Category Archives: Uncategorized

New York nonprofit healthcare organization hit with $200K HIPAA fine

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https://www.beckershospitalreview.com/cybersecurity/new-york-nonprofit-healthcare-organization-hit-with-200k-hipaa-fine.html

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The Arc of Erie County, a Buffalo, N.Y.-based nonprofit that serves people with developmental disabilities, agreed to pay a $200,000 penalty to the state of New York to resolve allegations it violated HIPAA in a yearslong data breach.

As part of the settlement, Arc of Erie County is required to conduct a thorough risk analysis of vulnerabilities of all electronic equipment and data systems, as well as review its policies and procedures. It must submit a report on its findings to the Attorney General’s Office within 180 days of the settlement.

“The Arc of Erie County’s work serves our most vulnerable New Yorkers — and that comes with the responsibility to protect them and their sensitive personal information,” New York Attorney General Barbara Underwood said in a news release. “This settlement should provide a model to all charities in protecting their communities’ personal information online.”

In early February 2018, Arc of Erie County learned clients’ personal information — including full names, Social Security numbers, gender, race, primary diagnosis codes, IQ scores, insurance information, addresses, phone numbers, dates of birth and ages — was exposed on its website.

An investigation determined the information had been publicly accessible in spreadsheets since July 2015 and 3,751 clients were affected. The webpage was intended only for internal use, but the investigation noted several unauthorized third parties accessed the datasets on numerous occasions. Officials said there is no evidence of malware on the system or ongoing communications with outside IP addresses.

The organization notified all affected individuals in March, and it offered them one year of free identity theft protection services.

 

Swedish Health Services cuts 550 jobs

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https://www.beckershospitalreview.com/hospital-management-administration/swedish-health-services-cuts-550-jobs.html

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Seattle-based Swedish Health Services is eliminating about 550 jobs, which represents about 4 percent of the health system’s 13,500-person workforce, according to The Seattle Times.

The job cuts are part of the system’s ongoing reorganization plan. In a memo to employees, Swedish Health CEO Guy Hudson, MD, said the system is cutting jobs and making other changes to shift to a “more cost-effective model of care” that involves investing more in outpatient care and focusing less on hospital care, according to the report.

Swedish Health declined to say which positions or programs would be affected by the job cuts. The system intends to inform employees by Sept. 14.

Although the system is scaling back its workforce in some areas, Swedish Health plans to add new staff to support other service lines, including adding physician assistants and registered nurse practitioners to some of its primary care clinics.

 

 

Newly merged Advocate-Aurora sees 20% drop in operating income

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https://www.healthcaredive.com/news/newly-merged-advocate-aurora-sees-20-drop-in-operating-income/532082/

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Dive Brief:

  • After finalizing its merger in April, Downers Grove, Illinois-based Advocate Aurora Health released a financial report on the combined company’s year-over-year performance showing a 20% drop in operating income to $220 million for the first six months of the year. The decline is partly due to $34 million in costs related to both the merger and implementation of a new EHR.
  • Total revenue increased 3% to nearly $6 billion for the first six months of the year, while revenue increased 3.5% to about $3 billion for the quarter. Net patient service revenue grew across most service lines, excluding inpatient volumes during the quarter, according to the financial statement.
  • While revenue climbed, so did expenses. The 27-hospital system increased its spending on salaries and wages, supplies and purchased services, and contracted medical services. Total expenses grew 4% to nearly $2.87 billion during the three months ended June 30, and increased 3.5% to $5.68 billion during the first six months of the year.

Dive Insight:

In line with industry trends, inpatient volumes for what is now the 10th-largest nonprofit health system in U.S. either slightly declined or remained flat during the reporting periods. 

About 85,000 patients were discharged from Advocate Aurora during the first six months of the year while more than 3 million patients during that time were seen either during a traditional doctor’s visit or through another outpatient setting. The system’s home care unit saw the largest increases during both reporting periods. 

Meanwhile, the company is not alone in its struggles to rein in EHR rollout costs. The University of Texas MD Anderson Cancer Center in Houston and Partners HealthCare in Boston have all experienced those costs weighing down financial performance, according to a previous report from Becker’s.

