Kaiser’s net income more than doubles to $3.2B in Q1

https://www.beckershospitalreview.com/finance/kaiser-s-net-income-more-than-doubles-to-3-2b-in-q1.html

Oakland, Calif.-based Kaiser Permanente reported higher revenue and net income for its nonprofit hospital and health plan units in the first quarter of 2019.

Kaiser saw operating revenue increase to $21.3 billion in the first quarter of 2019. That’s up 5.3 percent from operating revenue of $20.3 billion in the first quarter of last year.

The boost was partly attributable to the system’s health plan unit. Kaiser saw health plan membership increase year over year to 12.3 million.

“We are pleased that our membership increased by more than 150,000 members in the first quarter, as more people are choosing Kaiser Permanente for their care and coverage,” Kaiser Executive Vice President and CFO Kathy Lancaster said in a press release. “We normally see our largest membership growth in the first quarter due to the fall open enrollment cycle.”

After factoring in operating expenses, which increased 3 percent year over year, Kaiser reported operating income of $1.5 billion in the first quarter of 2019. That’s up from $1.1 billion in the first quarter of 2018.

“This year-over-year increase in Q1 operating income was significantly impacted by several accounting estimates that were favorable when compared to the same period last year,” Kaiser said.

Kaiser’s nonoperating income, generated largely by returns on investments, was $1.6 billion in the first quarter of this year, up from $334 million in the same period a year earlier.

Under an accounting change that took effect Jan. 1, Kaiser reported unrealized gains on certain equities as net nonoperating income, which added $896 million to the organization’s nonoperating income in the first quarter of this year.

Kaiser reported net income of $3.2 billion in the first quarter of 2019, more than double its net income of $1.4 billion in the first quarter of last year.

Ms. Lancaster said Kaiser’s strong first-quarter performance will allow for more strategic investments in facilities, people and technology. During the first quarter of 2019, Kaiser said it spent $834 million on technology and upgrading and opening new facilities.

 

 

‘Who’s going to take care of these people?’

https://www.washingtonpost.com/news/national/wp/2019/05/11/feature/whos-going-to-take-care-of-these-people/?utm_campaign=Issue:%202019-05-13%20Healthcare%20Dive%20%5Bissue:20860%5D&utm_medium=email&utm_source=Sailthru&utm_term=.32a0834177a0

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The hospital had already transferred out most of its patients and lost half its staff when the CEO called a meeting to take inventory of what was left. Employees crammed into Tina Steele’s office at Fairfax Community Hospital, where the air conditioning was no longer working and the computer software had just been shut off for nonpayment.

“I want to start with good news,” Steele said, and she told them a food bank would make deliveries to the hospital and Dollar General would donate office supplies.

“So how desperate are we?” one employee asked. “How much money do we have in the bank?”

“Somewhere around $12,000,” Steele said.

“And how long will that last us?”

“Under normal circumstances?” Steele asked. She looked down at a chart on her desk and ran calculations in her head. “Probably a few hours,” she said. “Maybe a day at most.”

The staff had been fending off closure hour by hour for the past several months, ever since debt for the 15-bed hospital surpassed $1 million and its outside ownership group entered into bankruptcy, beginning a crisis in Fairfax that is becoming familiar across much of rural America. More than 100 of the country’s remote hospitals have gone broke and then closed in the past decade, turning some of the most impoverished parts of the United States into what experts now call “health-hazard zones,” and Fairfax was on the verge of becoming the latest. The emergency room was down to its final four tanks of oxygen. The nursing staff was out of basic supplies such as snakebite antivenin and strep tests. Hospital employees had not received paychecks for the past 11 weeks and counting.

The only reason the hospital had been able to stay open at all was that about 30 employees continued showing up to work without pay, increasing their hours to fill empty shifts and essentially donating time to the hospital, understanding what was at stake. Some of them had been born or had given birth at Fairfax Community. Several others had been stabilized and treated in the emergency room after heart attacks or accidents. There was no other hospital within 30 miles of two-lane roads and prairie in sprawling Osage County, which meant Fairfax Community was the only lifeline in a part of the country that increasingly needed rescuing.

“If we aren’t open, where do these people go?” asked a physician assistant, thinking about the dozens of patients he treated each month in the ER, including some in critical condition after drug overdoses, falls from horses, oil field disasters or car crashes.

