RehabCare Group, Inc., completed its merger today with Triumph HealthCare Holdings, Inc., a long-term, acute-care hospital (LTACH) chain, in a transaction valued at $575 million.
The combined organization will provide post-acute services in more than 1,280 locations in 41 states and becomes the fourth-largest, post-acute hospital operator and the third largest LTACH provider in the nation.
"Our merger with Triumph is a winning combination, and we are excited to begin the process of blending our strengths to elevate the role of our hospital division and achieve a more diverse company with the potential to reach more patients in need of specialized, restorative care," said John H. Short, RehabCare president/CEO, in a media release. "We look forward to integrating our best practices, technologies and the talents of our now more than 18,000 people as we work toward a common goal of helping people regain their lives."
The transaction is being financed through a combination of committed bank financing, the net proceeds of the equity offering that closed on Nov.18, and cash on hand. RehabCare also closed on a new senior secured credit facility consisting of a $450 million term loan B facility and a $125 million revolving credit facility.
Triumph HealthCare President/COO Brock Hardaway will lead the combined company's LTACH business, under the direction of Kevin Gross, RehabCare's senior vice president of hospital operations.
Houston-based Triumph HealthCare operates 20 LTACHs in seven states, with two hospitals scheduled to be added by mid-2010.
St. Louis-based RehabCare manages rehabilitation programs at more than 1,250 hospitals and skilled nursing facilities in 41 states, and owns and operates 33 rehabilitation and long-term acute care hospitals.
BlueCross BlueShield of Tennessee is readying a Nov. 30 mass mailing to some of its 3.1 million customers in the Volunteer State who may have had their Social Security numbers and other private data compromised after an Oct. 2 hard drive theft at a remote training facility in Chattanooga.
"It's going to be a progression of mailings, with those who would be most at risk receiving the first mailings, depending upon how many people had a Social Security number compromised," says BCBST spokeswoman Mary Thompson.
"If you don't get a letter, you are safe. No news is good news," Thompson says.
Meanwhile, local, state, and federal law enforcement officials have been called in to investigate the Oct. 2 theft of three 3.5" X 10" hard drives, which were physically removed from server racks on computers inside a data storage closet at a training center located in a strip mall.
"We were using the information on those drives for training purposes. We were auditing our [customer service representatives] to ensure that they were delivering the correct information and servicing providers correctly and using it for training of new CSRs," Thompson says.
Thompson adds she could provide no update on the criminal investigation.
"There are many theories circulating," she says. "Of course, so we don't compromise the investigation, I'd rather not speculate. But the data was not encrypted, which would be the ideal way to secure the data. It was encoded and scrambled across the drive. Only individuals who have the most-high level of expertise, access to software and equipment would be able to reassemble the data into a form where they could access the data for any criminal activity.
"Obviously there is great concern any time data is breached, but this wasn't something that was done where somebody hit the wrong button or put the wrong labels on a file. This was a crime. This was an actual burglary," she says.
In the past several weeks, Thompson says BCBST has had as many as 800 people—including employees from a private security company—working at any given time on the arduous task of analyzing more than 300,000 screen shots and about 50,000 hours of audio data to identify potential breaches.
"You have to cross reference what was being said at the time the screen shot was captured," Thompson says. "We are going through all of those and as we are identifying groups we are triaging them based on who had a Social Security number and any of the data that was stolen. The next level down would be those who had a diagnostic code. The third level down would be those with a name or address and date of birth."
The burglary occurred on a Friday afternoon, but BCBST did not discover the theft until the following Monday morning.
"Because the data on the drives were only used for training purposes, it wasn't essential to daily operations," Thomson says. "The person in charge of the servers did not service them over the weekend because they weren't going to harm any service providers or members. It wasn't until Monday morning when they went to the data storage closet when they realized they weren't there."
Questions about the theft or other privacy matters may be directed to the BCBST Privacy Office Hotlines at 1-888-422-2786 or 1-888-455-3824 or Privacy_Office@bcbst.com.
Physician pay-for-performance programs are gaining popularity across the country as ways to promote better healthcare quality. But a new study from the University of California, Los Angeles, has found that not all programs operate with the same goals and that the ultimate success of the programs depends on how the rewards are actually used.
The UCLA study found that patient care performance ratings for 25 medical groups across California showed meaningful improvement overall following the launch of a statewide pay for performance program in 2004, according to the study appearing in the December issue of the Journal of General Internal Medicine.
Study author Hector Rodriguez, assistant professor in the department of health services at the UCLA School of Public Health, and his colleagues, determined that financial incentives used for the purpose of improving patient care—in combination with public reporting of medical group performance ratings—had a positive impact on patient care experiences. However, these incentives could cause a negative impact, as well.
