NOT-FOR-PROFIT OPERATING MARGINS CONTINUE TO DECLINE

https://www.healthleadersmedia.com/finance/not-profit-operating-margins-continue-decline?utm_source=silverpop&utm_medium=email&utm_campaign=ENL_180801_LDR_BREAKING_DeKalb_Emory%20(1)&spMailingID=14040768&spUserID=MTY3ODg4NTg1MzQ4S0&spJobID=1460932625&spReportId=MTQ2MDkzMjYyNQS2

Operating margins for systems and hospitals continued to decline due to increasing expense pressures as well as slowing net patient revenue growth across all rating levels.


KEY TAKEAWAYS

Strong balance sheets and capable leadership continue to lead the way for stable success.

M&A activity has bolstered the financial standing and credit ratings of not-for-profit health systems.

Not-for-profit systems are outnumbering stand-alone hospitals through increased M&A activity.

Stand-alone hospitals experienced their second consecutive year of negative outlooks.

Not-for-profit health systems and stand-alone hospitals have maintained generally favorable bond ratings due in large part to strong balance sheets, despite the continual decline in operating margins and cash flows.

S&P Global Ratings released research this week on the financial status of not-for-profit health systems and stand-alone hospitals in 2017.

The sector remained consistent in several year-to-year, such as improving days’ cash-on-hand levels and marginal reduction in debt levels, though the study found that the underlying pressures on not-for-profits are beginning to take their toll. The operating margin for the sector declined from 2.4% in 2016 to 1.8% in 2017.

S&P also noted that not-for-profit health systems continue to outnumber stand-alone hospitals and received stronger overall ratings from the agency.

RATINGS ACTIONS FOR THE SECTOR THROUGH JUNE 22:

  • 152 total affirmations
  • 16 total upgrades, though six upgrades were driven by systems merging together.
  • 15 total downgrades

S&P said a major factor that allowed health systems and hospitals to weather financial challenges last year was the combination of strong balance sheets and leadership. 

CREDIT STRENGTHS OF NOT-FOR-PROFIT SYSTEMS:

  • Robust M&A activity has improved the financial profile for systems.
  • Despite the same challenges with maintaining an overall patient base, systems have experienced a growth in outpatient services.
  • Sizable investments in information technology have resulted in strong credit ratings.

S&P analysts said that stand-alone hospitals featured stronger medians than systems but found they are weakening. This is due to softer patient volumes, a weakening payor mix combined with increased pressure from commercial payors, and labor expenses. 

HOW STAND-ALONE HOSPITALS PERFORMED:

  • While the amount of stand-alone hospitals are shrinking, they produced stable balance sheets that were noted as a “principal strength of financial profile.
  • Debt levels fell due to declining unrestricted net assets.
  • However, negative operating margins appeared in BBB rating levels.

 

CHS faces investigation related to EHR incentive program

https://www.beckershospitalreview.com/legal-regulatory-issues/chs-faces-investigation-related-to-ehr-incentive-program.html

Image result for community health systems

Franklin, Tenn.-based Community Health Systems has received a civil investigative demand related to the company’s adoption of EHRs and adherence to the meaningful use program, according to CHS’ latest financial filing.

Under the meaningful use program, now called the promoting interoperability program, CMS distributed incentive payments to eligible providers for installing EHR systems and using them to engage patients and families and to improve care coordination.

In its financial filing, CHS said it is responding to a civil investigative demand related to its “adoption of electronic health records technology and the meaningful use program.”

Federal and state authorities issue these types of demands to collect records and information related to ongoing civil investigations, including False Claims Act cases.

CHS declined to comment on the investigative demand beyond what is included in the financial filing.

EHR incentive payments grabbed the attention of federal regulators after HHS’ Office of Inspector General released a report in 2017 that revealed Medicare made approximately $729.4 million in EHR incentive payments to medical providers who did not comply with federal requirements.

 

Health Care Industry Gears Up to Fight ‘Medicare for All’

http://www.thefiscaltimes.com/2018/08/10/Health-Care-Industry-Gears-Fight-Medicare-All

In anticipation of a “blue wave” election that brings more Democrats to Congress, the insurance and drug industries are gearing up to push back on the idea of a single-payer health care system.

The Hill’s Peter Sullivan reports that health-care industry forces have teamed up to form the Partnership for America’s Health Care Future, “which lobbyists say could run advertisements against single-payer plans and promote studies to undermine the idea.” The health care groups in the partnership, formed in June, include America’s Health Insurance Plans (AHIP), the Pharmaceutical Research and Manufacturers of America (PhRMA), the American Medical Association and the Federation of American Hospitals.

