Category Archives: Health System

UPMC workers to strike Nov. 18

Posted on by • Posted in Employee Benefits, Employee Compensation, Employee Raise, Employee Strike, Health Insurance Industry, Health System, Hospital, Hospital Industry, Job, Job Market, Labor Shortages, Labor Spend Management, Labor Strike, Labor Union, Labor Union Grievance, Sign of the Times • Leave a comment
https://www.beckershospitalreview.com/hr/upmc-workers-to-strike-nov-18.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

Workers at Pittsburgh-based UPMC plan to strike over wages and benefits, the Post-Gazette reported Nov. 5. 

Service Employees International Union Healthcare Pennsylvania, which does not represent the workers but is supporting them, told Becker’s Hospital Review the strike would involve workers at UPMC hospitals in Pittsburgh, including transporters, dietary workers, housekeepers, nurses, patient care techs, medical assistants, pharmacy techs, surgical techs, valets, therapists, health unit coordinators and administrative assistants. Workers plan to strike for one day on Nov. 18.

The workers are demanding a $20 per hour minimum wage, affordable high-quality healthcare, elimination of all medical debt and respect for union rights, according to a union news release.

Their strike notice came after UPMC announced Nov. 2 that the health system is giving 92,000 staff members a bonus of $500 to thank them for their work during the pandemic. UPMC will issue the bonuses on Nov. 26. The health system also announced improvements to employee compensation and benefit programs, including raising the entry level wage to $15.75 in January, according to the Post-Gazette. 

“There was no ‘thank you pay’ until we started organizing to strike,” Juilia Centofanti, pharmacy tech at UPMC Children’s Hospital of Pittsburgh, said in a news release.

Ms. Centofanti added that employees are “owed this [$20 per hour wage] and so much more,” and said she “will continue organizing with my co-workers for the pay, safer staffing and union rights we deserve.”

In announcing the bonuses, Leslie Davis, president and CEO of UPMC, told workers, “Over the past 20 months, you have risen in truly exceptional ways to meet challenges we could have never anticipated. With your critical support, UPMC continues to care for so many.”

A UPMC spokesperson declined to comment to Becker’s on Nov. 5.

UPMC is a $23 billion healthcare provider and insurer. SEIU Healthcare Pennsylvania has been trying to organize about 3,500 hourly workers at UPMC Presbyterian and Shadyside hospitals for nearly a decade, but has not yet held a unionization vote, according to the Post-Gazette.

Read the full report here.

Lower volumes, higher wages, supply chain disruption all dragged down hospital

Posted on by • Posted in Employee Compensation, Employee Raise, Employee Staffing, Employee Staffing Shortage, Health System, Hospital, Hospital Industry, Labor Shortages, Labor Spend Management, Market Outlook, Market Trends, Market Uncertainty, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Operating Revenue, Supply Chain • Leave a comment
https://www.fiercehealthcare.com/hospitals/lower-volumes-higher-wages-supply-chain-disruption-dragged-down-hospital-performances?utm_source=email&utm_medium=email&utm_campaign=HC-NL-FierceHealthFinance&oly_enc_id=8564C4000334E5C

Hospitals’ performances declined “by almost every metric” during September as volumes dropped, average patient stays rose and expenses increased “dramatically” due to labor and supply chain issues, Kaufman Hall wrote in its latest monthly report.

Although revenue increased compared to this time last year, the industry analyst said that these pressures have led median change in hospital operating margin to decline 18.2% from August to September, not including CARES act funding.

These declines were greatest across regions heavily affected by the recent delta surge, with the west part of the country seeing the largest year-over-year drop in its median change in operating EBITDA margin (38%), Kaufman Hall wrote.

Hospital size also played a role in margin performance, they wrote, with hospitals containing more than 500 beds seeing year-over-year declines of 36% while those with 25 or fewer beds actually seeing their margins increase year over year.

Adjusted discharges dropped 5.1% month over month but remained up 11.4% year over year. Patient days similarly dropped 1.4% month over month, “reflecting a decrease in COVID-19-related hospitalizations,” but are still up 11.4% year over year, according to the report. Notably, the average length of stay saw increases across the board—0.7% month over month and 4.8% year over year.