In the process of finding out how medical group performance ratings changed over time, the researchers observed that the ratings of specific measures representing three broad categories—physician communication, care coordination, and office staff interactions—improved during the period right after the start of a pay for performance program. For the study, researchers looked at information collected from 124,021 patients of 1,444 primary care physicians between 2003 and 2006.
When the incentives were aimed at addressing the quality of patient clinician interactions, the overall experience of patient care tended to result in improved performance in those three categories. This was true—especially when additional funds were used by medical groups to positively reinforce a patient centered work culture, according to the study.
However, the researchers found that the greatest improvements were found among those groups that placed less emphasis on physician productivity—and greater emphasis on clinical quality and patient experience. When financial incentives were paid directly to physicians—rather than being used more broadly- they found that putting too much emphasis on physician productivity actually had a negative impact on the experiences patients had when visiting their primary care provider.
Keeping in mind the current healthcare debate on Capitol Hill, Rodriguez said that quality improvement and reimbursement reform efforts "should integrate patient reported experiences of care as a central metric for evaluating reform effects."
Medication-related problems are common among older adults, costing billions of dollars annually and reducing the quality of life for many individuals suffering from those issues. Unless something is done to address this issue, the prevalence of medication-related problems will most likely increase as the baby boomer generation ages.
The American Society of Consultant Pharmacists (ASCP) has stepped up to the plate and in the fall of 2008 launched Campaign 2011, a multi-faceted initiative designed to raise awareness of medication-related problems in the elderly, educate seniors and caregivers about the appropriate use of medications, and take additional steps including educating policymakers to reduce medication-related problems.
"ASCP wants to make the public aware of these medication-related problems in older adults, especially as the first of the baby boomers enter the Medicare population in 2011, hence the name of our initiative," says Katharine Gavett, government affairs manager at ASCP in Alexandria, VA.
Medication-related problems are responsible for 28% of hospitalizations in the elderly and 23% of nursing home admissions and cost approximately 200 billion dollars a year, according to the Campaign 2011 brochure.
"If we can reduce the medication-related problems among older adults, we will improve their quality of life," Gavett says. "Saving healthcare dollars at the same time is a definite plus."
The initiative aims to empower consumers and providers through education about the proper use of medications, ensure elderly people at high risk of medication-related problems has access to a senior care pharmacist, and increase the number of pharmacists working to reduce medication-related problems among older adults.
"We encourage our members to go out into the community to address and educate seniors in all settings," Gavett says. "Nursing homes can also support the different initiatives of Campaign 2011, whether it is educating seniors or supporting policy changes."
Hospital outpatient settings are grappling with a rate of methicillin-resistant Staphylococcus aureus that has doubled between 1999 and 2006, an increase caused almost entirely by community-acquired bacteria strains, according to a new CDC report.
The rapid rate of infection spread threatens inpatient settings as well, according to the December issue of the Centers for Disease Control and Prevention's Emerging Infectious Diseases, which summarizes findings from 300 microbiology labs serving U.S. hospitals.
"The frequency of community-acquired (CA) MRSA among inpatients increased nearly in conjunction with outpatient rates, overall and at each infection site," according to the report.
"Despite increases in the proportion of CA-MRSA strains among inpatients, the continuing high level of (hospital-acquired) HA-MRSA suggests that in contrast to reports from local institutions, CA-MRSA strains are adding to the problem of MRSA rather than replacing HA-MRSA strains."
The report added that some "crowding out of HA-MRSA strains within the hospital may be occurring." However, hospital-acquired strains may be "more fit, and thus CA-MRSA strains are unable to replace them fully. The result is a coexistence of both strains in the hospital and maintenance of CA-MRSA because of the large influx of colonized and infected patients."
Community-acquired MRSA in outpatient settings is an increasing concern, the report said, because the infections spread to inpatients through hospital staff interaction "or use of similar hospital resources, such as surgical rooms."
The finding is especially worrisome because increasingly, hospital care is shifting from inpatient to outpatient settings, with outpatients outnumbering inpatients 3 to 1. Also, federal payers will no longer reimburse providers for infections they are deemed to have caused.
The report, by Eili Klein, David L. Smith, and Ramanan Laxminarayan, said CA-MRSA "has become a major problem in US hospitals already dealing with high levels" of hospital-acquired staph infections. Klein and Laxminarayan are affiliated with Princeton University. Smith is from the University of Florida at Gainesville, and all three are associated with Resources for the Future, Washington, DC.
Understanding these trends can "help hospital administrators and policy makers make infection control investments to address the role that large influxes of outpatients with CA-MRSA infections may play with regard to overall MRSA infection rates in the hospital."
Imagine if health reform stakeholders attended a Thanksgiving feast, a Norman Rockwell-like scene of commotion might ensue. At first, hospitals and doctors might argue over which game to watch on TV. Or they might jockey for who gets to sit at the head of the table.
