The federal Pension Benefit Guaranty Corp. said this week it will assume responsibility for the pension plan covering more than 9,500 workers and retirees at the shuttered St. Vincent Catholic Medical Centers in New York City.
The SVCMC Retirement Plan is 55% funded, with assets of $345 million to cover benefit liabilities of $622 million, PBGC estimates. The agency expects to cover about $267 million of the $277 million shortfall.
PBGC said the intervention was necessary because the underfunded retirement plan will be unable to make benefit payments and will be abandoned after SVCMC's assets are liquidated, its activities cease, and there is no one left to administer the plan. By taking action now, PBGC prevents further deterioration of the plan's condition.
SVCMC, serving the Greenwich Village section on Manhattan's West Side, filed for bankruptcy on April 14, and by the end of May patients had been discharged or transferred to other hospitals, and debtors began selling off SVCMC's assets.
PBGC will take over the assets and use insurance funds to pay guaranteed benefits earned under the plan, which ended Sept. 14. Retirees and beneficiaries will continue to receive monthly benefit checks without interruption, and other workers will receive their pensions when they are eligible to retire. Until the PBGC becomes trustee, the plan remains ongoing under SVCMC sponsorship.
Under federal law, the maximum guaranteed pension at age 65 for participants in plans that terminate in 2010 is $54,000 per year, or lower for those who retire earlier or elect survivor benefits. Some early retirement subsidies and benefit increases made within the past five years may not be fully guaranteed.
PBGC will not have specific information about SVCMC pension benefits until it becomes trustee of the plan, when PBGC will send notification letters to all plan participants. SVCMC retirees who draw benefits from PBGC may be eligible for the federal Health Coverage Tax Credit.
SVCMC previously filed for bankruptcy in 2005 and emerged in 2007. As part of the plan of reorganization in that bankruptcy, PBGC negotiated an additional contribution of $75 million to the retirement plan and additional payments in later years.
PBGC is a federal corporation created under ERISA. It insures basic pension benefits of about 44 million American workers and retirees in more than 29,000 private-sector defined benefit pension plans. PBGC receives no general tax money. Operations are financed by insurance premiums paid by companies that sponsor pension plans and by PBGC's investment returns.
Supply chain management company MedAssets, Inc. Tuesday announced that it will pay $850 million in cash to acquire Dallas-based rival The Broadlane Group.
The Broadlane Group serves more than 1,100 acute care hospitals and 50,000 non-acute care facilities nationwide, and MedAssets serves more than 3,300 hospitals and 40,000 non-acute healthcare providers.
Using 2009 figures, the combined MedAssets and The Broadlane Group had estimated net revenue of $508.9 million and estimated combined adjusted EBITDA of $161.8 million, the two companies said in a joint statement.
"We are bringing together some of the best contract pricing in the industry, with highly complementary technology and clinical consulting expertise from both companies," said John Bardis, chairman/president/CEO of Atlanta-based MedAssets. "Our core strategy is to enable broader clinical and operating effectiveness throughout our nation's health system, and this transaction will further enhance our ability to help hospitals and other healthcare providers drive their operating and supply costs lower, while improving patient care."
Bardis said the collective strengths of the two companies will enhance MedAssets' financial profile, with recurring revenue, cash flow and profit expansion opportunities.
Patrick Ryan, chairman/CEO of The Broadlane Group, will join the MedAssets board of directors and become president of the company's Spend Management segment when the deal is finalized by the end of 2010.
"As a combined entity, we offer a strategic opportunity for our clients to drive operating expenses down while improving quality of care," Ryan said. "The collective strengths of The Broadlane Group and MedAssets will provide expanded supply chain capabilities, and further enhance the financial improvement opportunities, both near and long-term, for our healthcare provider clients."
The agreement calls for MedAssets to purchase The Broadlane Group for approximately $850 million in cash, with $725 million to be paid at closing and $125 million to be paid in January 2012. MedAssets has obtained financing from J.P. Morgan and Barclays Capital.
