New payment startup Ooda Health has raised $40.5 million on the premise that its technology will make sure patients never get another bill from a hospital or doctor.
Why it matters: Ooda Health not only has big-name venture capitalists on board (Oak HC/FT and DFJ led the funding round), but also has large health insurers and providers as investors. However, while the company attempts to cut administrative waste, it won’t address the health care system’s underlying pricing and spending habits.
An employee at Kings County Hospital’s emergency room stole nearly 100 patients’ private information and sold it through an encrypted app on his phone, according to New York Daily News.
Orlando Jemmott, 52, has worked at the city-run Brooklyn hospital for more than 10 years, where he was in charge of charting patient demographic data into the hospital’s computer system. But between December 2014 and April 2015, he allegedly sold patient data to Ron Pruitt, 43, a buyer in Pennsylvania.
FBI agents arrested Mr. Jemmott in February after receiving a tip in June 2017. A tipster told the FBI she had learned two years earlier that Mr. Jemmott was stealing and selling health records.
Hospital officials told the publication that Mr. Jemmott sold the names of 98 patients, and he accessed the private health records of at least 88 of those patients.
Kings County fired Mr. Jemmott in April. He has been negotiating a plea deal with prosecutors since.
“We have zero tolerance for anyone who intentionally violates our patient privacy rules,” Kings County Hospital CEO Sheldon McLeod said in a written statement to the New York Daily News. “The privacy of patient information is an important foundation for the care we provide.”
Sacramento, Calif.-based Sutter Health saw revenues and operating income increase in the six months ended June 30, according to recently released unaudited financial documents.
Here are four things to know:
1. The health system reported operating revenues of $6.3 billion in the first six months of 2018, up 6.5 percent from revenues of $5.9 billion in the same period a year earlier. Sutter said the increase was primarily attributable to higher patient service revenues and premium revenues, which climbed 5.3 percent and 11.3 percent year over year, respectively.
2. Sutter’s operating expenses climbed 4.3 percent year over year to $6.1 billion in the six months ended June 30.
3. Sutter ended the first half of 2018 with operating income of $145 million, up 806 percent from $16 million in the same period of 2017. The health system’s operating margin increased from 0.3 percent in the first half of 2017 to 2.3 percent in the first six months of 2018.
4. After factoring in investment income, which declined due to a drop in value of certain securities and debt extinguishment, Sutter’s net income was $174 million in the first six months of this year, compared to $350 million in the same period a year earlier.
Healthcare’s confluence of unknowns and erratic overtures coming out of Washington has stalled many healthcare biggest stakeholders—payer, provider, and pharma. Success in transformative, threatened markets requires companies to continually reassess strategic direction: anticipate and absorb change, generate situational-driven strategic insights, and act with deliberate speed. Healthcare leaders need to step back, ask tough questions, and manage through a new set of obstacles to capture opportunity.
For healthcare marketers it’s a time to rethink basic assumptions, challenge institutional bias, breakdown silos, and force debate around longstanding approaches to marketing. Tomorrow’s marketers will be healthcare orchestra leaders. They will help set strategic pillars, sequence strategic execution, and lead go-to-market implementation that is results-driven and measurable.
Following are six healthcare impact trends that will challenge marketers in the upcoming year.
For healthcare marketers social media is a critical tool to extend reach and enhance engagement. More than 65% of chief marketing officers say they use social media to drive business and build their digital brand. Done well it boosts awareness, generates new business leads, and builds more intimate, connected customer relationships. Purpose-driven healthcare social media comes down to a brand’s respect for the importance of content. Today’s perpetually connected consumers are impatient. Their most valued brands engage with them in an evocative, relevant dialogue. They look for social media content that is shareable, fresh, unique, and above all, worth reading. Its compelling healthcare content that attracts their interest and holds their attention around a personalized, interactive value exchange.
For healthcare marketers the challenge is bringing key stakeholders along for the ride. Moving from traditional fee-for-service to value-based payment means answering the question “what’s in it for me?” Not only for patients, but equally as important are the providers of care responsible for living within the guardrails of high-performance, consumer-centric healthcare built on new models of financing, care delivery, and patient engagement, and measured on cost and quality of clinical outcomes. Marketers must use successes to demonstrate the value in value-based care, and use any failures as lessons learned.
For healthcare marketers, innovation isn’t just a substitute for brand narrative or value proposition, it’s a means to an end. Simply stating ’we are an innovative company’ won’t cut it. The storyline has to read…we are an innovative company that delivers value to our customers, improves health outcomes and does it in a way that changes healthcare delivery. Entrepreneurs and risk-takers are making stunning advances in cancer, Alzheimer’s, population health, and wellness. And, they’re the agile innovators breaking down barriers with wearables, blockchain, artificial intelligence/AI, Internet of Things, and precision medicine. If storytelling is the new marketing, marketers will have a treasure trove of material to draw from in this era of digital health technology.
