Archive for April, 2011
April 30th, 2011 | 
Author: The long engagement is almost over and the wedding is near. Three health care systems in Albany and Troy said their organizations will join by the end of summer.
After three years of talking about it, the official merger of St. Peter’s Health Care Services, Northeast Health and Seton Health/St. Mary’s Hospital can finally move forward after the Federal Trade Commission gave the green light on Wednesday.
“The real beneficiaries of this are the citizens,” said Steven Boyle, president of St. Peter’s. “The people of this region will, we believe, benefit from a more integrated health system, which will provide high-quality access at a low cost.”
The new system, which still doesn’t have a name, merges four hospitals, nearly 12,000 employees and 120 locations including nursing homes, hospice, home health care and doctors’ offices.
Leaders of the organizations said they will make every effort to preserve jobs, but many workers will have new duties.
The merged system will be larger than the Capital Region’s reigning health care giant, Albany Medical Center, a level one trauma center with 6,000 employees.
James J. Barba, president of Albany Med, said the merger will control health care costs, but will be challenging.
“As this process plays out, Albany Medical Center will continue to assure that residents of the region have access to care of the highest quality,” Barba said in a statement. “As always, we will support all of our community hospitals by caring for those patients whose needs are more complex, and by accepting transfers of patients from those hospitals when that is best for the patients. Beyond that, we accept our responsibility to control health care costs as well.”
St. Peter’s will be the lead hospital in the new organization. Albany Memorial will continue as a medical hospital with a speciality-focused surgical program. St. Mary’s Hospital will become an outpatient care center for behavioral health and outpatient care while Samaritan Hospital will provide Troy’s inpatient and surgical care. Sunnyview Rehabilitation Hospital in Schenectady will handle the rehab services for the system.
The merged organization will follow the Ethical and Religious Directives for Catholic Health Services, while a separately licensed hospital called the Burdett Care Center will handle maternity and reproductive care. The center, which will be located at Samaritan Hospital, will perform sterilizations but not abortions.
Initially, 43 people will sit on the new health system’s board of trustees but the number will be winnowed down over three years.
“This is not something that on Day 1 everything changes,” said Dr. James Reed, president of Northeast Health. “The emphasis on this merger is going to be on partnering — partnering with physicians, with the community and with the payers in trying to move health care away from its silo mentality, which has been a problem for quite some time.”
Now that the FTC review has ended, the hospitals are allowed to share information about wages, pricing, benefits and market share. Over the summer, workgroups for each clinical service will meet and discuss how to merge care.
The executives said the new company will explore innovative business models including the medical homes, bundled payments and some of the concepts behind accountable care organizations that reduce costs by providing care more efficiently.
The merger will move forward quickly with the FTC review complete.
“I see nothing that will undo us,” said Scott St. George, interim president of Seton Health.
Reach Cathleen F. Crowley at 454-5348 or ccrowley@timesunion.com. Visit her blog at http://blogs.timesunion.com/healthcare
Timeline:
2008, hospital leaders begin discussing merger
February 2009, plans to merge publicly announced
June 2010, Federal Trade Commission begins review
April 2011, FTC allows merger to proceed
End of summer 2011, merger expected to occur
By 2013, full integration of the organizations should be complete
Posted in 
- Tweet
- (0)
-
See more topics »
10:55 a.m. CDT, April 29, 2011
Health care officials and patient advocates are taking opposing sides over the benefit of requiring doctors and hospitals to report mistakes that are made while treating a patient.
Advocates for patients believe public reporting of medical errors, both minor and deadly, reduces mistakes and helps patients shop for the safest hospitals. Opponents of mandatory reporting claim Iowa hospitals already report errors voluntarily.
The Gazette in Cedar Rapids reported Friday that 26 states require hospitals to report their medical mistakes, but Iowa does not.
Officials with the Iowa Hospital Association said mandatory reporting can stifle innovation as providers focus on the care of patients.
“Government regulation does not create that kind of buy-in or progress,” said Scott McIntyre, a spokesman for the association.
The association supports providing information to the Iowa Healthcare Collaborative, which posts online reports of medical outcomes of various procedures at hospitals.
Dean Lerner, a former director of the Iowa Department of Inspections and Appeals, said that isn’t enough.
