Springfield, OR-based PacificSource Health Plans has completed its previously announced $46 million acquisition of Clear One Health Plans, Inc., which becomes a wholly owned subsidiary.
Included in the acquisition are Bend, OR-based Clear One subsidiaries Central Oregon Individual Health Solutions, Inc., Trusteed Plans Service Corp., Clear Choice Properties, LLC, and Clear One Life and Health, LLC.
The acquisition, announced in December, was approved by state and federal agencies, including the Oregon Insurance Division, and the Centers for Medicare & Medicaid Services. Clear One shareholders approved the deal April 23, and will receive $26 per share in cash.
"Serving Medicare and Medicaid beneficiaries has been a longtime goal for PacificSource," said Ken Provencher, president/CEO of PacificSource, an independent, not-for-profit community health plan. "The acquisition of Clear One, with their expertise in government programs, will allow us to be a true community health plan, providing health coverage to people throughout their lives." Provencher replaces Clear One President/CEO Patricia Gibford, who retired Friday.
PacificSource employs 590 people, serves more than 259,000 policy holders, and has 6,200 employer clients throughout the Northwest. Clear One has 97 employees and covers 47,000 people, including 28,000 Medicaid enrollees, and 10,000 Medicare enrollees. The TPSC subsidiary has an additional 62 employees and covers 55,000 lives.
Staff reductions will be minimal, PacificSource said, with more than 90% of Clear One staff retained. "Our first priority is to take care of our customers, and Clear One’s talented employee team is crucial in making that happen," said Paul Wynkoop, vice president of human resources at PacificSource. "Clear One customers will continue to work with the experienced representatives they’ve come to know."
PacificSource will consolidate its Bend office, using the existing Clear One office as its Central Oregon location. A Clear One sales office in Kalispell, MT, and the TPSC office in Tacoma, WA, will remain open.
PacificSource named Peter McGarry, the insurer’s acting senior vice president of government programs, to oversee its new Medicare and Medicaid lines. McGarry is now vice president of provider network for PacificSource, and will continue in that role as he oversees the Clear One in the interim.
Clostridium difficile, a germ that causes deadly intestinal infections in hospital patients, has long been thought to be spread only by contact with contaminated surfaces. But a new study finds that it can also travel through the air. British researchers emphasized that there is no evidence that C. difficile can be contracted by inhaling the germs. Rather, they float on the air, landing in places where more people can touch them, the New York Times reports.
Home healthcare provider Gentiva Health Services, Inc. announced today that it will pay $1 billion for hospice provider Odyssey HealthCare, Inc., in an all-cash transaction valued at $27 per share.
Atlanta-based Gentiva said in a release that the acquisition will create the largest hospice and home healthcare providers in the nation, operating in 30 states with an average daily patient census of 14,000. Based on the two companies' fiscal 2009 financials, the merged companies anticipate more than $1.8 billion in annual revenue, comprised of 60% in home healthcare revenue and 40% in hospice revenue.
"The combination of the two companies clearly positions us as a leader in both home health and hospice care in the United States," said Gentiva CEO/President Tony Strange, in a prepared statement. "The two companies share similar geography between Gentiva's home health operations and Odyssey's hospice operations, with very little overlap between the two companies' hospice programs."
Odyssey President/CEO Robert A. Lefton said the two companies operate "complementary businesses that are positioned for continued leadership in the hospice industry. We believe Gentiva shares our commitment for compassionate, personalized care, and we look forward to better serving our patients and their families with the enhanced resources and depth of the combined company."
The deal was unanimously approved by both companies’ boards, and Odyssey’s board recommended that shareholders approve the acquisition. The deal is expected to close in the third quarter of 2010, subject to standard closing conditions. Gentiva will raise $1.1 billion in new debt to fund the purchase and to refinance existing debt, and expects the deal to be accretive to adjusted earnings per share, exclusive of one-time costs, within the first year after closing.
National Nurses United at its founding convention last December vowed to create a unified agenda and push for staffing ratios at every local affiliate. They're making good on that pledge in Minnesota, and they are showing themselves to be formidable. Pay attention to this fight, because it may soon come to a hospital near you.
Last week, 12,000 members of the NNU-affiliated Minnesota Nurses Association at 14 Minneapolis-area hospitals overwhelmingly voted to authorize a one-day walkout on June 1 unless their contract demands are met. Linda Hamilton, president of the MNA, says the fight is about patient safety, not money.
"What are we fighting for? The simple answer is this: We're fighting for you. We're fighting for any patient who ever walks through the doors of one of our hospitals," Hamilton wrote in a May 15 editorial in the Pioneer Press.
"The math doesn't lie: The thinner nurses are spread in hospitals, the greater number of patients who die… Despite what the Twin Cities hospital systems want readers to believe, this contract fight is not about economics. For nurses, this is much more personal than a paycheck or a pension benefit. This is about our patients," Hamilton wrote. "Everybody knows a nurse, and everybody knows nurses are not greedy."
