Healthcare information technology giant McKesson Corp. has announced it is scheduled buy US Oncology in a cash deal valued at more than $2.1 billion.
The transaction, which is expected to be finalized by the end of the year, includes the purchase of all outstanding shares of US Oncology, and the assumption of all of the company's outstanding debts.
McKesson, ranked 14th on the FORTUNE 500, said the acquisition of US Oncology will provide oncology customers access to:
Evidence-based medicine that improves clinical outcomes and enables value-based reimbursement;
Expanded clinical expertise and research, and personalized medicine offerings;
Integrated, efficiency-enabling HIT to improve outcomes measurements, reporting, and product and inventory management;
Practice-management consultation for independent specialists;
Distribution and supply-chain expertise.
"This strategic acquisition is a logical next step in our commitment to ensure the continued vitality of community oncology, while creating value for our shareholders," said John H. Hammergren, chairman/CEO of McKesson. "The combination of US Oncology and McKesson will enhance our ability to achieve these goals in one of the most important segments in healthcare. Community oncology practices need strategic support that offers not only technology and distribution solutions, but also value-added clinical and reimbursement management services that enable them to provide the highest-quality, most efficient care to their patients. With this acquisition, McKesson will offer a compelling suite of services and solutions to community oncologists and other partners in the rapidly evolving specialty business.?
The combined McKesson Specialty Care Solutions business will be led by Bruce Broussard, Chairman/CEO of US Oncology, and will be headquartered in The Woodlands, with operations in San Francisco and throughout the country. Broussard will report to Paul Julian, executive vice president and group president, McKesson Corp. McKesson will continue to operate the United Network of US Oncology, including US Oncology’s Comprehensive Strategic Alliance, US Oncology Research, and other services under the US Oncology brand name.
"With the healthcare marketplace moving rapidly toward reimbursement based on quality and cost-effectiveness, our physician customers need access to deep clinical, operational and information technology capabilities to create integrated networks that continually enhance the quality of care in a cost-efficient manner," Broussard said. "In joining McKesson, we are building the scale and expertise necessary to empower our customer base to shape the future of healthcare."
Serving about 3,000 physician customers, the unified company is expected to accelerate investments in integrated systems that improve processes and outcomes for the delivery of more efficient care.
"The addition of US Oncology’s physician-centric business model and clinical expertise to the McKesson portfolio advances our strategy and significantly strengthens our offering for community oncology and other partners in the specialty segment," Julian said. "McKesson and US Oncology's businesses are highly complementary, providing our collective customers access to more services and solutions that will enhance their ability to deliver advanced cancer care."
Cynthia Barraca Palomata, RN, died last week after she was attacked and struck in the head with a lamp by a prisoner she was treating at the Martinez Detention Facility in Contra Costa County, CA.
Palomata was a veteran nurse who'd worked in San Francisco-area hospitals for more than 20 years. She joined Contra Costa Health Services in 2005 and had worked in the Martinez Detention Facility since then.
"She was a well respected member of our nursing staff and our hearts go out to her
family during this incredibly difficult time," says William Walker, MD, director of Contra Costa Health Services. "Staff safety is the highest priority and we continue to work closely with the Sheriff's Office to evaluate safety procedures."
Palomata was attacked in the intake area of the jail by a burglary suspect who police said had no previous history of violent behavior and who allegedly picked up the lamp and struck the nurse "without provocation or warning," even though sheriff's deputies were in the area. The inmate faces murder charges.
Regular HealthLeaders Media readers know we've touch upon the subject of workplace violence numerous times. The topic doesn't get old for us, because the incidents of violence won't go away. Bureau of Labor Statistics data for 2008—the latest figures available—show 2,890 work-related assaults at hospitals. That doesn't tell the whole story, because the data reflect only assaults that are serious enough to inflict injury and force the victim to miss at least one day of work. Other BLS data show that for every 10,000 hospital workers, there were eight workplace assaults that resulted in missed work days. By comparison, in the overall private sector, there were only 1.7workplace assaults resulting in missed work for every 10,000 workers. Last year, more than half of the 3,465 respondents to an Emergency Nurses Association online survey said they've been spit on, hit, pushed, shoved, scratched, or kicked while on the job.
The public is becoming aware of the issue, and they're getting angry, thanks to high-profile media reports of attacks like the one that killed Palomata. The publicity is a good thing. People need to know about the extent of the problem.
