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Nervous About Retail
Clinics? It Just Got Worse

Philip Betbeze, Senior Editor-Finance

News out of the Gopher State this week means primary physician practices already struggling with weak reimbursement now have something else to worry about. A new plan for beneficiaries of the state Blue Cross Blue Shield plan should prove popular and will put added pressure on practice margins. Other insurers may soon follow their lead. [Read More]
  August 4, 2008

 
Editor's Picks
West Penn Allegheny system overstated payments
Here's another reminder that "accounting irregularities" are not limited to for-profit companies. An independent review has found that West Penn Allegheny Health System senior leadership overstated payments from vendors and patients to the tune of $73 million over the past two years—a revelation that will result in significant operating losses. This means the system essentially overstated its earnings, which could affect its bond rating and its ability to borrow. Though at present there is no indication the accounting problems were intentional, this type of news is highly irregular in nonprofit healthcare and echoes the implosion 10 years ago of Allegheny General Hospital's former parent, the Allegheny Health and Education Research Foundation, which defaulted on more than a half-billion in debt in 1998—one of the biggest municipal defaults ever. [Read More]
UConn Health Center desperately seeks hospital partners
Another public hospital system is seeking rescue—this time in Connecticut. The University of Connecticut Health Center struggles annually with losses which, until now, have been made up by the state legislature. As in all of these situations, any solution remains mired in politics, with good ideas being torpedoed by competitors, legislators, and the hospital leadership itself. The system is in the process of waiting for ideas to partner with nonprofit competitors to allow it to build a new hospital. Those same competitors, who may or may not submit proposals for partnership with the UConn Health Center, helped nix a proposal UConn made in 2007 to build a $495 million, 352-bed hospital in suburban Farmington to replace its current hospital. That hospital would have siphoned paying patients away from the other nonprofits in the area. [Read More]
Frist family looks to China for new hospital venture
The Frist family, which built HCA into a giant in for-profit healthcare, is taking the business model to China. The new China Healthcare Corp., which will be based in Nashville, is being run by Chuck Elcan, son-in-law of Dr. Thomas F. Frist Jr., one of the co-founders of now-private HCA Healthcare. They're cautious and starting small, with just one agreement for a share in a replacement hospital in Ningbo, a city southwest of Shanghai. [Read More]
Commonwealth comparative healthcare study panned
Commonwealth Fund's recent scorecard on the performance of the U.S. health system as compared to systems in other countries got some things right and some things wrong, says Cain Brothers senior vice president Stewart Carr. That there's much room for improvement in the nation's healthcare system is one of the study's persuasive arguments, says Carr, but many of the problems stem from efficiency issues. Carr argues that researchers did not consider that some problems arose from users of the system and that the report understates problems with systems in other nations, including long wait times for elective surgeries. [Read More]
Indianapolis hospitals see dramatic growth as healthy
Hospitals in the Indianapolis area have spent more than $1 billion since 2000, increasing bed count by 20%. They've also feasted on for-profit subsidiaries, increasing profits, and offering more services in the area. But many are concerned the projects have exacerbated disparities among the four major hospital systems in the area and have driven up the cost of care. St. Vincent Health appears to be benefiting most in the city, with a 16% margin recorded in 2006, the most recent period for which financial information is available. However, other nonprofits outside the city have done much better. [Read More]
 
Finance Forum
Retail clinics attract investors
Rising consumerism in healthcare has given rise to retail-based convenience health clinics throughout the United States. The concept has grown from an industry anomaly to a disruptive innovation, starting with only 60 stores in 2000 to nearly 2,000 clinics projected by the end of 2008. These clinics are clamoring for a piece of industry revenues, which are expected to reach nearly $4.5 billion by 2011. HealthLeaders Media contributor Lang Aston argues that these clinics can no longer be considered a fad—they are a mainstay. [Read More]
 
Finance Headlines
Booming business helps patients navigate medicine
AP/Yahoo - July 24, 2008
Medical malls could make services more accessible, convenient
Washington Post - July 27, 2008
More scrutiny for Atlanta hospital interim CEO
Atlanta Journal-Constitution - July 28, 2008
Kansas City's St. Luke's to proceed with UnitedHealthcare split
Kansas City Star - July 25, 2008
Birmingham hospitals going to suburbs, but process can be long, complicated
Birmingham News - July 24, 2008
As dermatologists cater to looks, skin patients wait
New York Times - July 28, 2008
Universal Health Services reports good numbers
Philadelphia Inquirer - July 29, 2008
 
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From HealthLeaders Magazine
The Hospital of the Future
HealthLeaders July 2008 Sure, your organization offers sophisticated, compassionate care. But the patients of tomorrow will want much more than that. Here's how some hospitals are creating facilities for a new vision of healthcare. [Read More]
 
Money Talk

Lewistown Hospital, Lewistown, PA
Rating: BBB
Outlook: Negative
Affected Debt: $22.4 million
Agency: Standard & Poor's
Remarks: Downgraded from BBB+ due to weak operating performance and decreased liquidity. [Read More]
 
Audio Feature

Certificate of Need: Deborah Kolb-Collier, a senior principal in the strategy and planning practice at the Noblis Center for Health Innovation, discusses certificate-of-need laws and what their further relaxation means to competition in healthcare. [Listen Now]