Tucked somewhere in the behemoth Patient Protection and Affordable Care Act is a readability standard. No, it doesn’t apply to the act itself.
Instead, this standard will require that every health insurer and every group health plan provide a summary of benefits and coverage, or SBC, that is written not exactly in plain English but in a uniform format that will make comparisons across health plans a bit easier. The ACA also requires the development of coverage facts labels, which will illustrate how a health plan might cover treatment for all of the services needed for a certain health condition such as diabetes.
This is important because beginning in March 2012 anyone who applies for health insurance, or has insurance through an employer, will be handed this information packet to shop for benefits or to provide a clearer idea of how their existing benefits work.
The Department of Health and Human Services entrusted the development of the SBC to the National Association of Insurance Commissioners, a group of appointed or elected state government officials who regulate insurance companies in their individual states. In turn, NAIC named a consumer information subgroup of 21 state insurance regulators and 14 industry representatives, health policy wonks, and consumer advocates.
What the subcommittee developed has been likened to the nutrition labels that populate almost every food item in a grocery store. That’s a bit of stretch, though, unless we’re talking industrial sized cans and packages.
Including the coverage fact labels, the SBC runs six pages. It includes definitions for terms such as 'premiums' and 'deductibles,' and presents some what-ifs: If a health plan member visits a healthcare provider’s office to treat an injury, what will be the copay or coinsurance amounts? The numbers are specific to the member’s policy.
The coverage fact labels include three examples of the costs incurred for having a baby, treating breast cancer, and managing diabetes. The care costs are specific to the experience of one individual who received that diagnosis or treatment.
I have to say that I am impressed. The information is useful and the presentation is simple. Plus everything is presented in a readable font and I didn’t see a single asterisk.
The insurance industry is supportive of the effort in general, but is not happy about being required to use real and meaningful cost examples. I had to laugh at a couple of the industry comments submitted to the committee after reviewing a draft of the SBC and coverage fact labels. There were concerns that the labels “might be confusing” or be “too complex” for the average consumer. Seriously? Have you read your own health benefit policies?
Still, in a roundabout way, the industry raises an important point – where should the line be drawn in terms of making a hard-to-understand-topic understandable without oversimplifying it to the point of compromising the usefulness of the information?
The summary of benefits and coverage will undergo two rounds of consumer testing, one by the independent Consumers Union and a second sponsored by the Blue Cross Blue Shield Association and America’s Health Insurance Plans or AHIP.
This is not us-versus-them testing. In many ways the interests of the Consumers Union, AHIP and the BCBSA are aligned. They each want to make sure that this complicated and important information is understandable and meaningful. But their approaches may be a bit different.
Consumer advocates want learn if the information is presented clearly and easily understood. The industry is interested in learning if the SBC packet contains the information consumers want and need.
The industry has raised a red flag about the coverage facts labels, which illustrate sample coverage for threes medical scenarios, including treating breast cancer. In a letter to the subcommittee on insurer recommended that the less complex medical conditions should be used in the examples. That’s a good point and certainly reminds everyone of the danger of oversimplification.
“It is a complicated balancing act,” says Susan Pisano, a spokesperson for AHIP. She points to studies that show that consumers are happy with summaries as long as additional information is available elsewhere, like on a web site.
With healthcare reform expected to being millions of new insurance shoppers into the market, the time is definitely right for a summary of benefits and coverage that can be easily presented and understood. But the coverage facts label may need to be tweaked to make sure that in the push to make health benefits understandable, we don’t trip and make the information meaningless.
MedCath Corp. announced Monday that it will file a proxy statement with the SEC to request stockholder approval to authorize the MedCath board to dissolve the company, sell its remaining assets without further stockholder approval, and distribute available net proceeds to stockholders. MedCath hopes to file the proxy during its fiscal third quarter ending June 30, 2011.
Charlotte, NC-based MedCath is a healthcare provider focused on high acuity services, especially the diagnosis and treatment of cardiovascular disease. It began by providing acute care hospitals with mobile cardiac catheterization labs and transitioned into hospital ownership in partnership with physicians.
