Kindred Healthcare, Inc., the Louisville, KY-based long-term healthcare services provider, will acquire RehabCare Group, Inc. in a $1.3 billion deal that will create the nation’s largest rehabilitation services company, the two companies announced jointly on Tuesday.
When the merger is finalized, the combined company will generate $6.2 billion in annual revenues, with operations in 46 states, including 118 long-term acute care hospitals with 8,492 licensed beds, 226 nursing and rehabilitation centers with 27,442 licensed beds, 121 inpatient rehabilitation hospitals, and 1,808 hospital, nursing center and assisted living rehabilitation therapy services contracts, the two companies said.
“The expansion of our size and scale and the opportunities to integrate RehabCare's LTAC and IRF hospitals and rehabilitation therapy contract business with our operations will create a stronger company both nationally and locally and create value for all of our constituents in the communities we serve,” said Paul J. Diaz, president/CEO of Louisville, KY-based Kindred.
“We are particularly excited about the opportunity to add RehabCare’s services in our cluster markets and inpatient rehabilitation services to our service offerings. Together with our growing home care and hospice businesses, the merger offers our patients an expanded continuum of services and the opportunity for us to ‘continue the care’ for our patients and residents through an entire episode of treatment and recovery,” Diaz said.
The merger agreement was unanimously approved by the board of directors of both Kindred and RehabCare. Two members of the RehabCare board will join the Kindred board when the deal is finalized.
Shareholders of St. Louis, MO-based RehabCare will get $26 per share in cash and 0.471 of a share of Kindred common stock, which the two companies said equates to about $35 per share.
“Our combination with Kindred delivers significant value to our stockholders and provides an opportunity to share in the future growth of the combined company,” RehabCare President/CEO John H. Short said. “We share the same commitment to delivering leading-edge post-acute care that improves lives, and we expect our patients, healthcare partners and professionals to benefit from the blending of our organizations.”
Kindred expects to issue approximately 12 million shares in connection with the transaction. The aggregate value of the pending transaction approximates $1.3 billion, including approximately $400 million of existing indebtedness.
The deal is expected to be finalized by June 30, but must still be approved by stockholders of both companies, and cleared by federal regulators.
Eight Miami-area nurses were sentenced to prison and ordered to pay hundreds of thousands of dollars in restitution after pleading guilty to their role in an $18.7 million Medicare home healthcare fraud scheme, the Department of Justice said.
The nurses were originally indicted in July 2010, along with Jorge Dieppa, MD, who awaits trial on charges of healthcare fraud, and making false statements related to Medicare payments.
According to prosecutors, the Miami-based healthcare agencies ABC Home Health Inc. and Florida Home Health Care Providers Inc. were owned by the nurses, and allegedly referred Medicare beneficiaries to Dieppa for prescriptions, medical certifications and care plans for therapy and home health services. ABC and Florida Home Health billed Medicare $18.7 million for services that were either medically unnecessary or never provided.
The eight nurses each previously pleaded guilty to one count of conspiracy to commit healthcare fraud and were sentenced in US District Court:
Diana Sanabia, 36, RN, was sentenced to 30 months in prison, three years of supervised release and ordered to pay $594,000 in restitution;
Daisy Santos, 43, RN, was sentenced to 30 months in prison, three years of supervised release and ordered to pay $699,000;
Roberto Rodriguez, 44, RN, was sentenced to 30 months, three years of supervised release and ordered to pay $603,900;
Marlene Magadan, 36, RN, was sentenced to 24 months, three years of supervised release and ordered to pay $334,200;
Maria Perez, 49, RN, was sentenced to 18 months, three years of supervised release and ordered to pay $180,600;
Alberto Alvarez, 55, RN, was sentenced to 15 months, three years of supervised release and ordered to pay $101,800;
Yanisley Chao, 32, LPN, was sentenced to 5 months, two years of supervised release and ordered to pay $66,800;
Leonardo Malagon, 40, LPN, was sentenced to 5 months, two years of supervised release and ordered to pay $65,900.
