EMHS bid for Portland hospital brings questions about effect on patients
Posted Dec. 11, 2012, at 6:50 p.m.
A move by Eastern Maine Healthcare Systems to plant stakes for the first time in southern Maine through a merger with Mercy Health System is raising questions about how the deal will affect patients.
Mercy has signed a letter of intent to merge with Brewer-based EMHS after a planned deal with Steward Health Care System, a for-profit Massachusetts hospital chain, fell through.
Neither Mercy nor Steward commented publicly about why the deal collapsed, but a Steward spokesman accused Mercy of misrepresenting its financial health in a confidential memo obtained Monday by The Boston Globe.
Mercy, which runs the 230-bed Mercy Hospital in Portland, had been trying since August to reach a deal with Steward.
The move sparked curiosity about why EMHS, parent organization to Bangor’s Eastern Maine Medical Center, wants to expand its reach beyond its territory of northern, central and eastern Maine. The merger also would bring EMHS into the backyard of MaineHealth, parent of Maine Medical Center, Mercy’s main competitor in Portland.
“What purpose does it serve, other than to help Eastern Maine grow, and is that in itself a good thing for the people they’re supposed to be serving?” said Philip Caper, a Brooklin physician who serves as one of roughly 200 EMHS “corporators” on a volunteer board.
The parties have remained largely mum.
“We’ve got a confidentiality agreement associated with the joint nonbinding letter of intent, so we’re going to honor that and look forward to speaking publicly on the status of things as soon as we can,” said Susan Rouillard, Mercy’s chief development and communications officer, who didn’t indicate when that might occur.
The letter of intent allows Mercy and EMHS to negotiate exclusively with each other, but doesn’t commit them to finishing a deal.
EMHS also largely declined to comment, except to reiterate that Mercy would maintain its Catholic identity. If the deal goes through, Mercy would be the only Catholic hospital organization in Maine to become a member of a secular hospital organization.
“We have agreed that, should this be successful, we would respect their ethical and religious doctrine and understand their need to remain a Catholic hospital,” said Suzanne Spruce, director of community relations for EMHS. “We welcome that, we can work with that.”
Steward HealthCare says it `unilaterally withdrew’ from talks to buy Maine hospital group
An executive at Steward Health Care System told presidents of Steward’s hospitals Monday that the Boston-based chain “unilaterally withdrew” from talks to acquire Mercy Health System in Maine after concluding Mercy had misrepresented its finances.
The account given in a confidential memo from Steward director of media relations Chris Murphy, obtained by the Globe, differed from a statement Steward and Mercy released jointly late Friday afternoon saying the letter of intent to merge had been terminated because the parties “were unable to come to a definitive agreement” during negotiations.
Among other problems, Murphy wrote, Mercy’s data on patient volume and trends proved much worse and construction costs for its new Portland, Maine, campus were far higher than Steward had been led to believe. Also, he said, Mercy’s parent, Catholic Health East, withdrew $9 million in cash from the Maine hospital after Steward had signed a letter of intent to buy it.
Among other problems, Murphy wrote, Mercy’s data on patient volume and trends proved much worse and construction costs for its new Portland, Maine, campus were far higher than Steward had been led to believe. Also, he said, Mercy’s parent, Catholic Health East, withdrew $9 million in cash from the Maine hospital after Steward had signed a letter of intent to buy it.
“With each day that passed during the due diligence process, our confidence in the numbers presented by Mercy eroded to the point that we were unable to responsibly submit a bid,” Murphy wrote to the heads of his system’s Massachusetts hospitals. “We came to the conclusion that, even if Mercy were to give us their hospital for free, we couldn’t make the numbers work.”
Mercy Hospital: Potential buyer wasn't misled
A memo tells a different story about how talks faltered between Mercy and a for-profit group.
By Kelley Bouchard kbouchard@mainetoday.com
Staff Writer
Staff Writer
PORTLAND — Executives of Mercy Health System of Maine deny that they misled the Massachusetts company that negotiated to buy the hospital group in Greater Portland before the talks ended abruptly on Friday.
Mercy officials responded Tuesday to a report in The Boston Globe that said Steward Health Care System "unilaterally withdrew" from talks because the Catholic nonprofit organization misrepresented the condition of its finances and operations.
