Tag Archives: Health System

12 recent hospital, health system outlook and credit rating actions

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https://www.beckershospitalreview.com/finance/12-recent-hospital-health-system-outlook-and-credit-rating-actions-10-5-18.html?origin=cfoe&utm_source=cfoe

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The following hospital and health system credit rating and outlook changes or affirmations occurred in the last week, beginning with the most recent:

1. S&P assigns ‘AA+’ rating to OhioHealth‘s bonds
S&P Global Ratings assigned its “AA+” long-term rating to Columbus-based OhioHealth’s $125 million series 2018A and $50 million series 2018B. Concurrently, S&P assigned its “AA+/A-1+” dual rating to the health system’s $37.5 million series 2018C and $37.5 million series 2018D.

2. S&P assigns ‘AA-‘ long-term rating to Atrium Health‘s bonds
S&P Global Ratings assigned its “AA-” long-term rating to Charlotte, N.C.-based Atrium Health’s series 2018A-E bonds. Concurrently, S&P affirmed its “AA-” underlying rating on the health system’s existing bonds.

3. S&P revises Mercy Health Services‘ outlook to positive
S&P Global Ratings revised Baltimore-based Mercy Health Services outlook to positive from stable.

4. Fitch assigns ‘BBB+’ issuer rating to ProMedica
Fitch Ratings assigned its “BBB+” issuer default rating to Toledo, Ohio-based ProMedica. Concurrently, Fitch assigned its “BBB+” long term rating to ProMedica’s $300 million series 2018A bonds and $1.15 billion series 2018B taxable bonds.

5. Fitch upgrades St. Francis Healthcare System to ‘AA’
Fitch Ratings upgraded Cape Girardeau, Mo.-based St. Francis Healthcare System’s rating to “AA” from “AA-,” affecting $139.3 million of debt. Concurrently, Fitch assigned the health system its “AA” issuer default rating.

6. S&P downgrades South Georgia Medical Center‘s rating to ‘BBB+,’ assigns negative outlook
S&P Global Ratings downgraded its long-term rating on Valdosta, Ga.-based South Georgia Medical Center’s certificates to “BBB+” from “A-.”

7. Fitch assigns ‘A’ rating to Edward-Elmhurst Healthcare‘s bonds
Fitch Ratings assigned its “A” rating to Naperville, Ill.-based Edward-Elmhurst Healthcare’s series 2018 bonds, affecting about $249.74 million of debt. Concurrently, Fitch affirmed its “A” issuer default and revenue bond ratings.

8. S&P revises PeaceHealth‘s outlook to positive for improved operations
S&P Global Ratings affirmed its “A” long-term and underlying rating on Vancouver, Wash.-based PeaceHealth and assigned its “A” rating to the health system’s series 2018A bonds. Concurrently, the outlook was revised to positive from stable.

9. S&P revises SSM Healthcare‘s outlook to stable
S&P Global Ratings affirmed its “A+” long-term and underlying rating on St. Louis-based SSM Health. Concurrently, the outlook was revised to stable from negative.

10. S&P downgrades Crawford Memorial Hospital‘s rating to ‘BBB’
S&P Global Ratings downgraded Robinson, Ill.-based Crawford Memorial Hospital’s long-term and underlying rating to “BBB” from “A.”

11. S&P downgrades Lexington Medical Center to ‘A’ after error correction
S&P Global Ratings downgraded West Columbia, S.C.-based Lexington Medical Center’s series 2011, 2016 and 2017 revenue bonds to “A” from “A+.

12. S&P assigns ‘AA-‘ rating to Parkview Regional Medical Center
S&P Global Ratings assigned its “AA-” rating to Fort Wayne, Ind.-based Parkview Regional Medical Center’s series 2018 and 2019A bonds, affecting about $162 million of debt.