“They’ll go to the cemetery,” another employee said. “If we’re not here, these people don’t have time. They’ll die along with this hospital.”

“We have no supplies,” Steele said. “We have nothing. How much longer can we provide quality care?”

 

 

 

 

 

 

As emergencies rise across rural America, a hospital fights for its lifeAs emergencies rise across rural America, a hospital fights for its life

 

12 latest hospital bankruptcies

https://www.beckershospitalreview.com/finance/12-latest-hospital-bankruptcies-041019.html

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From reimbursement landscape challenges to dwindling patient volumes, many factors lead hospitals to file for bankruptcy.

Here are 12 hospitals that filed for bankruptcy since Jan. 1, beginning with the most recent:

1. De Queen (Ark.) Medical Center filed for Chapter 11 bankruptcy on April 3. The hospital, owned by an affiliate of Kansas City, Mo.-based EmpowerHMS, entered bankruptcy after facing financial challenges for months. Electricity was temporarily shut off in some parts of the hospital in February due to nonpayment, and the hospital subsequently stopped providing patient care.

2. Prague (Okla.) Community Hospital, owned by an affiliate of EmpowerHMS, entered Chapter 11 bankruptcy on March 21. A judge allowed a new company to take over management of Prague Community Hospital in early March after the hospital experienced payroll issues and lacked funds for supplies.

3. I-70 Community Hospital in Sweet Springs, Mo., filed for Chapter 11 bankruptcy on March 21. The bankruptcy filing came after CMS ended its provider agreement with the hospital, which voluntarily suspended its license for 90 days on Feb. 15. I-70 Community Hospital is owned by an affiliate of EmpowerHMS.

4. Haskell County Community Hospital in Stigler, Okla., filed for Chapter 11 bankruptcy on March 17. The hospital, owned by an affiliate of EmpowerHMS, entered bankruptcy with less than $50,000 in assets and at least $1 million in liabilities.

5. Drumright (Okla.) Regional Hospital, owned by an affiliate of EmpowerHMS, filed for Chapter 11 bankruptcy on March 17. The hospital entered bankruptcy with less than $50,000 in assets and upward of $10 million in estimated liabilities.

6. Oswego (Kan.) Community Hospital entered Chapter 11 bankruptcy on March 17. The bankruptcy filing came after the hospital, owned by an affiliate of EmpowerHMS, abruptly closed Feb. 14.

7. Fairfax (Okla.) Community Hospital, owned by an affiliate of EmpowerHMS, filed for Chapter 11 bankruptcy March 17. The hospital entered bankruptcy with less than $50,000 in assets and at least $1 million in liabilities.

8. Horton (Kan.) Community Hospital entered Chapter 11 bankruptcy March 14, just two days after it closed. In its bankruptcy petition, the hospital said it has less than $50,000 in assets and liabilities of between $1 million and $10 million. Horton Community Hospital is owned by an affiliate of EmpowerHMS.

9. Hillsboro (Kan.) Community Hospital, owned by an affiliate of EmpowerHMS, filed for Chapter 11 bankruptcy on March 13. According to documents filed in the bankruptcy case, the hospital has at least $10 million in assets and at least $10 million in liabilities. The hospital owes more than $334,000 in real estate taxes, making the Marion County (Kan.) Treasurer the unsecured creditor with the largest claim against the hospital.

10. Lauderdale Community Hospital in Ripley, Tenn., filed for Chapter 11 bankruptcy on March 8. The hospital, owned by an affiliate of EmpowerHMS, has faced financial challenges for months, and a federal judge appointed a receiver to oversee the hospital’s finances in February.

11. Washington County Hospital in Plymouth, N.C., entered bankruptcy in February after creditors filed an involuntary Chapter 7 bankruptcy petition. The hospital, owned by an affiliate of EmpowerHMS, missed payroll Feb. 8 and suspended all medical services Feb. 14.

12. Penobscot Valley Hospital, a 25-bed critical access hospital in Lincoln, Maine, filed for Chapter 11 bankruptcy Jan. 29. “We have made tremendous strides over the last three years in bringing our operational costs in line with revenue,” Hospital CEO Crystal Landry said in a press release. “Legacy debt is the issue here, and Chapter 11 allows us to restructure that debt so we can keep our doors open and ensure that our community continues to have a hospital close to home.”

