The University of Colorado Hospital in Aurora will add a second tower at a cost of about $400 million, the university announced.
The new 720,000-square-foot tower will open in 2013, will be dedicated to inpatient and emergency care, will add 144 staffed inpatient beds to the hospital's current capacity of 407, and will include space to add another 144 beds to meet future demand.
"As the only academic medical center in the Rocky Mountains, our team of specialists and sub-specialists provide unique care for patients with complex healthcare needs," said Bruce Schroffel, president and CEO of University of Colorado Hospital. "Expanding the hospital will allow us to provide that care to more people in Colorado and the entire Rocky Mountain region.
About 660,000 square feet of the new tower will be new construction and 60,000 square feet of existing space will be renovated. The new tower will include a much larger emergency department, more operating rooms and additional diagnostic and treatment facilities. The expansion includes additional parking and better access to the rapidly expanding Anschutz Medical Campus.
Planning for the new tower was completed in January when an executive committee and 22 user groups met to ensure that the tower will meet the needs of the region's growing population.
"University of Colorado Hospital has been working near or above capacity since moving our inpatient facilities to the Anschutz Medical Campus in 2007," Schroffel said. "The demand for our services only promises to grow, and expanding the hospital will help us continue to serve a growing patient population."
Schroffel touted the economic stimulus that the project will bring to the area, including hundreds of new jobs and millions of dollars in material costs and tax revenue to Aurora and the state. "This is a multi-million dollar project and while UCH and its patients will benefit from the expansion, the entire state of Colorado also will see the positive effects. We also will be bringing over a thousand jobs to our community," he said. "And we will be able to do this without any funding from the state or federal governments."
When finished, the tower will create another 1,400 jobs at UCH with an average annual salary of $81,000, including benefits. The project also will create 600-650 jobs during construction. An architect and general contractor have yet to be contracted.
UCH also is in the midst of a $67 million project to implement an integrated, patient-centered electronic medical record across all clinical areas. That project will bring another 150 jobs to the Anschutz Medical Campus during its three-year implementation.
Shands HealthCare CEO Timothy Goldfarb says the nonprofit health system's decision to sell a 60% controlling stake in three money-losing hospitals in rural Florida will help the economies of the small communities they serve.
"What we are describing is an opportunity to grow our facilities," Goldfarb said at a media availability announcing the $21.4 million deal with Naples, FL-based Health Management Associates.
"Shands facilities are the pivots in the economic growth of our communities. Yes we provide outstanding healthcare, but we surely drive the economies in most of these economies. What this partnership will facilitate is the growth of these programs." The three University of Florida-affiliated hospitals, Shands Lake Shore, Shands Live Oak, and Shands Starke, reported losses totaling $14 million in the last three years, and were projected to lose another $7 million this year, despite $54.8 million in facilities upgrades and renovations over the last 14 years.
The losses were blamed on increases in uncompensated care and a competitive market, and were a key factor in the decision to sell controlling interest, which allows HMA to concentrate on the business and management side, while Shands focuses on medical operations.
"We've done wonderful things in partnership with the employees and medical staff in these communities, but we also learned our limitations," Goldfarb says. "We learned that we don't know all there is to know about running hospitals in communities the size of Live Oak, Stark, and Lake Shore. We learned that we have only so much capital to go around in the Shands system and sometimes we don't invest in our communities the way we should invest to grow these programs. And we learned that we have a lot to do as an academic health center. To accomplish those goals it is better to do them in partnership with somebody who is talented and competent and knows what they are doing rather than trying to do it by yourself."
Shands HealthCare will retain 40% ownership in each hospital, which will continue to prominently carry the Shands name. The deal is expected to be finalized by July 1, with Shands and HMA sharing equal governance.
Gary D. Newsome, president/CEO of HMA, said the hospital chain will rely on experience to stem the red ink at the three Shands hospitals.
"We have carved out a niche very specific in nonurban healthcare. Because of that we have some strategies and processes and programs that we know work," he says. "This is an opportunity for us to not only bring our knowledge to the table in how to manage and grow local hospitals in small communities, but for us to leverage the knowledge of Shands because they have tremendous resources from an educational standpoint."
