12 US cities ranked by cost per square foot to build a hospital

http://www.beckershospitalreview.com/facilities-management/12-us-cities-ranked-by-cost-per-square-foot-to-build-a-hospital.html?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202017-07-25%20Healthcare%20Dive%20%5Bissue:11297%5D&utm_term=Healthcare%20Dive

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The most expensive U.S. city to build a hospital in is Honolulu, according to a report by Rider Levett Bucknall. In fact, the cost per square foot to build a hospital in Honolulu is about 60 percent higher than in Las Vegas, which has the lowest per square foot hospital construction costs of any city on the list.

For the report, values were based on hard construction costs per square foot of gross floor area.

Here is the range of costs to build a hospital per square foot in 12 large U.S. cities, ranked from most to least expensive.

Please note that some of the costs are equal so there are more than 11 cities listed.

1. Honolulu: $475 to $760 per square foot
2. New York City: $475 to $700
3. Los Angeles: $470 to $700
4. San Francisco: $450 to $650
5. Boston: $400 to $650
5. Washington. D.C.: $400 to $650
6. Chicago: $360 to $630
7. Portland, Ore.: $380 to $525
8. Seattle: $385 to $530
9. Phoenix: $350 to $500
10. Denver: $370 to $455
11. Las Vegas: $285 to $455

Healthcare CEO pay climbs steadily since ACA passage

http://www.healthcaredive.com/news/healthcare-ceo-pay-climbs-steadily-since-aca-passage/447772/

Dive Brief:

  • Earnings of healthcare CEOs have continued to grow under the Affordable Care Act (ACA) and the pay packages give them little incentive to rein in spending, a new Axios analysis concludes.
  • Since the ACA was passed in 2010, CEOs of the 70 largest healthcare companies have cumulatively earned a whopping $9.8 billion — or almost 11% more money on average each year. However, because most of the pay is in vested stock, CEOs often base decisionmaking on what boosts stock prices (e.g., bigger sales, more tests and procedures) and not the ACA goals of patient-centered, value-based care.
  • The analysis was based on financial reports from 70 publicly traded U.S. healthcare companies comprising more than $2 trillion in annual revenues. Not-for-profit hospital CEOs were not included.

Dive Insight:

The biggest payout — $863 million — went to John Martin, CEO of biotechnology company Gilead Sciences, according to the analysis. Other takeaways include:

  • Just four of the 113 healthcare CEOs in the analysis were women
  • 11 of the top 20 top earners were CEOs of pharma and drug-related companies;
  • CEOs earned a little less as a whole last year versus 2015 due to market uncertainty over the presidential election.

Rising salaries are drawing increased scrutiny and some pushback. In April, North Carolina lawmakers approved a bill that would bar compensation for CEOs of behavioral health managed care organizations from exceeding by more than 30% the average salary of other behavioral health managed care businesses in the state. The bill seemed targeted at Cardinal Healthcare Innovations CEO Richard Topping, whose salary was $435,000 more than the average salary for a managed care organization in the state.

Salaries of executives at nonprofit organizations have also been growing. According to a Wall Street Journal report in March, many nonprofits are embracing salary strategies used in the for-profit world and offering packages totaling more than $1 million, with possibility of bonuses and deferred payments. In 2014, about 75% of nonprofit pay packages totaling $1 million or more went to healthcare executives.

In Massachusetts, in fact, pay for hospital CEOs outpaced state health spending. The largest compensation package went to Elizabeth Nabel, president of Brigham and Women’s Hospital, who received $5.4 million in 2014, up 119% from the previous year. By contrast, overall healthcare spending in Massachusetts rose 4.8% that year.