In its heyday, MedCath had ownership interests in 13 hospitals in nine states, 27 cardiac diagnostic and therapeutic facilities in 12 states, and a rental fleet of mobile and modular cardiac cath labs.
The dissolution does not come as a huge surprise. In March 2010, MedCath retained Navigant Capital Advisors and announced the formation of a strategic options committee to consider the sale of the entire company or the sale of its individual hospitals and other assets.
Although there was no formal announcement of which option MedCath would pursue, the individual sale of many of its hospitals and the sale last week of MedPartners, one of its two operating segments, signaled that the company was liquidating.
In recent years, MedCath's financials have taken a beating. The company reported a loss from operations of $30.5 million for the year ended Sept. 30, 2010 and a net loss of $21.1 million for the same time period. That performance followed a net loss of $54.6 million from operations for the year ended Sept. 30, 2009 and a net loss of $58.6 million for the same time period.
Whit Mayo, a senior research analyst with Robert W. Baird and Co. in Nashville, has followed MedCath through its up and downs since 2004. He says the company "never hit its stride on a growth model" and that it was "blind-sided by the specialty hospital moratorium" imposed by Congress in 2003. During the 18-month moratorium physician-investors in new specialty hospitals could not refer Medicare patients to those hospitals.
The shift from inpatient to outpatient cardio procedures, especially implanting stents, also hurt MedCath. "They had a lot of beds and then insurers quit paying for patients to be hospitalized for stent work," explains Mayo. In 2009, MedCath's president and CEO, O. Edwin French, noted in a stockholder's letter that 40% of MedCath's heart catheterization business was now handled on an outpatient basis and that there had been a "decline in the number of open-heart surgeries, partly because of the effective use of drugs and drug-eluting stents."
Efforts to diversify its stand-alone specialty hospitals included ER expansions, diagnostic imaging services and the addition of orthopedic surgeries. Despite these efforts, in the 2009 stockholder's letter French said non-cardiovascular services accounted for only 20% of MedCath's business.
Mayo says MedCath simply didn't have the wide support among physicians, especially in primary care, it needed for its diversification efforts.
The trend in recent years for large hospital and health systems to purchase physicians groups also caused problems for MedCath. "The docs they relied on the most aligned themselves with competing systems. MedCath's only option in those markets was to sell its hospital."
Mayo points to the sale of hospitals in Austin and Phoenix to HCA and Vanguard Health Systems, respectively, as part of that trend. HCA purchased Austin Heart, a major cardiology practice affiliated with the MedCath facility, in December 2009 and was part of the partnership that then acquired the Heart Hospital of Austin in November 2010. In Phoenix, Vanguard Health Systems acquired the cardiology group Arizona Heart Institute in May 2010 and then purchased the Arizona Heart Hospital in October 2010.
In the end, "MedCath realized that the value of its individual assets was worth more than the company as a whole," explains Mayo. For the most part MedCath properties have been acquired by local buyers with strong positions in the local market:
MedCath Partners was sold to DLP Healthcare LLC, a joint venture between Nashville-based LifePoint Hospitals and Duke University Health System in Durham, NC. The $25 million deal included six hospital-based cardiac catheterization labs and three mobile cath labs in North Carolina. The acquired assets will be operated by DLP Cardiac Partners. (May 2011)
Coastal Carolina Heart was sold for $5 million to New Hanover Regional Medical Center in Wilmington, NC. (May 2011)
Arkansas Heart Hospital in Little Rock is expected be sold for $73 million to AR-MED, LLC, which is majority owned by Dr. Bruce Murphy, a physician affiliated with Little Rock Cardiology Clinic, P.A. and a current investor in the Arkansas Heart Hospital. (May 2011)
Heart Hospital of New Mexico in Albuquerque is expected to be sold for $119 million to Lovelace Health System of Albuquerque. Lovelace is part of Nashville-based Ardent Health Services. (May 2011)
TexSan Heart Hospital in San Antonio was sold for $78.5 million to Methodist Healthcare System of San Antonio. (December 2010)
MedCath's 27% minority ownership of Southwest Arizona Heart and Vascular, LLC was sold for $7 million to the joint venture's physician partners. (Nov. 2010)
The Heart Hospital of Austin was sold for $83.8 million to HCA's St. David's Healthcare Partnership, L.P. (Nov. 2010)
Avera Heart Hospital in Sioux Falls, SD was acquired by Avera McKennan, a member of Avera Health, a regional healthcare entity with more than 235 facilities in South Dakota, North Dakota, Minnesota, Iowa and Nebraska. Avera McKennan paid $20 million plus an estimated $16 million in cash for the hospital. (Oct. 2010)
Arizona Heart Hospital transaction was acquired for an estimated $32 million by Vanguard Health Systems. (Oct. 2010)
Four hospitals remain in the MedCath fold: Bakersfield Heart Hospital in California, Harlingen Medical Center in Texas, Hualapai Mountain Medical Center in Kingman, AZ and Louisiana Medical Center and Heart Hospital in Lacombe. No sales details for these facilities could be confirmed with MedCath.