 

 

 

Private equity-owned hospital chain files for bankruptcy

https://www.beckershospitalreview.com/finance/private-equity-owned-hospital-chain-files-for-bankruptcy.html

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New LifeCare Hospitals, a long-term acute care hospital operator based in Plano, Texas, filed for Chapter 11 bankruptcy protection May 6, according to The Wall Street Journal.

The company, owned mostly by affiliates of Blue Mountain Capital, Monarch Alternative Capital and Twin Haven Special Opportunities Fund, cited declining reimbursement due to Medicare changes as the reason for the bankruptcy filing.

Prior to entering bankruptcy, New LifeCare, which operates 17 facilities in nine states, closed some hospitals and took other steps to cut costs.

New LifeCare is in discussions with potential buyers, and CEO James Murray expects the company to be auctioned through the bankruptcy process later this year, according to The Wall Street Journal, which cited bankruptcy court documents.

 

 

 

Hedge fund manager predicts CHS will go bankrupt

https://www.beckershospitalreview.com/finance/hedge-fund-manager-predicts-chs-will-go-bankrupt.html

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Firefly Value Partners Co-Founder and Portfolio Manager Ryan Heslop is bearish on Franklin, Tenn.-based Community Health Systems, according to Reuters.

Mr. Heslop, who was one of several hedge fund managers to present May 6 at the Ira Sohn Investment Conference in New York, announced a short position in CHS during the conference.

He said CHS will likely go bankrupt over the next few years due to rising debt costs and dwindling revenue per hospital bed. 

The company’s “pile of debt and the declining profitability of hospitals make it almost certain that this patient will die,” Mr. Heslop said, according to Reuters.

CHS didn’t immediately respond to Reuters’ request for comment.

During the conference, other discussions about for-profit hospital operators were positive. Glenview Capital Management Founder and CEO Larry Robbins said he’s bullish on hospitals overall, and owning stock in Nashville, Tenn.-based HCA Healthcare, King of Prussia-based Universal Health Services and Dallas-based Tenet Healthcare is a wise decision, according to Barron’s.

 

 

Judge Rules 340B Cuts Unlawful, Decision Applauded by Industry Stakeholders

https://www.healthleadersmedia.com/finance/judge-rules-340b-cuts-unlawful-decision-applauded-industry-stakeholders?spMailingID=15621129&spUserID=MTg2ODM1MDE3NTU1S0&spJobID=1640683769&spReportId=MTY0MDY4Mzc2OQS2

A federal judge reaffirmed his view that the cuts by HHS to the discount drug program are unlawful.

KEY TAKEAWAYS

In a joint statement, three hospital plaintiffs urged HHS to follow the judge’s directive.

340B Health added their approval in a statement, asking the agency to “act quickly.”

A status report regarding HHS’ progress remedying the situation must be submitted to U.S. District Court Judge Rudolph Contreras by August 5.

U.S. District Court Judge Rudolph Contreras again ruled Monday evening that the 340B drug reimbursement rate that Health and Human Services set in the 2019 Outpatient Prospective Payment System (OPPS) rule is unlawful, a decision that earned praise from various industry stakeholders. 

Five months after first vacating the 22% cut in 340B payments that HHS Secretary Alex Azar proposed late last year, Contreras reiterated that the cuts were implemented “in contravention of the Medicare Act’s plain text.”

Medicare Part B will sell prescription drugs to hospitals participating in the program at the average selling price plus 6%, well above the average selling price minus 22.5% as HHS had proposed.

“The Court also concludes that, despite the fatal flaw in the agency’s rate adjustments, vacating HHS’ 2018 and 2019 rules is not the best course of action, given the havoc vacatur may wreck on Medicare’s administration,” Contreras wrote in the 22-page ruling.

HHS will have “first crack” at crafting appropriate remedies for the two rules, according to the ruling.

Tuesday, three hospital plaintiffs applauded the ruling as a positive development for the embattled federal program, which has been deemed wasteful and rife with abuse by critics who demand additional oversight and accountability.