Expenses and revenues continued their hand-in-hand climb during September.

For the former, total expenses grew 2.2% month over month and 11.2% year over year. Labor expenses increased 1.4% month over month at the same time as workers per patient bed declined, the group wrote. Other non-labor expenses, including drugs and medical supplies, also saw a 1.3% month-over-month increase.

“Multiple factors are contributing to alarming and sustained increases in hospital expenses,” Erik Swanson, a senior vice president of data and analytics with Kaufman Hall. “Growth in labor expenses are outpacing increases in hours worked, suggesting hospitals are paying more due to nationwide labor shortages. Rising supply and drug expenses also point to worldwide supply chain issues.”

Hospital revenues saw their seventh consecutive month of year-to-date increases when compared to 2020 and 2019 alike, “due in part to yearly rate changes and the continued rise in higher acuity cases,” Kaufman Hall wrote. Specifically, gross operating revenues minus CARES grew 12.3% year over year from 2020 and 12.3% year over year from 2019, with inpatient revenue rising faster than outpatient revenue.

Month over month was a different story, however, with gross operating revenue without CARES dropping 1.4%. While inpatient revenue was up 1.5% from August, a 3.3% decline in outpatient revenue “suggests that consumer worries about accessing care during the recent delta surge have led to another downswing,” Kaufman Hall wrote.  

Kaufman Hall’s reports incorporate data from more than 900 U.S. hospitals. The September numbers follow early warnings of delta-fueled recovery roadblocks from the group’s preceding monthly reports as well as recent hospital chain earnings calls highlighting high revenues, costs and COVID-19 patient counts.

The future of hospitals will be outside of hospitals

Posted on by • Posted in Consumer Focus, Consumer Preferences, Future, Health System, Home-Based Care, Hospital, Hospital Industry, Intensive Care (ICU), Pandemic, Patient Centered Care, Patient Conveniance, Patient Satisfaction, Smart Infrastructure, Wearables • Leave a comment

https://www.axios.com/the-future-of-hospitals-will-be-outside-of-hospitals-b3074182-a3cb-466e-89cb-66d2a0a27a72.html

Illustration of a medical red cross with beams of light cast from one side

Hospitals in the future will look far more tech-enabled and consumer-focused — when patients are actually even getting care in a hospital building itself.

Why it matters: Hospitals were already pushing more care outside their four walls before the pandemic. COVID accelerated that shift, forcing hospitals to reimagine what’s possible to deliver in patients’ homes, experts say.

The big picture: One way to picture what hospitals of the future will look like is to look at two brand new hospital buildings opened this fall by competing Pennsylvania health systems.

  • The buildings, by Penn Medicine and Highmark Health both offer hotel-like amenities such as better food, streaming services, and better-positioned outlets for cell phone charging. They’ve also made medical records more accessible to patients, executives say.
  • But they were also designed with the belief that, in the future, only the most complex care might be delivered in them.

State of play: Every medical room in Penn Medicine’s new $1.6 billion health pavilion can be turned into an ICU-capable room when needed.

  • It added 7% in costs to the project, but made sense considering the ICU demands of the pandemic and “not knowing what the future will be,” CEO Kevin Mahoney told Axios.
  • The hospital also offers patients bedside tablets that allow patients to control the light and temperature of the room, and to activate frosted privacy glass on the doors of their rooms.
  • The benefits are two-fold: patients really like it and it can help free up staff to focus on more critical tasks, Mahoney said.

“The pandemic was an amplifier for natural trends that were already starting to develop,” Highmark CEO David Holmberg told Axios. “The complexity of medical procedures [in hospitals] is going to be significantly higher.”

The bottom line: Tech advances will change the entire hospital experience no matter where the care is delivered.

  • Wearables will provide digital biomarkers to allow better patient monitoring from the home. “Smart” infrastructure will help patients find parking and navigate massive hospital campuses when they need to go into the hospital.
  • And 5G will allow doctors to pull up massive amounts of personalized data on a wireless screen in seconds, Hon Pak, chief medical officer at Samsung Electronics told Axios.
  • “The perspective we want to bring to the smart hospital is it’s not just about caring for the condition or the disease, but it’s about caring for the whole,” Pak said.

