Montefiore Buying Sound Shore Hospital. According to the PR release Sound Shore Health System (“SSHS”) announced today it has entered into an Asset Purchase Agreement with Montefiore Health System for Montefiore to acquire its assets. The transaction, which is expected to close by the end of this year, subject to Bankruptcy Court and regulatory approval, will enable Montefiore to continue, and enhance, the provision of care at Sound Shore and Mount Vernon Hospitals as well as at the Schaffer Extended Care Center.
Earlier in May, negotiations between Westchester Medical Center and the Sound Shore Health System broke off after Westchester Medical ended the merger talks.
Sound Shore system was facing a $3 million to $5 million year-end loss when talks with Westchester Medical began late 2012.
Westchester Medical Ceneter has been in the news in recent years embattled with insurance carrier stand-offs. The first was with Empire Blue Cross in Nov 2010 which had been resolved but not with Oxford Health Plans which had terminatedits contract in May 2012.
Still, there are concerns of Hospital and Provider consolidations changing the market place. The Hospital will possibly be transitioned into an ambulatory/multi-specialty center/urgent care center.
Urgent Care have been the good news in bending of the health care cost curve. Approximately 45% of acuities in a hospital ER can be done at an Urgent Care Center. Urgent Care Centers will be filling in the gap between regular family doctors and sitting in an ER. Cost of Urgent Care are up to half of ER. The patient also avoids high ER copays that average $200 aside form possible high in-network deductible. Yet if the Hospital indeed transitions to ambulatory surgery/multi speciality Westchester Hospital available area-hospital beds may further be reduced.
In Time magazine’s March issue Bitter Pill: Why Medical Bills Are Killing Us Steven Brill gets to work on answering the ever elusive Why are Medical Costs So High? The 21,000 word article is longest article in Time Magazine history that can boiled down to simply there is no free marketplace in health care. We think everything in this country is a free market but is there a free market when one needs to got to an emergency room or a free market when one must take a cancer pill? According to Howard Dean the singular reason is to get away form the current fee for service system where providers get paid per procedure and not per patient.
Here’s an eye opener: “Insurance Companies are not really the problem they run pretty terribly. They process claims, a lot of us think they process claims and fairly consistently but they are increasingly at the mercy of hospitals which are consolidating buying a doctors practices. We should tax profits on so-called nonprofit hospitals and put that money back into the system. We should control all the prices for prescription drugs because if I have a monopoly a cancer wonder drug I can charge anything I want for them that’s obviously not a free market and it’s completely two different uses you see this article once you follow the money.”
Transcript of the video:
“This is not a free-market. You don’t get health care because you want it. You don’t wake up in the morning and gee I love to go down to the emergency room today. You enter that market and will you know nothing about the products of you being asked by no choice of those products. Hi I am Steve Brill I’ve got the cover story this week in TIME Magazine looking at the health care debate from a very different perspective. Everybody focuses on who should pay for the exorbitant cost of health care and that I decided to do was ask for more fundamental question which is why does health care cost so much.
I look behind the bills and trace the bills all the way back to who’s getting what money is making what profits and the results are really surprised one of the things I found that everybody in the healthcare industry knows about that that nobody else knows his something called the charge-master. The charge master is a internal listing each hospital of the thousands of different items that they charge and nobody could explain it to me. Indeed would be hard to explain for example why would you charge $77 for a box of gauze pads? You can buy for a dollar at the drugstore. why would you charge thousands of dollars for CAT scan it really isn’t cost you anything?
It’s emblematic if you will, of the irrationality of the higher healthcare system because no one can explain the cost no one tries to and the only people who are guaranteed surefire to pay to be asked to pay the charge-master prices are the poorest people who don’t have health insurance.
Real profit makers are way hospitals markup very expensive drugs that you get. If you have cancer to have pneumonia but they’re making thousands of dollars on these drugs and drug companies in turn making still more thousands of dollars.
Obamacare does very little to solve any of these problems and just probably why you got to Congress I’m it doesn’t do anything to control the prices of prescription drugs or medical devices CAT scan. In fact if anything it will increase the profitable the players in the market by making equal insurance and therefore more people are in the marketplace with the funds from insurance companies to buy all these products.
Insurance Companies are not really the problem they run pretty terribly. They process claims, a lot of us think they process claims and fairly consistently but they are increasingly at the mercy of hospitals which are consolidating buying a doctors practices. See Provider Consolidation Info-graph– “The proliferation of hospital mergers and hospitals’ appetite for buying doctors’ practices—in part to assure a steady stream of patients to fill hospital beds—could create local monopolies that raise prices without increasing efficiency. ‘Historically,’ says Deloitte’s Mr. Keckley, ‘hospital consolidation hasn’t reduced costs.’”
We should tax profits on so-called nonprofit hospitals and put that money back into the system. We should control all the prices for prescription drugs because if I have a monopoly a cancer wonder drug I can charge anything I want for them that’s obviously not a free market and it’s completely two different uses you see this article once you follow the money.”