In an analysis earlier this year, Axios found that Sutter Health CEO Patrick Fry gets paid the most per patient stay ($6.88 a day) among the 20 largest hospital systems. Greenwich Hospital CEO Norman Roth earned the most ($56.40 a day) among other studied hospitals.

https://www.axios.com/the-sky-high-pay-of-health-care-ceos-2442398819.html

 

7 recent hospital, health system outlook and credit rating actions

http://www.beckershospitalreview.com/finance/7-recent-hospital-health-system-outlook-and-credit-rating-actions.html

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The following hospital and health system rating and outlook changes and affirmations took place in the last week, beginning with the most recent.

1. Moody’s affirms ‘A1’ rating on Munson Healthcare
Moody’s Investors Service affirmed the “A1” rating on Traverse City, Mich.-based Munson Healthcare’s revenue bonds issued by the Grand Traverse County Hospital Authority, affecting $155 million of debt.

2. S&P downgrades North Broward Hospital District’s bond rating to ‘BBB+’
S&P Global Ratings downgraded the rating on Fort Lauderdale, Fla.-based Broward Hospital District’s series 2005A, 2007 and 2008A variable-rate revenue bonds to “BBB+” from “A-.”

3. Fitch affirms ‘AA-‘ on SCL Health’s revenue bonds
Fitch Ratings affirmed the “AA-” rating on Broomfield, Colo.-based SCL Health’s revenue bonds issued by the Colorado Health Facilities Authority, Kansas Development Finance Authority and Montana Facility Finance Authority, affecting $1.3 billion of outstanding debt.

4. Moody’s revises Agnesian HealthCare’s outlook to negative
Moody’s Investors Service assigned its “A2” rating to Fond du Lac, Wis.-based Agnesian HealthCare’s proposed $58 million series 2017 revenue bonds to be issued by the Wisconsin Health and Educational Facilities Authority. The expected sale date is July 27.

5. Fitch affirms ‘BBB’ rating on Methodist Hospitals’ revenue bonds
Fitch Ratings affirmed its “BBB” rating on Gary, Ind.-based The Methodist Hospitals’ series 2014A revenue refunding bonds issued by the Indiana Finance Authority.

6Fitch affirms ‘AA’ rating on Texas Children’s Hospital’s
Fitch Ratings affirmed the “AA” rating on a number of Houston-based Texas Children’s Hospital’s revenue bonds, including series 2015-1, series 2015-3, series 2015-4, series 2010, series 2009 and series 2008-2, all issued by the Harris County Cultural Education Facilities Finance Corp. These rating actions affect a total of $683 million of debt.

7. Moody’s affirms ‘Baa1’ rating on Cooper Health System
Moody’s Investors Service affirmed its “Baa1” rating on Camden, N.J.-based Cooper Health System’s revenue bonds issued by the Camden County Improvement Authority and New Jersey Economic Development Authority, affecting $240 million of outstanding debt.

ACOs are leaving $886M in net payments on the table, analysis finds

http://www.beckershospitalreview.com/accountable-care-organizations/acos-are-leaving-886m-in-net-payments-on-the-table-analysis-finds.html

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ACOs in Track 1 of the Medicare Shared Savings Program are losing out on millions of dollars in additional net payments from CMS by not taking on more risk and missing out on the Quality Payment Program’s 5 percent lump sum bonus payment for ACOs in Track 2 and 3, according to an analysis from Avalere.

The analysis simulates how much Track 1 ACOs would earn if they were enrolled in Track 2 — based on 2015 performance — and the QPP was in place. Track 1 ACOs do not bear downside financial risk, and therefore share in a smaller portion of savings than their Track 2 and 3 counterparts. However, if these ACOs had taken on more risk in 2015, they would have earned $178 million more in shared savings, according to the analysis. And if the Track 1 ACOs took on downside risk, they would qualify as an Advanced Alternative Payment Model under the Medicare Access and CHIP Reauthorization Act’s QPP. These models have the opportunity to earn a bonus up to 5 percent on Medicare Part B expenditures — and based on 2015 performance, those ACOs would be leaving $1.1 billion in AAPM bonus payments on the table by not bearing the downside risk necessary to qualify, according to the report.