According to plea documents, Perez and Chao worked for Florida Home Health; Santos, Magadan and Malagon worked for ABC; and Sanabia, Rodriguez and Alvarez worked for both ABC and Florida Home Health. They falsified patient files for Medicare beneficiaries to make it appear that the beneficiaries qualified for services from Florida Home Health or ABC that were prescribed by Dieppa. In fact, the nurses knew that the services were not medically necessary and /or were not rendered, DOJ said.
Sanabia and Santos also recruited Medicare beneficiaries for the agencies and received kickbacks for the recruitments, even though the pair knew that the beneficiaries they recruited did not qualify for the home health services, DOJ said.
Co-defendant Alfredo Zayas, 76, a Medicare beneficiary who pleaded guilty to one count of conspiracy to commit healthcare fraud, was also sentenced to two years of probation. Zayas solicited and accepted kickbacks and bribes for allowing his Medicare number to be used to bill Medicare for the bogus treatments, DOJ said.
Sanabia, Santos, Magadan, Perez, Rodriguez, Alvarez, Chao, Malagon and Zayas were responsible for fraudulently billing to Medicare the following approximate amounts, respectively: $594,000, $699,000, $381,100, $180,600, $603,900, $101,800, $66,800, $65,900 and $23,800, DOJ said.
The sentences were imposed by U.S. District Court Judge Ursula Ungaro in Miami.
Since their inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 850 individuals who collectively have falsely billed the Medicare program for more than $2.1 billion, DOJ said.
Turnover among first-year nurses remains a huge cost driver and source of frustration for hospital managers. It's hard enough to find these skilled clinicians, and even more annoying that they quit, just when they should be settling into their new careers. That leaves harried HR staff to start the process anew and with no more assurances of retaining the next new recruit.
Beyond the hard-and-fast cost of finding and on-boarding replacements or hiring temps, first-year nurse turnover impacts patient care. It also signals larger workforce management issues, most notably a failure to effectively engage employees and sell them on the mission.
There are theories about why first-year nurses quit. Perhaps some of these new nurses weren't trained well in school, a cold fact that comes home quickly in the life-and-death hospital setting. Some new nurses probably have unrealistic expectations that collide with on-the-job realities. Some nurses get better offers elsewhere for their high-in-demand skills. Maybe, just maybe, your hospital is not a good place to work. Whatever the reason, the problem persists.
If it's any consolation, Shebani Patel, a director with PwC Saratoga, the workforce research arm of PricewaterhouseCoopers LLP, says retaining new workers is a challenge not unique to healthcare.
"First year turnover tends to be the most problematic length of service for most organizations across most industries," she says. "What is occurs is the assimilation process -- that is really critical for organizations -- but sometimes the goal is just filling positions and getting people in the door and the steps aren't always done in the best way possible."
"With this economy, what we have experienced is a nurse gets an offer they are going to take it. But if there is a lot of competition in the area, they are going to take the job to get the experience and then jump at the next best offer," Patel says.
PwC Saratoga found that first-year nursing turnover can run as high as 60% in some of the 40 healthcare systems that participate in its Human Capital Effectiveness Benchmarking Report. The median first-year turnover was 17.1% for the report's "best practices" health systems, and PwC Saratoga interviewed them to find a common theme for their relatively successful nurse retention.
Here's what they found:
1.Schedule competency-based interview processes/selection testing that includes cultural fit.
Best practice hospitals use competency-based interviews/selection testing based on a standard set of questions to identify qualities and skills. One system grades "B" or "C" level candidates for certain roles but must hire only "A" candidates for others. These systems have found a correlation between those who meet the requirements of the upfront selection process and lower turnover.
Successful health systems also are increasingly aware of the importance of creating a good fit along cultural and ethical lines. The candidate assessment includes behavioral questions and bringing other nurses in for a team interview. One system job shadows during the interview to give candidates a firsthand view of the work environment and culture.