“States that have public reporting have seen bigger changes, bigger improvements,” he said.
Andrew Leffler, who became paralyzed from the waist down after an epidural leaked into his spine and damaged his nerves as he was being treated for a broken leg, said he would support mandatory reporting.
“It’s OK if you screw up, just acknowledge it and go on,” said Leffler, 54, of Keokuk.
Leffler sued the University of Iowa Hospitals and Clinics in 2004 and reached a settlement five years later for $850,000. After legal fees he received $485,000
The Iowa City hospital has used a computer program since 2007 to tracks mistakes in the 729-bed facility.
Each report receives a “harm score” that rates an incident from unsafe to death. The most serious reports are analyzed by hospital leaders to determine how the problem can be fixed and avoided in the future.
“Our whole goal is to prevent these things from happening,” said Dr. Richard LeBlond, the hospital’s chief quality officer.
Employees have filed about 50,000 reports to the system, but only a small number are serious errors, LeBlond said.
The hospital refused requests by The Gazette for information on the reports saying it would discourage employees from filing them.
Dr. Mark Valliere, chief medical officer for Mercy Medical Center in Cedar Rapids, doesn’t believe mandatory reporting is a guarantee against preventing them.
“In past days, anytime an error occurred, it was somebody’s fault,” he said. “Now we’re looking at what the system can do.”
One example is that Mercy bought a pharmaceutical robot in 2009 that limits human error in prescribing drugs.
——
Information from: The Gazette, http://www.gazetteonline.com/
AP-WF-04-29-11 1847GMT
Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
- Tweet
- (0)
Currently there are no comments. Be the first to comment!
HOSTILE takeovers are never polite. One fight in America, however, has become particularly ugly. In December a huge stockmarket-traded hospital company, Community Health Systems, announced that it wanted to buy another, Tenet Healthcare, for $3.3 billion. The bid soon became a brawl. In the saga’s most recent chapter, Tenet filed a lawsuit accusing Community of overbilling government and private health-insurance schemes. Community denies this and, as The Economist went to press, was due to present a more detailed rebuttal.
Although this bid battle has become unusually rancorous, it is in line with a broader trend of consolidation in the huge but fragmented business of providing hospital care. In 2009 America’s hospitals soaked up one-third of all national health-care spending, or $759 billion, roughly equal to the entire GDP of the Netherlands. In the long term an ageing population will produce more invalids and thus more business. In 2014 the “Obamacare” health reforms will bring 32m newly insured patients. The less good news is that the health reforms also bring new regulations and intense pressure to contain costs. This is strengthening the argument for consolidation among hospital operators.
Mergers are nothing new in the industry. In 1979 only 31% of America’s hospitals were part of a larger hospital system. By 2001 more than half were. The rationale for joining a larger chain is simple. It means better access to capital for renovation and expansion, better management and—most important—more clout when negotiating treatment prices with health insurers.
Now, the health reforms are piling on the pressure to merge. Obamacare requires hospitals to invest heavily in technology, even as the government cuts payments for treatments. Hospitals will increasingly have to demonstrate the quality of their services. Small hospitals may struggle to meet such demands; bigger groups will be better equipped. Besides, now is a good time to be doing deals, says Gary Lieberman of Wells Fargo. Credit markets have offered favourable terms to hospital groups raising money. And thanks to the downturn there has been ample supply of not-for-profit hospitals for sale. Community’s bid for Tenet is the biggest deal now in the works. The combined companies would have annual revenues of $22 billion, second only to HCA, which last month raised $3.79 billion in an initial public offering (IPO). But plenty of smaller deals are going on. Vanguard Health Systems, which this month filed for an IPO, has bought hospitals in Detroit, Chicago and Arizona in the past year. HCA seems likely to use at least some of its IPO cash to make more acquisitions.
Big hospital operators must still grapple with Obamacare’s new requirements. And in some cases, growing larger brings its own challenges. Vicki Bryan of Gimme Credit, a bond-research firm, worries that Vanguard’s shopping spree (and dividends to its shareholders) have left it with excessive borrowings. Another worry is that although there are many benefits to being big, realising them takes time. HCA’s recently improved earnings, Ms Bryan contends, are largely due to changes in accounting and billing models. Tenet says Community has boosted revenue by keeping patients in hospital unnecessarily; Community denies this vehemently.