The ACO (Accountable Care Organization) referenced in our post NYU Beth Israel Merger and ACOs are models encouraged in Obamacare in fact as examples of Provider capitated reimbursement that Howard Dean is in favor of. An ACOI cordiantes patient care and provide the full range of health care services for patients. The health reform law provides incentives for providers who join together to form such organizations and who agree to be accountable for the quality, cost, and overall care of Medicarebeneficiaries who are enrolled in the traditional fee-for-service program who are assigned to the ACO.
The fee-for-service system has evidentially driven costs by incentivizing volumes of added procedures. The ACO model is built on par excellence hospitals such as Mayo Clinic where there is team of providers are financially incentivized for patient care coordination outcomes and high quality of care. The ACO’s payment would be tied to achieving goals that improve health care and save money. Members of the ACO would divvy up that payment. Today’s payment system, investments in providing better care are doubly penalized. If a hospital hires a nurse to follow up with patients after they are discharged in order to reduce readmissions — for example, to help patients with diabetes improve blood sugar control — it must pay for the nurse, which is typically not reimbursed by insurance companies or Medicare, and it loses revenue by preventing the readmission.
Congress included ACOs in the health care law as a way to rein in Medicare spending. That federal program pays for health care for people 65 and older and the disabled. The federal government estimates ACOs could save the Medicare program up to $940 million over four years. Medicare recently began testing this system with 32 pilot ACOs in 18 states, including one in the New York City area – Bronx Accountable Healthcare Network.
Some have pointed to ACO Model just as a pro-merger supporting argument with the FTC. These significant mergers create market dominance and therefore limit competition and drive up health care dollars. And yet Hospitals operate on thin profit margins and cannot afford to lose market share therein lies is the conundrum.
Note: At time of this article MVP and Hudson Valley Health Plans announced a merger –Hudson Health Plans joins MVP. Hudson Health Plan, the Medicaid managed care organization based in Tarrytown, will join the MVP Health Care group of companies, the two nonprofit health plans jointly announced today.
“Size and diversity of offerings are important for health plans in the new world of the health insurance marketplaces. A 55-year-old person would like to join a health plan that can continue to cover him when he turns 65. Likewise, if someone is no longer eligible for Medicaid, she might prefer to buy a commercial product from that same insurer. Together, MVP and Hudson now can cover people through all of life’s stages and changing needs.
In the coming months, Millennium Medical Solutions Inc will host seminars and will share information you’ll need to know as the countdown continues to October 1st. Please contact us for immediate information on how to implement these initiatives for your group-specific needs at info@medicalsolutionscorp.com or Call (855) 667-4621.
To no one’s surprise the InterfaithHospital in Brooklyn Files for Bankruptcy Protection– Dec3, 2012 NYT . In addition to the $130 Million in debt “…hospital estimates its cash spending will exceed its cash receipts by nearly $2 million, and it will have $7 million in unpaid obligations and $26 million in unpaid receivables, other than professional fees.”
The long time beleaguered hospital has been a stepchild of the State with multiple bail outs in the past decades. “Interfaith officials have said that they need $20 million from the state just to continue operating during the bankruptcy reorganization, and otherwise face the possibility that the hospital will close.” The State promised some financial support last year to accomplish an integrating Wyckoff Hospital, Brooklyn Hospital andInterfaith Hospitalby a Cuomo Pane Administration. Interfaith Hospital, located in Bedford Stuyvesant, took extreme steps to save cash by foregoing malpractice insurance – NYT “Troubled NY Hospital Forgo Coverage for Malpractice”.
Since health care is viewed as a right, the government has been subsidizing and encouraging its growth for decades, helping it to evolve into the juggernaut of 17% of the GNP that it is. Now, as Margaret Thatcher so famously said of all socialist experiments, “they have run out of other peoples’ money”. The law and the courts compel them to give everyone 21st century technology which costs more than many patients make in their whole life ! Now the medical industry is up against the limits of what they can pry out of the taxpayer and the private citizens but they are still compelled to offer insanely expensive health care to everyone. Very bright people try to wiggle around this dynamic but they are finding that they cant. We need to strike at the source, and accept : Health care is not a right, you don’t get it because you exist, you have to buy it. Only by accepting this truth can we begin to save a reasonable health care industry.
Unlike St Vincent’s Hospital Bankruptcy Closurein 2010 was a complete shock to NYC Health Community. For more than 150 years the hospital was a mainstay of Downtown Manhattan. It remains to be seen if this Administration will step in and save Interfaith Hospital again.
As reported in NYT last week – New York Hospitals Look to Combine, Forming a Giant “The proposed merger would bring together NYU Langone Medical Center, a highly specialized academic medical center, and Continuum Health Partners, a network of several community-oriented hospitals, including Beth Israel and the two St. Luke’s-Roosevelt campuses.”
Anticipating changes in the way health care is paid for and delivered abound. WIth new Health Care Reform law the traditional fee-for-service model is being sacked in favor of patient care coordination. The consolidations by hospitals are needed in order to deliver the scales build on the ACO model of using independent providers/facilities.