MedAssets said the combined company will offer:
An industry leader that can reduce hospital costs with supply chain management operations that include group purchasing, strategic sourcing, medical device or PPI cost management, centralized procurement, supply chain outsourcing, supply chain analytics and data services, lean process consulting expertise, and a clinical workforce or labor management solution;
A group purchasing portfolio that gives providers high compliance pricing and flexible contracting for commodity products and purchased services;
Software-as-a-Service-based revenue cycle technology and revenue cycle consulting and extended business office services that increase net revenue capture and cash flow improvement for healthcare providers with low upfront cost and a return on investment in months;
Approximately 85% recurring revenue with high client retention and minimal client concentration;
A national sales force and client service teams to expand use of the combined companies' services to new and existing clients;
Strategic support to help healthcare providers stay viable in the anticipation of healthcare reform and related financial/operational challenges.
Consumers remain confused and unsure of the timing for implementation of many provisions in the sweeping healthcare reform law that was passed by Congress last spring, according to a telephone survey from the National Association of Insurance Commissioners.
When asked to choose from four dates for which the first healthcare reform provisions officially take effect, only 14% correctly identified Sept. 23, 2010.
"Our survey findings are a clear indicator that most Americans are not aware of how soon some of the early healthcare changes may impact them," said NAIC President and West Virginia Insurance Commissioner Jane L. Cline. "It's essential for consumers to understand what to expect and when to consult their state insurance departments for more information."
When asked about specific reform provisions that take effect Sept. 23, 72% of respondents knew that children with pre-existing conditions may not be excluded from coverage and 70% understood that children up to age 26 may be covered under their parents' insurance.
However, half of the respondents incorrectly believed that employers with fewer than 50 employees will have to offer coverage to employees, and 47% incorrectly thought that all health insurance plans must cover approved preventive care and checkups without co-payment.
In reality, those qualifying for Medicare will receive new preventive care benefits that will include annual visits free of copayments, but this is not mandated for all health insurance plans.
"The results show that while most consumers are well attuned to provisions specifically affecting their children's healthcare, they do not grasp the overall reform framework," said Cline. "It's promising to see this, but we feel it necessary for consumers to fully understand the changes and get informed about what to expect."
NAIC conducted the Insurance IQ Omnibus national telephone survey of 1,000 adults on Aug. 12-15. NAIC said consumers with questions about the reforms should contact their state insurance department.
There are some interesting—but hardly surprising—findings in a report from the Medical Group Management Association and the Society of Hospital Medicine that show that base salary impacts both productivity and overall compensation for hospitalists.
According to the study, State of Hospital Medicine: 2010 Report Based on 2009 Data, hospitalists who receive a lower proportion of total compensation paid as base salary tend to be high producers who are incentivized to earn more.
The report—which contains information on 443 hospital medicine groups and 4,211 hospitalists—found that hospitalists who received 50% or less of their compensation as fixed base salary reported the highest median work relative value units (wRVUs) at 5,407. Hospitalists who received 51% to 70% of their compensation as base salary performed 4,591 wRVUs, compared to 3,859 wRVUs for hospitalists who received 71% to 90% of their compensation as base salary. Hospitalists who received 91% to 100% of their compensation as base salary reported 3,571 wRVUs.
In plain English, the report shows that the more a hospitalist receives in base pay as a percentage of overall compensation, the less incentivized he/she is to add to his/her workload. Of course! They have nothing to gain monetarily by improving productivity. If anything, they are disincentivized—as any employee would be—to do more work for the same money.
Though the study is new, the findings are hardly a revelation. Actually, the findings are a hard data affirmation that medicine is a business as much as it is a healing mission. The idea of paying more money for more and better work is bigger than hospitalists, and hospitals, and the entire healthcare system. It's human nature, and it's good old incentive-laced capitalism.
Hospitalists are among the fastest growing specialties, and a growing number of them are directly employed by hospitals. With that trend in mind, MGMA/SHM say more hospitals are catching on to this dynamic and moving away from straight base compensation and towards base salary and incentive packages that emphasize productivity and quality.
