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Steward Health Care to acquire IASIS Healthcare

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http://www.beckershospitalreview.com/hospital-transactions-and-valuation/steward-health-care-to-acquire-iasis-healthcare.html

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Boston-based Steward Health Care has signed a definitive agreement to acquire Franklin, Tenn.-based IASIS Healthcare.

The Wall Street Journal reported the transaction is for $1.9 billion. Becker’s has reached out to Steward to verify the value of the deal and the article will be updated accordingly.

Under the deal, Steward will become the largest private for-profit hospital operator in the U.S. with 36 hospitals across 10 states, managed care operations in Arizona, Utah and Massachusetts and projected revenues of nearly $8 billion in 2018, the first year of consolidated operations. The transaction, which is subject to regulatory approvals and customary closing conditions, is expected to close in the third calendar quarter of 2017, according to a news release on Steward’s website.

Currently, Steward operates 18 hospitals and directly employs more than 1,300 multispecialty physicians in facilities across Massachusetts, Ohio, Florida and Pennsylvania. IASIS operates 17 hospitals and one behavioral health hospital across Utah, Arizona, Colorado, Texas, Arkansas and Louisiana.

The deal will transfer operations of IASIS Healthcare’s 18 hospitals, which encompass nearly 7,500 patient beds and approximately 38,000 employees — including more than 1,800 directly employed multispecialty physicians and several thousands aligned physicians — to Steward Health Care. Steward will also assume operations of IASIS’ 140 outpatient facilities across Arizona, Arkansas, Colorado, Louisiana, Texas and Utah, according to The Wall Street Journal.

Steward Health Care is backed by private-equity firm Ceberus Capital Management LP and real estate investment trust Medical Properties Trust. Under the deal, Medical Properties Trust has agreed to acquire the interests of substantially all of IASIS’ hospital real estate subject to long-term leases and loans with Steward, according to the news release from Steward. The terms of the agreement specify that cash proceeds paid by MPT and other financing sources will be used to retire IASIS’ senior secured term loans and unsecured notes. Remaining cash proceeds will be paid to IASIS equity holders, including its majority stockholder, TPG Capital.

This deal marks the latest in a series of acquisitions for Steward, which in May closed a deal to acquire eight hospitals from Franklin, Tenn.-based Community Health Systems.

Rising Insulin Prices Have Diabetics Crying Foul

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http://www.cbsnews.com/news/insulin-prices-rise-yet-again-causing-diabetics-to-cry-foul/

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Insulin prices are only getting more painful.

Drugmakers Eli Lilly (LLY) and Novo Nordisk recently boosted their insulin list prices by almost 8 percent each, adding to concerns that treating diabetes is unaffordable for some patients. The average price of insulin almost tripled between 2002 and 2013, according to the American Diabetes Association (ADA). Even before the most recent price hike, some diabetics were cutting back or even going without the drug because of its expense.

The price hikes come at a sensitive time for the drugmakers as Eli Lilly, Novo Nordisk and rival Sanofi-Aventis are facing a class-action lawsuit alleging they conspired to raise their prices in lockstep. Almost one in 10 Americans has diabetes, a group of conditions where the body fails to properly regulate blood sugar. People with Type 1 diabetes, often referred to as juvenile diabetes, need to take insulin daily to stay alive.

“We were really disappointed in this announcement,” said Dr. William Cefalu, the chief scientific, medical and mission officer for the ADA, who noted that his organization has partnerships for research with the drugmakers. “This is really going in the wrong direction.”

 

Lobby groups to watch in Senate healthcare fight

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Lobby groups to watch in Senate healthcare fight

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Lobbying groups opposed to the House’s healthcare reform bill are pinning their hopes on the Senate for big changes.

Industry groups felt largely cut out of the House’s drafting and passage of the American Health Care Act and now are clamoring for action to fix what they view as serious defects in the legislation.

Major hospital and doctor associations, for example, want people with health insurance to stay covered and are pushing to ensure adequate funding for the Medicaid program.

Characterizing this wish list, one healthcare lobbyist put it simply: “Coverage, coverage, coverage.”

AARP, meanwhile, is urging the Senate to start from scratch on a new healthcare bill. The powerful lobbying group for senior citizens believes the legislation, in its current form, creates  “an unaffordable age tax” for older Americans.

Here are the industries and groups to watch as senators write their healthcare reform bill.

Hospitals

Just a day after the House released its bill, the American Hospital Association (AHA) sent a letter to lawmakers in opposition — and that position hasn’t changed.