RWJBarnabas hospital exec placed on administrative leave after Facebook comment

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https://www.beckershospitalreview.com/hospital-management-administration/rwjbarnabas-hospital-exec-placed-on-administrative-leave-after-facebook-comment.html?origin=cfoe&utm_source=cfoe

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Michellene Davis, an executive vice president and chief corporate affairs officer for West Orange, N.J.-based RWJBarnabas Health, was placed on administrative leave pending an investigation into a racially charged Facebook comment, according to the North Jersey Record.

Ms. Davis commented on a NorthJersey.com article that her friend shared on Facebook.
“Who is going to train them not to shoot black children first?!?” Ms. Davis commented.

The comment has since been deleted. It did not appear on a public post, but screenshots began circulating on social media.
A few days later Ms. Davis posted an apology on Facebook for what she called “an insensitive and offensive comment.”
She has reportedly deleted her Facebook page.

“My concern for the safety of schoolchildren and gun violence led me to react to a headline without thinking,” she wrote in the apology post, according to the North Jersey Record. “Having a late sister and other family in law enforcement I deeply respect the law enforcement community and appreciate their service and admire their sacrifice.”

RWJBarnabas Health is conducting an internal investigation into the incident.

Ellen Greene, a spokesperson for RWJBarnabas, told the North Jersey Record, “statements posted by RWJBarnabas Health official social media outlets are the only statements that represent the views and policies of the organization.”

Read the full article here.

 

4 hospital business models of the future

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https://www.beckershospitalreview.com/hospital-management-administration/pwc-4-hospital-business-models-of-the-future.html?origin=cfoe&utm_source=cfoe

 

For hospitals, the million-dollar question is, “How do we adapt to the changing needs of the healthcare industry and remain fiscally stable?” PwC’s Health Research Institute articulates four potential answers to that question in a report published Oct. 4.

Here are the four business models identified by PwC’s HRI as successful strategies for hospitals over the next decade:

1. The product leader. Under this model, hospitals are focused on delivering top-notch, advanced care. Best-in-class care is the core product. This model will focus on specific healthcare needs, particularly those that may be costly or complex. Whole patient care, low-cost options and a large footprint are not the focus. This model is focused on the product and the brand and will build scale using technology like telehealth. It relies on partnerships with other provider types for referrals and new patients.

2. The experience leader. This model is focused on building the best possible customer experience. It relies on patient retention and loyalty. This is built on offering consistency and convenience. A focus on wellness, patient preferences and cost transparency is key. Offering the lowest cost option isn’t a top priority, so long as consumers understand what goes into the pricing and get what they are looking for.

3. The integrator. This business model focuses on offering the best value option to consumers via scale and scope. This is the largest of the business models and will likely require a multiregional or national presence. The top focus isn’t the brand, however. Instead, it’s about offering low-cost options, which will require working with providers outside of the hospital and aligning economic incentives to keep prices down.

4. The health manager. The last model puts a premium on the health of populations. Its focus is on keeping complex populations out of high-cost settings by addressing social determinants of health. This model requires a broad understanding of populations, a balance of risk and health equity, and partnership with the public sector. It will require hospitals to take on the broadest definition of healthcare to succeed, including mental, social and logistical supports for patients.

Learn more about PwC’s analysis here.

https://www.pwc.com/us/en/health-industries/health-research-institute/provider-systems-future.html

 

 

 

CHS shares sink to new low

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https://www.beckershospitalreview.com/finance/chs-shares-sink-to-new-low-100518.html

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Shares of Franklin, Tenn.-based Community Health Systems closed Oct. 4 at $2.67, their lowest closing price ever and down 1.1 percent from the day prior.
The hospital chain’s stock price traded as low as $2.62 on Oct. 4 after closing Oct. 3 at $2.70 per share. Over the past year, CHS shares have traded between $2.62 and $7.62.

CHS saw its net loss shrink in the second quarter of 2018 as the company continued to refine its hospital portfolio. The company is using proceeds from the hospital divestitures to pay down its debt load.