"This new data will prove tremendously helpful to hospitalists and healthcare executives alike," said William Landis, MD, chair of SHM's practice analysis committee. "While it is important to keep in mind that wRVUs cannot measure every work effort, this survey data will definitely support better decisions about how hospitalist practices are resourced, and it will ultimately promote delivering the best possible care to hospitalized patients across the country."
A further breakdown of the data showed that median wRVUs were higher for physicians in practices that were not hospital-owned than for physicians in hospital-owned practices. Physicians working in practices that provide on-call coverage at night generated more wRVUs than physicians working in practices that provide on-site care at night.
Internal medicine hospitalists reported median compensation of $215,000. Family practice hospitalists received $218,066 and pediatric hospitalists reported compensation of $160,038. Compensation varied based on geography, practice teaching status, and practice size.
Eagle Hospital Physicians, an Atlanta-based practice management company, has been acquired by private equity firms Highlander Partners, LP, and Flexpoint Ford, with equity fund Health Enterprise Partners, LP, the companies have announced in a joint statement.
Financial terms of the deal were not disclosed.
Eagle, which provides hospitalist contract services, telemedicine, and hospitalist temporary staffing to hospitals in the Southeast and Mid-Atlantic regions, named Brent McCarty as its chairman/CEO. McCarty was president/COO of revenue management specialists Alpharetta, GA-based Accuro Healthcare Solutions, Inc.
"Eagle has a great history of providing powerful hospital solutions by developing and managing hospitalist programs," McCarty said. "Moving forward, we're uniquely positioned to help our hospital partners meet their inpatient physician service needs. We will be making focused investments in people, process and technology, including improving and developing quality measurement systems and focusing on telemedicine and other specialty lines of business."
Robert Young, MD, founder/CEO of Eagle since 1998, will serve on Eagle's board. Mac McCormick, MD, senior medical director with Eagle since 2003, was named COO.
"Over the past decade, Eagle Hospital Physicians has gained recognition as one of the top hospitalist companies in the Southeast, providing inpatient solutions tailored to client hospital size, location and needs," Young said. "I am excited to partner with Brent McCarty as well as Highlander Partners and Flexpoint Ford to capitalize on the strategic opportunity to continue building Eagle."
Highlander Partners, based in Dallas, and Flexpoint Ford, with offices in Chicago and New York, specialize in private equity investments in middle-market companies in the healthcare and financial services industries. Health Enterprise Partners is a growth equity fund specializing in healthcare services and healthcare IT companies. HEP's investors include 16 of the nation's largest hospital systems and health plans.
Accessible, quality care for the elderly and disabled will become more difficult to find in the coming years under the new healthcare law because of draconian cuts in payments to doctors and hospitals, according to the National Center for Policy Analysis, a free market think tank.
Medicare payment rates will fall below the rates paid by Medicaid by the end of this decade and will fall even further behind all other payers in succeeding decades.
Medicaid pays about 80% of what private insurance pays today, but the payment rates will fall to two-thirds of private payment by the end of this decade and one-half of private payment by midcentury.
Just as Medicaid patients must often seek care at community health centers and safety net hospitals today, seniors could face similar access problems in the near future.
The financial breakdown:
The annual reduction in spending will reach $2,300 per beneficiary by 2020 and $3,844 per beneficiary by 2030.
By the time today's teenagers reach the retirement age, one-third of Medicare will effectively be gone.
If seniors are allowed to make up for the cuts in Medicare spending with out-of-pocket payments—something not allowed under current law—they will need to spend 10% of the average Social Security check by 2017.
In 2060 seniors will spend half of their Social Security income to offset the decline in Medicare spending.
Unless the law is changed, Medicare beneficiaries will be pushed into a separate healthcare system and not have the same access to care as the rest of the population, the report says.
IASIS Healthcare, based in Franklin, Tennessee, has announced it will acquire Brim Holdings, Inc., the operator of Wadley Regional Medical Center in Texarkana, TX, and Pikes Peak Regional Hospital in Woodland Park, CO, in a cash-for-stock deal valued at $95 million.
