The Bush administration has announced that states won't be penalized for failing to install restrictions making it harder for middle-income children to participate in a federal-state health insurance program, at least for now. States had been directed to make the changes in their State Children's Health Insurance Program by August 18 or face financial penalties. Among the required changes include that children must be uninsured for one year before they could enroll; and at least 95% of poor children eligible for Medicaid or SCHIP were already in those programs before states covered higher-income children.
A man on disability since surgeons may have operated on him with instruments coated in hydraulic fluid will be able to sue Duke University Medical System after a judge ruled that the $14,000 price tag to bring the grievance before a panel of private arbitrators is too costly. The ruling could be repeated in other courtrooms around the state, and it echoes a decision by the North Carolina Supreme Court earlier this year that found mandatory arbitration agreements can make it too pricey for consumers to pursue their disputes. The ruling could also help create a more favorable legal climate for an untold number of the 3,648 patients who may have been operated on in late 2004 with contaminated instruments at two Duke hospitals.
Despite the mass exodus of doctors from the New Orleans area after Hurricane Katrina, a journal is reporting that doctors have returned to the city at a rate that has pushed their per-capita number above the national average. The American Journal of the Medical Sciences says the number of doctors in Orleans, St. Bernard, Plaquemines, and Jefferson parishes has grown at from 239 doctors per 100,000 people in 2005 to 256 doctors per 10,000 in 2007. The national average is 237 doctors per 100,000, and the trend in New Orleans is one of many signs indicating the city's healthcare system is recovering, medical professionals say.
The Department of Health and Environmental Control has decided to allow another vote on an amendment to the South Carolina health plan that will make it easier for Lexington Medical Center to gain state approval to build a heart center. Lexington Medical asked the DHEC to make changes in the state's health insurance plan that would lower the minimum number of heart surgeries a heart center must perform to remain open and maintain quality. Currently, only Providence Hospital and Palmetto Health are certified to perform open-heart surgeries in the region. State officials have blocked efforts to establish a heart unit in Lexington, saying the region does not need a third open-heart surgery program. But Lexington Medical has remained persistent in making its case.
Des Moines, IA-based Broadlawns Medical Center has announced it is cutting back on free prescription drugs for its patients. The medical center recently sent a letter to patients saying they would all have to start paying $4 per prescription, beginning in September. But uninsured patients whose income is below the federal poverty level will continue to receive free medication, and no eligible patient will be charged more than $20 per month, said hospital officials. Hospital leaders said Broadlawns was one of only two public hospitals in the country that still gave free medications to patients, but the hospital can no longer afford to do so.
After a year of delays, Women & Children's Hospital of Buffalo is taking the next step for an ambulatory services center. Plans call for a five-story, 190,000-square-foot outpatient diagnostic and treatment center. In addition to doctors' offices, the center will bring together about a dozen outpatient clinics currently located throughout the hospital, and there will be eight outpatient operating rooms.
Especially for celebrated plaintiff's attorney Richard "Dickie" Scruggs. You hospital CFOs remember him, don't you?
He came after you aggressively just four short years ago for your charity care policies, your chargemaster prices, and your own aggressive collection practices. He suggested you didn't deserve your multiple tax exemptions because you didn't offer enough charity care—by a long shot—in return for not having to pay taxes. He filed lawsuits against many of you that, while they ultimately went nowhere, were quite scary back in the fall of 2004, when I last spoke with him for a cover story in HealthLeaders magazine entitled "Do Nonprofit Hospitals Deserve Their Tax-Exempt Status?"
Many lawsuits were filed against nonprofit hospitals across the country. If you had a discrepancy between your hospital's chargemaster and what you charged insurance companies—as almost every hospital did at the time—you were a fat, juicy lawsuit target. He even convinced one major hospital in his own backyard, North Mississippi Medical Center, to settle his lawsuit in return for multiple changes in its charity care practices. Things were looking up for Scruggs. After all, fresh on the heels of his tobacco litigation success, he and his firm were on a hot streak.
Now he's in jail. In a Kentucky federal prison, to be exact. Serving a five-year sentence. Disgraced and disbarred.
That's right, Scruggs and his son both received jail sentences early this summer for attempting to bribe a Mississippi judge in return for turning over Hurricane Katrina settlement money that was held up in court. Instead, the judge turned FBI informant and got the goods on the Scruggses. The elder Scruggs will serve five years. His son will serve a little more than one.
I'll forgive you if you want to take a few seconds to snicker up your sleeve.
Many hospital leaders saw Scruggs' actions as simply the latest money grab for a smooth-talking Mississippi attorney who got filthy rich off of tobacco litigation in the 1990s and became something of a minor celebrity as a character played by actor Colm Feore in the 1999 film "The Insider," which also starred Al Pacino and Russell Crowe.
The truth is somewhat more complicated, but it's hard to argue that greed didn't have a lot to do with Scruggs' actions toward hospitals when the man who owns his own Gulfstream jet tried to buy a judge over an insurance settlement.
Bill Cox, then president and CEO of the Sacramento-based Alliance for Catholic Healthcare, saw former Sen. Trent Lott's brother-in-law as an opportunist who was simply seeking another easy class action target-a "vulnerability they could exploit." Seems more true than it ever did.