“America’s 340B hospitals are pleased with the District Court’s decision and urge HHS to follow the judge’s directive to promptly resolve the harm caused by its unlawful cuts to Medicare reimbursement for certain 340B hospitals,” the American Hospital Association, Association of American Medical Colleges, and America’s Essential Hospitals said in a joint statement. “The ruling reaffirmed that the 2018 cuts were unlawful and extended that ruling to the 2019 cuts. Owing to the complexity of the Medicare program, the judge gave HHS first crack at fashioning a remedy for its unlawful actions. He also asked for a report from HHS on its progress on or before August 5, 2019. We urge HHS to promptly comply with the judge’s ruling and restore to 340B hospitals all funds that have been unlawfully withheld.”

HHS has not issued a statement regarding Monday’s ruling and did not respond to a request for comment by time of publication. 

The December ruling by Contreras did have a material impact on nonprofit hospitals, according to Moody’s Investor Service, which determined in early January that the reversion of the cuts would lead to improved operating performance.

340B Health, an advocacy group for the federal program, also issued a statement Tuesday afternoon applauding Contreras’ ruling.

“On behalf of the nearly 1,400 hospitals we represent that participate in 340B, we are pleased that the court has, once again, found that HHS exceeded its statutory authority by cutting what Medicare pays for outpatient drugs delivered to their patients,” Maureen Testoni, CEO of 340B Health, said in a statement. “The cuts made in 2018 and again in 2019 have reduced hospitals’ ability to care for those in need. The sooner this policy is reversed, the better hospitals will be able to serve the needs of patients with low incomes and those in rural communities. HHS must act quickly, as any further delay will only harm patients and the hospitals they rely on for care.”

Nearly 2,500 hospitals currently participate in the 340B Drug Pricing Program, which was created in 1992 to assist safety-net and low-income providers purchase prescription drugs.

A status report regarding HHS’ progress remedying the situation must be submitted to Judge Contreras by August 5. 

 

 

For the First Time, Employed Docs Outnumber Self-employed Docs

https://www.healthleadersmedia.com/first-time-employed-docs-outnumber-self-employed-docs

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The milestone continues a long-term trend that has shifted the distribution of physicians away from ownership of private practices.


KEY TAKEAWAYS

Employed physicians were 47.4% of all patient care physicians in 2018, up 6% points since 2012.

Self-employed physicians were 45.9% of all patient care physicians in 2018, down 7% points since 2012.

In the aggregate, 34.7% of physicians worked either directly for a hospital or in a practice at least partly owned by a hospital in 2018, up from 29.0% in 2012.

Employed physicians outnumber self-employed physicians for the first time in the United States, according to an updated study on physician practices by the American Medical Association.

“Transformational change continues in the delivery of healthcare and physicians are responding by reevaluating their practice arrangements,” AMA President Barbara L. McAneny, MD, said in a media release.

Employed physicians were 47.4% of all patient care physicians in 2018, up 6% points since 2012.

Self-employed physicians were 45.9% of all patient care physicians in 2018, down 7% points since 2012.

Such a dramatic shift is not unprecendented. Older AMA surveys show the share of self-employed physicians fell 14% points during a six-year span between 1988 and 1994.

Given the rate of change in the early 1990s, it appeared a point was imminent when employed physicians would outnumber self-employed physicians, but the shift took much longer than anticipated.


The AMA’s researchers said that history suggests that “caution should be taken in assuming current trends will continue indefinitely.”

The majority of patient care physicians (54%) worked in physician-owned practices in 2018 either as an owner, employee, or contractor. Although this share fell from 60% in 2012, the trend away from physician-owned practice appears to be slowing since more than half of the shift occurred between 2012 and 2014, the study said.

At the same time, there was an increase in the share of physicians working directly for a hospital or in a practice at least partly owned by a hospital.

Physicians working directly for a hospital were 8% of all patient care physicians, an increase from 5.6% in 2012. Physicians in hospital-owned practices were 26.7% of all patient care physicians, an increase from 23.4% in 2012.

In the aggregate, 34.7% of physicians worked either for a hospital or in a practice at least partly owned by a hospital in 2018, up from 29.0% in 2012.

Younger physicians and women physicians are more likely to be employed. Nearly 70% of physicians under age 40 were employees in 2018, compared to 38.2% of physicians age 55 and over.