In a unanimous vote, the Tenet Healthcare board once again rejected Monday an unsolicited offer from Community Health Systems Inc. to acquire the Dallas-based healthcare services company.
In a statement issued Monday evening, Community Health Systems announced that it "has withdrawn its offer" to acquire all of the outstanding shares of Tenet's common stock and has also "withdrawn its nominees" for election to Tenet's board.
The most recent CHS offer dated May 2, 2011 proposed to acquire all of the outstanding shares of Tenet for $7.25 per share cash or about $4.1 billion.
In a letter dated May 9 and released Monday morning, Tenet CEO Travis Fetter and Tenet board chair Edward A. Kangas told Wayne T. Smith, board chair, president and CEO of CHS, that the May 2 offer "grossly undervalues the company and is not in the best interests of Tenet or its shareholders. In addition, as we have indicated to you previously, the Tenet board has serious concerns about Community Health's ability to consummate the proposed transaction. Our board believes that Community Health's latest proposal does not reflect our current financial position, our strong 2011 outlook, and our positive future growth prospects. We are confident that the execution of Tenet's current business strategy will deliver greater value than Community Health's inadequate proposal."
The Tenet board considered, among other things, the opinion of Barclays Capital as of May 8, 2011 that the price proposed by CHS was inadequate to Tenet shareholders from a financial perspective, according to a media release.
Franklin, Tenn.-based CHS had earlier termed its May 2 offer for Tenet as "its best and final offer." In a statement announcing the offer, CHS's Smith said "unless we see meaningful engagement by May 9, 2011, we will withdraw the offer and move on to the many other compelling growth opportunities available to us." At that time Smith also said that CHS would withdraw its 10-person slate of nominees for the Tenet board if the latest offer was rejected.
The Tenet response to the May 2 offer appears to confirm the end to any potential future negotiations: "We believe that the latest proposal fails to offer value sufficient to warrant discussions between Tenet and Community Health."
Another indication that negotiations with CHS may be a closed subject: The Tenet board has authorized the repurchase of up to $400 million of Tenet common stock. "Shares will be repurchased at times and amounts based on market conditions and other factors. The stock repurchase program may be modified, suspended or terminated at any time," the company said in a statement.
CHS and Tenet have been embroiled in a bitter takeover battle since November 2010. The saga's highlights include:
On Nov. 12, in a letter to Tenet's board CHS offered to acquire Tenet for $6 per share, including $5 per share in cash and $1 per share in CHS common stock.
The Tenet board rejected the CHS offer on Dec. 6.
On Jan. 14, 2011, CHS notified Tenet of its intention to nominate a full slate of 10 independent directors for election to Tenet's board at its November 2011 annual meeting.
On April 11, Tenetfiled a federal complaint alleging that CHS overbilled Medicare by as much as $377 million.
A federal jury convicted Martin and Joaquin Tasis, owners of a fraudulent Detroit-area medical clinic, and Leoncio Alayon, who helped launder the proceeds of the fraud, for their roles in a $9.1 million Medicare fraud scheme, the Departments of Justice and Health and Human Services announced jointly.