 

US hospitals pay up to 6 times more for medical devices, study finds

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https://www.beckershospitalreview.com/supply-chain/us-hospitals-pay-up-to-6-times-more-for-medical-devices-study-finds.html

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U.S. hospitals spend more on prescription drugs than their peers in European countries, and the same is true for medical devices, a new study published in Health Affairs suggests. In some cases, hospitals in the U.S. paid six times more for a medical device than their European counterparts.

The study was conducted by two researchers from the London School of Economics and Political Science who looked at what hospitals in the U.S., U.K., France, Italy and Germany paid for various heart implants, such as stents and pacemakers. They used data from 2006 to 2014 from a large hospital panel survey consisting of 30,000 unique price points.

The researchers found that depending on the type of stent or pacemaker, U.S. hospitals paid anywhere from two to six times more than the country that paid the lowest prices. The country that often paid the lowest price was Germany.

One example provided was drug-eluting stent prices. The price of the device in the U.S. consistently exceeded the price in Germany by $1,000.
Prices between countries differed for various reasons, including the market power of medical device manufacturers and each country’s tech-based regulations.
The findings suggest “that manufacturers exploit varying levels of willingness to pay and bargaining power between buyers to charge different prices across hospitals and increase profits,” the researchers wrote.

 

 

 

 

 

 

 

15 health systems with strong finances

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https://www.beckershospitalreview.com/finance/15-health-systems-with-strong-finances-100418.html

Here are 15 health systems with strong operational metrics and solid financial positions, according to recent reports from Moody’s Investors Service and Fitch Ratings.

Note: This is not an exhaustive list. Health system names were compiled from recent credit rating reports and are listed in alphabetical order.

1. St. Louis-based Ascension has an “Aa2” senior debt rating and stable outlook with Moody’s. The health system has a large diversified portfolio of sizable hospitals and strong liquidity. Moody’s expects Ascension’s margins to improve in fiscal year 2019.

2. Morristown, N.J.-based Atlantic Health System has an “Aa3” rating and stable outlook with Moody’s. The system has a strong market position, favorable balance sheet ratios and strong operating performance, according to Moody’s.

3. Atrium Health has an “Aa3” rating and stable outlook with Moody’s. The Charlotte, N.C.-based health system has historically stable operating performance and solid cash-flow metrics, according to Moody’s.

4. Prince Frederick, Md.-based Calvert Health System has an “AA-” rating and stable outlook with Fitch. The system has a leading market share, a favorable payer mix and stable cash flow, according to Fitch.

5. Children’s Healthcare of Atlanta has an “Aa2” rating and stable outlook with Moody’s. The health system has a dominant market position, strong margins and ample liquidity, according to Moody’s.

6. Cleveland Clinic has an “Aa2” rating and stable outlook with Moody’s. Cleveland Clinic has strong brand recognition, exceptional fundraising ability and healthy cash flow, according to Moody’s.

7. Inova Health System has an “Aa2” rating and stable outlook with Moody’s. The Falls Church, Va.-based health system has consistently strong cash-flow margins, a leading market position and a good investment position, according to Moody’s.

8. Philadelphia-based Main Line Health has an “Aa3” rating and stable outlook with Moody’s. The system has a strong market position, healthy balance sheet metrics and a light debt burden, according to Moody’s.

9. Rochester, Minn.-based Mayo Clinic has an “Aa2” rating and stable outlook with Moody’s. Mayo has a strong clinical reputation, favorable fundraising capabilities and a robust balance sheet, according to Moody’s.

10. Dallas-based Methodist Health System has an “Aa3” rating and stable outlook with Moody’s. The health system has a favorable liquidity position, consistent operating results and a growing market population, according to Moody’s.

11. Omaha-based Nebraska Medicine has an “AA-” rating and stable outlook with Fitch. The system has strong operating margins and a light debt burden, according to Fitch.

12. Fort Wayne, Ind.-based Parkview Health System has an “Aa3” rating and stable outlook with Moody’s. The system has healthy debt service coverage, manageable capital spending and improving liquidity metrics, according to Moody’s.