In a statement after the bill’s passage through the House, AHA President and CEO Rick Pollack said he was “disappointed” because the bill “jeopardize[s] coverage for millions of Americans” and “makes deep cuts to Medicaid.”

The association’s voice carries weight, as it represents nearly 5,000 member hospitals and healthcare systems and is the sixth-highest spender on lobbying this year, according to OpenSecrets.

About 24 million people would become uninsured under the House bill, according to the nonpartisan Congressional Budget Office (CBO). An updated score from the CBO is expected next week.

Other hospital organizations have also panned the House’s healthcare bill, including the Federation of American Hospitals and America’s Essential Hospitals.

Hospital associations want a bill that won’t result in millions more without health coverage and are looking to prevent the CBO-estimated $880 billion in Medicaid cuts. They say the proposed reductions will make it more difficult for hospitals to deliver care.

One hospital advocate said its group is having serious conversations on the policy recommendations it can make to the Senate to help protect patients and hospitals from the costs that could fall on their shoulders.

Healthcare providers

The fourth-largest lobbying spender this year, the American Medical Association (AMA), is also a vocal critic of the House bill.

On Monday, the group representing physicians and medical students sent a letter to Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Minority Leader Charles Schumer (D-N.Y.) to “reaffirm the principles” that they say should guide any bill that changes ObamaCare.

Health coverage is a top priority for the group.

“Throughout the current debate we have consistently recommended that any proposals to replace portions of the current law should pay special attention to ensure that individuals currently covered do not lose access to affordable, quality health insurance coverage,” AMA CEO James Madara wrote in the letter.

The group is pushing to retain protections for pre-existing conditions and ensure states that expanded Medicaid under ObamaCare isn’t put at risk.

The AMA also says the new tax credits in the Republican bill for purchasing insurance should factor in income, geography and age. The House-passed bill only factored in age for determining a credit, increasing the size of the subsidy as a person gets older.

The American College of Surgeons, consisting of more than 80,000 members, didn’t formally oppose the House bill. Yet it had concerns about the bill’s access to surgical care and ability to let states opt out of requiring insurers to cover a list of 10 categories of services.

“Making sure that patients have insurance that is needed to making sure that they have timely access to surgical care was important, and I know will continue to be important to the American College of Surgeons as we review a Senate bill,” Christian Shalgian, the director of the group’s division of advocacy and health policy, said.

He added: “I think we’re definitely getting a receptive ear from the Senate. They’re interested in where we’re at with what they’re going to be doing in the coming weeks and months.”

Insurers

The leading lobbying group for health insurers, America’s Health Insurance Plans (AHIP), didn’t oppose the House bill.

But it did see room for improvement — and was quick to provide recommendations to the Senate.

Just two hours after the House passed its bill, Marilyn Tavenner, AHIP president and CEO, detailed a few proposed changes in a statement. They included bolstering tax credits for lower-income Americans, older adults and those living in areas with high healthcare costs and providing enough time for people to adjust to Medicaid changes, among others.

Insurers also have an immediate request, though: getting certainty from the administration and Congress that crucial ObamaCare payments to insurers, to the tune of about $7 billion, will continue to be made.

The Association for Community Affiliated Plans (ACAP) did come out against the bill. ACAP represents 60 nonprofit safety net plans serving those enrolled in public health programs, such as Medicaid and the children’s health insurance program.

ACAP CEO Margaret Murray said the House’s bill, if enacted, “would cause considerable damage to our health care system.” Areas of concern included Medicaid cuts and phasing out the enhanced federal funding to states that expanded the health program for the poor and disabled.

“[The bill] will severely limit access to services for the more than 70 million people who rely on Medicaid for effective health coverage — and locks states’ funding to what they spent on Medicaid in 2016,” Murray said in a statement an hour before the bill passed.

AARP

AARP says the bill has an “age tax.”

The group, which represents nearly 38 million people, opposes a provision in the House bill that would let insurance companies charge older adults five times more than younger people.

This is a change from ObamaCare, which operates under a 3-to-1 ratio — a ratio that AARP would like to keep, said David Certner, AARP’s legislative counsel. “Already at 3-to-1, it’s quite expensive,” he said.

AARP is concerned that the change to the age ratio, coupled with reduced financial assistance, will result in premiums older adults can’t afford. The CBO estimated a 64-year-old making $26,500 a year would have to pay more than half of their income in premiums under the American Health Care Act.

“AARP urges you to ‘start from scratch’ and craft health care legislation that ensures robust insurance market protections, controls costs, improves quality, and provides affordable coverage to all Americans,” AARP Executive Vice President Nancy LeaMond wrote in a letter sent to senators Monday.