Moody’s: Rising costs will slow hospitals rebuilding margins to pre-COVID-19 levels

Posted on by • Posted in Employee Staffing, Employee Staffing Shortage, Health Insurance Industry, Health System, Hospital, Hospital Industry, Labor Shortages, Labor Spend Management, Nurse Agency Staffing, Nurse Travelers, Nurses Compensation, Nurses Shortage, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Operating Revenue, Physician Compensation, Physician Staffing • Leave a comment

https://www.healthcarefinancenews.com/news/rising-costs-will-make-it-difficult-hospitals-rebuild-margins-pre-covid-levels-moodys-says

Operating cash flow margins for nonprofit hospitals fell to a median 7% in 2020.

A shortage of nurses and other workers will continue to erode hospital financial performance into 2022, according to a new Healthcare Quarterly report from Moody’s.

A rise in COVID-19 cases in various regions of the United States has contributed to a wave of nurses, often burned out, resigning to take care of family, to work in less acute healthcare settings such as ambulatory care or to pursue higher-paying contract opportunities, such as becoming a travel nurse.

Hospitals are also having difficulty finding other types of healthcare workers, such as respiratory therapists and imaging technicians, as well as nonclinical workers in areas such as dietary, housekeeping and environmental services.

WHY THIS MATTERS

The report holds no surprises for hospital executives, who already know the financial affect labor shortages are having on revenue. But Moody’s confirms projections that rising costs will make it difficult for hospitals to rebuild margins to pre-COVID-19 levels. 

Labor shortages are driving up costs and also may be limiting the number of lucrative elective procedures, resulting in lost revenue. Not-for-profit hospitals saw operating cash flow margins fall to a median 7% in 2020, from 8.3% in the three prior years, according to Moody’s median data.

Hospitals using contract nurses report that hourly wages are very high, in some cases higher now with the Delta variant than during earlier COVID-19 surges. Many hospitals and health systems have also increased minimum wages for nonclinical workers and are finding they must compete with other service sectors, such as the food industry, to attract nonclinical staff.

Given their substantial reliance on government reimbursement from Medicare and Medicaid, most healthcare providers maintain limited pricing flexibility to offset the costs of higher wages. While there are opportunities for more lucrative commercial insurance contracts, rates are the subject of intense negotiations, limiting providers’ pricing power, Moody’s said. 

Providers with strong liquidity and diversified cash flow will remain better positioned to manage stress from cost constraints. Hospitals are taking steps to retain nurses, including developing “float pools” of nurses who can work in multiple departments, increasing retention and merit pay, and expanding healthcare benefits such as mental health and child care services. 

LifeBridge Health, a not-for-profit health system operating in Baltimore and Carroll County, Maryland, paid its nursing staff retention bonuses in December 2020 as the labor market tightened. To recruit nurses, many systems are offering signing bonuses in exchange for multi-year work commitments as well as scholarship and loan forgiveness programs with local nursing schools.

While these strategies will ease the effect of labor shortages over the long term, they will cause hospitals’ costs to increase in 2022 as salaries and benefits typically represent at least half of a hospital’s expenses. Labor shortages will also likely spark an increase in unionization efforts or lead to more difficult negotiations between unions and providers, potentially increasing costs via new contracts.

THE LARGER TREND

The quarterly report focused on the impact of labor shortages and cost pressures for various sectors, including hospitals, insurers, pharmaceuticals, healthcare services such as staffing firms and health insurers.

Health insurers are less affected by labor shortages, wage pressure and potentially burgeoning inflation than many other healthcare sectors, Moody’s said. Insurers reset premiums each year, which helps them to offset inflation. But if the government does not keep up with payment, providers will look to insurers to make up the shortfall. 

Large physician staffing companies, such as Envision Healthcare Corporation and Team Health Holdings, will experience pressure on their profitability as it becomes harder and more expensive to fill open positions as burnout and retirements decrease the number of doctors available to work.

Travel nurse staffing has higher profit margin resilience compared to physician staffing, the report said. 

For real estate investment trusts, worker shortages are slowing net operating income growth for REITs to invest in senior housing and skilled nursing facilities.

Growth in salaries and benefits has exceeded hospitals’ expense growth, a trend likely to continue for the remainder of 2021 and into 2022, Moody’s said in an earlier October report.