Healthcare marketers have seen sweeping changes over the last few years. Gone are days where ‘product, price, place, and promotion’ is the ultimate marketing framework. As healthcare marketers face full-blown marketplace transformation, there’s a new priority: the need for marketing to have a power seat at the c-suite business strategy table. Why? 72% of CEOs believe the next three years will be more critical to their industry than the last 50 years—and the question is how many are ready, according to KPMG. Marketing can no longer take a functional or tactical focus, it has to expand its influence and integrate with leadership’s vision-driven corporate business strategy.
Voters this fall could make Massachusetts only the second state in the country to limit the number of patients that hospital nurses can help at one time.
Question 1 would create legal ratios based on the type of patients that nurses are dealing with. Nurses aiding women during birth and up to two hours after, for instance, would be limited to one patient. If they’re working with children, they could see four patients at once. In the psychiatric ward, nurses could help up to five patients.
While nurses unions and progressive political groups back the ballot measure, most medical groups — including the Massachusetts chapter of the American Nurses Association and the state’s Health and Hospital Association — oppose it.
The ballot measure’s supporters argue that not regulating this negatively impacts patient care and overall health outcomes.
“There is overwhelming evidence when you look at studies and talk to nurses that when there are limits, there are better health outcomes,” says Kate Norton, campaign spokewoman for the Committee to Ensure Safe Patient Care, which is the official campaign for the ballot measure.
A 2011 study in the journal Health Affairs found that nurse-patient ratios in California resulted in decreased mortality rates after surgery and an additional half-hour of care for patients overall.
Seven states have laws that require hospitals to have committees that address staffing issues, but California is the only state with a cap on the number of patients a nurse can see during one shift. Advocates have struggled to gain support for ratio laws elsewhere, in part because the hospital industry doesn’t believe there’s enough evidence to support them.
California’s regulations were drafted by the state’s department of health and have been in effect since 2004. There was some fear at the time that hospitals would be forced to hire more nurses with less education in order to comply with the ratios. But according to the 2011 study, that didn’t happen.
Opponents of Massachusetts’ measure also worry that it would force hospitals “to make deep cuts to critical programs, such as opioid treatment and mental health services. Many community hospitals will not be able to absorb the added cost and will be forced to close.”
In California’s experience, those fears are likely overblown.
Research by the California Healthcare Foundation in 2009 shows that while “leaders reported difficulties in absorbing the costs of the ratios, and many had to reduce budgets, reduce services or employ other cost-saving measures,” the impact of the ratios was not discernible on hospital finances.
Research further shows that hiring levels only increased slightly after the mandate. But California is expected to have a nursing shortage of more than 44,000 by 2030. It’s not clear how big a role, if any, the staffing ratios play in this shortage.
In Massachusetts, opponents of the measure argue that it would worsen the existing nurse shortage there. Right now the vacancy rate for registered nurses in Massachusetts hospitals is 6.4 percent.
“If it passes, the estimates are that hospitals will have to hire 6,000 more nurses [according to a study led by the opposition camp]. Where will they get them?” says Jake Krilovich, director of policy and public affairs for the Home Care Alliance of Massachusetts, which opposes the measure.
But according to data from the U.S. Department of Health and Human Services, the state is projected to have a surplus of nurses by 2030.
Although well-financed organizations like the Massachusetts Business Roundtable, Massachusetts Health and Hospital Association and 11 local chamber of commerces oppose the measure, the supporting campaign has much more cash on hand: $1 million to just over $11,000 in the opposition camp.
There hasn’t been any formal polling done on the measure.
https://www.healthleadersmedia.com/strategy/scene-crime-where-and-how-healthcare-fraud-happens
1. Don’t forget the basics
As complicated as cyber fraud may seem, don’t forget the basics. The scariest headlines for healthcare executives are about fraudsters using ransomware to shut down a system, as happened to the UK’s National Health Service in 2017. But a breach doesn’t require sophistication. “A lot of cyber fraud continues to be perpetrated via good old-fashioned phishing techniques,” says Charles Alston, Market Executive at Bank of America Merrill Lynch. “Fraudsters send an email that gets them into an organization. Then employees, oftentimes even though thoroughly trained, can make an error in judgment by clicking on a link or responding to a fraudulent email. That one action ends up pulling a thread that creates a system wide problem.”