House Bill Targets Pre-Existing Conditions in Multiple Ways

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http://www.realclearhealth.com/articles/2017/05/18/house_bill_targets_pre-existing_conditions_in_multiple_ways_110599.html?utm_source=RC+Health+Morning+Scan&utm_campaign=38995c8cb7-EMAIL_CAMPAIGN_2017_05_19&utm_medium=email&utm_term=0_b4baf6b587-38995c8cb7-84752421

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For those with pre-existing medical conditions, the House-passed health bill became notorious for a last-minute addition that would let insurers once again charge them higher premiums in the individual market based on their health status. But the focus on this single provision distracts from a troubling fact: even without it, the bill would threaten health care for those with pre-existing conditions in four broader ways.

#1: The bill would cap and cut federal funding for virtually all of Medicaid by imposing a per capita cap or letting states convert Medicaid into a block grant.

A per capita cap would set annual limits on federal funding per beneficiary that would grow more slowly than actual health care costs. A block grant would cap the amount of overall federal Medicaid funding the state could receive. Either way, states would receive significantly less federal funding compared to current law, under which the federal government pays a fixed share of state Medicaid costs, and the funding cuts would grow deeper each year.

Faced with large cuts in federal funding, states would have no choice but to sharply cut their programs. Consequently, tens of millions of people with pre-existing conditions – including millions of children with disabilities and special health care needs – would face the threat of Medicaid cuts.  They could lose coverage entirely or go without needed care as states scaled back covered benefits and payments to medical providers.

Home- and community-based services, an optional Medicaid benefit that most states already limit based on available funds, would be at particular risk. These services, which include nursing and home health care and help with chores, meals, transportation, and other services, let seniors and other low-income people with serious health problems remain in their homes instead of having to go to a nursing home.

#2: The federal government wouldn’t provide any more enhanced funding after 2019 for Medicaid enrollees who were enrolled because their states took the option, under the Affordable Care Act (ACA), to expand their Medicaid programs.

That would force states to pay three to five times more for the ACA’s Medicaid expansion.  Most or all of the 31 states and Washington, D.C. that have adopted it would have no choice but to drop it because they could no longer afford it.

The Medicaid expansion now covers 11 million people, including many who have pre-existing conditions. For example, almost 30 percent of those benefitting from the Medicaid expansion have a mental illness or substance use disorder. By effectively ending the Medicaid expansion starting in 2020, the House bill would leave millions of low-income people with pre-existing conditions without coverage.

#3: The bill would let insurers charge older people — many of whom have pre-existing conditions —at least five times more to buy coverage compared to younger consumers, while also slashing the subsidies that help them afford insurance. 

For example, a 60-year-old woman with $22,000 of annual income who faced the national average benchmark premium would pay $8,200 more in premiums after accounting for federal tax credits than she does now. The Congressional Budget Office projects that uninsured rates for people age 50-64 would double due to the House bill.  Some 84 percent of people age 55-64 have pre-existing health conditions.

#4: The bill would eliminate a broad range of consumer protections that the ACA established in the individual market, threatening access to health care and coverage for those with pre-existing conditions.

Plans would no longer need to offer a comprehensive set of benefits and could exclude even core benefits such as maternity services and mental health care. Nor would they have to limit the amount that people with expensive health care must pay out-of-pocket for deductibles and other cost-sharing each year.  Insurers could again place annual and lifetime limits not only on individual and small-group plans but also on coverage that people get from large employers, leaving millions with costly pre-existing conditions to once again worry about exhausting their benefits.

All told, then, the House bill would bring back the highly-flawed, pre-ACA individual insurance market that made it impossible for millions with pre-existing conditions to get adequate, affordable health coverage.  Additionally, it would threaten the coverage of millions of Medicaid recipients with pre-existing conditions.

That’s not a health care system that should make us proud.

THE PEOPLE WHO LEAD THE BEST TRY THE LEAST

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The People Who Lead the Best Try the Least

Genuine leadership:

Real leaders change us effortlessly. Who they are influences us more than what they do. Comfort with themselves and their belief in us gives us courage to open our hearts to their influence.

Authentic leaders give us courage to see strength in ourselves because they don’t need us to affirm their worth. Phony leaders fear power in others and work to control rather than release.

Jim Parker, former CEO of Southwest Airlines said his favorite word of advice to leaders is, “Be yourself.” Warren Bennis said, “Becoming a leader is synonymous with becoming yourself.”

The leader on a white horse is a myth propagated by our own fears and neediness.

Finding genuine leadership:

Jot down memories of people and events. Who comes to mind when you think of your past? How are they living in you today?