The financial report of the combined companies marks a milestone in Advocate’s quest for a partner to increase its scale. The system set its sights on Aurora after it had long tried to acquire NorthShore University Health System, a deal Advocate later dropped after pushback from antitrust regulators worried about price increases.

Analysts don’t expect the frenzied pace of M&A in the healthcare sector to slow down any time soon. The Advocate-Aurora deal was the largest regional transaction, Kaufman Hall reported, amid a year that turned out blockbuster deals threatening to shake up the status quo. 

As patients seek care in lower-acuity settings and as payers and providers team up to transform access to the industry, hospitals have eyed mergers to increase scale and offerings to attract more patients.

The consolidated financial statement details the results of the quarter ended June 30 and the first six months of the year.

 

 

 

Dr. Patrick Soon-Shiong failed to turn around Verity Health: 7 things to know about where the system stands now

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https://www.beckershospitalreview.com/finance/dr-patrick-soon-shiong-failed-to-turn-around-verity-health-7-things-to-know-about-where-the-system-stands-now.html

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El Segundo, Calif.-based Verity Health filed for bankruptcy in August, just 13 months after billionaire entrepreneur Patrick Soon-Shiong, MD, bought a majority stake in its management company with a promise to revitalize the health system.

Here are seven things to know about Verity Health’s financial situation.

1. The health system filed for bankruptcy Aug. 31. It secured a $185 million loan to remain operational during the bankruptcy, which CEO Richard Adcock told Reuters could last at least a few years.

2. Verity is still seeking a buyer for all or some of the hospitals. Mr. Adcock told Reuters the system has been contacted by more than 100 potential buyers since July 9, when it announced it was exploring strategic options due to nearly $500 million in long-term debt. “We are exploring a number of options to deleverage our balance sheet and address challenges our hospitals face after a decade of deferred maintenance, poor payer contracts and increasing costs,” said Mr. Adcock.

3. The system’s financial issues pre-date Dr. Soon-Shiong’s investment but have not improved since. Mr. Adcock told Reuters that Verity has been hemorrhaging $175 million per year on cash flow basis. Verity has operated at a loss for at the least the past three years. Executives had planned to break even in the 12 months ended June 2018, however, the system reported its operating performance compared to the budget was unfavorable by $116 million, according to a report from Politico. In the 12 months ended June 2017, the system saw losses of $37 million, and the year prior marked nearly $200 million in operating losses.

4. Prior to filing for bankruptcy, Verity stopped all capital improvement projects, Politico reported in the same article. However, the system needs millions of dollars in updates to meet California’s seismic standards by 2019. Approximately 94 percent of California’s hospitals already comply with this major legal requirement, according to the report. Verity Health needed an estimated $66 million in improvements. Since November, the system has put $5.1 million toward compliance. If Verity does not meet deadlines for compliance in 2019, its hospitals can no longer be used for patient care.

5. The health system’s spending on charity care declined 28 percent at five of its six hospitals in the first quarter of 2018, compared to the same period the year prior. The sixth hospital reported an error in its financials. Dr. Soon-Shiong updated the health system’s financial assistance policy in December to exclude services from more than 50 hospital departments, according to Politico. Preliminary data from the second quarter of 2018 suggests this trend has continued.

6. The health system is spending millions on an Allscripts EHR implementation. Dr. Soon-Shiong served as interim CEO of Verity in 2017, during which the system signed a contract to implement a new Allscripts Sunrise EHR by 2019. Verity spent $12.8 million on the EHR through June, according to Politico. Sources told Politico the final cost could range from $20 million to $100 million.

7. The EHR investment faces scrutiny due to Dr. Soon-Shiong’s close ties to Allscripts. Dr. Soon-Shiong bought a $100 million stake in Allscripts in 2015, and Allscripts had a $200 million stake in NantHealth, his precision medicine company, Politico reported. Allscripts and NantHealth also had an agreement to work together to promote precision medicine technology. This agreement was restructured in 2017, when the value of NantHealth’s stock was down, according to the report. Allscripts returned NantHealth’s stock, and in return, NantHealth transferred ownership of some of its software to Allscripts and agreed to deliver $95 million worth of business to the EHR vendor. Allscripts President Rick Poulton told Politico the Verity Health EHR deal does not count against the $95 million in promised business, and the health system had already been considering Allscripts before Dr. Soon-Shiong assumed leadership.