HealthLeaders Media Finance - March 3, 2008 | This is Gonna Cost You View as a Webpage | Subscribe for Free
This is Gonna Cost You
Philip Betbeze, Senior Editor-Finance

Got any auction-rate securities in your hospital's debt portfolio? If you do, you're probably not getting a whole lot of sleep these days. Who thought the financial dominoes that kicked off with the subprime housing crisis would fall this far? As the credit markets have seized up one by one, many plain vanilla debtors like hospitals and municipalities whose debt ratings haven't changed and who pay their bills on time are facing huge unexpected increases in debt service costs through no fault of their own. [Read More]

  March 3, 2008

 
Editor's Picks
Hospital issuers ask SEC for break amid auction-rate woes
A group of 14 hospitals has asked the SEC to allow them to buy their own debt in hopes of preventing a rash of failed auctions, which if allowed to continue may cost the hospitals huge amounts in interest as a result of the contracts associated with such securities. Some are already paying interest rates of as high as 17 percent on these bonds when the auctions have failed. They need the SEC's approval because such activities could be construed as market manipulation. But if the hospitals can afford to buy back their own debt, why in the heck did they need to issue it in the first place? I know, I know, it's a short-term fix for a bond market in gridlock, but if the SEC allows it, maybe these hospitals should just retire this debt and take it as a lesson learned. [Read More]
UPMC to manage hospital in Ireland
The University of Pittsburgh Medical Center, having saturated its home market in Pennsylvania, has done its fifth management deal with a foreign healthcare concern. This time, it's the 183-bed Beacon Hospital in South Dublin, Ireland. But its Irish connection probably won't end there, should UPMC do a good job at Beacon. Beacon Medical Group has an agreement with the Irish government to build three more hospitals on public hospital grounds in north Dublin, Cork and Limerick. UPMC is paying $22 million for a 25 percent equity stake in the hospital and will share 25 percent in any profits. If all goes well, UPMC could become the country's largest operator of private hospitals, as the Irish government owns and operates the majority of that nation's hospitals. [Read More]
Tenet on the mend?
This company has been in a turnaround phase so long I've almost forgotten it's still one of the biggest for-profit healthcare chains in the nation. About four years, to be exact. Well, for the first time in four years, Tenet recorded an increase in patient admissions. More importantly for shareholders, it recorded a quarterly loss that was much less than the same period a year ago, although it was more than Wall Street expected. Shares still rose sharply. But shareholders shouldn't celebrate yet. The company is clearly facing some of the same headwinds other hospital systems are facing--to be precise, a 10 percent increase in uninsured patients--that caused bad debt allowances to be raised by 12.8 percent. [Read More]
Free market care?
Interesting Q&A here with Greg Scandlen. I get his e-mails (along with thousands of others), but I actually find myself reading his sometimes rather than just scanning. He has strong opinions about consumer-directed healthcare. He dishes about his role as CEO of Consumers for Health Care Choices, an advocacy group. But the best stuff in here consists of his unabashed, unfiltered and sometimes inflammatory comments about the state of the healthcare payment system. That's refreshing to someone (me) who gets stale, sterilized and canned press releases about the next big thing in healthcare so regularly. [Read More]
Finance Forum
ED Revenue Cycle Management
Emergency department revenue cycle management has never been more critical than in 2008. With the advent of evaluation and management visit guidelines in the 2008 OPPS final rule, composite APCs for observation services, new HCPCS and revenue codes for trauma activation, and the Centers for Medicare & Medicaid Services' recent clarification of critical care services, coding, billing, and coverage requirements continue to escalate. The skills of physicians, nurses, case managers, HIM, chargemaster staff members, and compliance staff members come into play for optimal revenue cycle management in the ED. [Read More]
Finance Headlines
Healthcare spending surge seen in next decade
Reuters/Yahoo News - February 26, 2008
Senators denounce hospital story
Forbes.com - February 26, 2008
Detroit Medical Center moves to end fight with WSU
Detroit Free Press - February 27, 2008
Atlanta hospital clears 'major hurdle'
Atlanta Journal-Constitution - February 27, 2008
Upcoming Events
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From HealthLeaders Magazine
Love Thy Vendor?
HealthLeaders February 2008 Providers and IT suppliers don't get along, right? You can build a partnership of trust with your vendor--and actually get what you pay for. Here's how. [Read More]
Money Talk

A look at one hospital's struggles to improve

HealthEast Healthcare System, St. Paul, MN

Rating: BB1
Outlook: Positive
Affected Debt: $302.5 million
Agency: Standard & Poor's
Remarks: Outlook revised to positive because of yearly budget outperformance coupled with an ability to invest in its facilities. [Read More]
Audio Feature

Across-the-Board Transparency: Mike Freed, CFO for Spectrum Health based in Grand Rapids, MI, recently took the bold step of listing not only its prices for a wide variety of healthcare services, but also what the hospital is paid by a variety of payers for those services. In this conversation, Freed talks about the strategy behind the plan, which he believes provides a much-needed window into the cost-subsidies insured patients pay to subsidize government payer sources, boosts hospital price transparency, and serves as a first step for developing better public policy regarding healthcare payment.
Sponsor HealthLeaders Media Finance

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