“The CMS’ new value-based payment incentives really tip the scales for doctors to assume greater financial risk,” Josh Seidman, PhD, senior vice president at Avalere, said in a statement. “For those physicians who were dipping their toes in the water with low-risk ACO models, the incentives now make it advantageous for a majority of them to move more aggressively into greater accountability for population health.”

Of course, some of the ACOs would have also generated net losses. The analysis indicates some of the ACOs in the simulation would have had to pay back CMS for spending above the benchmark. These shared losses would have totaled $437 million. Benefits and losses taken together, if all Track 1 ACOs joined Track 2 of the MSSP and performed as well as they did in 2015, they would earn additional net payments of $886 million, according to the analysis.

However, the majority of ACOs would still benefit by joining Track 2. Avalere found 79 percent, or 307 of the Track 1 ACOs, would have financially benefitted, compared to 21 percent, or 82, that would not.

This year 486 ACOs are participating in Track 1, accounting for most of the MSSP program. Track 2 counts just six participants and Track 3 has 36 ACOs.

Adventist Health closes Washington hospital

http://www.beckershospitalreview.com/finance/adventist-health-closes-washington-hospital.html

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Roseville, Calif.-based Adventist Health on Monday closed Walla Walla (Wash.) General Hospital along with its affiliated home health division and medical group.

The closure comes after Adventist called off plans in June to transfer ownership of Walla Walla General to Renton, Wash.-based Providence Health & Services. Under the deal, Providence agreed to assume ownership and operation of the Walla Walla campus and disburse $14 million over 24 years into a special fund for community health that Adventist would direct.

However, Adventist said late last month the proposed transaction encountered “unexpected regulatory challenges” that could possibly block the deal. The system discontinued negotiations with Providence and announced it would close the Walla Walla campus.

Adventist said Walla Walla General has faced financial troubles for the past decade. The system invested $68 million into Walla Walla General in recent years, but that wasn’t enough to save the hospital.

“We respect the legacy of this hospital, its place in the heart of our community, and the investments we have all made to sustain it for more than a century,” Adventist said. “Unfortunately, the current volatile healthcare environment, legislative challenges, and consistent low inpatient census have created an unsustainable future for Walla Walla General Hospital.”

Adventist said many of the Walla Walla General Hospital physicians will remain local and will inform patients of their future plans.

Walla Walla General Hospital was founded in 1899 and has more than 400 employees, including a medical staff of more than 175 clinicians.

Building a ‘nimble’ multi-state health system: 5 questions with Ascension CEO Dr. Anthony Tersigni

http://www.beckershospitalreview.com/hospital-management-administration/building-a-nimble-multi-state-health-system-5-questions-with-ascension-ceo-dr-anthony-tersigni.html

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With 2,500 sites of care — including 141 hospitals and 30 senior living facilities that sprawl across 23 states and Washington, D.C. — St. Louis-based Ascension may not seem well-suited to make sudden business changes. But Ascension President and CEO Anthony Tersigni, EdD, aims to make the nation’s largest nonprofit health system into one of America’s most agile hospital networks.

Here, Dr. Tersigni discusses the system’s recent national rebrand, how he instills a spirit of risk-taking and innovation and the issues he is focusing on over the next five years, despite uncertainty on Capitol Hill.

Question: What prompted the decision to rebrand Ascension’s healthcare facilities? What effect has the rebranding had within the organization and outside in the communities it serves since being implemented in 2016?

Dr. Anthony Tersigni: In 1999 we decided not to brand Ascension because the brand equity was in the local entities. But since then, we believe we’ve made enough inroads in safety, quality and high-reliability that we felt Ascension has developed a reputation of its own. How do we combine the national reputation with the local reputation? Since co-branding the Ascension name with the names of our hospitals in our communities in advertising and on the web, the results have been outstanding. It’s about making it easier for the people we serve to navigate our system within a particular community because they now understand we’re all connected. We’re going to roll this out throughout the country, but we’re doing it in a sequential way because it’s very costly. But we believe now is the time to position ourselves as the national system that we are.

