Orlando, FL-based Dr. P. Phillips Hospital is ready to open a $170 million tower that adds two floors of private patient rooms and expands capacity for high-demand services. The five-story structure provides 315,000 square feet of new space needed to keep up with south Orange County's growing population, said Mark Schaefer, the hospital's chief operating officer. With the addition, the hospital's number of licensed beds grows from 143 to 237. Dr. P. Phillips Hospital is owned by Orlando Health.
Indianapolis-based St. Vincent Joshua Max Simon Primary Care Center has received a $1 million donation that will be used to create an endowment to help pay for supplies, staff training, and other needs. The 60,000-square-foot Simon center provides primary medical care to the poor and those with inadequate or no health insurance. Income from the $1 million gift will be used to generate ongoing funding of patient care-related expenses, said St. Vincent representatives.
In June, Pennsylvania Gov. Ed Rendell called on Senate Republican leaders to strike a deal on expanding health insurance for the uninsured before the end of the budget season, but was rejected. Now, Rendell—armed with new figures on the uninsured, and buoyed by the presidential election of universal-healthcare advocate Barack Obama—has asked the Senate to return to the Capitol to take action on his healthcare proposal before the end of the year.
Trustees of Beverly (MA) Hospital's parent organization met to determine the future of chief executive Stephen R. Laverty, whose management style has come under fire from doctors and nurses. The board is believed to be looking for an interim CEO to run Beverly Hospital, Addison Gilbert Hospital in Gloucester, BayRidge Hospital in Lynn, and three outpatient facilities during a search for a permanent replacement. A spokeswoman for Northeast said she had no information about the meeting.
Following New York Gov. David A. Paterson's comments that he would most likely ask for deep cuts in money for Medicaid, and might even try to renegotiate labor contracts, hospital advocacy groups pushed back forcefully. Hospital groups, which said they were still trying to manage the effects of the reductions approved by the Legislature in August, said they would resist further cuts unless there was a sense of shared sacrifice. "We will fight in an animated and energetic way if somehow healthcare is being targeted, because lives are at stake here," said Kenneth E. Raske, president of the Greater New York Hospital Association. "If everybody's pitching in, then we'll try to pitch in."
The American Medical Association's House of Delegates has voted to undertake a study of the repatriation of uninsured immigrant patients by hospitals. The doctors' group was prompted to address the matter by the California Medical Association, which voted in October to oppose the forced repatriation of patients. But the AMA delegates, while expressing concerns about repatriations and what they called the "inappropriate discharge of patients," declined to take a stand before examining in detail the legal, financial and medical issues involved.
A judge has heard arguments in the case of a 12-year-old boy who was declared dead by Washington, DC-based Children's National Medical Center, but he held off making a decision until he can hear from the family and medical experts. The boy has brain cancer and has been in the hospital since June 1. The hospital says that he has no brain activity, meeting the legal definition for death in Washington, DC. Doctors declared him dead, and the hospital is asking Judge William Jackson to affirm its judgment that the boy can be taken off life-sustaining equipment.
If there is—for want of a better term—a silver lining in this black cloud that bedims our economy, it may be that the nation's projected shortage of healthcare workers will be somewhat alleviated in the coming years because many Baby Boomers in our aging workforce will be too financially strapped to retire.
Lucky them!
This doesn't even qualify as making lemonade from lemons. But it may well be the new reality, and along with everybody else, America's hospitals should prepare to adapt accordingly.
I asked around and I scoured the Internet, but I couldn't immediately find any studies or sources that have dealt specifically with this financial collapse and its impact on aging healthcare workers. The American Medical Association says it has heard anecdotally that a few physicians are delaying retirement for financials reasons, but the AMA has no data to suggest a trend. Nevertheless, it would be foolish to think that healthcare providers are not affected adversely.
The McKinsey Quarterly this month issued a new study that shows that at least two-thirds of Boomers will have to delay retirement because they can't afford to give up a paycheck. Even worse, many of the more than 5,100 Boomers surveyed by McKinsey weren't even aware that they had a problem.
Home prices have fallen off a cliff. The Center for Economic and Policy Research in June reported that the U.S. housing market has lost $4 trillion in value, at an average loss of about $50,000 per homeowner since the housing bubble burst.
The stock market has lost nearly 30% of its value in the last year, about $7 trillion. And the Congressional Budget Office reports that Americans' retirement accounts lost $1 trillion in equity in the year before the market tanked this fall.
McKinsey says Americans may simply have no choice but to delay retirement, even if only for a year or two. "If they worked long enough to increase the median retirement age from 62.6 today to 64.1 by 2015, they could continue accumulating assets longer and avoid tapping them until age 70," the report states. Delaying retirement would also generate more income and reduce the strain on Social Security, Medicare, and other big-ticket government programs.
Marcie Pitt-Catsouphes, a sociologist with the Sloan Center on Aging & Work at Boston College, says it's hard to predict the fallout for retiring Boomers because we've never seen a situation like this. "With economics, we base predictions on our understandings of patterns that have emerged in the past and adjust them for new situations, but these are very special circumstances," Pitt-Catsouphes says.
McKinsey says the nation's businesses must press the federal government to provide more incentives for older workers, such as flexibility with Medicare eligibility. Government must also lower the age eligibility (now at 62) for part-time workers who want to access their defined benefits pensions. And, the payroll taxes that fund Social Security have to be reduced for older workers earning less, to provide more incentives to continue working.