Authenticity consists of your responses to influential individuals and formative circumstances combined with your genetic code. You can’t change genetics. You can interpret and assimilate circumstances and relationships.

Say what you really think. “Candor says, ‘Here’s what I think. What do you think?’” Kim Scott, author of, Radical Candor. The courage to say what you think is formative. Our words impact who we become.

If you can’t say what you think, you can’t become who you were meant to be.

Abandon yourself to a grand idea and live it in small ways everyday. Don’t dabble on the edges of purposeful work. There is no authority except in submission to something meaningful that lies outside ourselves – a calling that finds expression in a cause.

I mentioned that our responses to circumstances and people combined with genetics constitutes authenticity. What other components of authenticity do you see?

How might leaders become themselves?

AHCA Would Affect Medicare, Too

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http://www.commonwealthfund.org/publications/blog/2017/may/ahca-would-affect-medicare?omnicid=EALERT1211869&mid=henrykotula@yahoo.com

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“Don’t touch my Medicare” has been a rallying cry in recent years, first as Congress considered health reform and now as it debates the fate of the Affordable Care Act (ACA). While the bill that would repeal and replace the ACA—the American Health Care Act (AHCA)—does not include explicit changes to Medicare, the legislation could have a profound impact on the 11 million Medicare beneficiaries who also rely on Medicaid for key components of their care. Here’s a look at how the ACHA’s major changes in federal funding for Medicaid would affect low-income older adults and the Medicare program.

One-Third of All Medicaid Spending Is for People Covered by Medicare

Low-income Medicare beneficiaries who also are enrolled in Medicaid—often referred to as “dual eligibles”—could be disproportionately affected by congressional efforts to cut and cap federal Medicaid financing. Not only do these older adults account for one-third of all Medicaid spending, much of the Medicaid spending for low-income Medicare beneficiaries is “optional” for states.1

The nearly three-quarters (72%) of dual eligibles who receive full Medicaid benefits are most at risk under the AHCA’s funding caps.2  They tend to be in poorer health than other Medicare (and Medicaid) beneficiaries, and rely on Medicaid for high-cost services.3  While Medicare covers physician, hospital, and most other acute care, Medicaid covers some of dual eligibles’ behavioral health services as well as most of their long-term services and supports, such as nursing home and home and community-based services. Under federal law, many of these services are optional. Similarly, many low-income Medicare beneficiaries who qualify for Medicaid are “optional” beneficiaries who qualify only when they incur health and long-term care costs that are well in excess of their incomes. States can drop optional services and optional enrollees even without any new federal flexibility.

Economists propose paying physicians salary over fee-for-service method to avoid conflicts of interest

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http://www.healthcarefinancenews.com/news/conflicting-jama-reports-highlight-debate-over-reality-pending-physician-shortage

In a Journal of the American Medical Association Viewpoint article, a pair of behavioral economists contend that doctors should be paid by salary, rather than the fee-for-service arrangements under which most of them now operate.

While most conflict of interest research and debate in medicine tends to focus on physicians interacting with pharmaceutical and device companies, how doctors are paid is one important source of conflict that’s largely ignored in medical literature, they said.

Fee-for-service compensation arrangements, they propose, create incentives for physicians to order more, and different, services than are best for patients.

“Paying doctors to do more leads to over-provision of tests and procedures, which cause harms that go beyond the monetary and time costs of getting them,” said George Loewenstein, the Herbert A. Simon University professor of economics and psychology at Carnegie Mellon University, in a statement. “Many if not most tests and procedures cause pain and discomfort, especially when they go wrong.”

He and Ian Larkin, an assistant professor of strategy at UCLA’s Anderson School of Management, said that a commonly proposed solution to the problem involves requiring physicians to disclose their financial interest for a given procedure. But disclosure of conflicts has been found to have limited, or even negative, effects on patients.

Loewenstein and Larkin argue that the simplest and most effective way to deal with conflicts caused by fee-for-service arrangements is to pay physicians on a straight salary basis. Several health systems well-known for high quality of care, such as the Mayo Clinic, the Cleveland Clinic and the Kaiser group in California, pay physicians salaries without incentives for volume of services performed.

Moving more physicians to straight salary-based compensation might have benefits not only for patients, but also for physicians themselves, they said.

“The high levels of job dissatisfaction reported by many physicians may result, in part, from the need to navigate the complexities of the fee-for-service arrangements,” said Larkin. “Instead of focusing on providing patients with the best possible medical care, physicians are forced to consider the ramifications of their decisions for their own paychecks.”