The idea of a single-payer or “Medicare for all” health-care system has gained momentum among Democrats, even as significant questions remain about how such a massive overhaul might be implemented and how to pay for it. “Industry groups are worried that support for single-payer is quickly becoming the default position among Democrats, and they want to push back and strengthen ties to more centrist members of the party to promote alternatives,” Sullivan writes.

The groups’ concern is more about the prospects of a Democratic single-payer platform in 2020, given that a host of the party’s potential presidential candidates have backed Bernie Sanders’ “Medicare for all” bill. “Every one of those organizations that’s in that group will look at Bernie Sanders’s single-payer and see massive losses of money,” John McDonough, a former Democratic Senate staffer who worked on the Affordable Care Act and is now at Harvard’s T.H. Chan School of Public Health, told The Hill.

The industry’s budding campaign could pose a formidable political and public relations challenge to proponents of a single-payer system. “Leaving aside whether single payer is good policy or not,” the Kaiser Family Foundation’s Larry Levitt tweeted, “it seems like the idea is going to eventually need some powerful institutional allies from somewhere to advance.”

 

 

“It Was About the Insurance Fix”

https://www.jacobinmag.com/2018/03/west-virginia-teachers-strike-medicare-for-all

West Virginia teachers are engaged in an inspiring illegal strike. They’re also showing why we desperately need Medicare for All.

On Friday, hundreds of striking teachers flooded the foyer of the West Virginia capitol building in Charleston. Holding signs that read “Whose side are you on?” they voted to occupy the building until their demands were met.

As the Supreme Court considers the Janus v. AFSCME case this very week — posing an existential threat to public sector unions throughout the country — labor movement activists should be watching the West Virginia teachers’ strike closely. The coincidence of the two events seems almost scripted: as Janus promises to gut the legal framework for public sector worker organizing, West Virginia teachers are militantly flouting the law.

Many in the labor movement contend that this level of rank-and-file engagement is the key to surviving right to work. The question is, how does a militant mood in a workforce like West Virginia’s teachers come into being? Finding the answer in this case requires paying attention the central demand that caused workers to defy union leadership and embark on one of the largest wildcat strikes in recent American history: adequate health care.

Back to the Table

Three days prior to the building occupation, the West Virginia governor’s office announced that it had reached a deal with the state teachers’ union leadership. The agreed-upon 5 percent raise for teachers and 3 percent for all public employees was supposed to mark the end of the statewide teachers’ strike. The state had already seen four days of school closures in all fifty-five counties, the result of a work stoppage involving twenty thousand teachers.

But the teachers weren’t satisfied with the deal. At the meeting where it was announced, they began to chant, “Back to the table!” and “We are the union bosses!” According to the agreement, the teachers were supposed to return to work on Thursday, but by Wednesday night all fifty-five counties were again reporting school closures. The strike was still on.

The primary source of striking teachers’ dissatisfaction is the state’s meager offering of a “task force” to fix the Public Employees Insurance Agency (PEIA), West Virginia’s health insurance program for public employees. Tax cuts have resulted in changes to the insurance plan, sending co-pays and out-of-pocket expenses through the roof as teacher pay remains among the lowest in the country. One projection shows premiums under PEIA rising as much as 11 percent per year starting in 2020.

“This has been a huge issue, causing problems for years,” said one striking teacher. “They’ve been cutting our health insurance over and over, making it really expensive to survive.” Throughout the strike teachers held signs that read “Will teach for insurance” and “I’d take a bullet for your child but PEIA won’t cover it.”

According to the strikers, the 5 percent raise offered won’t reverse the damage that rising health care costs have done to West Virginia public employees’ ability to make ends meet. Explaining why she chose to remain on strike, one teacher said, “The number one thing was we needed a permanent fix to PEIA. It wasn’t about the money at all. It was about the insurance fix.”

Pressure Point

Health care touches a nerve, one so tender that twenty thousand teachers are willing to defy their union leadership to try to force the state government to fulfill their health care demands (unlawfully, no less). This is one reason many socialists and left-wing labor activists are advocating a movement-wide focus on single-payer health care, or Medicare for All.

It’s no surprise that health care is the crux of the most combative domestic labor upsurge in years. In a poll last summer, Americans said they regarded health care as far and away the biggest challenge facing the nation.

Working-class people are watching their paychecks disappear as they shoulder an increasing share of rising health insurance costs. We live in a country where nearly half of the money raised through crowdfunding websites goes toward medical expenses, where drug costs can increase 5,000 percent overnight, where having premature twins can obliterate the entire savings of a family with insurance, and where medical debt is the number one cause of personal bankruptcy. On top of all that, we have alarmingly deficient care compared to nations with comparable resources.

It’s in this context that single-payer health care, until recently considered anathema in US politics, has garnered the support of the majority of Americans.