Martin Tasis and Joaquin Tasis, two brothers, were each convicted on Friday of one count of conspiracy to commit healthcare fraud, one count of conspiracy to pay healthcare kickbacks and three counts of healthcare fraud. Martin Tasis was also convicted of one count of conspiracy to commit money laundering and one count of money laundering. He was found not guilty on one money laundering count.
Alayon, a family friend, was convicted of one count of conspiracy to commit money laundering and two counts of money laundering.
According to evidence presented during the one-week trial, Martin and Joaquin Tasis were owners of Dearborn Rehabilitation and Medical Center, a fraudulent HIV-infusion therapy outpatient clinic located in Dearborn, Mich. Evidence showed that DMRC was established for the sole purpose of defrauding Medicare.
Between November 2005 and March 2007, DMRC billed approximately $9.1 million in claims to Medicare for injection therapy services that were never provided and were not medically necessary. Evidence presented at the trial showed that Medicare beneficiaries were not referred to DMRC by their primary care physicians or for any legitimate medical purpose. Instead, they were recruited to the clinic through the payment of cash kickbacks.
The Dearborn clinic was relocated from South Florida to Michigan after increased law enforcement scrutiny in South Florida. Martin Tasis enlisted Leoncio Alayon to help launder the proceeds of the fraud through a shell corporation in Florida called Infinity Research Corp. Evidence presented at trial showed that Infinity had no employees, did no research and was based at Alayon’s home. Alayon took a commission and then distributed the laundered proceeds to the Tasis brother and their co-conspirators.
A sentencing date for the Tasis brothers and Alayon has not been scheduled. Each count of healthcare fraud, money laundering and conspiracy to commit healthcare fraud carries a maximum penalty of 10 years in prison and a $250,000 fine. The conspiracy to commit money laundering count carries a maximum penalty of 20 years in prison and a $500,000 fine; conspiracy to pay healthcare kickbacks carries a maximum penalty of five years in prison and a $250,000 fine.
A new rule from the Centers for Medicare & Medicaid Services is expected to make it easier for small and critical access hospitals to use telemedicine to link with physicians and other larger hospitals or academic medical centers. The change will also make it easier for small hospitals in underserved areas to access specialty services such as teleradiology, teleICU, and telestroke.
The final rule revises the conditions of participation for hospitals and CAHs by implementing a new credentialing and privileging process for physicians and practitioners who provide telemedicine services.
Each hospital and CAH will no longer be required to credential and grant privileges to each physician and practitioner who provides telemedicine services to its patients from a distant hospital or other telemedicine location. Instead, hospitals can rely on the credentialing and privileging decisions of the distant hospital.
For small hospitals and CAHs in rural areas and regions where there may be a limited supply of primary care and specialist physicians, telemedicine can provide more flexible and cost-effective medical care.
Groups such as the American Telemedicine Association, the American Medical Association, and the American Hospital Association have been lobbying for years for the change. Among the complaints: The old system were particularly burdensome for small hospitals, which often lack the staff and the financial resources to confirm the privileges of individual telehealth physicians.
Under the current system, rural hospitals often contract for specific telemedicine services and physician groups. The new rule will mean rural hospitals will have access to a larger pool of physicians and services, explained Mona Moore, director of operations at the Georgia Partnership for Telehealth in Waycross. "This rule allows facility-to-facility credentialing. If a hospital in Waycross has a telehealth contract with a medical center in Atlanta then all of those physicians are automatically credentialed for the Waycross hospital."
Moore said the current system of individual credentialing has meant that rural hospitals must duplicate the credentialing checks already performed by the larger hospitals. The process begins by checking with the national practitioner data bank at the Department of Health and Human Services. If everything checks out, the final credentialing approval is granted by the hospital governing board. The process can take 30 to 45 days because many rural hospital boards often meet only once a month. It also must be repeated annually for each physician to update information about malpractice insurance.
Under the new rule the entire process will be the responsibility of the larger hospital. Additional costs will be negligible because the distant hospital is already credentialing all of its physicians.
The new rule, published on Thursday in the Federal Register, will take effect July 2.