In the wake of Palomata's murder, there have been calls to re-examine enhanced criminal penalties for assaults against healthcare workers. California enacted a law in 1993 requiring hospitals to have a security plan in place for general acute-care hospitals, but the law did not cover prisons and jails. There is now a call to amend the law to include correctional facilities.
The California Nurses Association has weighed in too, and it's completely appropriate that they do. CNA represents the nurses at the Contra Costa Health Services, which contracts to provide inmate healthcare services. The union says its members had repeatedly called for stronger security measures, but that the health system has indicated it is not responsible for security at the detention center, and has ignored requests for security upgrades in the main hospital to include 24-hour guards, metal detectors and other security devices in the ER and psychiatric unit.
"We can no longer tolerate inadequate security measures which threaten not only RNs and other staff, but also put families and other patients at risk," said Kay McVay, RN, CAN's president emeritus, and a long-time resident of Contra Costa County.
CNA is correct to raise these concerns. So far, it's not clear what—if anything—could have been done to prevent Palomata's murder. Perhaps it was an isolated, tragic instance. However, there are just too many of these "isolated" incidents going on across the nation, and hospitals must be compelled to evaluate their security measures to ensure a safe workplace for their frontline healthcare workers.
Many will note that Palomata was killed in a jail, not a hospital. That point is irrelevant for Palomata's family and colleagues, however, and it should be for the rest of us as well. There shouldn't be a tacit lowering of standards for safety and security for healthcare providers depending upon where they practice their profession. Any hospital or health system that provides healthcare beyond the campus should make every effort to ensure that their employees are as safe there as they would be in the C suite.
"Prevention is essential for creating a safe and therapeutic environment for patients and a safer workplace for healthcare workers, and to reduce the loss of experienced staff who leave because of assaults and threats of violence," McVay said.
Ascension Health has announced plans to open a professional service center in Indianapolis, creating up to 500 new jobs by 2013.
The Ascension Health Ministry Service Center will provide support services in human resources, supply chain, finance, and accounting for the Catholic nonprofit health system's 70 acute care hospitals and more than 400 related facilities in 20 states and the District of Columbia. Ascension Health is finalizing a lease on an office building in northwestern Indianapolis that will house the new center, with a total investment in the facility of nearly $11 million.
"Bringing our capabilities together in one place to serve the national health ministry in vital support areas will allow us develop new capacity and expertise, lower our costs and improve our ability to serve overall," said Ascension Health's President/CEO Anthony Tersigni in a statement.
"Over the years," he said, "the Health Ministries of Ascension Health have demonstrated a willingness to innovate in ways that allow us to devote more resources to our Mission and service to our communities. We are very excited about the potential of this resource for our ministry, those we serve and for the community."
Based in St. Louis with 113,000 associates around the country, Ascension Health is the nation's largest Catholic nonprofit health system, and is already is a major employer in Indiana. St. Vincent Health, a 20-hospital system in Indiana that has more than 13,000 associates and 2,500 physicians, is a part of Ascension Health.
TriMedx, an Ascension Health subsidiary and healthcare equipment services company, also is headquartered in Indianapolis. In Evansville, St. Mary's Health System is a member of Ascension Health that employs 3,765, and the national system also operates an information services division in that city.
"The establishment of this new center is a key part of a larger transformational process under way within Ascension Health to standardize and synchronize systems, processes and data," said Robert Henkel, Ascension Health's president, healthcare operations/COO. "We're giving our Health Ministries new insights into their operations and enabling the sharing of best practices across our national health ministry. All of that contributes to better controlling healthcare costs."
Hiring for the center will begin in a few months, and the facility is expected to be operational in mid 2011.
The Indiana Economic Development Corporation offered Ascension Health up to $5 million in performance-based tax credits and up to $90,000 in training grants based on the company's job creation plans. Develop Indy and the City of Indianapolis offered Ascension Health infrastructure support and a training grant worth up to $300,000. Develop Indy will also support property tax abatement for Ascension Health before the Metropolitan Development Commission. Indy Partnership served as a project liaison, providing research and site selection support.
The quarterly costs to hospitals for growth in wages, salaries, and total compensation has steadily declined over the past decade and now is roughly the same as the wage, salary, and total compensation growth for all workers in the overall economy, U.S. Bureau of Labor Statistics data shows.