No layoffs are planned. Shands employees—including leadership teams—will become HMA employees. They will keep their base salaries, and tenure will be honored. Employee benefits will change, but HMA said it provides "a wide variety of choices and a very competitive benefits package."
Most if not all local physician contracts will be transferred to the new jointly owned hospitals, with all service lines remaining in place. It is anticipated that practices will be added. Local advisory boards comprised of representatives from the medical staff, the local community, Shands, and HMA will be established at each hospital. Combined, the three hospitals operate 139 beds and generate approximately $100 million of annual net revenue.
When the deal is completed, HMA will operate 58 hospitals, with approximately 8,500 licensed beds, in non-urban communities in 15 states, including 22 in Florida. David Peknay, a director at Standard & Poor's, calls the deal "a pretty modest investment" for a company the size of HMA, which last year generated about $4.6 billion in net revenues from continuing operations.
Peknay says he couldn't say authoritatively what HMA might do differently to turn the Shands hospitals around financially, because he's not familiar with Shands' operations. Generally speaking, he says, "there are cases where a for-profit will come in and introduce aspects of operating a hospital that might be a little more cognizant of payer mix or service offerings, perhaps adding services that generate more revenues. On the for-profit side they have been very active in controlling costs. Many of them have been doing pretty well."
IPC The Hospitalist Company, Inc., the North Hollywood, CA-based hospitalist group practice, has acquired Continuum Geriatric Services PLLC in Livonia, MI. Financial terms of the deal were not disclosed.
CGS practices in more than 60 nursing and assisted living facilities in Michigan, where IPC has an established presence. CGS has an annualized volume of approximately 105,000 patient encounters.
Adam Singer, MD, chairman/CEO of IPC said the acquisition of CGS "represents continued expansion for IPC into closely related business segments that focus on the management and coordination of facility-based care."
"The highly dedicated geriatric physicians and midlevel providers at CGS offer IPC's Michigan operation an opportunity to improve coordination and integration of patient care with the goal of improving overall quality and offering a better experience for patients and their families," Singer said in a media release.
Jerry Wilborn, MD, co-founder of CGS, will join IPC as a practice group leader for the region's sub-acute practice groups. "This is a culmination of our long-term vision for developing a true continuum of care for our patients," Wilborn said. "IPC is well established in the area's acute care hospitals, and is best situated to develop a comprehensive program for care of the elderly in this market."
Deutsche Bank analyst Darren Lehrich estimated that the purchase "will add about 20 practitioners and is one of the larger sub-acute practices of its kind in the U.S. While revenue per encounter is slightly lower for these types of practices than hospitals, the gap is converging and we estimate revenue per encounter between $80-90 for a practice like this."
Lehrich estimated that "IPC paid roughly 1x revenue for CGS. The acquisition with 105,000 patient encounters will add roughly 3% to IPC's volumes and an estimated $8.4 million in revenue based on a Q1 run-rate numbers."
"We would not be surprised if IPC announces other similar investments ahead of their investor day scheduled on June 10," Lehrich wrote.
Patient volumes at the nation's acute care hospitals fell slightly in April, and are expected to be weak into the second quarter of 2010, according to the Deutsche Bank Hospital Volume Tracker.
Deutsche Bank's survey of more than 375 acute care hospitals found inpatient volumes down 2.2% and outpatient volumes down 1.1% for April. Inpatient surgeries were up 3%, outpatient surgeries were up 3.5%, and births were up 1.1%. ER visits fell 1.8%
"Uninsured mix looks fairly stable on a sequential basis, thus alleviating concerns about short-term bad debt volatility, although we are going to have to keep a close eye on MCO mix given steeper inpatient declines in recent months," the report stated.
Deutsche Bank said inpatient MCO volume declines are down about 5% on a rolling three-month basis. "This trend could be an indication that COBRA is beginning to roll-off, although we emphasize that we are not seeing corresponding growth in the uninsured volume," the report said.
Deutsche Bank anticipated Q2 volume growth of between 1% and 2%. "We believe our models have cushion in them with respect to conservative bad debt assumptions. We'll reassess volume, pricing and bad debt assumptions once we've gained a fuller picture on Q2 trends in the coming weeks," the report said.
