Tag Archives: EHR Implementation

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.

 

 

EHR installs carry huge financial risks, Moody’s says

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http://www.healthcarefinancenews.com/news/ehr-installs-carry-huge-financial-risks-moodys-says?mkt_tok=eyJpIjoiTXpVelkyRXhZMkpqTmpKaSIsInQiOiJFVjFscVRVVDdXZmZqek02STNMSVNjelwvREEwMmZmckZrWmNyZjNrQnVcL0szTGZuNXA4ZGdrOGRhT1V5bnREanBwWitPbTNkQllLZW5BTmd4VDk5TDg0ak1NNStnTllqdEllQlNpQmRZbDUwcm5JdVNaZ1lJcmpVVXJNYWxcL0JcL28ifQ%3D%3D

Hospitals run the risk of incurring operating losses, lower patient volumes and receivables write-offs if there are problems, Moody’s says.

Rolling out new electronic health record systems puts hospitals at a significant risk of financial losses, according to a new report by credit rating firm Moody’s.

“Hospitals run the risk of incurring operating losses, lower patient volumes, and receivables write-offs if there are problems with adoption of a new EMR system,” Moody’s said in its Monday report.

Add to that the operational and financial disruptions that typically accompany complex IT projects, and hospitals could find themselves walking an even thinner financial margin than they are used to, Moody’s said.

“In a sample of hospitals that have recently invested in major EMR and revenue cycle system conversions, increased expenses and slower patient volumes contributed to a median 10.1 percent decline in absolute operating cash flow and 6.1 percent reduction in days of cash on hand in the install year,” Moody’s found.

The good news is that many hospitals returned to pre-install levels within a year, owing to strong risk management.

When Epic Systems founder and CEO Judy Faulkner talked with Healthcare IT News at HIMSS17 last February, she said Epic customers had done well financially. True, Epic EHR installations cost millions of dollars. However, from 2004 to 2015, she said Moody’s and Standard & Poor’s statistics showed that Epic customers reaped profitability unsurpassed by clients who implemented her competitors’ EHRs.

Despite the risks, hospitals will continue to invest in EHRs, Moody’s said. Hospital executives want to improve patient safety, clinical quality and provide decision support. IT will also continue to be a selling point in physician recruitment and retention, as new data reporting will be required by Medicare for professional reimbursement.

While hospitals may be exposed to a number of risks during massive IT rollouts, the threats that come with cyber attacks make them even more vulnerable, according to Moody’s.

As example, Moody’s points to Hollywood Presbyterian Medical Center in Hollywood, California, which acknowledged paying ransom after an attack in 2016.

Moody’s expects cybersecurity to become an even stronger focus than it already is.

“As IT investments represent a growing portion of hospital budgets, an increasing amount will be allotted to guarding confidential patient data, which make hospitals a prime target for cyberattacks and ransomware events,” according to Moody’s. “We expect cybersecurity to be a primary focus of hospital management teams and their boards, with annual capital and operating budgets allotting appropriate levels of expenditures to protect patient data and testing vulnerabilities.”

Summa Health to cut 300 positions, scale back services in face of $60M operating loss

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http://www.healthcaredive.com/news/summa-health-to-cut-300-positions-scale-back-services-in-face-of-60m-oper/445874/

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Dive Brief:

  • Facing steep operating losses, Summa Health will shed 300 positions and rein in its services, Cleveland.com reported. Half of the eliminated positions are currently empty.
  • The Akron-based health system recorded $30 million in profits in 2016, but expects $60 million in operating losses this year brought on by low inpatient and outpatient numbers.
  • “This year, inpatient and outpatient volumes are dramatically down and, as a result, we are facing staggering operating losses, interim President and CEO Cliff Deveny said in an internal memo to staff on Monday. “While we have considerable cash in reserve to protect us for the short term, this trend must stop immediately.”