Nonetheless, the hospital-merger wave still has far to go. HCA, despite being the industry’s leader, controls less than 5% of the market. There are many more deals to come, the only question is how quickly.
INDIANAPOLIS
Hospital operator Community Health Systems Inc. likely will be affected by a two-to-three year “investigation overhang” that could impact several parts of its business, according to a Citi analyst.
The Franklin, Tenn., company faces a lawsuit from rival Tenet Healthcare Corp. alleging that Community systematically bilked Medicare by admitting thousands of patients that should have only been kept for observation, which is less expensive. The accusation came months after Community launched a $3 billion hostile takeover bid for Tenet.
After Tenet announced its lawsuit earlier this month, Community disclosed that it received a subpoena from the U.S. Department of Health and Human Services related to an investigation of potentially improper Medicare and Medicaid claims. It said the subpoena concerns emergency department processes and procedures, including a third-party software system, along with information about emergency department physicians, including financial details.
It said it will cooperate fully with the investigation by the health department’s office of the inspector general. It also has called the Tenet lawsuit allegations “irresponsible and inaccurate.”
THE OPINION: Analyst Gary Taylor downgraded Community to “hold/high risk” from “buy/medium risk.” He said in a research note the investigation likely has implications beyond a settlement or earnings risk tied to more conservative admissions guidelines.
“What we’ve been thinking and worrying about more of late is the likelihood that actual underlying operations could be impacted by a multi-year cloud of investigations,” Taylor wrote.
He said investigations, which could take a couple years to play out, may affect doctor recruitment, employee retention and possible deals to buy non-profit hospitals, among other areas.
THE STOCK: Down 44 cents to $30.24 in Tuesday morning trading.
If selected to build a hospital in Fort Mill, a change in the corporate ownership would have no impact on the hospital, Miller added.
?Fort Mill Medical Center would be a subsidiary of Amisub of South Carolina,? Miller said. ?Ultimately, yes, if you go all the way up the tree Tenet is the sole stock holder of Amisub, but Fort Mill Medical Center will be a subsidiary of Amisub. In theory, there could be a change of ownership at that top level, but I can?t see that impacting Fort Mill Medical Center.?
But at least one of the other hospitals involved in the Certificate of Need process, the process by which DHEC selects which company will be allowed to build a hospital in Fort Mill, says the possible transaction is a concern.
Although Presbyterian Healthcare and Carolinas HealthCare, the other applicants vying to build a hospital in Fort Mill, declined to comment on the possible deal, Miller said one of the groups has raised concerns with DHEC.
?Another applicant has gone to the trouble of making an issue of it with DHEC,? Miller said.
DHEC spokesperson Adam Myrick could not say how the offer could affect the hospital decision-making process.
?When a corporation buys another corporation, it?s obviously a very complex process. Until we get more information about how this transaction will be carried out, we?re not going to speculate on what impact it might or might not have on our process,? Myrick said.
In November 2010, Tennessee-based Community Health Systems made a public offer to purchase Tenet, based in Texas, for $5 per share and $1 per share in CHS stock, according to releases from Community Health Systems.
The offer was rejected by Tenet.
On April 18, Community Health Systems made a second offer to purchase Tenet, for $6 per share.
According to a release from Tenet, the company?s board of directors will review the proposal and ?determine the course of action that it believe is in the best interest of the company and its shareholders.?
After the first CHS offer, Tenet sent a letter to CHS saying that it believed CHS was undervaluing the company and that it was not in the best interests of Tenet or its shareholders.
The process of choosing which hospital will be allowed to build in Fort Mill has been ongoing for more than five years.
In May, 2006, Piedmont Healthcare System was granted a CON for construction of a hospital in Fort Mill. The applications of Carolinas Healthcare System, Presbyterian Healthcare System and Hospital Partners of America were denied. Carolinas Healthcare and Presbyterian both challenged the decision and in April 2010 the S.C. Supreme Court asked the three hospitals to resubmit updated applications for consideration.
Even after DHEC makes a decision, another round of appeals are expected.