In one bright spot in the earlier report, Moody’s noted recent rises in nursing school enrollment indicating a more robust long-term staffing pipeline. However, the aging population, combined with a healthcare workforce that may be retiring from their jobs or quitting due to burnout, represent long-term healthcare staffing challenges nationwide.

FTC tightens reins on merger control: 6 things to know

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https://www.beckershospitalreview.com/hospital-transactions-and-valuation/ftc-tightens-reins-on-merger-control-6-things-to-know.html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G
Federal Trade Commission (FTC) Definition

The Federal Trade Commission announced Oct. 25 it is restoring its practice of requiring companies that previously pursued an anticompetitive merger to get prior approval for future transactions. 

Six things to know: 

1. The FTC will now require companies to get prior approval from the agency for any transaction “affecting each relevant market for which a violation was alleged” for at least 10 years. 

2. The FTC said in some situations it may seek prior approval provisions that cover broader geographic markets beyond just the relevant markets affected by the merger. The agency will consider several factors to make the determination, including the level of market concentration, the degree to which the transaction increases concentration and evidence of anticompetitive market dynamics. 

3. The FTC is less likely to pursue a prior approval provision against merging companies that abandon their transaction, the commission said. 

4. The FTC is reinstating the prior approval practice after the commission voted in July to repeal a 1995 policy statement that prevented the agency from imposing these merger restrictions. 

5. The agency said it has already implemented the policy by imposing strict limits on future acquisitions by Denver-based DaVita after the company’s acquisition of University of Utah Health’s dialysis clinics.  

6. “The FTC should not have to waste valuable time and resources investigating clearly anticompetitive deals that should have died in the boardroom,” Holly Vedova, director of the agency’s bureau of competition, said in a news release. “Restoring the long-standing prior approval policy forces acquisitive firms to think twice before going on a buying binge because the FTC can simply say no.” 

9 hospital deals called off

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https://www.beckershospitalreview.com/hospital-transactions-and-valuation/9-hospital-deals-called-off.html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G
How to pronounce Called Off - YouTube

In the last six months, several health systems have canceled plans to merge, acquire a hospital or unwind an existing partnership. 

Here is a breakdown of nine of them:

1. Ascension, AdventHealth to unwind partnership
Ascension and AdventHealth are unwinding their Amita Health partnership after working together for nearly seven years, the organizations announced Oct. 21.

2. SSM Health ditches deal to sell Missouri hospital to Quorum
St. Louis-based SSM Health has abandoned its plan to sell a Missouri hospital to Brentwood, Tenn.-based Quorum Health.

3. North Carolina system severs ties with Atrium, joins UNC Health
Carolinas HealthCare System Blue Ridge, a two-campus system in Morganton, N.C., cut ties with Atrium Health and partnered with UNC Health. Carolinas HealthCare System Blue Ridge and UNC Health finalized their management services agreement Oct. 1. Under the partnership, Blue Ridge will be renamed UNC Health Blue Ridge.

4. Tower Health won’t sell hospitals, pursues alliance with Penn Medicine
West Reading, Pa.-based Tower Health abandoned plans to sell the entire health system and instead will remain independent. It also signed a letter of intent to develop a strategic alliance with Philadelphia-based Penn Medicine.

5. Iowa hospital exits MercyOne affiliation
Mercy Iowa City (Iowa) is ending its affiliation with MercyOne’s health network in West Des Moines, Iowa.

6. LifePoint, Prisma Health call off hospital sale
A deal to sell the three hospitals in South Carolina fell through. Brentwood, Tenn.-based LifePoint inked a deal to sell the three hospitals and an ER to Greenville, S.C.-based Prisma Health, but the parties canceled the deal April 9. The health systems said significant delays and challenges with the Federal Trade Commission “made it prohibitive to move forward.” Medical University of South Carolina in Charleston later purchased the three hospitals.

7. Sentara, Cone Health nix merger
Norfolk, Va.-based Sentara Healthcare and Greensboro, N.C.-based Cone Health have abandoned plans to merge into an $11.5 billion system, the organizations said in a joint statement June 2. 