But once everyone is calmly seated, physician and hospital leaders all might express thanks, forgetting the pandemonium that preceded.
1. Hospital leaders would go first, giving a blessing that after a year of running red ink, 80% of them this year are back in the black with margins and liquidity returning to pre-recession levels.
2. They'd bow their collective heads in appreciation that median days cash on hand nearly doubled, from 90 days in the first quarter of 2009 to 150 days for the second quarter, higher than the historic long-term average.
3. As they took second helpings of cranberry sauce and stuffing, they'd remark how nice it is that a significant chunk of their investment portfolio had returned and that inpatient volume has started to go back up.
4. And after the wine was poured, they'd raise a toast in appreciation that the dreaded predictions of a much more serious season of catastrophic influenza—seasonal or H1N1—has yet to impact their facilities. At the table's other end, physician groups would say a prayer giving thanks for many blessings as well.
5. For starters, doctors would bow their heads that Congress is working to prevent the dreaded sustainable growth rate from taking effect, thus barring a 21% scheduled cut in physician pay and repealing a flawed Medicare payment formula, and also for removing drugs from the pool, that makes that repeal less costly.
6. A spokesman for the American Medical Association, Robert Mills, would remark to the entire stakeholder family that doctors are grateful for health reform proposals that have brought us the "closest we have ever been to securing access to high quality, health insurance coverage for 46 million uninsured."
7. They'd give praise to the White House for directing $25 million to the states to implement and test tort reforms in pilot studies of projects like health courts and safe harbors, something they felt was out of reach in a Republican administration, and even more unexpected in a Democratic one.
8. They'd express gratitude that a database they believed allowed insurers to set artificially low reimbursement rates for out-of-network care was shut down.
9. As the mince meat and pumpkin pie was being sliced, they'd give thanks for $36 billion in federal support for physicians to adopt health information technologies, although they'd worry about how they'd make time and room for it in their practices. And they'd pray that it does not give them indigestion.
10. And last, doctors would say thanks to Congress for passing an ambitious law that for the first time allows the U.S. Food and Drug Administration to regulate tobacco products, controlling addictive nicotine as well as the packaging and marketing of cigarettes.
"Pervasive deficiencies" are plaguing the Centers for Medicare and Medicaid Services' internal controls over contracts, a situation which increases "the risk of improper payments or waste," according to a report made public Tuesday by the U.S. Government Accountability Office.
The agency found that based on a random sample of 2008 CMS contract actions, "at least 84.3% of fiscal year 2008 contract actions contained at least one instance where a key control was not adequately implemented."
Further, the report said, at least 37.2% of contract actions in fiscal 2008 had three or more instances in which a key control was not adequately implemented.
Among some of the deficiencies:
CMS used cost reimbursement contracts without first ensuring that the contractor had an adequate accounting system.
Project officers did not always certify invoices for payment.
The GAO said these deficiencies "stem from a weak overall control environment as characterized primarily by inadequate strategic planning for staffing and funding resources."
CMS also "did not accurately capture data on the nature and extent of its contracting, which hinders CMS' ability to manage its acquisition function by identifying areas of risk."
The GAO issued 10 recommendations for executive action to fix the problems within CMS and the Department of Health and Human Services.
Americans could pay billions of dollars more in new taxes for a few years before they're likely to see significant change in the nation's healthcare system under legislation that Congress is considering. Some analysts said that's not necessarily bad. Delaying major healthcare changes until at least 2013, as the pending Senate and House of Representatives bills would do, would give the government sufficient money and time to get things right. Critics counter that there's no guarantee that the money will be enough, and in the meantime, higher taxes could stifle an ailing economy.
Raising the U.S. government's $12.2 trillion borrowing limit tops an agenda of must-pass legislation that imperils Senate Democrats' ability to pass a healthcare bill this year. As the senators struggle to meet President Barack Obama's year-end deadline to overhaul the health system, they must also act to keep the government running and prevent a 21% drop in payments to doctors who treat Medicare patients. They need to approve measures to avert a Dec. 31 expiration of the estate tax, extend jobless benefits, and renew key provisions of the anti-terrorism USA Patriot Act. Pushing the measure into 2010 may create problems for Democrats because Republicans would have more opportunity to make the overhaul an issue in the congressional election year.
Feeling the pressure of a weakened economy, nonprofit Resurrection Health Care is selling two of its Illinois hospitals to a Tennessee-based for-profit company. Resurrection said Tuesday that it will transfer Westlake Hospital in Melrose Park and West Suburban Medical Center in Oak Park to Vanguard Health Systems, which operates 15 hospitals across the country, including two in the Chicago area. Financial terms of the deal, expected to close by midyear 2010, were not disclosed.