Texas Health Resources and Methodist Health System have signed an agreement to study the possible formation of a multi-provider accountable care organization.
The specific structure of the organization is not yet defined. The signed agreement allows the two health systems to form work groups to explore possible models for collaboration. According to Wendell Watson, THR spokesperson, it's too early to tell if the two health systems will follow the ACO model as defined by the federal Affordable Care Act. "The work groups will address that question. It's possible that we could use multiple models."
Although the regulations aren't final, an ACO as envisioned in the ACA will be a legal entity that includes a hospital and physicians that will, among other tasks, coordinate care, improve patient outcomes, and help reduce costs.
While 91% of healthcare organizations do not have an ACO today, 64% are planning one, and 39% will launch one by the end of 2012, according to a recent HealthLeaders Media Intelligence Report.
Watson said that when THR launched it 10-year strategic plan in 2006, one of its stated goals was to become an integrated provider and coordinator of care. "We've been looking at how we could collaborate with other providers and health systems to change how healthcare is delivered."
Although Texas Health Resources and Methodist Health System are both Dallas-based, their service areas don't overlap in north Texas, explained Kathleen Beathard, Methodist Health spokesperson. "We're complementary. In the current environment it makes sense for us to look at ways to come together."
Beathard stressed that the agreement is the beginning of a process to identify how the two health systems might work together. "It's still possible that we won't find the right model or the projects."
The nonprofit hospitals systems already co-sponsor CareFlite, an air and ground medical transport, and participate in the North Texas Hospital Laundry Cooperative.
Both organizations have participated in ACO preparatory projects with Premier Inc., a national health care performance improvement alliance.
The 14-hospital Texas Health Resources includes the Texas Health Presbyterian, Texas Health Arlington Memorial and Texas Health Harris Methodist family of hospitals. It also includes the Texas Health Physicians Group.
The four-hospital Methodist Health System includes medical centers in Dallas, Charlton, Mansfield and Richardson. It also includes the MedHealth physician group.
Last month the Department of Labor released a report in that under-the-radar way that makes you immediately wonder what's up.
These days almost any healthcare news worthy of a Department of Health and Human Services press release proudly proclaims yet another terrific program that is cutting costs, improving safety, insuring more people, etc. etc.
Selected Medical Benefits: A Report from the Department of Labor to the Department of Health and Human Services should have been released with that type of fanfare. After all, there's a line in the Affordable Care Act that specifically requires the Secretary of Labor to "conduct a survey of employer-sponsored coverage to determine the benefits typically covered by employers, and to report the results of the survey to the Secretary of Health and Human Services."
This information will be used by HHS to help identify the essential health benefits that should be included in the health insurance plans scheduled to be offered by health insurance exchanges beginning in 2014. Insurers in the HIEs, and in the individual and small group markets, will be required to offer benefits consistent with what employers typically offer.
That sounds important to me, like the type of report HHS would want to make sure received press coverage. Maybe the information it contained wasn't quite up to the level of a conference call with Secretary Sebelius, but this baby didn't even rate a decent press release. Instead, HHS put out a 4-paragraph press release that thanked the DOL for the report and then went on to talk about how exciting it is that Institute of Medicine is working on its own set of essential health benefits.
With that kind of faint praise I could hardly wait to get my hands on the DOL report. It is 62 pages of tables, text and data, some rehashed from other reports and a lot of it from 2008, which is a lifetime ago in terms of the economy and healthcare.
There is some new information on 12 selected benefits: ambulance services, durable medical equipment, diabetes care management, ER visits, infertility treatments, kidney dialysis, maternity care, organ and tissue transplantation, physical therapy, prosthetics, gynecological exams and sterilization.
But here's the rub: for a report that's supposed to help guide decisions about what constitutes essential healthcare benefits, it's very light on what is actually covered. Part of the problem stems from the definition of "covered" used in the report, which requires that health plan documents specifically mention the service as covered to be counted as covered. If a service isn't mentioned its falls into the "not mentioned" category, which the report explains means the service may or may not be covered. Huh?