2. Build relationships with nursing schools and a robust nurse resident program.
Hospitals with nurse resident programs swear by them. Nurses hired from these programs are generally strong performers because the systems assess their clinical performance before hiring them. These nurses are also less likely to leave because they are familiar with the culture. One health system fills most of its nursing slots from its nurse resident program, which pays for participants' tuition. The program begins after the first quarter of school and offers flexible hours. New nurses attend orientation and are partnered with preceptors. Another system offers outreach to nursing graduates, including a forum for nurse graduates to network and stay connected as they look for jobs. The system beats competitors by strengthening its pipeline of potential candidates and developing its employer brand.
3.Conduct extensive orientation followed by employee feedback.
New nurses are encouraged to maintain contact with and provide feedback to human resources staff through orientation programs that last up to a full year. Orientation may be customized by department/unit, and touch points typically occur after 30/45 and 90 days, six months, and a year. One system offers a week of orientation and follow-up with the same group of employees at 45 days and 90 days. At 45 days, nurses complete a satisfaction questionnaire. Another system conducts "re-interviews" at three and 10 months to ensure nurse satisfaction and fit. One system hosts reunions for recent hires at four months and a year and offers off-site retreats by nursing unit. Another system has recent hires lunch with the hospital president after one month and one year.
4.Implement new hire support programs.
Systems link new nurses to non-supervisor "buddies" who provide confidential support and guidance. One system offers a nurse retention contact on HR staff who provides a "safe haven" where employees can air concerns.
5.Track and measure criteria that to drive accountability.
Successful systems use metrics to drive retention. One system tracks data on turnover, engagement, and patient satisfaction on a unit level, and will intervene for units that do not meet the metrics. Another system measures key performance indicators that reflect retention, such as patient satisfaction. Managers select indicators each year, and attainment is tied to a bonus-sharing program.
Patel says accountability is a common theme for all hospitals with high retention rates. "There is a drive to be measurement oriented," she says. "Management owns this. They believe that their management is a huge contributing force toward retaining talent."
Obviously, different hospitals face different challenges, but Patel says good management has been shown to overcome outside pressures beyond the hospital walls. "I talked to organizations – and not just in healthcare – where there is high turnover versus those who have a low turnover and you can definitely tell there is a difference between the programs," she says. "The way they speak about their programs, the depth of their programs and how they manage the new hires, there is a difference."
Hospital job growth was flat in January, with only 700 payroll additions reported in the sector for the first month of 2011, Bureau of Labor Statistics preliminary data shows.
Overall, the healthcare sector – everything from hospitals to podiatrists' offices to kidney dialysis centers – created 10,600 payroll additions in January, which is half the average of more than 22,000 new healthcare jobs created each month in 2010. Ambulatory services continued to be the main catalyst for job growth in healthcare, recording 8,000 payroll additions in January. Ambulatory services accounted for 160,200 of the 265,800 payroll additions in the healthcare sector in 2010, while hospitals created 50,100 for the year.
January's preliminary totals are in stark contrast to December's job growth numbers. Healthcare recorded 35,700 payroll additions in the last month of 2010, including 8,000 hospital jobs, and 20,600 ambulatory healthcare services jobs.
BLS data from December and January is preliminary and may be considerably revised in the coming months.
Overall, the healthcare sector employed 13.9 million people in January, including 4.7 million jobs at hospitals, 6 million jobs in ambulatory services, and 2.3 million in physicians' offices, BLS preliminary data show.
The larger U.S. economy gained 36,000 jobs in January and the nation's jobless rate fell from 9.4% to 9% for the month as the number of unemployed people decreased by 600,000 to 13.9 million. The number of long-term unemployed - people jobless for 27 weeks or longer – fell from 6.4 in December to 6.2 million in January and accounted for 43.8% of the unemployed, BLS preliminary data shows.
Even with the relatively slower job growth in January, healthcare has been one of the few areas of steady job growth during the recession and slow recovery, averaging 22,150 new jobs each month in 2010, and creating 828,900 jobs since the recession began in December 2007. In 2009, healthcare created 215,300 payroll additions, including 25,700 hospital payroll additions, and 138,700 payroll additions in ambulatory healthcare services, BLS data show.