The combined revenue of the two hospitals is about $120 million. The deal is expected to be finalized by the end of 2010, subject to regulatory approval, IASIS said.
Altaris Capital Partners, the majority owner of Brim Holdings, will retain majority ownership of Brim's hospital management contract and health technology businesses through a spin-out transaction just before the closing of IASIS' acquisition of Brim Holdings.
"As we partner to provide high-quality healthcare to the communities served by each of these hospitals, we will support both locations with the same corporate expertise and resources that our other facilities enjoy, including our system-wide health information technology, quality initiatives, and access to capital," said Carl Whitmer, president of Franklin, TN-based IASIS.
Wadley Regional Medical Center, a general acute care hospital with 370 licensed beds, serves a population of about 275,000. Its services include internal medicine, family practice, cardiology, cardiovascular surgery, urology, neurology, pulmonology, orthopedics, gastroenterology, radiology, and women's services. The hospital has a 24-bed trauma-ready emergency department, eight general operating rooms, two open-heart operating rooms, two cardiac catheterization labs, a GI lab, and a 23-bed outpatient surgery pavilion.
"Through a commitment to excellence and strong relationships with our new physician partners, who will retain a 27% minority ownership in Wadley Regional Medical Center, we look forward to serving Texarkana and the surrounding communities by building on the momentum that has been established at the hospital," Whitmer said.
Pikes Peak Regional Hospital, a 15-bed critical access hospital, serves a Colorado community of 32,000, with services that include internal and emergency medicine, pulmonology, gastroenterology, cardiology, orthopedics, and neurology.
IASIS owns or leases 15 acute care hospital and one behavioral health hospital with a total of 2,886 beds, and annual net revenues of $2.5 billion. The hospitals are in six regions: Salt Lake City; Phoenix; Tampa-St. Petersburg; Texas; Las Vegas; and West Monroe, LA. IASIS owns and operates a Medicaid/Medicare managed health plan in Phoenix with more than 199,000 members.
A Connecticut home healthcare executive could face up to five years in prison and a $3 million fine after admitting this week that he failed to pay the Internal Revenue Service about $1.5 million in payroll taxes, the Department of Justice says.
John Durante, 50, of Old Saybrook, CT, pleaded guilty on Monday to one count of tax evasion stemming from the multi-year scheme. Sentencing was set for Nov. 29 in U.S. District Court in Hartford, CT.
According to prosecutors, between 1994 and 2001, Durante operated several small healthcare businesses in Connecticut, including Special Attention Home Health Care Inc. and Special Attention Health Services, which repeatedly failed to pay corporate income and payroll taxes.
In August 2001, IRS told Durante he was liable for withholdings and tax obligations totaling $1.1 million.
Aware of his payment obligation, Durante in 2001 set up two new companies, South Central Connecticut Home & Health LLC, and Shoreline Home & Health LLC, using sham owners who didn’t know the companies existed. Durante took money from both companies to support his gambling habit, DOJ says.
From 2002 through 2004, South Central Health failed to pay taxes in the total amount of approximately $246,759. For three years, Durante hid his ownership of South Central Health and Shoreline Health to keep the money from possible IRS seizure. He withdrew more than $100,000 from Shoreline Health in checks made out to him or to cash, which he endorsed, DOJ says.
In addition to the possible prison time and the fine, Durante must pay outstanding taxes, penalties and interest totaling more than $1.5 million, DOJ says.
The Department of Veterans Affairs has awarded a $1.3 million contract to Colorado builders Kiewit-Turner to provide preconstruction services for the $800 Denver VA Medical Center replacement hospital.
The hospital, scheduled for completion in 2014, will be on the same campus as the University of Colorado Hospital in Aurora, site of the former Fitzsimons Army Medical Center.
Englewood, CO-based Kiewit-Turner will assist VA and the architect/engineer team in the design of a new 1.1 million square-foot, 206-bed tertiary care medical center. The project includes a new 120-bed inpatient bed-tower with a 30-bed spinal cord injury unit, and a 30-bed nursing home community living center.
