The No. 1 priority for hospital CEOs? Cost control

https://www.beckershospitalreview.com/hospital-management-administration/the-no-1-priority-for-hospital-ceos-cost-control.html

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Cost control surpassed revenue growth as the top priority for hospital and health system CEOs in 2018, according to the Advisory Board’s Annual Health Care CEO Survey.

The nationwide survey, conducted between December 2017 and March 2018, included the responses of 146 C-suite executives from hospitals and health systems. Sixty-two percent of those surveyed identified preparing their organization for sustainable cost control as their foremost priority — the most for any concern outlined in the survey during the past four years.

“Health system CEOs recognize that any effective growth or financial-sustainability strategy must be built on a competitive cost structure in order for their enterprises to deliver high-quality, cost-effective care to the patients they serve,” Christopher Kerns, executive director of research at the Advisory Board, said in the organization’s July 11 statement. “The entrance of nontraditional healthcare providers … adds to the urgency of health systems improving cost structures.”

The survey analyzed executives’ responses and level of concern for 33 topics. Here are the top five areas of extreme interest hospital and health system CEOs selected as their No. 1 priority:

1. Preparing the enterprise for sustainable cost control — 62 percent
2. Innovative approaches to expense reduction — 56 percent
3. Exploring diversified, innovative revenue streams — 56 percent
4. Boosting outpatient procedural market share — 50 percent
5. Meeting rising consumer demands for service — 50 percent

 

Healthcare CEO gets prison time for role in $19.4M kickback scheme

https://www.beckershospitalreview.com/legal-regulatory-issues/healthcare-ceo-gets-prison-time-for-role-in-19-4m-kickback-scheme.html

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The former CEO of American Senior Communities, an Indianapolis-based skilled nursing and rehabilitation provider, was sentenced June 29 to nine and a half years in prison for his role in a fraud, kickback and money laundering conspiracy, according to the Department of Justice.

Federal agents began their investigation into James Burkhart three years ago. In September 2015, agents executed search warrants of his residence and ASC office. About a year later, Mr. Burkhart and three others — Daniel Benson, the former COO of American Senior Communities; Steven Ganote, an associate; and Joshua Burkhart, Mr. Burkhart’s younger brother — were indicted by a federal grand jury. All of the defendants, including Mr. Burkhart, had pleaded guilty to federal felony charges by January 2018.

Mr. Burkhart and his co-conspirators were accused of creating shell companies that would inflate vendors’ bills and submit them to ASC as if the shell companies were the real vendors. He also caused vendors or shell companies to submit false bills to ASC for fictitious services that were never provided, and, in some cases, demanded vendors pay him kickbacks in exchange for allowing them to service ASC’s large number of facilities.

In addition, Mr. Burkhart had vendors inflate their bills to ASC, which he would pay with money from Health & Hospital Corp. of Marion County, the public health department that operates several Indianapolis hospitals. The vendors would allegedly kick the overage back to Mr. Burkhart and his co-conspirators.

According to the DOJ, Mr. Burkhart and his co-conspirators funneled nearly $19.4 million to themselves through the scheme. The majority of the funds came from Health & Hospital Corp. of Marion County.

Mr. Burkhart was sentenced to prison after pleading guilty to three felony offenses: conspiracy to commit fraud, conspiracy to violate the healthcare Anti-Kickback Statute and money laundering.

 

 

Geisinger CEO forgoes chief exec role at Amazon, Berkshire, JPMorgan health company

https://www.beckershospitalreview.com/hospital-management-administration/geisinger-ceo-forgoes-chief-exec-role-at-amazon-berkshire-jpmorgan-health-company.html

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Geisinger President and CEO David T. Feinberg, MD, who was reportedly one of the top contenders for the chief executive role at the Amazon, Berkshire Hathaway and JPMorgan Chase healthcare venture, said he will remain at the Danville, Pa.-based health system, CNBC reports.

People close to the hiring process told CNBC Dr. Feinberg was at one time highly considered for the position. However, Dr. Feinberg confirmed to the publication through a spokesperson he would not be leaving the health system.

“I appreciate being part of the conversation, which I believe reflects the accomplishments of the entire Geisinger team. I personally remain 100 percent committed to Geisinger and remain excited about the work we are doing and the opportunities ahead as we continue to deliver exceptional care to our patients, our members and our communities,” he said.

Berkshire Hathaway Chairman and CEO Warren Buffett told CNBC June 7 the companies have selected a CEO for the venture and will publicly name the individual within two weeks. Sources familiar with the matter told CNBC the organizations did not announced the appointment June 7 because Dr. Feinberg declined the job.

Sources said the top 10 candidates for the position were asked to write a white paper detailing how they would fix the healthcare system, according to the report. From there, the companies narrowed down the candidate pool to three individuals. All three reportedly spoke with Jamie Dimon, chairman and CEO of JPMorgan, who referred his top two choices to Mr. Buffett, who passed along his top choice to Amazon Chairman, Founder and CEO Jeff Bezos.