Despite the soft volumes, Deutsche Bank said it will continue its Buy ratings on the major investor-owned hospitals, including Community Health Systems, Health Management Associates, Inc., LifePoint Hospitals, Inc., Tenet Healthcare Corp., and Universal Health Services, Inc., "based on reasonable valuations, upside risks associated with healthcare reform, accretive acquisitions, the potential for better volume and mix with an economic recovery, and continued execution with expense management over the short-run."
Pay increase budgets have fallen to 2.5%, down from 3% in 2009. Little change is expected over the next year, as healthcare organizations predict only a slight uptick in 2011 to 2.7%, according to the new 2010 Compensation Data Healthcare survey.
"With a slow economic recovery expected, healthcare organizations continue to make conservative compensation choices," said Amy Kaminski, director of marketing for Compdata Surveys, a compensation and benefits survey data provider. "Although organizations are making cuts to overall pay increase budgets, a larger portion of those budgets is likely being focused on providing the necessary pay increases to retain key employees, such as nurses and physical therapists."
Pay increase budgets vary within the industry, as critical access hospitals and physician clinics report the highest budgets, 2.8%. Home care respondents follow at 2.6%. Hospitals and rehabilitation facilities reported pay increase budgets of 2.5% and 2.3%, respectively. Behavioral healthcare had the lowest pay increase budget, 1.7%.
Physician clinics are projecting the highest pay increase budget in 2011 at 3.1%, with behavioral healthcare projecting the lowest, 1.8%.
The survey results show pay increase budgets vary by state. Arizona and Nebraska reported the highest pay increase budgets at 3.1%, closely followed by Nevada and Washington at 3%. Respondents in New York and California report pay increase budgets of 2.8% and 2.7%, respectively. Healthcare organizations in Minnesota had the lowest pay increase budget, 2%.
The survey contains data on more than 200 industry-specific job titles and more than 250 benchmark titles ranging from entry-level to top executives. Data was collected from more than 1,200 healthcare employers across the country.
Previously, CMS allowed hospitals and CAH to accept credentialing information about telemedicine providers from the distant site, but not privileging information.
"CMS has become increasingly aware, through outreach efforts and communication with various stakeholders in the telemedicine community . . . of the urgent need to revise the CoPs in this area so that access to these vital services may continue in a manner that is both safe and beneficial for patients and is free of unnecessary and duplicative regulatory impediments," the agency stated in its proposed rule.
Additionally, CMS cited smaller hospitals' lack of clinical expertise to adequately evaluate a variety of privileges as one of the reasons why a change was needed.
CMS will post the proposed rule on the Federal Register for a 60-day comment period, and the public can submit comments to www.regulations.gov. The revised language is contained in two sections of the CoPs: §482.12, "Governing body," and §482.22, "Medical staff."
"Upon reflection," CMS noted, "we came to the conclusion that our present requirement is a duplicative and burdensome process for physicians, practitioners, and the hospitals involved in this process, particularly small hospitals, which often lack adequate resources to fully carry out the traditional credentialing and privileging process for all of the physicians and practitioners that may be available to provide telemedicine services."
Under current CMS regulations, hospitals receiving telemedicine services from a distant site must privilege each physician or practitioner providing services to their patients as if the practitioners were onsite. While those hospitals could use third-party credentialing and verification organizations to make the process easier, the hospital's governing body remains responsible for all privileging decisions.
This process had been simplified: Hospitals that were accredited by The Joint Commission were deemed to also have met their Medicare condition of participation—including credentialing and privileging requirements—under the Commission's statutory deeming authority.
But with the passage of the Medicare Improvements for Patients and Providers Act of 2008, the statutory recognition of The Joint Commission's hospital accreditation program was ending—effective in several weeks on July 15. The law now would require The Joint Commission to secure CMS approval of its standards to confer Medicare deemed status on hospitals.
With this change, small and critical-access hospital medical staffs using telemedicine services could face "the burden of privileging hundreds of specialty physicians and practitioners" that large academic medical centers make available to them, CMS noted in the Register proposal.
Emily Berry is an associate editor for Briefings on CredentialingandCredentialing Resource Center Connection, and manages the Credentialing Resource Center. You can reach her at eberry@hcpro.com.Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached atjsimmons@healthleadersmedia.com.
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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