The hospital will be close to VA's medical school affiliate, the University of Colorado's hospital. When completed in four years, the hospital will have expanded telehealth, polytrauma, and traumatic brain injury programs. Department of Defense medical services will have a separate clinic on the entire fourth floor of the south clinic building.
VA will increase the number of employees at the new hospital from the current 1,815 employees to more than 2,000. Of the 24 architecture, engineering and support firms working on the new medical center, 17 are based in Colorado.
Two thirds of physicians say they are using personal devices for mobile health solutions that aren't connected to their practice or hospital IT systems, but nearly a third said their hospital or practice leaders will not support the use of mobile health devices.
As for patients, 40% would be willing to pay for a remote monitoring device that sends health information to their doctors, according to a new online survey and report by PricewaterhouseCoopers' Health Research Institute.
The findings of the survey, published in a report titled Healthcare Unwired were presented this week by PricewaterhouseCoopers at the mHealth Initiative 2nd International mHealth Conference in San Diego. Physicians' interest in mobile technologies reflects the growing market for remote and mobile health applications and business opportunities for organizations using consumer technologies to support preventative, acute, and chronic care, PWC said.
Two thousand consumers and 1,000 physicians regarding their use and preferences for remote and mobile health services and devices.
Of the physicians questioned for the survey:
88% would like their patients to track and/or monitor their health at home, particularly their weight, blood sugar levels, and vital signs.
63% said they are using personal devices for mobile health solutions that aren't connected to their practice or hospital IT systems, and 30% said their hospital or practice leaders will not support the use of mobile health devices.
57% said they would use remote devices to monitor the patients outside of the hospital. Physicians, however, want to see filtered information or exceptions in their patient's health, not all the data all the time. Too much information could actually slow down care.
56% of physicians using mobile devices said they expedite decision making and nearly 40% said the use of mobile devices decreases time spent on administration.
40% of physicians said they could reduce the number of office visits by 11% to 30% by using mobile health technologies, which could address the shortage of physicians, reduce hospital readmission costs, and increase access for patients who delay care.
The greatest benefit of mobile health, physicians noted, would be faster real-time access to more accurate data.
"Remote and mobile technology is making it possible to move healthcare delivery outside the traditional settings of physician offices and hospitals to wherever patients are. It's bringing back the concept of doctors making house calls," said Daniel Garrett, leader of PricewaterhouseCoopers' health Information Technology (HIT) practice. "New consumer-oriented business models and technologies are emerging. Companies that will be well positioned competitively are those than can integrate mobile health into healthcare delivery and create value in the health system by helping doctors and their patients better manage health and wellness through mass personalization."
The report found that much of the momentum behind mobile health to date has been from companies outside traditional healthcare, such as technology and telecommunications companies looking to expand their footprint in the health industries. When asked who they would prefer to receive mobile health services from, however, consumers ranked their healthcare provider, hospital or health system as No. 1, followed by their health insurer.
"There are significant opportunities for physicians, hospitals, health insurers, pharmaceutical companies and medical device manufacturers to market and differentiate themselves using mobile health," Garrett said. "Yet many healthcare organizations are largely ignoring the opportunity to integrate mobile health into other IT efforts such as the implementation of electronic health records."
Physicians said accessing information where and when it is needed is one of their top challenges. One-third said they make decisions based on incomplete information for seven of 10 patients. They also complained that they don't have time to interact with patients as much as they would like, and 45% said that Internet visits would expand access.
One barrier to mobile health may be that in-person consultation is still the main basis of reimbursement in healthcare. Public payers and private health insurers have not pushed for adoption of mobile health, the report says.
That may be because the healthcare industry hasn't figured out how to pay for electronic transactions in the way other industries have, such as for music and video downloads.
This may be changing. Health plans are beginning to pay for remote monitoring devices to help reduce hospital readmissions. Some physicians are now getting limited reimbursement for phone consultations, email consults, telehealth, and texting.