Hamilton may be sincere. Or, you can argue that staffing ratios are just a clever way for nurses' unions to protect jobs and increase membership under the guise of "patient safety." Whether or not a specific level of nurse staffing has any affect on patient safety or quality of care is one of the most hotly contested issues in healthcare.
There is also the blatant contradiction of a walkout in the name of patient safety. How can the MNA say that staffing ratios are critical to patient safety, and then threaten to abandon the patients they claim to be "fighting for?" Who bears the responsibility if a patient is harmed by this walkout? Is this about patient safety, or isn't it?
Still, Hamilton's argument is compelling for the general public because the union has made its grievance a fight for the little guy. The cause of patient safety is something that resonates with everyone. Who hasn't been either a patient or visited a loved one in a hospital, in pain, at their most vulnerable? This chord strikes deep.
The local news videos of rank-and-file MNA nurses marching in front of their hospitals, wearing their uniforms, waving picket signs, and demanding patient safety gets prime air time. Nice visuals! Very powerful!
Hamilton skillfully works the corporate greed angle when she complains that the six "nonprofit" (quotations hers) health systems made a combined $700 million in profits during recession-wracked 2009, and spent money on huge executive pay hikes and frivolous projects that add nothing to patient care.
The 14 Twin Cities hospitals have mounted their own media counteroffensive, and they've done an admirable job. They make themselves available to the media. They've set up a website and posted the union's contract demands with each health system, and each health system's counter-offer. They've banded together to get their message out, using amiable spokeswoman Maureen Schriner to quickly address media queries. (Their first spokeswoman was fired earlier this month after local news reported that she had pleaded guilty in 2006 to the misappropriation of about $15,000 at a South Dakota hospital. D'oh!)
Schriner's arguments are also compelling, but they're harder to fashion into an easily digestible sound bite. She says full-time nurses average about $79,000 a year plus benefits at the 14 hospitals, which is hardly chump change. She notes that Minnesota hasn't needed strict staffing ratios to score among the best states in the nation when it comes to patient safety, quality outcomes, and efficiencies. "Minnesota is a national leader. We have a reputation for quality patient care and innovative initiatives on patient safety," Schriner says. "For us to go to a national standard, why would we want to do that? We are above the national standards in so many areas already. We want to look to the future."
Technology is another issue.
"The union is asking for the contract to say you cannot introduce any new technology if it is going to reduce staff," Schriner says. "Of course we want to introduce new technology if it's going to benefit patients. Is the deciding factor of whether or not we use technology based on how it affects (full-time employees)?"
Despite their efforts, Twin Cities Hospitals' fight for public opinion will be an uphill slog. The hospitals' message is about economics. The nurses' message is also about economics, but they're calling it patient safety—easily identifiable, succinctly encapsulated, with an immediate emotional connection with the public. Plus, they control all the compelling video.
A hospital executive in a business suit explaining proposed pension reductions as a percentage of overall payroll expenses, or a website detailing contract specifics on "mandatory low need days," "unit closures," and "flex time summer deferral bonuses" cannot compete for the public's heart with video of a uniformed nurse holding a picket sign looking earnestly into a camera and saying she is fighting for you.
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The Health Alliance of Greater Cincinnati and The Christ Hospital will pay $108 million to settle a federal whistleblower suit alleging that the hospital ran a kickback scheme with physicians to funnel patients to its cardiac care center, the Department of Justice announced.
Susan Croushore, president/CEO of The Christ Hospital, said the hospital and HAGC dispute the government's allegations, which also include violations of the False Claims Act, but signed the agreement "instead of risking a potential catastrophic judgment that could jeopardize our ability to provide service to this community."
"This settlement allows The Christ Hospital to avoid the risk of the in excess of a $1 billion award that was sought by the government," Croushore said in a prepared statement.
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 allegations violate the federal Anti-Kickback Statute, which prohibits a hospital from offering or paying, or a physician from soliciting or receiving, anything of value in return for patient referrals. Claims to Medicare and Medicaid that were submitted by The Christ Hospital as a result of the kickbacks also violated the False Claims Act, prosecutors said.
"Healthcare providers should make medical decisions based on the needs of their patients, not on the financial interests of physicians or other providers," said Tony West, assistant attorney general for the Civil Division of the Department of Justice. "We will not allow hospitals to put profits ahead of sound medical decision-making."
Harry Fry, MD, a retired cardiologist, filed the whistleblower suit against The Christ in 2003, and could collect $23.5 million from the settlement. The Justice Department investigated the allegations for five years before intervening in 2008.
Croushore said The Christ "provided necessary and often life-saving medical care by ensuring sufficient cardiologists coverage to read heart tests provided in the hospital."