In the fourth quarter of 2001, BLS data shows that the cost increases to hospitals for wages and salary growth were 5.7% higher than they were in the fourth quarter of 2000. The cost of wages and salaries for all workers in the larger economy was 3.7% higher in the fourth quarter of 2001, than it was in the fourth quarter of 2000.
Since the fourth quarter of 2001, however, hospitals and the larger economy have seen the cost of growth in wages, salary and total compensation decline steadily. In the first three quarters of 2010, hospital wage and salary costs grew about 1.6%, when compared with the first three quarters in 2009, while wages and salary costs for all workers increased about 1.5% for the same period.
BLS does not provide a further breakdown of hospital wage and salary earners, who presumably could range from CEOs to environmental staff. Nor does BLS provide a monetary average or value to the cost growth data.
The growth in total compensation for hospital workers and all workers—which includes wages, salaries, health insurance, pension plans, 401(k) matches, and other perks—has followed a similar downward trend since the fourth quarter of 2001, according to BLS data.
Total compensation for employees cost hospitals 6% more in the fourth quarter of 2001 than it did in the fourth quarter of 2000, while total compensation costs for all workers in the larger economy was 4.2% higher in 2001, according to the BLS.
During the first three quarters of 2010, however, the growth of hospitals' total compensation costs for employees had slowed to 2.1% when compared with the first three quarters of 2009, and about 1.8% for all workers for the same three quarters.
The University of Michigan Health System and Physicians' Organization of Western Michigan have formed a new statewide group to help independent physicians improve access to resources, opportunities and support during the implementation of healthcare reform.
The new group—Physician Organization of Michigan—will recruit members from across the state when it becomes operational in January.
"We're very pleased to be able to expand and strengthen our abilities to support the independent practice of medicine through this relationship," says Randall Clark, MD, president of POM, an independent practice association which has 570 physician shareholders in western Michigan.
According to Ora Hirsch Pescovitz, MD, U-M executive vice president for medical affairs and CEO of UMHS, POM's aims to help independent physician members:
Improve and measure quality of the care
Monitor patients' health more effectively
Reduce or contain the growth of healthcare costs
Help physicians gain access to shared technology systems
Help patients receive primary care in their communities
Facilitate access to specialty care.
Access continuing medical education for physicians
"This concept of the right care, at the right place, and at the right time fits perfectly with our health system's goal of serving the entire state, by being available for any Michigander who needs the advanced care that U-M physicians provide," Hirsch Pescovitz, says.
UMHS includes a 1,600-member multispecialty physician group, with faculty from the U-M Medical School who practice at U-M hospitals and health centers, and at partner locations across the state. POM is the latest in a series of UMHS partnerships, which also includes the Pennant Health Alliance, a recently announced partnership among four western Michigan hospitals and UMHS.
POM members can become a "Colleague in Care," which gives them full access to a clinically integrated network of physicians with EHR, business and marketing support, and systems to track quality. In return, each Colleague in Care agrees to meet standards for ongoing education, care quality tracking and reporting, and other metrics.
"The vision is that POM will offer independent physicians and medical groups access to information technology and administrative and clinical services they need to meet the challenges of a rapidly changing environment without the need for employment by a large system," says David Spahlinger, MD, executive director of the U-M group practice and senior associate dean for clinical affairs at the U-M Medical School.
The Christ Hospital, which agreed in May to pay $108 million to resolve a whistleblower lawsuit alleging illegal kickbacks, signed a corporate integrity agreement with the federal government this week that allows the Cincinnati hospital to continue to participate in Medicare and other federal healthcare programs.
Daniel R. Levinson, Inspector General at the Department of Health and Human Services, said in a statement that the agreement resolves an investigation dating back more than one decade.
"This administrative case was resolved after the Office of Inspector General met directly with TCH's board of trustees. OIG has maintained throughout negotiations with TCH that independent monitoring was needed to oversee the hospital's compliance with Federal healthcare program requirements," Levinson said in a media release. "Once TCH's board of trustees met with OIG, we were able to successfully negotiate a CIA (corporate integrity agreement) and close the door on this multi-year investigation."
TCH was told in May that OIG was considering excluding the hospital because it rewarded cardiologists for referring patients to TCH in violation of the anti-kickback statute. TCH and The Health Alliance for Greater Cincinnati paid $108 million to resolve False Claims Act liability for the conduct.