The relatively slow job growth in the healthcare sector in January comes even though The Conference Board reports that online job ads for healthcare practitioners and technical workers surged in January by 78,500 listings for the month, and ads for healthcare support jobs also grew by 16,600 listings. Healthcare jobs led a strong first month of 2011 that saw 438,000 new job listings in the overall economy, The Conference Board reported.
Call them a Medicare rogues' gallery or a Fraud Hall of Shame. Federal prosecutors just call them 'Wanted.'
The Office of the Inspector General for the Department of Health and Human Resources has for the first time issued a Most Wanted Fugitives list for Medicare fraud. The Top 10 suspects – representing the worst of the worst from a list of 170 fugitives -- are allegedly responsible for about $124 million in fraudulent claims against the federal healthcare program, OIG said.
Inspector General Daniel R. Levinson said he hopes the Top 10 list will draw public attention to the crime. "With our Most Wanted Fugitives List, OIG is asking the public's help in tracking down fugitives. The public has a stake in the fight against fraud, waste, and abuse," Levinson said.
The Most Wanted Fugitives List on the OIG Web site includes photos and profiles of each featured fugitive. The site includes an online fugitive tip form and the OIG hotline number for reporting fugitive-related information in English or Spanish, 24 hours a day, 365 days a year. The site will show when a fugitive's status changes, including when he or she is arrested.
"Individuals who steal from federal healthcare programs and then flee from the consequences of their crimes must be held accountable. We hope our new Web page will encourage the public to help us apprehend these fugitives," said Gerald T. Roy, OIG Deputy Inspector General for Investigations.
The 10 people on the most wanted list have allegedly cost taxpayers more than $124 million in fraud, OIG said.
Suspects on the list include:
"The Benitez Brothers," who, working through their Miami-area HIV infusion clinics, are accused of submitting fraudulent claims to Medicare totaling about $110 million. OIG alleges that the services for which Carlos, Luis, and Jose Benitez billed were medically unnecessary or never administered.
Leonard Nwafor, and co-conspirators, who are accused of billing Medicare for $1.1 million and collecting $525,000 in fraudulent claims for durable medical equipment, including motorized wheelchairs, scooters, and hospital beds. This investigation was led by the Medicare Fraud Strike Force, including OIG investigators, which was created to identify and prosecute fraudulent DME companies and laboratories in the Greater Los Angeles area.
Susan Bendigo who is accused of billing Medi-Cal, California's Medicaid program, for $17.1 million, $10 million of which she actually collected. Working as director of nursing for a company providing nurses for home health agencies, Bendigo is said to have sent unlicensed nurses to treat Medi-Cal patients, though she knew Medi-Cal required licensed nurses to perform this work.
Starting salaries for female physicians are much less than those of their male counterparts, and the gender gap is widening by the year, regardless of the medical specialty, a study in Health Affairs finds.
The disparity in starting salaries has been growing steadily since 1999, increasing from a difference of $3,600 in 1999 to $16,819 in 2008. This gap exists even after accounting for gender differences in determinants of salary including medical specialty, hours worked, and practice type, the study found.
The authors based their conclusions on survey data from physicians exiting training programs in New York State, which has more residency programs and resident physicians than any other state. The physician survey sample included 4,918 men and 3,315 women.
In 1999, new women physicians earned $151,600 on average compared to $173,400 for men—a 12.5% salary difference. That difference grew to nearly 17% by 2008, with women starting out at $174,000 compared to $209,300 for men, the study found.
Women had lower starting salaries than men in nearly all specialties, said study lead author Anthony Lo Sasso, a professor and senior research scientist at the School of Public Health of the University of Illinois at Chicago.
“It is not surprising to say that women physicians make less than male physicians because women traditionally choose lower-paying jobs in primary care fields or they choose to work fewer hours,” Lo Sasso said. “What is surprising is that even when we account for specialty and hours and other factors, we see this growing unexplained gap in starting salary. The same gap exists for women in primary care as it does in specialty fields.”