It's unclear how the Globe's report will affect Mercy's new effort to merge with nonprofit Eastern Maine Health Systems of Brewer, which was announced late Friday, soon after Mercy and Steward issued a brief statement that their negotiations had ended.
The Globe quoted a confidential memo sent Monday by Chris Murphy, Steward Health Care System's director of media relations, to presidents of 11 hospitals in the Boston-based chain owned by Cerebus Capital Management, a for-profit private equity firm.
New Obamacare fee to start at $63 a person
Posted Dec. 10, 2012, at 6:27 p.m.
WASHINGTON — Your medical plan is facing an unexpected expense, so you probably are, too. It’s a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama’s health care overhaul.
The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers.
Employee benefits lawyer Chantel Sheaks calls it a “sleeper issue” with significant financial consequences, particularly for large employers.
“Especially at a time when we are facing economic uncertainty, (companies will) be hit with a multi-million dollar assessment without getting anything back for it,” said Sheaks, a principal at Buck Consultants, a Xerox subsidiary.
Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee.
The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 and then declines.
Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems. Under the law, insurers will be forbidden from turning away the sick as of Jan. 1, 2014.
The program “is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all,” the Obama administration says in the regulation. An accompanying media fact sheet issued Nov. 30 referred to “contributions” without detailing the total cost and scope of the program.
Of the total pot, $5 billion will go directly to the U.S. Treasury, apparently to offset the cost of shoring up employer-sponsored coverage for early retirees.
Feds nix full funding for partial Medicaid expansions
Posted Dec. 11, 2012, at 9:29 a.m.
WASHINGTON — The Obama administration told states Monday that they couldn’t do a partial expansion of Medicaid under the health-care law and still receive full federal funding, disappointing many Republican governors on one of the most important questions surrounding the health-care law.
In recent weeks, these governors, along with other state officials, had shown increasing interest in the idea of a partial expansion of the state-federal program for the poor and disabled. In ruling that option out, the administration has raised the stakes for states debating whether to participate in a part of the law that is crucial to its success.
The 2010 law called for states, starting in 2014, to open their Medicaid programs to people with incomes up to 138 percent of the federal poverty level. Under the law, the federal government will pay the entire cost of covering newly eligible individuals for the first three years. After that, the federal government’s share declines, reaching 90 percent by 2020. If all states were to take part in the full expansion, an additional 18 million Americans would be covered by Medicaid.
But many state leaders, especially Republicans, have been leery of sharply expanding their Medicaid programs; many worry that the federal government might reduce funding. As an alternative, they have floated the idea of partial expansions — extending coverage, for instance, to all adults with incomes up to 100 percent of the poverty level — while still having the federal government foot the entire bill.
On Monday, Secretary of Health and Human Services Kathleen Sebelius said no. In a memo to all 50 governors, she said that “the law does not provide for a phased-in or partial expansion.”
A Tense Compromise on Defining Disorders
By BENEDICT CAREY
They plotted a revolution, fell to debating among themselves, and in the end overturned very little except their own expectations.
But the effort itself was a valuable guide for anyone who has received a psychiatric diagnosis, or anyone who might get one.
This month, the American Psychiatric Association announced that its board of trustees had approved the fifth edition of the association’s influential diagnostic manual — the so-called bible of mental disorders — ending more than five years of sometimes acrimonious, and often very public, controversy.
The committee of doctors appointed by the psychiatric association had attempted to execute a paradigm shift, changing how mental disorders are conceived and posting its proposals online for the public to comment. And comment it did: Patient advocacy groups sounded off, objecting to proposed changes in the definitions of depression and Asperger syndrome, among other diagnoses. Outside academic researchers did, too. A few committee members quit in protest.
The final text, which won’t be fully available until publication this spring, has already gotten predictably mixed reviews. “Given the challenges in a field where objective lines are hard to draw, they did a solid job,” said Dr. Michael First, a psychiatrist at Columbia who edited a previous version of the manual and was a consultant on this one.
Others disagreed. “This is the saddest moment in my 45-year career of practicing, studying and teaching psychiatry,” wrote Dr. Allen Frances, the chairman of a previous committee who has been one of the most vocal critics, in a blog post about the new manual, the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders, or DSM5.