Scruggs apparently quickly lost interest in the hospital lawsuits after a few legal setbacks, and, more importantly, after Hurricane Katrina hit New Orleans and the Mississippi Gulf Coast. Without a doubt, given what's happened in the intervening years, he saw the deep pockets of insurance companies just itching to be picked.
Now his alma mater, the University of Mississippi, is frantically scrubbing off the Scruggs name from a building or two, as two large universities in Alabama recently did with buildings named after Richard Scrushy of HealthSouth infamy. As a graduate of bitter rival Mississippi State University, I can't help but snicker a little bit myself. But strange as it sounds, I also feel some sympathy for the guy, although it's hard to feel sympathy for someone who will go back to his multimillionaire lifestyle once his debt to society is paid.
As in many cases where the mighty have fallen, the bad guys don't wear all black hats and the good guys don't wear all white. After all, some hospitals were abusing their nonprofit status, and some probably continue to do so. And money is a powerful motivator. Without people like Scruggs, many hospitals might still be suing poor people based on inflated list charges. The regulations that are coming down from Congress and the IRS in the form of charity care regulations and tax filing requirements have added some bureaucracy to the tax exemption game, but they've added a bit of much-needed transparency, too. It'll be harder to get away with violating the spirit of tax exemptions simply because unlike four years ago, some regulations are nearly complete that will force hospitals to justify their benefit to the community they serve.
In fact, hospital leaders can take a big lesson from the fall of Richard Scruggs.
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The number of people who can't pay much-or anything-for their care just keeps rising. Some hospitals have found new ways to help them while still protecting the financial health of the hospital. +
Jim Molpus, Kathryn Mackenzie, John Commins, for HealthLeaders Magazine
A recent ruling by the Securities and Exchange Commission that asks public companies to implement "principles for comprehensive healthcare reform" has some up in arms. +
The healthcare C-suite talks a lot about strategy. But what constitutes true strategic thinking, and how can leaders be sure that it's taking place at their organizations? +
Because they aren't sure how healthcare reforms will play out, many managed care organizations are hedging their bets by diversifying into new markets and product lines that offer a wide range of coverage and pricing options. Many of these products are designed to appeal to price-sensitive small-group and individual buyers. Managed care organizations traditionally considered these to be modest niche markets at best, but now view them as important for future growth, particularly if reforms initially focus on getting coverage for the uninsured.
There is no perfect hospital CEO, but there seem to be a lot of imperfect ones lately. There was the star administrator—a COO actually—at a hospital in the Virgin Islands who authorities now allege took more than $1 million "in excess of the amounts specified in the employments contracts." Then federal investigators in Southern California uncovered an alleged scheme to recruit homeless people as claims for government healthcare programs and arrested the CEO of City of Angels Medical Center.
A few incidents for an industry with 5,700 hospitals and a concurrent number of CEOs is not unusual, but even with that caveat you'd be hard pressed to say it has been a stellar year for public perceptions of hospital CEOs in general.
No leader of a hospital or any venture is going to have all the attributes of leadership. If you could, however, build a CEO from a parts supply of strengths, what might they be?
1. The hospital CEO is a servant leader. There has to be only one good reason why a leader would want to be a hospital CEO—because they believe their skill set will leave the place a little better than when they found it. Either it is a calling or not. Being a servant leader also takes care of the core values of honesty and being a good steward of human and financial resources.
2. The hospital CEO is a risk taker. "Gambler" is not the right word because it implies too much left to chance. The days of the old style administrator are gone at top hospitals, but in the future, having a CEO who is willing to make large, fast moves based on sound analysis will be critical.
3. The hospital CEO is cheap (in a good way). There really is no place for extravagance—in executive compensation, amenities, perks, travel—in the hospital C-Suite. Plus extravagance is just asking for attention from the media, regulators, lawmakers and all sorts of people you do not want attention from.
4. The hospital CEO has strong assistant coaches. One leadership philosophy attributed to the late 'Bama coach Bear Bryant was that he did not coach players, he coached the assistant coaches. The best leaders in healthcare get a top-flight senior leadership team and support them.
5. The hospital CEO attracts people. Not every leader can or should be a motivational speaker. Some lead with quiet dignity. Others use zany tricks to fire up the staff. But there is no denying that in an industry staffed by people who are mission-oriented anyway, they will expect the head of the group to set the culture.
6. The hospital CEO rocks the babies once in a while. Maybe the correct term is "rounding with patients," but however you describe it, my perfect hospital leader would take every opportunity to reach out to the most important stakeholders: the patients.
7. The hospital CEO is not over competitive. Every leader has to want to win. But a good leader does not just win for its own sake. So you gained market share at the direct loss of your competitor? Now what? Are going to do a better job of serving the community? Or did you just win? Congratulations.
8. The hospital CEO holds everyone accountable. Middle managers who are middle performers have to go. Bully physicians who are big admitters can go work for someone else. The hospital CEO sets a bar for high achievement based on fair results, and is passionate about making necessary changes when those results fall short.
9. The hospital CEO looks outside. The hospital CEO is the leader of a large employer and may be the single most influential healthcare player in the community. Many of the necessary changes in national healthcare will only take place when healthcare leaders understand such changes may involve some level of sacrifice for their organizations.
Jim Molpus is Editor-in-Chief of HealthLeaders Media. He can be reached at jmolpus@healthleadersmedia.com.
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