"There was no challenge in this case to the medical necessity or quality of patient care. Nor did the government suffer any loss, as it did not expend any money for the services beyond standard Medicare payments," Croushore said.
The Christ Hospital declined to enter into a corporate integrity agreement that was acceptable to HHS' Office of the Inspector General. As a result, OIG did not provide a release of its administrative exclusion authorities and is still evaluating the case.
Occupational healthcare provider U.S. HealthWorks today announced the acquisition of Technimed Occupational Medicine and its two healthcare centers in Vernon, and Commerce, CA.
Financial terms of the deal were not disclosed. With the acquisition, Valencia, CA-based U.S. HealthWorks now operates 66 medical centers in California and 134 nationwide.
"We are continuing our expansion in the important California market," said Therese Hernandez, senior vice president of operations for U.S. HealthWorks. "This is an exciting acquisition for us because the addition of these two centers enables us to better serve our Los Angeles-area clients and patients."
Technimed provides injury and illness diagnosis and treatment, preventive services, pre-employment and post-offer exams and testing, and return-to-work programs.
"U.S. HealthWorks is uniquely positioned to provide a statewide network for employers, as well as having real-time electronic access for employer clients who are more and more frequently using online resources to better manage their claims," said Technimed founder David B. Landers, MD. "U.S. HealthWorks has it all, so our choice of a successor was a simple one."
The cumulative care costs of Alzheimer's disease over the next 40 years will exceed $20 trillion unless treatments to modify or delay onset of the incurable disease are discovered, an Alzheimer's Association report said.
The report, Changing the Trajectory of Alzheimer's Disease: A National Imperative examines the outlook for Alzheimer's based on a model from the Lewin Group. It projects that the number of Americans age 65 and older who have Alzheimer's will increase from the 5.1 million today to 13.5 million by mid-century if nothing is done to address the disease.
"We know that Alzheimer's disease is not just ‘a little memory loss'—it is a national crisis that grows worse by the day," said Harry Johns, president and CEO of the Alzheimer's Association, in a media release. "Alzheimer's not only poses a significant threat to millions of families, but also drives tremendous costs for government programs like Medicare and Medicaid."
Total costs of care for individuals with Alzheimer's disease by all payers will increase from $172 billion this year to more than $1 trillion in 2050, with Medicare costs increasing more than 600%—from $88 billion today to $627 billion in 2050. Medicaid costs will rise 400%, from $34 billion to $178 billion.
By 2050 48% of the projected 13.5 million people with Alzheimer's will be in the severe stage of the disease—when more expensive, intensive around-the-clock care is needed.
The news is not all bad, however. The report shows that Medicare and Medicaid could see dramatic savings—and lives could be improved—with incremental treatment improvements.
The Lewin Group model projects two scenarios: one in which a disease-modifying treatment delays the onset of Alzheimer's by five years, and another in which a hypothetical treatment slows the progression of the disease.
Under the first model, if a treatment breakthrough that delays the onset of Alzheimer's by five years could be in place by 2015:
The number of Americans 65 and older with Alzheimer's would fall from 5.6 million to 4 million in 2020, and 5.8 million in 2050—43% of the 13.5 million Americans who would have been expected to have Alzheimer's in 2050 would be free of the condition.
In 2050, the number of people in the severe stage would also be much smaller with the treatment breakthrough—3.5 million instead of 6.5 million.
Annual Medicare savings compared to current trends would be $33 billion in 2020 and climb to $283 billion by mid-century, while annual Medicaid savings would increase from $9 billion in 2020 to $79 billion in 2050.
The second model that assumes a hypothetical treatment discovered in 2015 could slow the disease's progression projected that:
In 2020 the number of people 65 and older with Alzheimer's in the severe stage would drop from 2.4 million to 1.1 million.
In 2050, severe stage cases would fall from a projected 6.5 million to 1.2 million.
Annual Medicare savings compared to current trends would be $20 billion in 2020 and $118 billion in 2050, while Medicaid savings would be $14 billion in 2020 and $62 billion in 2050.
The Alzheimer Association is calling on the federal government for more Alzheimer's research funding. "Given the magnitude and the impact of this disease, the government's response to this burgeoning crisis has been stunningly neglectful," Johns said. "Alzheimer's is an unfolding natural disaster. The federal government has sent a token response and has no plan."
The Medical Group Management Association told HHS this week that new HIPAA disclosure requirements for electronic medical records are burdensome, unnecessary, costly, and may discourage physicians from adopting the new technology.
The 2003 HIPAA Privacy Rule permits patients to request an accounting of disclosures of their protected health information. However, a new provision expands the type of information required in this accounting, and medical groups using EMR are now required to track all disclosures of patient information, including treatment, payment, and healthcare operation.