Obesity in Young Is Seen as Falling in Several Cities
By SABRINA TAVERNISE
PHILADELPHIA — After decades of rising childhood obesity rates, several American cities are reporting their first declines.
The trend has emerged in big cities like New York and Los Angeles, as wel
l as smaller places like Anchorage, Alaska, and Kearney, Neb. The state of Mississippi has also registered a drop, but only among white students.
l as smaller places like Anchorage, Alaska, and Kearney, Neb. The state of Mississippi has also registered a drop, but only among white students.
“It’s been nothing but bad news for 30 years, so the fact that we have any good news is a big story,” said Dr. Thomas Farley, the health commissioner in New York City, which reported a 5.5 percent decline in the number of obese schoolchildren from 2007 to 2011.
The drops are small, just 5 percent here in Philadelphia and 3 percent in Los Angeles. But experts say they are significant because they offer the first indication that the obesity epidemic, one of the nation’s most intractable health problems, may actually be reversing course.
The first dips — noted in a September report by the Robert Wood Johnson Foundation — were so surprising that some researchers did not believe them.
Deanna M. Hoelscher, a researcher at the University of Texas, who in 2010 recorded one of the earliest declines — among mostly poor Hispanic fourth graders in the El Paso area — did a double-take. “We reran the numbers a couple of times,” she said. “I kept saying, ‘Will you please check that again for me?’ ”
http://www.nytimes.com/2012/12/11/health/childhood-obesity-drops-in-new-york-and-philadelphia.html?pagewanted=2&nl=health&emc=edit_hh_20121211&pagewanted=print
While President Obama spars with congressional Republicans over whether to raise taxes, advocates for the elderly have been girding for a fight that promises to be at least as intense: what to do about the rising cost of Medicare, the federal health insurance program for the elderly and disabled. The program is vital to its beneficiaries, but its expenses are growing far faster than federal revenues or the economy. In fact, it is the single biggest factor in the deficit over the long run. And with multiple forces driving up costs, there's no easy way to solve the budget problems it presents.
The government created Medicare in 1965 to cover the doctor and hospital bills faced by Americans age 65 and over, almost half of whom had previously gone uninsured. The program's benefits have become more generous over the years, with the government picking up a greater share of the cost and adding heavily subsidized coverage for prescription drugs.
Meanwhile, the cost of medical care in general has risen considerably faster than inflation, spurred by expensive new pharmaceuticals, diagnostic equipment, treatment regimes and medical devices. At the same time, the average lifespan of Medicare beneficiaries has increased by about eight years (although not for lower-income seniors), and chronic diseases have become more prevalent, particularly those related to obesity. And as the baby boom generation reaches retirement age, the number of beneficiaries is climbing rapidly. Enrollment is projected to grow from 50 million today to 80 million in 2030. That's twice as many as in 2000.
Costs per beneficiary have stabilized in recent years, thanks largely to slower growth in spending on prescriptions, improvements in efficiency and the cost controls put in place by the 2010 healthcare law, most notably the new restraints on payments to Medicare providers. Some healthcare experts argue that those restraints are artificial and unsustainable, and history is on their side. Similar efforts in the past foundered within a few years, after doctors and hospitals, objecting to low rates, threatened to stop treating Medicare patients.
But even if the cost per beneficiary holds steady, the coming demographic changes darken Medicare's long-term outlook. In 2000, there were four times as many workers paying Medicare taxes as there were retirees receiving benefits. By 2030, there will be fewer than 2.5 workers per retiree. The trust fund that supports hospital coverage is projected to run out of money in 2024. And Medicare costs are expected to consume an ever-growing share of the federal budget, from $560 billion in 2011, or 15% of federal spending, to $1.1 trillion in 2022, or 19%.
In the face of these numbers, Republican budget negotiators have endorsed a plan to cut $600 billion from Medicare and other federal healthcare programs. Obama has called for cutting about half that amount, even as many Democrats argue for no cuts at all to Medicare benefits.
http://www.latimes.com/health/la-ed-medicare-costs-20121209,0,2345638,print.story
Our View: Don't change Medicare eligibility in budget deal
Efforts to lower health care costs should be tried before denying coverage to seniors.