2. Watch for wire fraud
In addition to straightforward check and ACH fraud, “Healthcare is just as susceptible as any other business to wirefraud,” Alston says. In a wirefraud, the fraudster sends an email to a treasury employee that appears to be from a top-level executive in the organization; often it will be sophisticated enough to mimic the executive’s writing style, or arrive when the exec is at a conference or on vacation, and hard to reach. The message asks the recipient to wire funds to an account—again, presenting it as an emergency or time-sensitive situation. The recipient is reluctant to turn down the request, since it’s coming from management. “People ask, ‘Why would a controller or treasury employee respond to an email like that?’” Alston says. “Well, it appears legitimate, and it’s a rare event; no one has likely seen something like that before.
And once that transfer is executed, the money is gone, because employees hadn’t been trained, or regularly reminded about such types of fraud, and there wasn’t a process in place to handle such situations. These are the situations that training can help avoid.”
3. Monitor for ransomware
Criminals’ use of ransomware is a threat that organizations should consider carefully, and will handle best if well prepared. One of the most effective preparation tools is a tabletop exercise that can walk the organization through a simulated ransomware event.
Doing a simulation can help answer the key questions: Would we be able to identify a situation and stop it? Would we be able to trace where it came from? Do we have all the right disciplines at the table? What kind of communications do we need to let people know what’s happening? Can we get the system back up? Many executives may be tempted to invest in cryptocurrency like Bitcoin, so they’re able to quickly pay in the event of a ransom demand, but should carefully consider whether paying a ransom is the best solution. Lynn Wiatrowski, National Treasury Executive at Bank of America Merrill Lynch suggests that healthcare providers, who often train for emergency medical events and natural disasters, can apply those learnings to handle a cyber fraud event.
4. Tighten provider-insurer connections
The connections between healthcare providers and insurance companies can create cracks where cyber fraud can flourish. “The structure of health insurance involves a lot of transactions and a slow process, a complicated architecture. And there is a lot of money fueling the system,” says Roger Boucher, Market Executive at Bank of America Merrill Lynch. “The process of reimbursement creates a back and forth interaction that the patient never sees; it can be weeks or months of submission, denial, resubmission, correction, denial (again), before the bills are processed. That lag creates a vulnerability. With so much data traveling back and forth, and such delays in payment, crooks find a way to insert themselves in the gap.” He says healthcare providers need to assess, and continually re-assess, the reimbursement process to double check that insurance companies are sending payments to the correct entity
5. Protect patient data
Patient data needs to be protected in as many ways as possible. Not only do healthcare providers need to be cognizant of patient privacy and HIPAA rules, they need to continually remind themselves that patient data is currency for criminals. As patient records are migrated from paper to digital forms, organizations need to be vigilant in keeping track of older records and how they are handled, stored or disposed of. Policies need to be in place to ensure safety, for instance, when employees handle patient data while working at home. Similarly, to keep records safe and up to date, providers need to regularly back up the data contained in their computer systems. Organizations will complain that backing up the database for the entire system is too time-consuming, or creates too much downtime. A solution is to break the data into smaller pieces, backing up a department or a piece at a time.
6. Keep tabs on third-parties
Whether it’s insurance companies, labs, doctors’ offices or other partners, an organization is only as protected as the third parties it works with and shares its computer connections and its data with. “A healthcare organization should be asking, ‘Where is all my data going, and who is keeping an eye on it?” Boucher says.
A strong vendor management program should include regularly checking the data protection policies and cybersecurity procedures of vendors, third-party services and strategic partners to make sure everyone is on the same page. “When contracts are reviewed, there should be an opportunity to build on a security element as well as outline liability of loss, if those items do not already exist,” Alston says.
7. Secure new equipment
The industry has been buzzing about how new products in the internet of things and medical devices are offering new entry points into a healthcare system. “When a hospital is introducing the newest, most sophisticated piece of medical equipment, thoughts are on the difference this new technology will make in patients’ lives, rather than considering that the new technology may also be introducing a cyberthreat,” Wiatrowski says. “It is not second nature to think about who is on the other end of those pieces of equipment, and what entry points may be introduced.”
8. Stay alert for new threats
Finally, remember that the threat environment will continue to evolve. Stay updated on the newest forms of cyberattacks by reading trade publications, attending conferences and webinars to share information with your peers, and comparing notes with your own strategic partners about what they are seeing. Says Alston, “There is a lot more ground to protect if you are in a healthcare organization, and a lot more opportunity for fraud to occur. And it’s hard to stop something if you have never seen it before. That’s why ongoing education and training are so important.”
https://www.healthcareitleaders.com/blog/5-revenue-cycle-trends-to-watch/
When we think of healthcare and hospitals, we primarily think of the patient experience as it relates to individual health and wellness. However, another important part of the patient experience involves the finance and billing departments of healthcare organizations. The moment a patient checks in for an appointment, they enter into this system of payment and processes and the journey ends when all claims and patient payments have been received either from the patient or from their insurance company. This sounds like a simple, linear process, but it’s much more complicated than that. To help organize these financial processes, organizations rely on healthcare revenue cycle management and software to process this constant influx of important data.