Workers are deeply invested in health care — not for abstract reasons, but because rising costs and confusing, extractive, punitive insurance bureaucracies are making their lives harder, with sometimes fatal consequences. The fact that health care is a pressure point for workers is reason enough to take health care seriously as a primary terrain of class conflict to fight on right now.

Social Unionism

Labor will need many more West Virginias to climb out of the ditch it’s in, and health care has an important role to play in the task of rebuilding the movement. Socialists see building a sense of class consciousness — a working class that identifies as such, knows it’s exploited by capitalists, and is united in struggle — as a necessary condition for the labor movement’s success. To that end, socialist labor strategists have proposed that unions focus on demands that benefit the entire working class, not just this or that individual union’s members.

The idea is that focusing only on narrow wins for specific groups of workers actually atomizes the class, heightening competition rather than solidarity — and resulting in a cautious, transactional union bureaucracy leading a disengaged, depoliticized membership. It also ensures that victories are temporary; without challenging capitalist power beyond the bargaining table, any gains made will be rolled back in no time.

What socialists want instead is a labor movement that advocates for ambitious policies that build worker power across society, not just for workers in a particular shop or trade. Adolph Reed Jr and Mark Dudzic call this a social-unionist orientation, observing that:

Many unions are beginning to redefine their battles against voracious profiteers and privatizers not as defensive struggles to preserve rights, privileges, benefits and conditions already lost by most of the working class, but as far reaching campaigns for the public good, and they are sinking resources into building the kind of alliances necessary to win.

Some ambitious examples of this type of unionism are offered by Sam Gindin, who calls it by its more common term, social-movement unionism:

Autoworkers could push to rejigger their workplaces so they could make the goods needed to confront the ecological crisis. Steelworkers could fight for the renovation and expansion of public infrastructure. Construction workers could demand public housing and the green retrofitting of existing housing stock.

At this particular moment, health care has an exceptional power to galvanize workers. The issue is urgent and personal; as we’re seeing in West Virginia, it inspires people to fight tooth and nail. Plus its appeal isn’t limited to particular industries — every worker needs health care, and every worker is getting squeezed.

What if unions carried out their own contract campaigns for better health care alongside a collective, movement-wide campaign for federal single-payer health care? This effort would satisfy two conditions at once: tapping into working people’s organic desire to challenge the current capitalist health care regime, and bringing individual union struggles into contact with broader movements to build power for the entire working class.

This idea is already gaining steam. A growing number of locals and internationals have endorsed the Labor Campaign for Single Payer, which maintains that labor must lead the charge in fighting for universal, decommodified health insurance. National Nurses United in particular have stepped to the fore, campaigning for “an improved Medicare-for-All system where everyone — rich or poor, young or old — has access to the same standard of safe medical care.” We need many more unions to follow their lead.

Taking it National

We won’t destroy the private health insurance industry and replace it with a democratically administered, wholly decommodified alternative that generates profit for no one without mobilizing millions of working-class people: nurses and teachers, cashiers and secretaries, anyone who’s ever had a medical debt-collection company breathing down her neck. As it happens, the kinds of mass organizing and diverse coalitions and rhetorical strategies that will be required to win single payer are also the ones required to rebuild a class-conscious workers’ movement.

Committing to an ambitious, universal campaign like Medicare for All is committing to society-wide class struggle, which is exactly what we’ll need to revitalize our imperiled unions — and to effectively challenge capital in arenas besides health care.

Fighting for single-payer health care will do the labor movement good, but so will winning it. Unions currently spend a lot of their time and resources fighting to protect their members from the vagaries of the profit-driven American health care system. In West Virginia, they’re responding to the fact that political elites (including, as Cathy Kunkel explained earlier this week, the state’s Democratic Party) are standing with business elites and passing on the costs of austerity to teachers in the form of rising health insurance costs.

The fact that we don’t have universal public health insurance plays to employers’ advantage: it puts unions on the defensive, constantly negotiating to keep workers from falling into the shark-infested waters of the private health insurance industry. By taxing the rich to pay for health care for everyone, we can empower organized labor to make more radical demands focused on workplace democracy.

Plus right now, individual workers usually have to worry about losing their health insurance when they lose their job. When that threat disappears, they’ll be much more willing to fight the boss. Under the right circumstances, the dire health insurance situation and the high stakes that accompany it can make people brave and ferocious, as we see in West Virginia. But more often they make workers guarded, afraid of rocking the boat, and easier to control. Winning single payer takes a powerful bargaining chip away from employers and deposits it directly into workers’ pockets.

Medicare for All is popular, universal, and social. The task for the Left and labor is to take the West Virginia fight national, to unite the teachers in Appalachia with nurses in California and to connect the demand for single-payer health care to the tactics of working-class militancy.

It’s to place this fight in the broader context of capitalist exploitation and domination, and articulate an alternative: a health care system that works for workers, driven by the needs of the many instead of the profits of the few.