One of the three finalists was Owen Tripp, co-founder and CEO of healthcare company Grand Rounds.

Sources told CNBC Dr. Feinberg had been advising the group since the companies announced the venture in January, and emerged as a top contender for the role. He has led the 13-hospital Geisinger Health System since 2015.

Berkshire Hathaway Investment Manager Todd Combs has been the lead recruiter on the venture, CNBCpreviously reported. Other candidates who have been approached for the role include former CMS Acting Administrator Andy Slavitt, former U.S. Chief Technology Officer Todd Park, and Gary Loveman, former senior vice president of Aetna.

To access the CNBC report, click here.

Successfully transitioning to new leadership roles

https://www.mckinsey.com/business-functions/organization/our-insights/successfully-transitioning-to-new-leadership-roles?cid=other-eml-nsl-mip-mck-oth-1806&hlkid=4adf5e2fa3c24dfd95b286467cbe91cc&hctky=9502524&hdpid=e04a4c97-f260-4069-b1e3-d0eb680bf64e

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Leadership changes are more common and important than ever. But most companies don’t get it right.

Every leadership transition creates uncertainty. Will the new leader uncover and seize opportunities and assemble the right team? Will the changes be sustainable? Will a worthy successor be developed? These questions boil down to one: Will the leader be successful?

Why are leadership transitions important?

Hardly anything that happens at a company is more important than a high-level executive transition. By the nature of the role, a new senior leader’s action or inaction will significantly influence the course of the business, for better or for worse. Yet in spite of these high stakes, leaders are typically underprepared for—and undersupported during—the transition to new roles.

The consequences are huge

Executive transitions are typically high-stakes, high-tension events: when asked to rank life’s challenges in order of difficulty, the top one is “making a transition at work”—ahead of bereavement, divorce, and health issues.2 If the transition succeeds, the leader’s company will probably be successful; nine out of ten teams whose leader had a successful transition go on to meet their three-year performance goals (Exhibit 1). Moreover, the attrition risk for such teams is 13 percent lower, their level of discretionary effort is 2 percent higher, and they generate 5 percent more revenue and profit than average. But when leaders struggle through a transition, the performance of their direct reports is 15 percent lower than it would be with high-performing leaders. The direct reports are also 20 percent more likely to be disengaged or to leave the organization.

Successful or not, transitions have direct expenses—typically, for advertising, searches, relocation, sign-on bonuses, referral awards, and the overhead of HR professionals and other leaders involved in the process. For senior-executive roles, these outlays have been estimated at 213 percent of the annual salary.4Yet perhaps the most significant cost is losing six, 12, or 18 months while the competition races ahead.

Nearly half of leadership transitions fail

Studies show that two years after executive transitions, anywhere between 27 and 46 percent of them are regarded as failures or disappointments.5Leaders rank organizational politics as the main challenge: 68 percent of transitions founder on issues related to politics, culture, and people, and 67 percent of leaders wish they had moved faster to change the culture. These matters aren’t problems only for leaders who come in from the outside: 79 percent of external and 69 percent of internal hires report that implementing culture change is difficult. Bear in mind that these are senior leaders who demonstrated success and showed intelligence, initiative, and results in their previous roles. It would seem that Marshall Goldsmith’s advice—“What got you here won’t get you there”6—is fully applicable to executive transitions.

Leadership transitions are more frequent, yet new leaders get little help

The pace and magnitude of change are constantly rising in the business world, so it is no surprise that senior-executive transitions are increasingly common: CEO turnover rates have shot up from 11.6 percent in 2010 to 16.6 percent in 2015.7Since 69 percent of new CEOs reshuffle their management teams within the first two years, transitions then cascade through the senior ranks. Sixty-seven percent of leaders report that their organizations now experience “some or many more” transitions than they did in the previous year.

 

 

‘No profit, no mission’ — Why this CEO believes every healthcare leader needs a strong understanding of finance

https://www.beckershospitalreview.com/hospital-management-administration/no-profit-no-mission-why-this-ceo-believes-every-healthcare-leader-needs-a-strong-understanding-of-finance.html

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In this special Speaker Series, Becker’s Healthcare caught up with Mark R. Anderson, CEO of AC Group, a healthcare technology and advisory research firm based in Montgomery, Texas.

Mr. Anderson will speak on a panel at Becker’s Hospital Review 7th Annual CEO + CFO Roundtable titled “The CEO paradox: Can you really have volume and value?” at 12:00 p.m. on Monday, Nov. 12. Learn more about the event and register to attend in Chicago.

Question: What keeps you excited and motivated to come to work each day?

Mark Anderson: The knowledge that we are finally moving away from fee-for-service billing to value-based reimbursement. For example, at AC Group, we have been able to cut medical costs for diabetic patients by 38 percent just by tracking blood sugar levels at home. Pay for results — don’t pay for just seeing the patient.

Q: What major challenges, financial or otherwise, are affecting hospitals in the markets you serve? How is your hospital responding?