As the healthcare industry continuously changes, revenue cycle management policies and software are changing with it. Healthcare IT Leaders Revenue Cycle Lead, Larry Todd, CPA, discusses the changes happening in the industry and the trends to watch in 2018 with revenue cycle management.
Healthcare systems are getting bigger as more organizations are merging. Many legacy systems are beginning to sunset, and there is a need for organizations to implement a new system to support the growth of the organization. “It’s important for organizations to consider how they will sunset their legacy system and embrace the new system during a revenue cycle implementation,” says Todd. “Organizations need to take a step back before the implementation to consider how to build a holistic system. Without proper integrations, many organizations will be challenged to manage their reimbursement processes.”
Claim denials and documentation to support appeals are areas where the revenue cycle marketplace continues to struggle, says Todd. “Organizations are seeking innovative ways to improve these processes and reduce denial rates, through either third-party systems, or, if possible, within the host system.”
“Any implementation will affect the revenue of the organization so it’s very important for CFOs to be involved in the implementation project and to be informed of key parts of the project that could put the organization and its revenue at risk,” says Todd.
As a former CFO and trained accountant, Todd says it’s a mistake for CFOs to disengage once an implementation is underway. “These are highly technical projects, so there is a tendency to hand over the reins to IT or the software vendor, but financial executives need to stay engaged throughout the project, including weekly implementation status updates.”
Clients should form a revenue cycle action team that includes the CFO and puts all of the revenue cycle stakeholders at the table, including clinicians, says Todd. Having the CFO involved in this process ensures critical executive oversight regarding decisions that impact AR and Cash.
As healthcare organizations transition from a legacy system to a new system, they need to consider how they will handle the change management for their staff. “Some employees have been using these systems for more than 10 years. Properly training employees on the new system is a top concern for executives and managers,” says Todd.
As organizations integrate their new system and implement changes, a key recipe for success is to hire experts who understand the technical and operational aspects of the the software and organizational processes. “It’s very valuable to work with a consulting firm that employs real consultants – people who have worked in operations for years and truly understand the unique challenges of implementing revenue cycle solutions” says Todd. “At Healthcare IT Leaders, we all have unique perspectives and experiences that we bring to the table thanks to this approach.”
Seattle-based Swedish Health Services is eliminating about 550 jobs, which represents about 4 percent of the health system’s 13,500-person workforce, according to The Seattle Times.
The job cuts are part of the system’s ongoing reorganization plan. In a memo to employees, Swedish Health CEO Guy Hudson, MD, said the system is cutting jobs and making other changes to shift to a “more cost-effective model of care” that involves investing more in outpatient care and focusing less on hospital care, according to the report.
Swedish Health declined to say which positions or programs would be affected by the job cuts. The system intends to inform employees by Sept. 14.
Although the system is scaling back its workforce in some areas, Swedish Health plans to add new staff to support other service lines, including adding physician assistants and registered nurse practitioners to some of its primary care clinics.
In line with industry trends, inpatient volumes for what is now the 10th-largest nonprofit health system in U.S. either slightly declined or remained flat during the reporting periods.
About 85,000 patients were discharged from Advocate Aurora during the first six months of the year while more than 3 million patients during that time were seen either during a traditional doctor’s visit or through another outpatient setting. The system’s home care unit saw the largest increases during both reporting periods.
Meanwhile, the company is not alone in its struggles to rein in EHR rollout costs. The University of Texas MD Anderson Cancer Center in Houston and Partners HealthCare in Boston have all experienced those costs weighing down financial performance, according to a previous report from Becker’s.
The financial report of the combined companies marks a milestone in Advocate’s quest for a partner to increase its scale. The system set its sights on Aurora after it had long tried to acquire NorthShore University Health System, a deal Advocate later dropped after pushback from antitrust regulators worried about price increases.
Analysts don’t expect the frenzied pace of M&A in the healthcare sector to slow down any time soon. The Advocate-Aurora deal was the largest regional transaction, Kaufman Hall reported, amid a year that turned out blockbuster deals threatening to shake up the status quo.
As patients seek care in lower-acuity settings and as payers and providers team up to transform access to the industry, hospitals have eyed mergers to increase scale and offerings to attract more patients.
The consolidated financial statement details the results of the quarter ended June 30 and the first six months of the year.
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.
HENRY KOTULA 