Q: What are your primary goals for the organization for the next five years?

AT: We want to continue to grow our primary care, expand access and continue to move toward value-based care. We want to be able to take on risk in a way where we can move into first-dollar coverage so we can move the patient through the continuum of care. We promise healthcare that works, that is safe and that leaves no one behind — for life. For us to do that, we need to be able to put patients in the right setting for the right care at the right time. If we can take on risk and walk with our patients and their families through our clinically integrated systems of care, we believe we can keep them well.

When it comes to population health management, the mindset is we need to change the way we look at our current business. We are moving from fee-for-service, where we get paid for doing things, to fee-for-value, or how to keep people well. We’ve been so successful as a hospital company under fee-for-service, and now we have to change the mindset and culture of all of these stakeholders. We have to go in a different direction. It’s like changing a flat tire on a car while it’s moving. No one has figured out yet how to do it, but you’re going to have to figure it out.

Another priority is mental and behavioral health. That’s very important to us. It’s a core part of our mission, and we want to be partners with whoever else sees that as a key component.

Q: What are the most important management practices when leading such a vast system with thousands of employees?

AT: In the 18 years since we created Ascension, we’ve been trying to have a culture that’s transparent, candid and nonpunitive. That’s a dramatic departure from the healthcare industry of old. I like to think I surround myself with really bright individuals and subject matter experts, and I try to empower everyone to do what’s in the best interest of those we serve. That’s what this is really all about. I like to think I hire people who are brighter than I am and give them the resources to do their jobs. Then I get out of the way.

That’s one of the principles we try to instill in our Leadership Academy — a program where we take high-potential employees for two to three years and help them develop. They focus on spiritual health to better understand their inner self. The second thing is leadership development. Everyone comes to us with certain gifts. We want them to hone those gifts and develop other skills. And the other piece, which people don’t talk about often, is personal health and vitality management. We expect our executives to work eight, 10 or 12 hours per day at optimal performance level. That’s virtually impossible unless you understand the physiology of your body.

Q: How would people describe you personally as a boss?

AT: My job is to allow leaders across the country to do what they are capable of doing. I like to think I am the supporting cast to what they do, and therefore I want to give them as much leeway and support as possible, and I want them to take risks. I am a risk-taker. As long as you don’t hurt people, that’s how we learn — through making mistakes. So take that risk.

Q: How do you plan for the future amid the current uncertainty surrounding healthcare policy?

AT: We need to be the highest-quality, lowest-cost, best-outcome provider in every market that we’re in. Then regardless of what happens in Washington D.C., we are going to be there for our patients and they’re going to want to seek us out.

We are working to do our part to reduce costs and cut waste in healthcare. But at the other end of what we do are human beings whose lives can either be helped or ruined by our actions or inactions. We are constantly advocating as a voice for the voiceless because many of those folks don’t get a chance to have this kind of conversation. I feel compelled to represent them because we are at ground zero in terms of healthcare. We see the pain and suffering that’s happening in society. They are in our clinics; they’re in our emergency rooms; they’re in our hospitals; they’re in our nursing homes.

I spent a couple weeks on Capitol Hill meeting with every senator I could meet and say, “Look, we want to be a resource. If you have a policy idea, let us know what that is and we will tell you the practical implications of that policy on the people we serve.”

We will continue to advocate for the poor and vulnerable. Last year we provided $1.8 billion of community care, community benefit and charity care. Given where this is going, I believe that number is going to go up next year. Because we are a faith-based, Catholic organization, we are going to continue to serve those people. If it ends up being over $2 billion, we’re going to figure out a way to serve them. We have to do so until we find a national solution here.

Kaiser Permanente plans $200M medical hub in N. Va.

https://www.bizjournals.com/washington/news/2017/07/18/kaiser-permanente-eyes-200m-medical-hub-in-prince.html?lipi=urn%3Ali%3Apage%3Ad_flagship3_feed%3BjOr1uQoFRSCV0kd0MJgD3Q%3D%3D

Kaiser Permanente of the Mid-Atlantic States is looking to build a medical center in Prince William County.