Ironically, the healthcare industry's attempts in recent years to deal with its anticipated future staffing needs has put hospitals in a better place to adapt to the reality of older workers. For example, hospitals are among the leaders in offering innovative plans to retain older workers, such as flexible scheduling.
In addition, many hospital clerical and administrative jobs are less-physically demanding, and could be undertaken by older employees. Younger nurses' assistants and other staff could help with more-arduous tasks, like lifting patients.
"In general, the healthcare industry has been very forward-thinking in looking at this, because they've been for some period of time addressing experienced labor force shortages, particularly around highly skilled nursing," Pitt-Catsouphes says.
John Commins is the human resources and community and rural hospitals editor with HealthLeaders Media. He can be reached at jcommins@healthleadersmedia.com.
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Everyone is feeling the pinch of the ailing economy, as the stock market continues its freefall, the government bails out financial institutions, and the credit market remains frozen. This dreary financial picture is made worse by the fact that the government is tightening reimbursement regulations and seemingly trying to take back the money it has already paid hospitals.
What can hospitals do to weather this financial storm?
The obvious answer is anything that will improve the bottom line. That means cutting costs and growing revenue. According to the accounting firm Deloitte & Touche, LLP, for hospitals, it takes $11,700,000 in new revenue to have the same impact as $100,000 reduction in operating costs.
Given this fact, the first place that hospitals can look to trim costs is in supplies, which represent 20% to 40% of their expenses. Another benefit to reducing supply costs is that reducing supply expenses doesn’t typically involve laying off employees.
Many hospitals are already working with group purchasing organizations to leverage purchasing power and cut costs on commodity items. However, in order to continue to find savings, hospitals need to work with their physicians to reduce costs on medical devices. Physicians can also help with negotiation efforts, as well as utilization issues.
Of course, hospitals can simultaneously implement strategies to improve their top line. One thing hospitals can do is improve patient documentation and record the right information about the severity of the illness and underlying complications that patients may have, which can have a direct impact on Medicare reimbursement.
For example, 60-bed Beauregard Memorial Hospital in DeRidder, LA, has been able to use a quality documentation tool to improve the accuracy of its documentation. As a result, the hospital was able to increase revenue by $247,000 in four months, and it estimates that reimbursement will increase by $600,000 in FY 2008.
While the financial landscape is uncertain, there are steps hospitals can take to increase their bottom line.
Many times, these steps save money, improve the quality of care the hospitals offer, and preserve employee jobs. That’s good news—for a change.
Scott Downing is executive vice president of supply chain management at VHA Inc. He may be reached at sdowning@vha.com.
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If you can momentarily turn off the noise about the financial crisis gripping this country, perhaps you can hear whispers from hospital senior leaders about community benefit. Not two weeks ago, we heard again from Sen. Charles Grassley that he's not stepping back on his crusade for greater transparency among hospitals and the amount of community benefit they do (or do not) provide their communities in return for the tax benefits they get. As things usually do in the world of politics and business, how you measure that comes down to money.
This past summer, I was part of the audience at a particularly animated discussion on these matters at the Healthcare Financial Management Association's Annual National Institute in Las Vegas.
It was fun to be the fly on the wall in that room, so to speak. One CFO whom I will not name stood up during the Q&A portion of the seminar and declared that the hospital itself is a community benefit—essentially because it's there. "The feds are missing the point," he exclaimed. "Many things the hospital offers simply wouldn't be there otherwise."
You can't make this stuff up. No one called him out on this statement. Not even me, but I was thinking to myself, "sorry bud, but that's not good enough."
By his logic, I thought, we could call a lot of things community benefits that really aren't. Wal-Mart could be considered a community benefit, and thus, should be exempt from taxation as well.
See if you agree with my reasoning here.
Wal-Mart brings low prices on a huge variety of consumer goods to a community—prices that would be much higher if Wal-Mart hadn't located there. If it wasn't for Wal-Mart, all those mom-and-pop stores downtown with high overhead and high prices would still be the only game in town. Therefore, they're providing a community benefit and deserve a tax break. Many companies, in fact, have successfully lobbied for local tax breaks by this twisted logic. But those are granted on an individual basis, and most thinking people carry a healthy dose of skepticism when looking at them. Kind of like those economic impact studies that people lobbying for a variety of preferential tax treatments trot out regularly—one of my pet peeves.
The fact that these tax breaks are given does not mean that the argument for giving them is not as ludicrous as that CFO's argument was at HFMA.
My Wal-Mart analogy is an imperfect one, but it serves to illuminate the differences between some hospitals' holier-than-thou attitude when it comes to taxation and others who want greater transparency from them, such as Sen. Grassley and other members of Congress from both parties. Perhaps a majority of hospitals do provide care that wouldn't be there if they weren't in the community. Free or substantially discounted healthcare is one benefit that in my mind, does deserve a tax break. But I don't understand the resistance to a uniform standard of reporting and accounting that benefit. Currently, we have no way of knowing for sure.
What do you think? What are the holes in my argument? I'd love to hear from you senior healthcare leaders, so write me and tell me your story.
Philip Betbeze is finance editor with HealthLeaders magazine. He can be reached at pbetbeze@healthleadersmedia.com.Note: You can sign up to receive HealthLeaders Media Finance, a free weekly e-newsletter that reports on the top quality issues facing healthcare leaders.