Trimming the federal budget deficit by raising the eligibility age for Medicare from 65 to 67 meets H.L. Mencken's definition of an answer to a complex problem that is "clear, simple and wrong."
The argument in favor of this much-discussed idea is that Medicare is one of the big-ticket entitlements that need to be "reformed" to prevent the country from sliding off the fiscal cliff, a draconian combination of tax hikes and spending cuts that could push the economy back into recession. Americans are living longer than they were when Medicare was created in the 1960s, and so pushing eligibility off for two years will help ease the actuarial pressure of the baby boom generation's march to retirement.
The 2,000-Year-Old Wonder Drug
By DAVID B. AGUS
Los Angeles
THE inexorable rise in health care spending, as all of us know, is a problem. But what’s truly infuriating, as we watch America’s medical bill soar, is that our conversation has focused almost exclusively on how to pay for that care, not on reducing our need for it. In the endless debate about “health care reform,” few have zeroed in on the practical actions we should be taking now to make Americans healthier.
An exception is Mayor Michael R. Bloomberg of New York, who is setting new standards that we would do well to adopt as a nation. In the last several years, he’s changed the city’s health code to mandate restrictions on sodas and trans fats — products that, when consumed over the long term, harm people. These new rules will undoubtedly improve New Yorkers’ health in years to come.
Such bold moves prompt a provocative question: when does regulating a person’s habits in the name of good health become our moral and social duty? The answer, I suggest, is a two-parter: first, when the scientific data clearly and overwhelmingly demonstrate that one behavior or another can substantially reduce — or, conversely, raise — a person’s risk of disease; and second, when all of us are stuck paying for one another’s medical bills (which is what we do now, by way ofMedicare, Medicaid and other taxpayer-financed health care programs).
In such cases, encouraging a healthy behavior, or discouraging an unhealthy one, ought to be a matter of public policy — which is why, for instance, we insist on vaccinating children for the measles, mumps, rubella and polio; we know these preventive strategies save lives.
Under that rationale, then, why not make it public policy to encourage middle-aged people to use aspirin?
latimes.com
Editorial
Medicare, the beloved budget buster
The program is the single biggest factor in the deficit over the long run. But there are no easy fixes.
December 9, 2012
The government created Medicare in 1965 to cover the doctor and hospital bills faced by Americans age 65 and over, almost half of whom had previously gone uninsured. The program's benefits have become more generous over the years, with the government picking up a greater share of the cost and adding heavily subsidized coverage for prescription drugs.
Meanwhile, the cost of medical care in general has risen considerably faster than inflation, spurred by expensive new pharmaceuticals, diagnostic equipment, treatment regimes and medical devices. At the same time, the average lifespan of Medicare beneficiaries has increased by about eight years (although not for lower-income seniors), and chronic diseases have become more prevalent, particularly those related to obesity. And as the baby boom generation reaches retirement age, the number of beneficiaries is climbing rapidly. Enrollment is projected to grow from 50 million today to 80 million in 2030. That's twice as many as in 2000.
Costs per beneficiary have stabilized in recent years, thanks largely to slower growth in spending on prescriptions, improvements in efficiency and the cost controls put in place by the 2010 healthcare law, most notably the new restraints on payments to Medicare providers. Some healthcare experts argue that those restraints are artificial and unsustainable, and history is on their side. Similar efforts in the past foundered within a few years, after doctors and hospitals, objecting to low rates, threatened to stop treating Medicare patients.
But even if the cost per beneficiary holds steady, the coming demographic changes darken Medicare's long-term outlook. In 2000, there were four times as many workers paying Medicare taxes as there were retirees receiving benefits. By 2030, there will be fewer than 2.5 workers per retiree. The trust fund that supports hospital coverage is projected to run out of money in 2024. And Medicare costs are expected to consume an ever-growing share of the federal budget, from $560 billion in 2011, or 15% of federal spending, to $1.1 trillion in 2022, or 19%.
In the face of these numbers, Republican budget negotiators have endorsed a plan to cut $600 billion from Medicare and other federal healthcare programs. Obama has called for cutting about half that amount, even as many Democrats argue for no cuts at all to Medicare benefits.
http://www.latimes.com/health/la-ed-medicare-costs-20121209,0,2345638,print.story
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