The University of California-Irvine has appointed Maureen Zehntner to head its medical center. Zehntner is a registered nurse who spent 12 years as one of the hospital's top administrators during a period in which it suffered a series of scandals. Her association with the medical program's troubled past that has led some to criticize the university for choosing Zehntner to lead the facility at a time when it is trying to wipe clean its stained reputation.
Under a provision in the mental health parity bill that the House has passed, overall doctors' ownership in existing hospitals would be restricted to 40% and the stake of any individual doctor would be limited to 2%. The provision also would prohibit doctors' ownership in new hospitals that serve Medicare and Medicaid patients. If that provision were in place today, Franklin, TN-based Surgical Development Partners wouldn't be doubling the size of a hospital in Houston that's owned 90 percent by doctors and 10 percent by the company, said Partners Chief Executive Eddie Alexander.
The debate about changing Michigan's rules guiding health insurance for individuals who aren't covered by employer or government plans may last much longer because the Legislature is considering at least three separate plans. Some of the debate about the differing proposals centers on whether to create a high-risk pool to cover individuals turned down by other insurers. The pool would require all insurers participating in the individual market to help cover losses when they reach a certain point.
Palos Community Hospital in Palos Heights, IL, has submitted a letter of intent to the Illinois Health Facilities Planning Board regarding a a $400 million expansion plan. Under the plan, the hospital would add an eight-story building with 192 rooms to the current facility. The purpose of the project is to provide patients with private rooms, said hospital officials.
The movement by employers and insurance companies to put employee wellness at the forefront of consumer health choices is getting a big boost by Blue Cross. Chicago-based Health Care Service Corp., which operates Blue Cross and Blue Shield health plans in Texas, New Mexico Oklahoma, and Illinois, has added the word "wellness" to the mission statements of its four health plans. The company has also embarked on a variety of wellness initiatives, including incorporating wellness programs in basic health benefit packages it sells.
Patients undergoing heart surgery that receive blood that has sat on a refrigerator shelf for two weeks or longer appear to have a higher risk of infection, kidney failure, and even death, according to a study by Cleveland Clinic scientists. Researchers found that cardiac surgery patients who received blood that was more than two weeks old were 30 percent less likely to be alive a year later than those transfused with fresher blood.
The Food and Drug Administration said it saw a higher death rate after five years among patients treated for abdominal aortic aneurysms with Medtronic Inc.'s AneuRx stent-graft system than among those treated through conventional surgery. The FDA said it was focusing on the AneuRx stent-graft system because it is the only currently marketed device that has a significant number of patients who have been followed for at least five years after receiving a device.
Republicans far more likely than Democrats to call the U.S. healthcare system the world's best, according to a poll released by the Harvard University School of Public Health and Harris Interactive. People taking part in the survey were asked if they thought the United States has the best healthcare system or if other countries had better ones. Among Republicans, 68 percent said the United States is the best, compared to 32 percent of Democrats.
The healthcare industry has long been divided about the best ways to prevent the spread of MRSA--or methicillin-resistant Staphylococcus aureus. Should we test all patients who come to the hospital for treatment, or should we focus our money and resources, testing only those who are at high risk? The results of two studies released last week may have left us even more divided about how we can combat this serious--and sometimes fatal--infection.
The first, released in the March 12 edition of The Journal of the American Medical Association, was done at a clinic in Geneva, Switzerland. The study tested 10,193 patients admitted for surgery between October 2004 and May 2006. Another 10,000 were admitted without the test. Patients who tested positive for MRSA were isolated from other patients, given antibiotics, and scrubbed with disinfectants. Despite these efforts, the number of MRSA infections for each group was similar. Researchers concluded that a universal screening of surgical patients was not worth the time and resources it would take.
The other study, released earlier this week in the Annals of Internal Medicine, shows that universal hospital surveillance for MRSA reduced infection rates by 70 percent at Evanston Northwestern Healthcare--a three-hospital system outside Chicago. During the study, researchers tested different groups of patients for MRSA to determine the best testing methods to combat infection. For the first 12 months, researchers tested no patients, followed by 12 months of testing only patients admitted to the ICU. For the next 21 months, the health system tested all patients who came into the hospital for care. Only universal surveillance was successful in significantly reducing healthcare-associated MRSA infections, the study says.
How can two similar studies bring back two very different conclusions?
"The biggest difference between the two studies was the scope of surveillance," says Ari Robicsek, MD, one of the researchers who worked on the Evanston Northwestern Healthcare study. "Theirs was unit based--it screened only 50 percent of surgical patients at a very large general hospital."
Certainly, the two reports--which appear to be conflicting--haven't done much for settling the debate about the best way to control MRSA. But if you look closely at the two studies, they do, in fact, point to the idea of widespread testing as a way to combat the spread of MRSA. The results gathered by Swiss researchers, who studied only a portion of patients admitted to the hospital in one particular department, are similar to those gathered by physicians at Evanston Northwestern Healthcare when only screening patients admitted to its ICU. It wasn't until Evanston Northwestern started universally testing that the real difference was apparent.