The differences in pay persist even when adjusting for differences in work hours, specialty choice, practice location, and numerous other factors. Potential reasons that cannot be ruled out include an increase in gender discrimination and that women are not as skilled as men at negotiating salaries, the study said.
Lo Sasso said the divergence may reflect the fact that women physicians want greater flexibility and family-friendly benefits, such as not being on call after certain hours. He said women may be negotiating these conditions at the same time that they are negotiating starting salaries. “It may be that lifestyle factors are increasingly important to newer physicians. It could be that women in particular want to have more of a lifestyle balance in their medical careers,” he said.
Women represent nearly half of all medical students and are projected to make up about one-third of all practicing physicians at the beginning of this coming decade. Historically, women have disproportionately chosen primary care fields. But the percentage of women entering primary care dropped from nearly 50% in 1999 to just over 30% in 2008. Despite entering higher-paying specialties, the widening gap in pay persisted. For example, the study found that:
Female heart surgeons were paid $27,103 less on average than males.
Female otolaryngologists made $32,207 less than males. Women specializing in pulmonary disease made $44,320 less than men.
Lo Sasso said physicians and specialty groups need to understand what is motivating the gender gap in physician pay and address it, especially given the increased need for physicians, particularly in the primary care field. He said policy makers and physician practices should reconsider how to attract providers, the structure of working arrangements, and how to pay providers.
Most commercial health insurance markets in the United States are dominated by one or two health insurers, according to report this week by the American Medical Association.
The 2010 edition of Competition in Health Insurance: A Comprehensive Studyof U.S. Markets found that 99% of health insurance markets in the U.S. are “highly concentrated,” based on the 1997 U.S. Department of Justice and Federal Trade Commission Horizontal Merger Guidelines. This indicates a significant absence of competition among insurers. In 48% of metropolitan statistical areas, at least one insurer had a market share of 50% or more, AMA reported.
“The market power of health insurers places physicians and patients at a significant disadvantage,” said AMA President Cecil B. Wilson, MD. “When insurers dominate a market, people pay higher health insurance premiums than they should, and physicians are pressured to accept unfair contract terms and corporate policies, which undermines the physician role as patient advocate.”
Robert Zirkelbach, press secretary for America’s Health Insurance Plans, disputed the findings. “Competition is vigorous among health plans across the country,” he said. “They operate in highly competitive markets in which consumers have numerous choices among plan types and insurers. Moreover, research examining competition in healthcare markets increasingly points to provider consolidation as a significant factor contributing to rising healthcare costs.”
AMA said the concentration of health plans is in stark contrast to that of physicians, who it said are the least concentrated segment of the health care sector, with 78% of office-based physicians working in practices with nine physicians or less. Most of those are in either solo practices or practices of two to four physicians.
“The market power of health insurers continues to prompt anti-competitive concerns among physicians,” Wilson said. “To help restore a competitive balance to health insurance markets, the AMA urges the federal and state agencies to prohibit harmful insurance company mergers and adopt policies that would level the playing field between small physician practices and large insurers.”
Zirkelbach said an analysis by AHIP of last year’s AMA study was beset with errors of fact and methodology. “For example, the AMA data exclude some types of self-funded plans, a large and growing portion of the market, and show significantly higher market concentration than data available from the National Association of Insurance Commissioners,” he said. “Moreover, a simple search on the new HealthCare.gov shows that in every state, families and employers have multiple choices of both insurance plans and types of coverage.”
Zirkelbach said that AHIP’s analysis showed that the states that are often cited as examples of high market concentration actually have some of the lowest premiums in the nation.
A not-for-profit Medicaid managed care plan in Ohio agreed this week to pay that state and the federal government $26 million to resolve whistleblower allegations by former employees that for six years the plan falsely billed for special needs assessments and case management services that weren’t provided, the Department of Justice announced.