For six of the 12 benefits the "not mentioned" percentage is larger than the "covered" percentage. What does that tell anyone who is trying to justify identifying one benefit over another as essential? If you followed the logic of the DOL report you'd give ER visits the nod over diabetes care management.
In its short life, the report, which was released April 15th, has collected its share of criticism. Trade groups and lobbyist have termed it "irrelevant" and "minimalist." There are complaints that the information is skewed toward the benefits offered by large employers and has little application to small employers and individuals.
In the DOL's defense I'll say that anyone who has ever tried to decipher their own health benefits plan knows that the documents are often less than clear. But you know what I do when I'm confused by my benefits? I pick up the phone and ask the benefits manager.
The DOL was charged with identifying benefits that are typically covered. It's an important piece of the healthcare puzzle and could affect coverage for years to come. Who knows, lives may even depend on the benefits selected.
Being a medical director can be nice work if you can get it. A physician medical director can add several thousand or even hundreds of thousands of dollars to his or her compensation package for duties that can range from recruitment, attending meetings, conducting clinical peer reviews, and strategic development.
Compensation for medical directors varies widely across specialties as well as practice ownership, a Medical Group Management Association survey shows. Duties and responsibilities can also play a role although the survey didn't collect that information by specialty.
MGMA's Medical Directorship and On-Call Compensation Survey: 2011 Report, based on specialty, shows that the lowest median annualized compensation, $7,500, was reported by internists and pediatricians. The highest, $208,000, was reported by radiation oncologists.
Depending on the specialty, practice ownership (hospital-owned or nonhospital-owned) also affects medical director compensation. Psychiatrists in a hospital-owned practices earned $25,000 while their counterparts in nonhospital-owned practices earned four times as much annually for medical director duties. On the other hand, family practitioners (with obstetrics) earned almost twice as much for being medical directors in hospital-owned practices as in nonhospital-owned practices: $24,000 versus $12,500.
The majority of survey participants reported median annualized compensation levels of $50,000 or less. Only four specialties reported annualized medical director compensation of more than $50,000: radiation oncologists, nephrologists, pathologists, and urologists.
The top three medical director duties listed by survey respondents were monitoring quality, developing policies and procedures, and attending meetings, Todd Evenson, assistant director of surveys at MGMA, explained in an interview.
The survey doesn't identify by specialty the compensation received for particular duties or responsibilities. It does provide duty and responsibility information in large physician categories: primary care, surgical specialists, and nonsurgical specialists. Here are some examples:
Meeting Responsibilities. Attending meetings increased compensation for nonsurgical specialist by 8.6% versus medical directors in that category without that responsibility — $43,421 annually compared with $40,001.
Documentation and care planning. Surgical specialist without this responsibility made 26.5% more than their counterparts with this duty. But primary care medical directors without documentation and care planning duties earned 6.3% less than their counterparts.
Recruitment. Primary Care medical directors with recruitment responsibilities reported $27,500 in compensation, compared to $20,000 for primary care directors without that responsibility.
According to the majority of survey respondents, being a medical director takes about four to six hours per week. Anatomical and clinical pathologists reported the greatest number of hours worked per week in a medical directorship (31 hours) while noninvasive cardiologists reported only three hours per week.
The voluntary on-line survey, which was conducted between October and December in 2010, contains data on 1,529 medical directorships in 255 medical organizations.
Developing individualized treatment guidelines for the management of hypertension reduces more myocardial infarctions (MIs) and strokes than following the current national guidelines, researchers find.
Compared to using no guidelines at all individualized guidelines for the treatment of hypertension could prevent 43% more MIs and strokes than the use of national guidelines from the Seventh Report of the Joint Committee on Prevention, Detection, Evaluation and Treatment of High Blood Pressure (JNC 7).
What accounts for the difference is that "national guidelines are designed to be easy to remember and easy to follow, they typically focus on only one risk factor or condition at a time, and draw sharp thresholds for treatment" explains David M. Eddy, MD and PhD, the lead author for Individualized Guidelines: The Potential for Increasing Quality and Reducing Cost, published in the Annals of Internal Medicine.