Robicsek says when a hospital only screens specific units, it runs the risk of missing a large number of patients in other departments that are infected by or carry the disease, allowing the bug to metastasize further. Screening all incoming patients makes sure that all cases of MRSA are identified immediately, reducing the time that a patient suffers with the infection and the cost of treating it.
But while universal screening has worked for Evanston Northwestern Healthcare, Robicsek is hesitant to say that every hospital should start universal screening immediately. He recognizes that the Evanston Northwestern study is the first to report on whole-house surveillance.
"When a hospital needs to make a risk assessment, they need to look at how much MRSA disease they are actually seeing," he says. "If a large portion of patients who develop MRSA were those that were not known to have MRSA, then that center would benefit from widespread screening."
More hospitals are moving toward universal testing, but the conflicting appearance of these two studies is sure to create further division in the industry. Unfortunately, it's not a topic on which we can all agree to disagree. MRSA is running rampant in our hospitals and at some point, we'll have to find a solution that works for our budgets, our staff levels, and most important, our patients.
A second wave of healthcare provider consolidation is on the horizon, rivaling what occurred in the 1990s and is guaranteed to bring a new round of challenges and opportunities for providers across the country. Although the number of mergers and acquisitions has been modest for the past five years, six key environmental forces are converging to create a new tidal wave of consolidation.
Insurance industry consolidation. Consolidation in the health insurance industry is creating fewer, larger companies and an increasing imbalance of power between these large companies and the fragmented providers with whom they negotiate contracts.
Tightening capital markets. While the capital needs of providers are growing rapidly, the worsening of the overall industry balance sheet and poor national credit situation, such as the subprime crisis, bond insurer poor financial performance, means that capital access will tighten and be less available to many.
Expense increases outpace reimbursement. Continuing inflation and flattening public and private payor reimbursement, combined with escalating uncompensated and undercompensated care, will undermine the financial situation of vulnerable organizations.
Workforce shortages. Growing workforce shortages combined with the changing recruitment markets, favor larger, well-heeled organizations that can compete for personnel in a broader market.
Physician practice dynamics. Physician shortages and the fact that physicians entering practice want employment, either by hospitals, systems, or large medical groups, also favor the larger organizations that can support such structures and put smaller hospitals at a substantial disadvantage.
Large number of financially fragile providers. The growing gaps between the financially strong and weak will widen with a disproportionate impact on small, inner-city and rural organizations. The inevitable consequence is that failures and consolidations will escalate.
In this more volatile environment, some leaders can position their organizations as consolidators, while many others must be realistic about their likelihood of survival if they go it alone.
Most health systems have flourished for the past several years, benefiting from a generally healthy economy, both inside and outside of healthcare, and a return to sound business fundamentals. Marginal operations have been pruned, focus has returned to core businesses, and a number of years of solid performance have strengthened these organizations.
In the next few years, many will have the opportunity to become a consolidator--either locally or nationally.
Can or should your organization be a consolidator?
Part of the answer lies in the impact of market forces in your community and region. How consolidated are and will be the insurance companies? How able is your organization to manage the capital access situation? What is the underlying financial strength of your hospital or system?
The nature of the opportunities available will be another important variable. Perhaps of greatest importance when deciding whether to be a consolidator is your ability to scrutinize each deal to see if it brings clear, significant revenue growth and expense reduction benefits. Unlike the last wave of consolidation in the 1990s, speculative, hypothetical benefits or the lack of vigorous pre-merger planning and post-merger implementation could lead to failure rather than just underperformance.
For organizations unable to take on the consolidator role, the issue will be one of survival and, if so, in what form. Healthcare organizations tend to avoid giving up their independence and autonomy until the organization is bankrupt or nearly so. Under these circumstances, attracting a partner can be grueling and reversing the organization's downward spiral, even if a partner exists, can be nearly impossible.
Weaker organizations must seek partners while they still have value. Nonprofit hospitals should emphasize continued service to their communities--not autonomy or protecting individual facilities. Continuance of mission is the essence of responsible governance. By recognizing when to come in from the cold, providers maintain some negotiating leverage in merger and acquisition situations and their missions are much more likely to survive in a reasonable form.
As systems grow and expand over the next five to 10 years, the industry must manage this change in a more business-like manner than the previous wave of consolidation. To maximize the chances for success, providers should drive toward six main categories of benefits:
Capital rationalization and access
Cost reduction
Access to scarce personnel and expensive technologies
Revenue enhancement
Quality improvement
Improved care for the vulnerable
Ensuring that management processes are in place to secure these benefits, post-merger and acquisition, means that this next surge of consolidation, while disruptive and unsettling, could ultimately lead to stronger, healthier, sustainable healthcare organizations that are better suited for meeting community needs.
Alan M. Zuckerman, FACHE, FAAHC is president of Health Strategies and Solutions, Inc. in Philadelphia, PA. He can be reached at azuckerman@hss-inc.com.