"MGMA asserts that this onerous new requirement on physician practices will be extremely difficult to achieve without an enormous outlay of resources," MGMA President and CEO William F. Jessee, MD, said in a 21-page letter to Georgina C. Verdugo, director of HHS's Office for Civil Rights. "These resources would be better utilized by physician practices to provide direct patient care. This mandate runs counter to the nation's efforts to improve patient care and reduce waste and inefficiency through administrative simplification and adoption of electronic health records."
An MGMA online survey of more than 360 practice administrators, representing more than 7,000 physicians, found most administrators had received very few accounting for disclosure requests from patients since 2003. The survey respondents expressed concerns about the cost, staff training, and computer upgrades required for compliance.
MGMA highlighted five critical concerns:
Administrative burden on physician practices;
Low volume of patient requests for accounting reports;
Burdensome and unnecessary accounting for treatment disclosures;
Burdensome and unnecessary accounting for payment and healthcare operations disclosures;
The rule's discouraging effect on physician adoption of EHRs.
While calling MGMA "a strong supporter of patient access to and protection of their health information," Jessee asked Verdugo for "significant modification to the requirements and request that OCR continue to closely monitor the industry to ascertain the impact of this regulation on physician practices."
Jessee's letter was in response to the "HIPAA Privacy Rule Accounting of Disclosures Under the Health Information Technology for Economic and Clinical Health Act; Request for Information," which was published in the May 3 Federal Register.
Health Savings Accounts began in January 2004. Since then, AHIP has conducted a periodic census of health plans participating in the HSA/high-deductible health plan market. "HSA plans continue to be an important coverage option for families and small businesses across the country," said Karen Ignagni, AHIP president and CEO, in a media release.
The census also found that:
Between January 2009 and January 2010, the fastest growing market for HSA/HDHP products was large-group coverage, which rose by 33%, followed by small-group coverage, which grew by 22%.
30% of individuals covered by an HSA plan were in the small group market, 50% of individuals covered by an HSA plan were in the large-group market, and the remaining 20% were in the individual market.
In the individual market, 2.1 million people are enrolled in HSA plans, while nearly 3 million people were enrolled in HSA/HDHP coverage in the small-group market and almost 5 million people were covered in the large-group market.
HSAs have grown steadily since first authorized in 2003. Approximately 1 million lives were covered under the plans when AHIP began surveying the market in 2005, and roughly 2 million have been added each year since.
Despite the steady growth, the makeup of the HSA/HDHP market has changed significantly since the plans were introduced. In 2005, 64% of the high-deductible plans were in the individual market, compared to only 20% in January 2010.
The group markets now account for the largest percentage of HSAs, with large groups accounting for 50% of the plans and small groups for 30%.
"What you've seen over last year is that a large percentage of growth has come from employers," says Robert Zirkelbach, spokesman for AHIP. "More employees in large and small companies are choosing to enroll in these plans. That can be a reflection of both more employers offering them and more employees showing interest."
Despite the growth, nearly 40% of people who are eligible to enroll in an HSA don't open one, according to a 2008 report from the Government Accountability Office. The report also found that HSA users tend to have much higher incomes—on average about $139,000, compared to $57,000 for other tax filers.
It is unclear if or how recently-passed healthcare reform legislation will change the patterns of consumer-directed health plan use. Although some legislators tried to include amendments that would kill or weaken HSAs, the plans made it through the reform process with only some minor changes to spending rules.
When health insurance becomes mandatory, more individuals and employers may look to HSAs to meet the new coverage requirements. In Massachusetts, where insurance is already required, HSAs/HDHPs represent 6.9% of of total private insurance plans, which is above the 4.8% average for the nation. However, Massachusetts doesn't have the highest percentage of HSA enrollees. States with the most include Vermont (13.8%), Minnesota (9.2%), Colorado (9.2%), Arkansas (8.2%), Indiana (8.1%), Ohio (8%), Louisiana and Nebraska (7.5%).
"I think it's too early to know what impact healthcare reform will have on these types of plans." Zirkelbach says. "A lot of the final requirements need to be refined through regulations that have yet to be developed, so it's hard to know what the impact will be. But clearly you've seen consistent growth in these plans and interest in them."
St. Joseph's Women's Hospital in Tampa will hold a groundbreaking ceremony on Wednesday for its $75 million expansion.
The 125,000 square feet, five-story building will house the St. Joseph's Children's Hospital's Level II and Level III-licensed Neonatal ICU, which includes 64 private rooms; and the Hinks and Elaine Shimberg Breast Center, a dedicated women's imaging center with diagnostic services including CT Scanner, Ultrasound, DEXA Scan and MRI, and 24 private patient rooms.
St. Joseph's Hospitals President/CEO Isaac Mallah and Tampa Mayor Pam Iorio will take part in the midmorning groundbreaking ceremonies, which will include tours of model rooms for the expansion.