MA: With hospital bankruptcies on the rise, we need to change how we deliver cost effective care and how we are paid. Because of high deductible health plans, the patient portion of the bill has increased from 9.4 percent in 2019 to 26.9 percent in 2017. How do we collect from the patient? How can we share clinical information about the patient with all providers without hurting our financial position?

Q: What initially piqued your interest in healthcare?

MA: It was my high school graduation present from my father. I wanted a trip to Hawaii and all I got was a letter stating, “Congratulations for finishing in the top 4 percent of your high school class. For your reward, you start work on Monday as the statistician for the hospital CEO.” Forty-five years and 250 hospitals later, I am still in hospital executive management.

Q: What is one of the most interesting healthcare industry changes you’ve observed in recent years?

MA: To name a few: Moving to electronic billing in 1985, moving from spending 2.1 percent on IT in 2005 to over 6.5 percent today (was it worth it?), forcing physicians to become data entry clerks so we can maximize coding with very little improvement in “health,” and moving to value-based reimbursement from fee-for-service so we are finally paid on quality, outcomes and our ability to lower costs through care coordination and remote patient monitoring. The four walls of the hospital are not the only care delivery system. Ninety-five percent of healthcare is delivered in the home.

Q: What is one piece of professional advice you would give to your younger self?

MA: Don’t enter the healthcare market without a strong financial knowledge base. Healthcare is a business. As the nuns told me back in 1976, no profit — no mission to help the poor and disadvantaged.

 

 

 

Healthcare CEO sentenced to 19 years for $18M physical therapy fraud scheme

https://www.beckershospitalreview.com/legal-regulatory-issues/healthcare-ceo-sentenced-to-19-years-for-18m-physical-therapy-fraud-scheme.html

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The former CEO of Team Work Ready, a Houston-based physical therapy chain, was sentenced June 1 to more than 19 years in prison for his role in an $18 million healthcare fraud scheme, according to the Department of Justice.

The sentencing came after a federal jury convicted Jeffrey Eugene Rose Sr. of healthcare fraud, conspiracy, wire fraud and money laundering in October 2016. Mr. Rose was one of three Team Work Ready executives convicted in the scheme.

According to federal prosecutors, Mr. Rose and his co-conspirators submitted $18.3 million in fraudulent claims for physical therapy services that were never provided through Mr. Rose’s 10 Team Work Ready clinics in Texas, Louisiana, Georgia, Tennessee and Alabama. The claims were submitted under the Federal Employees Compensation Act, which is administered by the Department of Labor’s Office of Workers’ Compensation Program.

In addition to the prison term, Mr. Rose was ordered to pay $14.5 million in restitution to the DOL’s Office of Workers’ Compensation Program.

 

 

Florida hospital CEO charged with fraud after allegedly embezzling funds

http://www.healthcarefinancenews.com/news/florida-hospital-ceo-charged-fraud-after-allegedly-embezzling-funds?mkt_tok=eyJpIjoiTmpFeE5tVmxNVEF3T0RVMSIsInQiOiJOZzVFMTN2NUpJTllJRVk0Q0RjN0lHQWN5bEhaOHVsWWRFWXpuQ3VDbGx2VkJYRFFmanBPaFJ0bXpvaWs2R3lmVUdGNWpjeVNKek13RWNHeVV1OHpRYUk1UngwelZ1WUhOdDU3SjZJa20rRGltZ2tCUDFFZzJWdGtKbEd3d1NtQyJ9

 

Former chief executive of Calhoun-Liberty Hospital is charged with using money to pay various personal expenses.

A former Florida hospital CEO has been indicted by a federal grand jury on charges he embezzled money from the hospital where he worked through false billing practices and a shell company, according to the U.S. Department of Justice.

Phillip Hill Jr. of Blountstown, Florida has been indicted on 24 counts of wire fraud and 4 counts of filing false tax returns. The indictment alleges that between 2010 and 2015, when Hill served in dual roles as Chief Executive Officer and department head of Emergency Management Services, to embezzle money from Calhoun-Liberty Hospital.  According to the indictment, he billed the hospital for goods it never received using invoices in the name of “Southeastern Medical Supply,” a fake business connected to a bank account he himself controlled. The indictment also stated that Hill ordered medical supplies from eBay and other vendors then billed the hospital for them supplies at price points far exceeding what Hill actually paid, the DOJ said.

According to the indictment, Hill used the funds in the Southeastern bank account to pay personal credit card bills, fund a business he owned and operated, to obtain cash, and to pay personal expenses including groceries and travel.

The DOJ also said the indicated that an employee at the hospital once inquired after contact information for Southeastern Medical Supply, and Hill responded that he had lost his phone and didn’t have the number, and also that the last time he had “talked with” the company they were discussing going out of business.

The maximum penalty for each wire fraud count is 20 years in prison. The maximum penalty for each count of filing false tax returns is 3 years in prison.  A trial date of this July 2nd has been set. The case was investigated by the Internal Revenue Service — Criminal Investigation, the Florida Department of Law Enforcement, and the Blountstown Police Department.