Kaiser Permanente of the Mid-Atlantic States is seeking approval to build a $200 million medical facility in Woodbridge as a “hub” for its ongoing growth in Greater Washington.

According to an application filed with Prince William County, Kaiser officials propose a 270,000-square-foot, five-and-a-half story medical center on a 15-acre parcel the company already owns at 13285 Minnieville Road. The project would include 1,270 surface and structured parking spaces and a plan for future expansion of about 65,000 square feet.

Kaiser officials declined Tuesday to comment about the project, but the application says Kaiser wants to make it the health system’s sixth hub in the region to offer urgent and specialty care. The company has been aggressively growing its footprint across the region in recent months in an apparent bid to gain market share in the already highly competitive Northern Virginia health care business.

The Woodbridge space would include space for adult and pediatric care, women’s health services and pharmacy, lab, optometry and outpatient surgery. It will also include virtual visit technology, an MRI suite and consult rooms. The Kaiser hub model offers specialty care for issues that are too complex for a doctor’s office but do not require a multiple-day hospitalization.

“Kaiser plans to continue to expand throughout Maryland, Virginia and Washington D.C. based on the needs of the community and its growing membership base,” officials said in the application.

The company, an affiliate of health care giant Kaiser Permanente, is headquartered in Rockville. It has more than 710,000 members in Maryland, Virginia and D.C. and comprises Kaiser Foundation Health Plan of the Mid-Atlantic States Inc. and The Mid-Atlantic Permanente Medical Group PC, an independent medical group of more than 1,300 physicians.

Kaiser has partnerships with 11 area hospitals, including Virginia Hospital Center, Reston Hospital Center and Stafford Hospital, as well as Sibley Memorial Hospital and Children’s National Health System in the District, Suburban Hospital in Bethesda and Holy Cross Hospital in Silver Spring.

Kaiser officials said they plan to employ 185 people at the Woodbridge site, which would accommodate an additional 60 jobs following future expansion. They also expect the project would create 200 temporary construction jobs.

Kaiser officials said they will create a “health park” with recreational elements such as workout stations, trails, woodlands and “sensory nooks.”

Documents show Kaiser is working with HKS Architects Inc. Law firm Cooley LLP is listed as the authorized agent and Annandale-based Dewberry Consulting LLC is listed as the engineer.

The project is among of a blitz of real estate moves by the health care in giant in Greater Washington this year.

Kaiser officials said they have invested more than $446 million across the region between 2012 and 2016.

 

Texas Health Resources utilizes work-from-home model to increase revenue cycle productivity

http://www.healthcarefinancenews.com/news/texas-health-resources-utilizes-work-home-model-increase-revenue-cycle-productivity?lipi=urn%3Ali%3Apage%3Ad_flagship3_feed%3BjOr1uQoFRSCV0kd0MJgD3Q%3D%3D#.WXC_Vgx95F4.linkedin

Whatever hours they’re at their best is when Texas Health Resources wants them to work, system says.

When Texas Health Resources hires new staff members to work in its revenue cycle department, it’s now required — for most functions, anyway — that they work virtually from home. Staff who have been there since before the virtual implementation have the choice, but many choose to go the route of the new hires. It’s a nice perk for the employees, but an even nicer one for the system, which has seen productivity increase significantly since taking this approach.

James Logsdon, THR’s vice president of revenue cycle operations and strategic revenue services, said the concept emerged in 2011 during the Super Bowl.

Dallas was the host city that year, and the big game took place in the midst of a rare ice storm. Logsdon came into work with the wind still whipping and noticed immediately that the office was like a ghost town, with few employees in sight. The system lost three to four days of productivity because people simply couldn’t make it into work, and thus a challenge was born: Turn revenue cycle operations 100 percent virtual within a year.