8. CommonSpirit’s plan to sell 14 hospitals to Essentia abandoned
Duluth, Minn.-based Essentia Health and Chicago-based CommonSpirit Health have abandoned a deal that would have added 14 hospitals and three clinics to Essentia Health’s network.

9. 2 hospitals to part ways with U of Kansas Health System
HaysMed, a single-hospital system in Hays, Kan., and Pawnee Valley Community Hospital in Larned, Kan., will depart from the University of Kansas Health System. The organizations mutually agreed to part ways.

ROI realized from pre-bill review of documentation and coding

Posted on by • Posted in Clinical Documentation Improvement (CDI), Health System, Hospital, Hospital Industry, Physician, Return on Investment, Rev Cycle Management, Revenue Cycle • Leave a comment

https://www.healthcarefinancenews.com/news/roi-realized-pre-bill-review-documentation-and-coding

Hospitals can decrease denials by having physicians involved in the mid-revenue cycle review process.

Involving physicians in the mid-revenue cycle process can increase hospital ROI by 700%, according to Enjoin CEO Dr. James Fee.

Hospitals and health systems can improve revenue through a pre-bill review prior to claims submission, according to Fee. Enjoin does this work as a revenue cycle consulting business focused on documentation and coding. 

One of the first things Enjoin physicians check is that the care of the patient has been properly recorded. 

“We’re never taught how to communicate with those who record our work, so it can be captured in the coding system,” said Fee, who continues to practice as a physician in Baton Rouge, Louisiana.

Secondly, hospitals need to check the accuracy of the representation of that patient. 

“You want to make sure the severity of the patient is justified to get appropriately reimbursed,” Fee said.

WHY THIS MATTERS

Documentation and coding falls in the middle of the revenue cycle. Through a pre-bill review of the estimated 30-50% of cases that are chosen for review at this stage because of their complexity, organizations can ensure the documentation supports coding compliance, MS-DRG accuracy, quality performance data and other measures.

Results have shown an impressive 700% percent ROI on average and in some cases, 1,000%, according to Fee. On average, the process shows a 17% decline in denial rates.

Hospitals already have clinical staff in the rev cycle. Physicians add a layer of review. 

“We have practicing physicians who understand the disease process,” Fee said. “We look at a case to make sure the diagnosis is correct. What was the focus of care for that hospital stay? That takes a level of clinical interpretation.”

Enjoin, which has been around for about 30 years, does not offer a software product, but uses an analytics platform. It partners with clients as consultants in a technically agnostic way.  

Fee will speak on the topic “Mid-Revenue Cycle Drives Financial Stability During COVID19: How One Academic Medical Center Prospered,” in-person during the Healthcare Financial Management Association annual conference, Monday, November 8, in Minneapolis. 

AUTOMATION

As revenue cycle directors look to automate, this is more easily done on the front and back ends of the revenue cycle rather than the mid-cycle process, according to Fee. This is one area that will have to wait until AI makes it possible to interpret the data seen by physicians and other clinicians, he said.

“Automation is easy to say as one-stop shopping for an easy solution, but you need to understand what you’re automating,” he said.

There can be an automation component to the prioritization of reviews, something Enjoin plans to bring to market soon.

“Automation will continue to rapidly grow,” Fee said, “but there will always be that people component.”

THE LARGER TREND

As in other areas of healthcare, COVID-19 brought a level of uncertainty about the proper testing and diagnosis recorded in the revenue cycle.

During the most recent wave of COVID-19, many hospital ICU beds were again full, and health systems once again were canceling elective surgeries, with a resulting loss of revenue. 

Higher expenses for labor, drugs and supplies, as well as a continuation of delayed care, are projected to cost hospitals an estimated $54 billion in net income over the course of this year, according to Kaufman Hall analysis released last month by the American Hospital Association.

“The biggest impact for reimbursement was the loss of patient care,” Fee said. “We were in a fee-for-service model and margins were driven by elective surgeries.”

COVID-19 also shifted the commercial dominance of margins to lower-paying government reimbursement as employees lost their jobs, according to Fee.

During the first COVID-19 wave in 2020, CFOs were asking he said, “How do I adapt to that?” Many looked to prevent financial leakage in employing resources they already had. 

“That’s where CDI (Clinical Documentation Improvement) is helpful,” Fee said.