitals, particularly those who are investor-owned, as owners look to maximize short-term profits.