Under the five-year corporate integrity agreement, TCH must implement compliance measures, hire an outside reviewer of its financial relationships with physicians, and be monitored by OIG. The agreement requires the trustees to annually review the hospital's compliance program and certify its effectiveness.
When the settlement was announced in May, TCH declined to enter a corporate integrity agreement. This week, however, TCH issued a statement saying it "views the CIA as further evidence of the hospital’s continued commitment to conduct its business in accordance with the highest ethical standards and in compliance with the requirements for participation in the federal healthcare programs."
The government alleged that The Christ Hospital, a 555-bed acute care hospital in Mount Auburn, OH, limited work at the Heart Station—an outpatient cardiology testing unit that provides non-invasive heart procedures—to cardiologists who referred patients to the hospital.
Cardiologists whose referrals contributed at least 2% of the hospital's yearly gross revenues were rewarded with a corresponding percentage of time at the Heart Station, where they could bill for the patients they treated at the unit and for any follow-up procedures that these patients required, prosecutors alleged.
The Department of Health and Human Services said it will make available up to $335 million in Expanded Services grants for community health centers to boost access to preventive and primary healthcare.
The Affordable Care Act grant program is the second of two major initiatives announced this month totaling more than $1 billion for community health centers. On Oct. 11, HHS said it would provide $727 million to 143 community health centers across the country for construction, expansion, and renovation projects.
The funds are specifically intended to increase access to preventive and primary health care, including dental health and behavioral health. Patients are increasingly turning to primary care providers for mental health services, even as the ranks of primary care physicians are stretched thin.
Community health centers serve nearly 19 million patients each year—about 40% of whom have no health insurance. Health centers deliver preventive and primary care services at more than 7,900 service delivery sites around the country to patients regardless of their ability to pay. Charges for services are set according to income, HHS said.
The Affordable Care Act provides $11 billion in funding over the next five years for the operation, expansion, and construction of health centers throughout the nation. Of the $11 billion, $9.5 billion will create new health centers in medically underserved areas and expanding preventive and primary healthcare services at existing health centers. An additional $1.5 billion will support major construction and renovation projects at health centers nationwide.
The expansions of sites and services are expected to help community health centers serve nearly double the number of patients they serve now, regardless of their insurance status or ability to pay.
Last month HHS announced grants totaling $320 million to fortify the primary care workforce. Of that sum, $167.3 million is for expanding primary care residency programs.
Health centers requesting grants must show how they will be used to expand medical capacity and services to underserved populations. Grant applications are due Jan. 6.
The Detroit Medical Center board voted Tuesday to delay its $417 million purchase agreement with Vanguard Health Systems until the end of the year to allow more time to complete governmental approvals.
DMC and Nashville-based Vanguard amended the definitive purchase agreement to conform it to the final vote by the DMC Board as soon as practicable, the two companies said in a joint statement. "All of us are looking forward to completing this process to bring DMC into the Vanguard family as soon as possible," said Keith Pitts, vice chairman of Vanguard.
Neither company detailed specific reasons for the delay.
DMC Chairman Steve D'Arcy said the complexity and size of the transaction have taken more time than expected. "Everyone involved is committed to getting this done quickly. We are absolutely confident this will be completed by the end of the year," he said.
The purchase agreement, signed in March, includes approximately $417 million for the sale of assets and to retire all outstanding DMC bonds and other long-term indebtedness. It also requires Vanguard to assume all DMC liabilities. Vanguard has also pledged to invest $850 million in capital improvements over the next five years at DMC hospitals, which D'Arcy has called "the single largest private investment in the city's history."
While the deal has drawn generally favorable reviews since it was announced last spring, some observers have raised concerns about the sale of Michigan's largest charity care provider to a private, for-profit company from out-of-state.
Vanguard and DMC said this week that—as an example of their commitment to the City of Detroit—they have formed a joint venture and will break ground Nov. 1 on a five-floor 105,550-square-foot Children's Specialty Center.
"The Children's Specialty Center is critical to this community. It is scheduled to open in January of 2012, but if we don't break ground before winter, completion will be delayed for months," said Mike Duggan, DMC president/CEO.
Children's Hospital of Michigan President Herman Gray, MD said the new specialty center will improve services to families who use many of the outpatient specialties currently located within the hospital.