According to the JNC 7 hypertension guidelines, a patient should be treated for hypertension when the systolic blood pressure reaches 140 (or 130 if the patient has diabetes or chronic kidney failure).
"In fact, there are multiple, interconnected risk factors that should be taken into account for blood pressure treatment. We looked at how computer models could be used to simultaneously assess all of the important risk factors and develop individualized recommendations for treating hypertension," said Eddy.
The goal of the study was to determine the potential health and economic benefits of using individualized guidelines versus current guidelines. The team compared outcomes when the treatment for a patient's blood pressure was based upon:
Standard guidelines from JNC 7
Individualized guidelines that consider patient age, sex, blood pressure, cholesterol, family history as well as diabetes and smoking status
Using no guidelines at all
The 2,710 participants were identified from among patients who took part in a separate long-term study of atherosclerosis risk. Participants were between 45 and 64 years of age, had no pre-existing cardiovascular disease, and were not receiving any treatment for hypertension.
Measuring the health benefits of using individualized guidelines proved to be easier than establishing the potential economic benefits. As Eddy explained, "There is no easy way to give a dollar estimate. It depends on too many factors about the particular settings in which individualized guidelines are implemented." He did estimate that "for the US as a whole they would likely be well over a $100 billion a year."
Eddy says making individualized guidelines easy to use is critical to their acceptance. He explains that physicians who use electronic health records should have little trouble implementing individualized guidelines. He cautions that a physician who uses paper records will need to manually enter patient information into the clinical information system, which would be a major barrier to the adoption of individualized guidelines.
Health Management Associates announced late Monday afternoon that it is in negotiations with Catholic Health Partners to acquire Mercy Health Partners, CHP's seven-hospital system based in Knoxville, Tenn. No details of the financial negotiations have been disclosed.
The potential sale means CHP would be exiting the Tennessee market. The announcement came on the same day that CHP completed the $150 million sale of Mercy Health Partners of Northeast Pennsylvania in Scranton to Community Health Systems in Franklin, Tenn.
Once the sale of Mercy Health Partners is completed, CHP will still own hospitals in Kentucky and Ohio.
Naples, Fla.-based HMA already owns four hospitals and a surgical center near Nashville. The for-profit company operates 60 hospitals in 15 states, including Alabama, Florida, Texas, Washington and West Virginia.
Last week, Jeffrey A. Ashin, president and CEO of Mercy Health Partners in Tennessee, told employees via an in-house publication that the name of a prospective purchaser would not be announced until Fall. On Monday, however, in a memo to employees and physicians posted on MHP's web site, Ashin announced the move by the health system's board.
According to the memo, the board selected HMA after considering several proposals from unnamed healthcare organizations. HMA's "consistent track record of transforming underutilized hospitals into profitable and superior medical centers" was listed among the reasons for its selection.
In the memo, Ashin said that the name of the health system is expected to change. He said the health system would no longer have an official Catholic affiliation, but that HMA has asked the Sisters of Mercy to continue to serve at the hospital and that despite the acquisition by a for-profit company, the health system would continue to follow its charity care policies.
Ashin's memo did not address any potential management or personnel changes.
The announcement ends several months of speculation regarding new ownership of the Knoxville-area hospitals. In November 2010, then CEO David Jimenez announced his pending retirement and revealed that discussions with the University of Tennessee Medical Center in Knoxville had ended without an agreement. At that time Jimenez said a request for proposal would be issued to other perspective point venture partners.
In the same announcement, Jimenez said the health system's services were being reimbursed at tens of millions of dollars less per year than the system received in 2007 and added that "without an infusion of additional capital we will not be able to make needed investments and, at the same time, pay off our debt."
MHP-Tennessee was formed by the merger of CHP-owned St. Mary's Health System and Baptist Health System of East Tennessee in 2008. In June 2010, the MHP board announced that it was considering the sale of the Mercy Medical Center West campus. At that time, the board said in a statement, that although "Mercy has a strategic plan for the development of the West campus, the board action reflects the realities related to healthcare reform and acknowledges the need to balance the capital needs of continued development at Mercy West with the needs of other Mercy facilities."