Accountable Care Organization (ACO) – These organizations coordinate patient care and provide the full range of health care services for patients. The health reform law provides incentives for providers who join together to form such organizations and who agree to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to the ACO.
The fee-for-service system has evidentially driven costs by incentivizing volumes of added procedures. The ACO model is built on par excellence hospitals such as Mayo Clinic where there is team of providers are financially incentivized for patient care coordination outcomes and high quality of care. The ACO’s payment would be tied to achieving goals that improve health care and save money. Members of the ACO would divvy up that payment. Today’s payment system, investments in providing better care are doubly penalized. If a hospital hires a nurse to follow up with patients after they are discharged in order to reduce readmissions — for example, to help patients with diabetes improve blood sugar control — it must pay for the nurse, which is typically not reimbursed by insurance companies or Medicare, and it loses revenue by preventing the readmission.
Congress included ACOs in the health care law as a way to rein in Medicare spending. That federal program pays for health care for people 65 and older and the disabled. The federal government estimates ACOs could save the Medicare program up to $940 million over four years. Medicare recently began testing this system with 32 pilot ACOs in 18 states, including one in the New York City area – Bronx Accountable Healthcare Network.
Some have pointed to ACO Model just as a pro-merger supporting argument with the FTC. These significant mergers create market dominance and therefore limit competition and drive up health care dollars. And yet Hospitals operate on thin profit margins and cannot afford to lose market share therein lies is the conundrum.
The NYT article – Waking Up to Major Colonoscopy Bills illustartes what our clients are increasingly running into – increased out of pocket expenses.
“Patients who undergo colonoscopy usually receive anesthesia of some sort in order to “sleep” through the procedure. But as one Long Island couple discovered recently, it can be a very expensive nap. Both husband and wife selected gastroenterologists who participated in their insurance plan to perform their cancer screenings. … And in both cases, the Gastroenterologists were assisted in the procedure by anesthesiologists who were not covered by the couple’s insurance. They billed the couple’s insurance at rates far higher than any plan would reimburse — two to four times as high, experts say.”
Patients can go for Colonoscopies either in an outpatient medical office or in ambulatory hospital setting. Gastrointerologists cannot bill for the anesthesia unless there is an employed licensed Anesthesiologist on staff. The treating Physician cannot be the same person who administer/monitors the sedation. Generally speaking the Anesthesiologist in a hospital settings are separate entities and attempt to bill independently form the hospital charges. Now you can begin to see how patients are getting added billing.
Furthermore, we are seeing increasing out of network charges with Physicians dropping health plans in certain geographic areas as well as insurers shifting more of the costs burden.
The posting Out of Control Out of Network Charges points to examples such as – “a neurosurgeon charged $159,000 for an emergency procedure for which Medicare would have paid only $8,493.” Another example: “ a consumer went to an in-network hospital for gallbladder surgery with a participating surgeon. The consumer was not informed that a non-participating anesthesiologist would be used, and was stuck with a $1,800 bill. Providers are not currently required to disclose before they provide services whether they are in-network.” The average out-of-network radiology bill was 33 times what Medicare pays, officials say.
Our clients get 3 bills with any procedure needing general anesthesia
1) A bill from the hospital
2) A bill from the surgeon
3) A bill from anesthesia
Actually, the physician bill is typically the lowest cost of the bill . On a $5,000 total bill the GI may only get 10%. Sometimes the hospital and anesthesia charges are bundled into a single bill but many times they are not. On most plans patients can negotiate with the hospital depending on pre-authorization the anesthesia bill and resubmit charges. This is probably the most common appeal we perform on behalf of our clients.
Patient on a cost sharing plan with in-network deductibles may fair better with outpatient office colonoscopies. From an insurer costs perspective the charges in an office setting are typically $2,000-$2,500. So why do it in the hospital? The procedure may require general anesthesia and financial incentives. Also, at times the procedure may be a loss to the provider. For example, Pediatricians will not perform Gardasil vaccination because the vaccine costs more than what the pediatrician will get reimbursed to give it.
The vast majority of providers make sure that patients were in-network or arranged pre-payment plan prior to the procedure. As with most non-HMO plans, however, the responsibility rests with patient to make sure everything is pre-authorized and in network is possible.
Oxford /United Healthcare has announced last week their contract termination with the Valhalla teaching hospital, Westchester Medical Center effective May 1, 2012. The NYS “cooling off period” imposes both parties to renegotiate a contract until July 1st. The hospital will be considered in-network until that time.
This marks the second time a large health insurer has terminated their contracts with Westchester medical Center. Empire had terminated their contract on Nov 10, 2010 after a similar dispute and is still not under contract. While contractual posturing is all too common in the health industry with eleventh hour agreements, we are seeing this disturbing trend playing out in other instances now.
We will monitor the situation and keep members posted. Oxford member letters explaing this are going out. Please contact us with any questions.