Dive Insight:

Summa’s future has been uncertain since CEO Thomas Malone resigned in January. His departure followed a letter signed by 240 Summa physicians giving him a vote of no confidence and urging him to leave. The physicians complained of not being consulted on major changes that would affect patient care at Summa and questioned the nonprofit health system’s decision to sever a contract with emergency physicians.

As patient care shifts from inpatient to outpatient/virtual settings and hospitals face reimbursement cuts, nonprofit and for-profit hospitals alike are struggling to keep operating losses under control. In March, for example, Cleveland Clinic reported a 71% drop in operating income from $480.2 million in 2015 to $139.9 million last year — despite a 12% jump in revenues to $8 billion. Among expenses weighing the system down were pharmaceuticals (up 23%), labor (up 19%) and supplies (up 13%).

More than half of hospitals in the U.S. suffered operating losses in 2016, Cleveland Clinic CEO Toby Cosgrove said earlier this year during a panel to discuss changing demands on healthcare systems. While healthcare reforms are forcing hospitals to transform care delivery, they aren’t being funded adequately to do so, he said.

NYC Health + Hospitals suffered a $76 million operating loss in the first half of fiscal 2017, softened slightly by about $78 million in capital contributions from the city. The health system blamed the loss in part on timing of government payments and the need to count costs like depreciation. The health system has experienced several years of operating losses and had hoped to flip their luck with implementation of a $764 million Epic EHR. However, implementation fell far behind H+H’s original spring 2016 systemwide go-live deadline.

And Boston-based Partners HealthCare suffered $108 million in operating losses for fiscal 2016. The health system has struggled financially since purchasing Neighborhood Health Plan, Medicaid managed care subsidiary in 2012. Partners was hit with a nursing strike and expenses related to implementation of a new EHR system.

University of Vermont Health Network to implement $112.4 million Epic EHR

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http://www.healthcarefinancenews.com/news/university-vermont-health-network-implement-1124-million-epic-ehr

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The University of Vermont Medical Center filed a certificate of need, or CON application, with the state of Vermont Jan. 3, seeking approval to create a unified electronic health record system across four hospitals in the University of Vermont Health Network.

The submission of the CON application signals the start of a regulatory review process for the project.

A unified EHR would significantly improve patient care by having all of a patient’s information available to a healthcare provider regardless of location whenever it is needed, health system officials noted in their CON application.

“If a patient needs to go from their primary care provider’s office to a specialist, that specialist would have instant access to the patient’s full record rather than just portions that can be shared electronically today,” John Brumsted, MD, president and CEO of UVM Health Network, in a statement.

“There are still times when the medical records are faxed or even hand-delivered by the patient at the appointment,” he added. “In urgent situations, and especially during an emergency, having immediate access to important information is critical. A unified EHR is foundational to our ability to collaborate fully to provide the highest quality care possible.”

The capital cost of the project, which is subject to CON review, is $112.4 million. It includes $3.1 million in capitalized interest. The total cost of the project over the first six years of implementation and operation is expected to be $151.6 million.

Done independently, it could cost up to $200 million for the four hospitals to upgrade their own systems, and it would lack the network connectivity, UVM officials calculated.

Partners HealthCare suffers $108M in operating losses in FY 2016

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http://www.healthcaredive.com/news/partners-healthcare-suffers-108m-in-operating-losses-in-fy-2016/432128/

Dive Brief:

  • Operating revenues at Boston-based Partners HealthCare increased 7% from the previous year to $12.5 billion, but $12.6 billion in operating expenses canceled out those gains, according to the health system’s financial statements.
  • The operating loss is the largest posted in the system’s 22-years of history, which has struggled financially since it acquired Neighborhood Health Plan in 2012, a Medicaid managed care subsidiary that had a $89-million operating loss two years ago.
  • A nursing strike and implementation of a new EHR system also contributed to poor financial performance at Partners in fiscal year 2016, according to the Boston Herald.

This CNIO is a Nurse First

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CNIO

Once on track to be a CNO, Amy Rosa took an unexpected detour to becoming a nurse leader and now uses her clinical experience, collaboration skills, and knowledge of informatics to affect patient outcomes as a CNIO.