13. Sisters of Charity of Leavenworth (Kan.) Health System, which does business as SCL Health, has an “Aa3” rating and stable outlook with Moody’s. The system has a good market position in a favorable service area, strong operating margins and limited capital spending, according to Moody’s.

14. Hollywood, Fla.-based South Broward Hospital District has an “Aa3” rating and positive outlook with Moody’s. The health system has a dominant market position, robust debt coverage and improving operating margins, according to Moody’s.

15. Chapel Hill-based University of North Carolina Hospitals has an “Aa3” rating and stable outlook with Moody’s. The health system has an excellent market position, strong patient demand and healthy financial performance, according to Moody’s.

 

 

 

Cleveland Clinic may grow to 15 hospitals

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https://www.beckershospitalreview.com/hospital-transactions-and-valuation/cleveland-clinic-may-grow-to-15-hospitals.html

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The boards of Cleveland Clinic and Vero Beach, Fla.-based Indian River Medical Center voted to approve a series of agreements allowing IRMC to integrate into the Cleveland Clinic, the organizations announced Oct. 3.

Here are five things to know:

1. The advisers and legal teams of both organizations shared details of the agreements with board members during a public meeting Sept. 25. Board members and trustees spent the last week analyzing the details and finalized their decision Oct. 3. Officials from both organizations will formally sign the agreements later this week.

2. Under the deal, IRMC and its affiliates will become part of the Cleveland Clinic, which also agreed to commit at least $250 million to IRMC over the next 10 years.

3. Cleveland Clinic will maintain full governance over IRMC and has committed to maintaining maternity care, inpatient well-baby care/pediatrics and gynecology services, behavioral health services, and other inpatient and outpatient services for at least 10 years. However, the hospital district will phase out support for indigent care at IRMC during the three years after the transaction closes.

4. The deal is still pending regulatory approval.

5. Cleveland Clinic recently inked a definitive agreement to purchase Martin Health System, a three-hospital institution in Stuart, Fla. If both deals are successful, Cleveland Clinic will comprise 15 hospitals in addition to its main campus.

 

EEOC sues Saint Thomas Health over mandatory flu shot policy

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https://www.beckershospitalreview.com/quality/eeoc-sues-saint-thomas-health-over-mandatory-flu-shot-policy.html

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The U.S. Equal Employment Opportunity Commission filed a lawsuit against Nashville, Tenn.-based Saint Thomas Health Sept. 28, alleging Murfreesboro, Tenn.-based Saint Thomas Rutherford Hospital violated federal law by ordering an employee to receive a flu shot despite his religious beliefs.

Saint Thomas Health requires all workers to receive an annual flu shot, which includes employees from TouchPoint Support Services — one of the Saint Thomas Rutherford Hospital’s food and environmental services providers, according to the EEOC.

In 2013 and 2014, Saint Thomas Health allowed the TouchPoint employee at the center of the lawsuit to wear a protective mask, instead of receiving a flu shot, due to his religious beliefs. When the employee requested to again forego the flu shot in 2015, Saint Thomas Health turned down his request and fired the employee after he refused to get vaccinated, according to the EEOC.

“For several years, [Saint Thomas Health] accommodated the employee’s religious belief,” Delner Franklin-Thomas, director of the EEOC’s Memphis District Office, said in the press release. “Then, [Saint Thomas Health] refused to accommodate his religious belief. An employer should not force an employee to choose between employment and his religious belief unless doing so would cause an undue hardship to the employer.”

Becker’s Hospital Review reached out to St. Louis-based Ascension, which owns Saint Thomas Health, for comment on the suit and will update the article as more information becomes available.

 

 

Dignity Health’s net income more than doubles

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https://www.beckershospitalreview.com/finance/dignity-health-s-net-income-more-than-doubles.html

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Dignity Health, a 40-hospital system based in San Francisco, saw its financial position improve in fiscal year 2018 as it booked higher revenue and benefited from a one-time payment related to a transaction that closed earlier this year.

