HealthLeaders Media Finance - December 8, 2008 | Improving Your Way to Oblivion? View as a Webpage | Subscribe for Free
Improving Your Way to Oblivion?

Philip Betbeze, Senior Editor-Finance

Generally, people think about personal improvement in terms of cutting out smoking or other bad habits. As we enter the new year, it's a popular, if often unkept, promise people make to themselves. Much of the work surrounding business improvement involves process improvement programs like "Lean" manufacturing techniques and "Six Sigma," which aim to take wasted effort—and cost—out of the processes used to create a good or service. It may seem counterintuitive that by lowering prices you ensure your organization's future, but it's true in healthcare, where successful efforts to make your organization a low-cost leader can ensure financial viability for years to come. [Read More]
  December 8, 2008

 
Editor's Picks
Cleveland Clinic to publish doctors' ties with drug, device makers
The Cleveland Clinic has moved to publish the ties—financial and otherwise—that its doctors have with drug and medical device makers—the first major medical organization to do so. Many have opined that Cleveland Clinic is doing so only after much negative publicity over the fact that some of its doctors—the Clinic says about one-fourth—benefit financially from the relationships, a conflict of interest. Whatever the reason, the system was under no obligation to make this move, and perhaps the change in policy will force others to become more transparent with these relationships as well. I'm happy to cheer the move, because regardless of whether patients actually look at the information, perhaps doctors will think twice about their conflicts if they know patients have easy access to information about which companies help line their pockets. [Read More]
The capital markets: Not for the faint of heart
Roller coasters, anyone? Matt Goldreich provides a concise, interesting analysis of the bond market blues for nonprofit healthcare providers. Bottom line? It's a helluva lot more expensive now for nonprofit hospitals and health systems to issue fixed-rate debt than it was prior to September, if you can even bring an issue to market. But you already knew that. Still, Goldreich makes some good points about the reasons liquidity in the market has dried up and forecasts that as the $700 billion financial bailout works its way through the system, secondary market bond trading will likely return from its now-three-month vacation, putting downward pressure on yields. Geez, let's hope so. [Read More]
Bad economy likely to move up Medicare's insolvency
More good news here as federal officials have bumped up the Medicare trust fund's insolvency date from 2019 to somewhere between 2016 and 2017 because of the recession. Don't look now, but that date's getting uncomfortably close. Secretary Mike Leavitt punctuated that sentiment by cautioning those who think the problem lies far out in the future that the trust fund may be exhausted not in some future president's administration, but possibly in Barack Obama's. [Read More]
Finance Forum
Preparing for the RAC: Assessing and Mitigating Financial Risk
We are all familiar with the financial success of the three-year Recovery Audit Contractor Demonstration Project, which yielded nearly a billion dollars in improper overpayments collected from providers. Providers have appealed only 19.6% of the initial RAC determinations, and of these a mere 6.8% have been overturned. But hospitals with the foresight to prepare for the permanent RAC program by learning from the demonstration projects will be on their way to reducing financial exposure to RAC record reviews and increasing the probability of overturning RAC denials, says Glenn Krauss, who pens this week's Finance Forum. [Read More]
Finance Headlines
Maryland nonprofits set to battle over new hospitals
Washington Post - December 3, 2008
Illinois medical center to pay $36 million to settle fraud allegations
Chicago Tribune - December 1, 2008
Miami's Mount Sinai expects operating losses to double
Miami Herald - December 4, 2008
West Penn health system making cuts
Pittsburgh Post-Gazette - December 2, 2008
Hurdle cleared for Sacramento-area hospital expansion
Sacramento Bee - November 29, 2008
Discount healthcare?
Miami Herald - November 30, 2008
From HealthLeaders Magazine
What's Your Brand?
That's what your patients want to know. But hospitals are discovering the same old differentiators aren't good enough anymore. Is YOUR organization ready to deliver on its brand promise? [Read More]
Money Talk

FirstHealth of the Carolinas, Pinehurst, NC
Rating: AA-
Outlook: Stable
Affected Debt: $151.5 million
Agency: Standard & Poor's
Remarks: Downgrade from AA based on concerns regarding the issuance of an estimated $95 million in additional debt over the next four months. [Read More]
Audio Feature

Device Dysfunctionality: Today we're talking with John Bardis, chairman, president and CEO of MedAssets, one of the nation's largest healthcare supply chain and revenue cycle companies, about a variety of issues facing healthcare, not the least of which is the cost equation, which is unsustainable long term. Bardis talks about the dysfunctional economy, his challenges in running a now-public company, and the institutionalized lack of transparency in medical device pricing, which he believes leads to irrational high costs in healthcare. [Listen Now]
Webcasts

December 16: What Your Practice Is Worth: Calculating Fair Market Value
On Demand: Financial Meltdown: Managing Through The Crisis
On Demand: Case Studies in ER Marketing: Three Targeted Efforts That are Getting Results
On Demand: Marketing Obstetrics: Strategies for Service Line Campaigns
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