CareSource, and its related CareSource Management Group Co. and CareSource USA Holding Co., acknowledged the settlement in a statement but denied any wrongdoing. The company is headquartered in Dayton, and provides managed care benefits to about 880,000 Medicaid and Medicare Advantage beneficiaries in Ohio, Indiana and Michigan.
The settlement resolves allegations that between January 2001 and December 2006, CareSource knowingly failed to provide required screening, assessment and case management for adults, and children with special healthcare needs, even though the plan billed and was paid millions of dollars for those services, state and federal prosecutors said.
CareSource allegedly submitted false data to the state of Ohio so that it appeared they were providing the required services to improperly retain incentives received from Ohio Medicaid and to avoid penalties, prosecutors said.
“Cash-strapped Medicaid programs, such as Ohio’s, can ill afford conduct such as this, designed to improve this company’s bottom line at the expense of a program benefitting the poor and disabled,” said Tony West, assistant attorney general for the Civil Division.
CareSource President /CEO Pamela Morris said the plan denied the allegations throughout the litigation process. “In the end, we chose to reach a financial settlement, bringing the matter to a close, and continuing to focus on our mission of making a difference in the lives of underserved people by improving their healthcare,” she said.
Morris said that because it is a mission-driven organization, CareSource “has always dealt with our relationship with the State of Ohio and the management of Medicaid funds with the highest integrity.”
“We have proven our not-for-profit model works in a growing for-profit health care environment. Our model is highly member-focused and demands being great stewards of taxpayer dollars spending more than 90% of every dollar we receive on quality healthcare for our members, while saving the State of Ohio hundreds of millions of dollars and providing predictability of budget. We are extremely unique in the industry,” Morris said.
The settlement resolves a federal whistleblower action filed by two former employees at CareSource, Laura Rupert and Robin Herzog, who will receive a $3.1 million share of the federal portion of the settlement.
The Justice Department has used the False Claims Act recover approximately $5.3 billion since January 2009 in cases involving fraud against federal healthcare programs. Total recoveries in False Claims Act cases since January 2009 have topped $6.8 billion.
Blue Cross and Blue Shield of Illinois and the Illinois Hospital Association have launched a four-year joint initiative to reduce some of the nation's highest hospital readmission rates, the two organizations announced Tuesday.
"This collaboration leverages IHA's experience and relationships with hospitals, the expertise of the academic community and resources from BCBSIL," said Scott Sarran, MD, BCBSIL vice president/CMO. "We expect this collaboration to have a positive impact on improving the way hospitals, physicians, and other healthcare providers transition patients to outpatient care in the community."
The Commonwealth Fund State Scorecard 2009 ranked Illinois 44th in the nation for its high rate of Medicare 30-day readmissions as a percentage of admissions. The state had a readmissions rate of 20.3%, an increase from 19.6% in 2007. Nationally, the median is 17.5% and the average for the top five states is 13.8%.
In 2009, there were more than 50,000 readmissions to Illinois hospitals, with each patient spending, on average, five additional days in the hospital. Sarran said improving the Illinois readmission rate to the current national average has the potential to save or avoid costs of approximately $150 million dollars in the first year.
BCBSIL expects to invest up to $1 million a year over the next four years to reduce preventable hospital readmissions. "Our commitment to this program is part of our ongoing efforts to work with health care providers to improve the quality of care and slow increasing health care costs," Sarran said.
More than 200 Illinois hospitals have pledged to reduce readmissions by the end of 2013 with the goal of raising the state's performance from the bottom quartile to an upper quartile, IHA President Maryjane A. Wurth said.
"Over time, these savings will go back to the taxpayers and businesses in Illinois, as the state (Medicaid), the federal government (Medicare), employers, and individual policy holders in the form of lower healthcare costs," Wurth said. "More importantly will be the improved health and safety of patients, and the satisfaction hospital and physician partners receive from being able to deliver improved care."