Dignity recorded revenues of $14.2 billion for the year, which ended June 30, compared with revenues of $12.9 billion for fiscal 2017, according to recently released financial documents. 

In fiscal 2017, Dignity and other California healthcare providers struggled with loss of funds from the state’s provider-fee program, which is designed to help hospitals and health systems treat a large number of indigent patients. The program levies a tax on hospitals, and the state then pools funds to receive federal matches for Medicaid dollars. The Medicaid dollars are distributed back to hospitals based on the number of indigent patients they treat.

In November 2016, California’s participation in the provider-fee program was made permanent with the passage of Proposition 52. However, CMS did not approve the first iteration of the program, which covers the period from Jan. 1, 2017, to June 30, 2019, until December 2017. Accordingly, Dignity’s financial statements for fiscal year 2018 include $447 million in provider-fee payments for the most recent fiscal year plus an additional $217 million of catch-up related to fiscal 2017.

Although the provider-fee payments helped improve Dignity’s financial picture, the system said its unpaid Medi-Cal costs totaled $556 million even after the inclusion of the provider-fee and supplemental payments.

After factoring in expenses, which climbed 6 percent year over year, Dignity ended fiscal 2018 with operating income $529.3 million. That’s compared to fiscal 2017, when the system recorded an operating loss of $66.8 million. The system’s net income more than doubled year over year to $932.5 million.  

During fiscal 2018, Dignity’s financial position was boosted by a one-time gain of $120 million related to a deal with Mechanicsburg, Pa.-based Select Medical to combine occupational medicine and urgent care businesses. Under the transaction, which closed in February, Select Medical’s Concentra Group Holdings and Dignity’s U.S. HealthWorks combined.

Daniel Morissette, Dignity Health’s senior executive vice president and CFO, said several of the system’s balance sheet-related financial metrics also improved in fiscal 2018.

“Our balance sheet continued to strengthen, and cash flows were solid, as we remain focused on further enhancing the long term financial viability of our enterprise and honoring our commitments to the many communities and constituents we serve,” he said in a press release.

 

UPMC, Highmark face off over out-of-network prepayment rule: 5 things to know

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https://www.beckershospitalreview.com/payer-issues/upmc-highmark-face-off-over-out-of-network-prepayment-rule-5-things-to-know.html

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A state-brokered consent decree between Pittsburgh rivals Highmark Health and UPMC expires June 30, 2019, after which Highmark’s Medicare Advantage members will be unable to access UPMC at in-network rates. A recent report from Trib Live found the systems are clashing over a new rule concerning how some nonemergent care will be paid for by out-of-network Highmark members.

Here are five things to know:

1. Beginning in July, Highmark MA members will have to pay any estimated upfront charges for nonemergent treatment in full before accessing care from most UPMC providers, UPMC said in an Oct. 1 internal memo.

2. For example, a Highmark MA member wishing to schedule a surgery next July at most UPMC hospitals will have to request an estimate for the service from UPMC and pay it in full before undergoing surgery, according to Trib Live, which cites the internal memo.

3. Partial payments or arranged payment plans will not be accepted, according to UPMC. “If you choose to access nonemergency care from a UPMC provider that is out-of-network, you will be required to pay in advance,” a UPMC mailer sent to patients explains. It adds that patients can maintain in-network access to UPMC through plans sold by Aetna, its subsidiary Coventry, Cigna and UnitedHealthcare.

4. Highmark officials were surprised by the new rule. They told Trib Live the mandate is “an extremely unusual” move by UPMC. A Highmark spokesperson told the publication the rule runs counter to other “providers across the nation, when our Medicare Advantage members travel and may see an out-of-network provider.”

5. A UPMC spokesperson told Trib Live the system sent out the Oct. 1 memo to physicians “because we didn’t want any of their patients to be surprised.”