"The new specialty center will improve the overall experience for families who require frequent outpatient visits at Children's because they will not have to navigate a large multi-story parking deck just to see the doctor," Gray said.
Complications after gastrointestinal endoscopies appear to be higher than previous estimates. However, most of the problems are minor and the rate of serious complications is lower than previously anticipated, a study in this week's Archives of Internal Medicine shows.
The overall risk of complications was two to three times higher than had been reported. However, the risk of severe complications such as perforations and bleeding, heart attacks or even death, were lower than previous studies by about half, says study author Daniel Leffler, MD, director of clinical research at the Celiac Center at Beth Israel Deaconess Medical Center in Boston.
Leffler says electronic medical records might emerge as a better way to track complications from different hospital procedures.
About 15 million to 20 million GI endoscopic procedures are performed each year in the U.S. In this study, Beth Israel Deaconess Medical Center's electronic medical records were used to monitor emergency department visits and hospitalizations of patients who had had an endoscopy within the past two weeks. Previous research shows that most post-endoscopy-related hospital visits occur within two weeks after the procedure.
The system recorded 6,383 endoscopies and 11,632 colonoscopies between March 1 and Nov. 30, 2007. A total of 419 ED visits and 266 hospitalizations took place within two weeks following the procedures. Of these, 134 (32%) ED visits were related to complications related to the endoscopies, as were 76 (29%) of the hospitalizations. Traditional reporting by physicians recorded only 31 such complications, the study shows.
Almost half of the visits were due to abdominal pain, 12% to gastrointestinal tract bleeding and 11% involved chest pain. Older patients were more likely to have complications, the study found.
Most complications were minor but the cost of follow-up care was not. The average cost per ED visit following endoscopy was $1,403 and the average cost of hospitalization for post-procedure complications was $10,123, the study reports.
The findings may help guide how doctors counsel patients following one of these procedures. "We've done a lot over the years to mitigate the risks of bleeding and perforation, and rightly so," Leffler says. "Now [that] we know of the underlying iceberg of minor complications, we can really look at those because they're a significant burden to patients and the healthcare system."
Two of three medical practices surveyed—67% of respondents—say they will either limit the number of new Medicare patients they accept or stop seeing Medicare patients altogether if Congress does not halt reimbursement cuts of about 30% that take effect by the end of the year, a survey by the Medical Group Management Association shows.
A reimbursement cut of 23.6% is slated to take effect Dec. 1, followed by an additional 6.5% cut on Jan. 1, as part of the Medicare's controversial sustainable growth rate formula.
The SGR formula has called for an across-the-board reduction in physician payment rates every year since 2002, and since 2003, through May 31, 2010, the cuts have been averted by legislative action.
"This is a situation that must be dealt with immediately when Congress returns after the elections," said MGMA President/CEO William F. Jessee, MD in a statement. "Further congressional delays jeopardize patients and the medical practices that serve them."
If no action is taken to stop the reductions, 49.5% of medical groups said that they will stop seeing new Medicare patients, and 27.5% of respondents said they would cease treating Medicare patients.
In addition, physician practices are considering other steps to address reimbursement cuts:
76% will likely delay the purchase of new clinical equipment and/or facilities;
60% will likely reduce the number of administrative support staff;
54% will likely reduce clinical staff; and
45% will likely delay purchase of electronic health records systems
Nearly 30% of practices began reducing the number of appointments for new Medicare patients last spring when Congress failed to avert Medicare payment cuts by the June 1 deadline. Congress temporarily delayed the cuts retroactively.
MGMA's survey shows the uncertainty created by the retroactive legislation has already triggered:
37% delayed purchasing electronic health records systems;
32% reduced administrative staff; and
27.5% reduced clinical staff
"The concrete actions already taken by medical groups as a result of the uncertainty created by congressional inaction have added significant barriers to quality care," Jessee said.
"Uncertainty about the future is creating an unsustainable environment for many who practice in areas with large Medicare populations."
Jessee called on Congress to block the cuts and provide an updated SGR that lasts, at a minimum, through the end of 2011. "This will provide lawmakers and the provider community time to develop a long-term solution that ensures beneficiaries have continued access to quality care," he said.
MGMA conducted its SGR survey from mid-September to mid-October, and received responses from more than 2,860 practices where 63,000 physicians practice.