The initiative—Preventing Readmissions through Effective Partnerships – will team with the Division of Hospital Medicine at Northwestern Memorial Hospital, and Northwestern University Feinberg School of Medicine and the Society of Hospital Medicine, to reduce readmissions by 2014, focusing on:
PREP will stress patient education—assessing a patient's needs before discharge, and making sure they have the information they need for a smooth transition. This patient/provider partnership includes standardized discharge planning that highlight medications, follow up, pending tests, self-management instructions, and goal setting, IHA and BCBSI said.
Duke University Health System, Inc. and LifePoint Hospitals have partnered to create "flexible affiliation options" that will range from joint ventures to outright ownership of community hospitals in North Carolina, the two healthcare providers have announced.
The joint venture -- DLP Healthcare, LLC -- combines Brentwood, TN-based LifePoint's financial resources and experience managing community-based hospitals with Durham, NC-based Duke's development of clinical services and quality measures. The partnership is one of the first between an academic health system and a for-profit hospital company, Duke/LifePoint said.
"This is a challenging time for many community hospitals as the healthcare environment undergoes significant change and costs continue to rise," said William F. Carpenter III, chairman/CEO of LifePoint Hospitals. "Duke/LifePoint has the ability to help hospitals not only weather the months and years ahead, but also prosper and offer their communities even better care."
Maria Parham Medical Center, a private, non-profit, hospital in Henderson, NC, this week signed a nonbinding memorandum of understanding that would make it the first hospital in the new network. Under the partnership, MPMC would retain 20% ownership and Duke/LifePoint would have 80% ownership, but governance would be shared 50/50, "giving the community an equal and long-term voice in the strategic direction of the hospital," MPMS said.
MPMC assets and the proceeds from the transaction would eliminate MPMC's debt, and the remaining assets -- approximately $30 million -- would create a locally governed charitable foundation to fund new programs and services in the service area, which includes north central North Carolina and southern Virginia.
"For the last year, MPMC has explored the possibilities of a partnership or affiliation that would allow us to strengthen our hospital," said W. Beverly Tucker, MD, chairman of the MPMC board, and family physician. "After lengthy consideration, the MPMC board unanimously determined that a partnership with Duke/LifePoint has the potential to bring a powerhouse of clinical and operational resources that could enhance our ability to grow and provide more services to patients."
LifePoint brings to the venture access to investment capital for new technology and facility renovations. Duke will help MPMC and other affiliated hospitals develop clinical services, support enhancing quality systems, and provide access to specialized medical services and best practices.
"Duke and LifePoint share a commitment to working collaboratively with communities, physicians and hospital staffs to optimize the availability of innovative healthcare services locally, while applying proven operational strategies that are more important than ever in the era of healthcare reform," said William J. Fulkerson, Jr., MD, executive vice president of Duke University Health System.
Jone L. Koford, president of strategic growth and development at LifePoint, said the "flexible affiliations" with other hospitals "really range from full acquisition, you could do a long-term lease of the facility, or a joint venture with the facility, like we are doing with Maria Parham."
There is no predetermined target number of hospitals that Duke/LifePoint would like to see in the partnership, Koford said. "The number of hospitals that we believe will want to consider partnership will need access to capital, will want operational expertise or resources they currently don't have, and would love to have the relationship with Duke and their reputation," she said.
"The combination of what we bring to the table, our operational excellence, our access to capital, our commitment to quality, Duke's reputation, their clinical expertise, you couple those and offer them to a stand-alone community hospital that is facing many challenges, more so in the future with health reform and the increases in regulation, and the capital commitments that will have to be made for IT, those kinds of things, they need a strong partners going forward. We believe the DLP partnership offers them the best of both worlds," she said.
Koford said LifePoint is also "in discussions" with other health systems in other states about setting up similar partnerships. "We look for those systems that have a strong market position and a very solid reputation for quality," she said.
LifePoint Hospitals operates 52 hospitals in 17 states, and specializes in community hospitals in non-urban markets where the hospital is the sole provider in most of the communities it serves. Duke University Health System has inpatient and ambulatory locations across North Carolina and surrounding areas, and has partnered with hospitals in its region to establish specialized medical services in their communities.