Among female physicians, more were employees than practice owners (57.6% vs. 34.3%). The reverse is true for male physicians, more were practice owners than employees (52.1% vs. 41.9%).

As in past AMA studies, physicians’ employment status varied widely across medical specialties in 2018.

The surgical subspecialties had the highest share of owners (64.5%) followed by obstetrics/gynecology (53.8%) and internal medicine subspecialties (51.7%).

Emergency medicine had the lowest share of owners (26.2%) and the highest share of independent contractors (27.3%). Family practice was the specialty with the highest share of employed physicians (57.4%).

Most physicians still work in small practices, but this share has fallen slowly but steadily since 2012. In 2018, 56.5% of physicians worked in practices with 10 or fewer physicians compared to 61.4% in 2012.

The AMA report said the transition has been driven primarily by the shift away from very small practices, especially solo practices, in favor of very large practices of 50 or more physicians.

The new study is the latest addition to the AMA’s Policy Research Perspective series that examines long term changes in practice arrangements and payment methodologies.

“Transformational change continues in the delivery of healthcare and physicians are responding by reevaluating their practice arrangements. ”

 

 

 

 

SSM Health is offering $25 virtual visits to all Wisconsin, Missouri residents

https://www.beckershospitalreview.com/telehealth/ssm-health-is-offering-25-virtual-visits-to-all-wisconsin-missouri-residents.html?origin=rcme&utm_source=rcme

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St. Louis-based SSM Health is upping the ante for providers in Wisconsin and Missouri by offering all residents — established patients or not, health insurance or not — $25 virtual visits within an hour of requesting an appointment.

The service will be available Monday through Friday 9 a.m. to 7:30 p.m., and Saturday and Sunday from 10 a.m. to 4:30 p.m. Residents who wish to use the service log onto SSM’s virtual visit platform, complete a questionnaire and within 15 minutes to an hour, will receive a video or phone call from an SSM Health clinician.

The service is available for patients ages 2 to 75 for nonurgent health conditions like flu, pink eye or bladder infections. Parents or guardians must complete visits for minors.   

SSM Health will charge a $25 flat fee for a virtual visit. However, if the issue cannot be resolved online and a follow-up visit in person is necessary, the virtual visit is free.

The health system plans to roll the program out in Illinois and Oklahoma later this year.

 

Washington health system files for bankruptcy, cites issues with revenue cycle vendor

https://www.beckershospitalreview.com/finance/washington-health-system-files-for-bankruptcy-cites-issues-with-revenue-cycle-vendor.html?origin=cfoe&utm_source=cfoe

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Astria Health, a three-hospital health system based in Sunnyside, Wash., filed for Chapter 11 bankruptcy protection on May 6.

Astria plans to use the bankruptcy process to restructure its finances, enter into a plan of reorganization with its creditors and replace its billing company, according to TV station KIMA.

In a press release issued May 6, the health system said it is facing a significant shortfall in cash flow due to issues with the company it contracted with to manage its billing in August 2018. Astria said the unidentified company failed to process a significant number of accounts receivable, leading to a backlog of unpaid claims, according to the Yakima Herald-Republic.

“Although hospital leadership has actively managed the supply chain to ensure necessary supplies for patient care, this delay in cash collections has now become severe enough to potentially disrupt the organization’s ability to pay for crucial items in a timely matter,” Astria Health wrote in its news release, according to the Yakima Herald-Republic.

Astria said it has secured debtor in possession financing and the bankruptcy filing will not affect operations at its hospitals or clinics. They will remain open as the health system moves through the bankruptcy process.

“As one of the largest healthcare providers and employers in the Yakima Valley, we believe this step was necessary in order to protect the Valley’s hospitals and its local economies,” Astria Health President CEO John Gallagher told KIMA. “We believe it will protect and sustain the three hospitals for the future.”

Astria aims to emerge from bankruptcy by the end of 2019.

 

 

Healthcare Triage: Doctors’ White Coats Can Host a Lot of Bacteria

Healthcare Triage: Doctors’ White Coats Can Host a Lot of Bacteria

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For a lot of doctors and patients, the physician’s traditional white coat is a big part of a doctor’s identity, and contributes to their authority. Those white coats can also spread disease! It turns out, fabrics in doctors coats can be a breeding ground for bacteria, and they probably don’t get cleaned often enough.