“It started out as a business continuity plan, but progressed into an initiative,” said Logsdon, recalling the event during the Healthcare Financial Management Association‘s annual ANI conference in Orlando. “It was a drive.”

It took longer than a year, and it may never reach 100 percent; some functions have to stay in-house, particularly with the jobs that involve direct patient interaction. But the effects have been noticeable. Employee satisfaction and morale are at an all-time high, and the turnover rate has been reduced substantially. The system used to lose revenue cycle employees to jobs that paid 10 or 15 cents an hour more, but no longer.

The linchpin of the program’s success is quality. It can’t budge an inch, and employees have to be held accountable.

“The metrics have to be award-winning,” said Logsdon. “You’ve got to set the expectation that this is a privilege. It’s something that could potentially be taken away. Basically, the message was, ‘Don’t let me down.'”

So far they haven’t, and part of the reason is the flexibility the virtual job affords them. Workers are allowed to set their own schedules as long as they put in the minimum eight hours. At whatever hours they’re at their best is when THR wants them to work.

Benefits aren’t just limited to reduced turnover and higher productivity, either. The system allows for better use of its real estate. Where there were cubicles packed tightly together like honeycomb bees, there are now classrooms, war rooms and revenue cycle training areas.

All that saves the system money, since it now uses its existing space for such purposes rather than expanding its footprint. New revenue cycle personnel are expected to work at least 90 days in the office while they undergo their training and education, but after that, they’re released to their virtual offices.

That’s not to say there aren’t challenges. Logsdon said that in some instances employees feel a sense of entitlement, resisting requests to return to the office when the need arises. There are also distractions that differ from the usual office distractions — children, neighbors, friends and family can sometimes intercede. To address this, THR conducts unannounced site visits to make sure everything’s copacetic.

The arrangement has created some new challenges for management, as they now have to ensure employees are using the right equipment and protocols and have an appropriately speedy internet connection. Few issues have arisen.

“Productivity is a topic that always comes up,” said Logsdon. “The requirement for employees, in writing, is to increase productivity by 5 percent. They have no problem hitting it. It’s amazing what you can pull out of people when they’re motivated by the right reasons.”

72 healthcare layoffs so far in 2017

http://www.beckershospitalreview.com/hospital-management-administration/72-healthcare-layoffs-so-far-in-2017.html

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The following healthcare layoffs were reported by Becker’s Hospital Review so far in 2017. They are listed below, beginning with the most recent.

Amid tension with CHS, 3 more executives and advisory board member quit Lutheran Health Network

http://www.beckershospitalreview.com/hospital-management-administration/amid-tension-with-chs-3-more-executives-and-advisory-board-member-quit-lutheran-health-network.html

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Three top executives of Fort Wayne, Ind.-Lutheran Health Network and a member of the system’s advisory board have resigned due to actions by LHN’s parent company, Franklin, Tenn.-based Community Health Systems.

LHN Medical Staff President James Cameron, MD, Lutheran Hospital President-elect Matt Carr, MD, and Lutheran Hospital Medical Staff Vice President Marlene Bultemeyer, MD, announced their resignations in a letter sent Friday to the system’s acting CEO Mike Poore, according to the News-Sentinel.

“Although we had the most sincere intentions of guiding the medical staff in the years to come, the events of the past days and weeks have shown that this process will take more than we could individually or collectively accomplish without compromising the quality of care we now provide our patients,” they wrote.

Tom Kelley, a member of the advisory boards for LHN and Lutheran Hospital also resigned Friday, according to The Journal Gazette. He resigned one day after Chuck Surack stepped down from the advisory boards.

The new resignations come after CHS rejected a buyout offer from a group of LHN physicians in May. After saying no to the deal, CHS fired Lutheran Health Network CEO Brian Bauer and CMO Geoff Randolph, MD. Lutheran Hospital CMO Matthew Sutter, MD, resigned in June and Steven Orlow, MD, the system’s CMIO, resigned earlier this month.