11 September 2012

Midwest Edition
September 23-25

HealthPartners, Park Nicollet Merge
Deal Will Create $5 Billion Giant In Upper Midwest
until the agreement is effective, likely in early 2013 pending regulatory approvals. Combined, the two providers will have revenue of nearly $5 billion a year and operate ve hospitals, including two in Wisconisn. They will also operate a 1,500physician medical group and a health plan with 1.4 million lives. “In many ways, we’ve shown what’s possible when healthcare organizations work together to put people rst. By combining our organizations, we’ll take that collaborative spirit much further, creating new potential for meeting the changing needs of our community at this important time in healthcare,” said David Abelson, M.D., Park Nicollet’s chief executive ofcer. Under the merger plans, the combined entity would operate under the HealthPartners name, which is much more broadly recognized in the Midwest. HealthPartners
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Two of the Midwest’s most prominent healthcare systems announced last week they would merge, creating a multi-hospital system =4%"904290!49!</'54/>!</'"!*+(*?!@8"! operating in two states. A9$"'>29$49"9$/7!B2$"7)!<7"3"7/95?! The merger of !#2902'"5!&-!$8"!<7"3"7/95!<7494>)!$840! 0"%49/'!40!/4%"5!/$!96'049:!#'2C"00429/70?! HealthPartners and ! D**EFDGE+?! Park Nicollet, both located in the <74>H!B"'"!C2'!I2'"!A9C2'%/$429 Minneapolis suburbs of Bloomington and St. Louis Park, is expected to cut costs October 3-5 for both the organizations. Ofcials with both A992FN"9$429!*+(*)!O2-/7!./'H!B2$"7)! HealthPartners and Park O2>8"0$"')!I4>84:/9?!J!I"54>/7!I/49! Nicollet say they merged !$'""$!<29C"'"9>")!C2>60"5!29!$8"! organizations will focus >2%#7"$"!74C"!>->7"!2C!%"54>/7!5"34>"! on reducing patient 5"3"72#%"9$?!DPE? readmissions, cutting <74>H!B"'"!C2'!I2'"!A9C2'%/$429 patient infection rates, and expand the use of electronic medical records in order to eliminate duplicative care. December 4-5 The transaction is expected to create opportunities for growth, through “shared knowledge, care redesign efforts, pooled resources and investments and other ;4C"!>4"9>"!J77"-!/996/7!>29C"'"9>"?! advantages,” said Jeremiah Whitten, director I499"/#2740!<293"9$429!<"9$"'?!J9! of media relations for Park Nicollet. "K/%49/$429!2C!$8"!H"'-!5'43"'0!49!74C"! However, Whitten noted that the groups 0>4"9>"!/95!8"/7$8>/'"?!<20$!LMJ? won’t begin looking at concrete opportunities <74>H!B"'"!C2'!I2'"!A9C2'%/$429

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Merger (Continued from Page One)
CEO Mary Brainerd will retain that position over the two organizations. Abelson will oversee the medical group component of HealthPartners, which will be called the Park Nicollet HealthPartners Care Group. The merger would place the combined eneity among the top 10 largest employers in the state, according to the Minneapolis/St. Paul Business Journal.The transaction strengthens Park Nicollet so it will hold up against other large providers in the region.

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In Brief
Illinois Hospital CEO Resigns Suddenly
Dan Woods resigned abruptly as chief executive officer of St. Anthony’s Memorial Hospital in central Illinois. Woods, who had served as CEO for 12 years, announced his resignation at a staff meeting late last week. A hospital spokesperson said Woods’ decision to resign took hospital personnel by surprise. The 146-bed St. Anthony’s, which is based in Effingham, is part of the Springfield-based Hospitals Sisters Health System. In a prepared statement, Woods said he and his wife had been considering his stepping down for a significant length of time. However, he did not give a specific reason for his departure. Mark Reifsteck, manager of Sisters’ Southern Illinois division, has been appointed interim CEO. The hospital spokesperson said it would take about six months to recruit and hire a permanent replacement.

No layoffs are expected to be held after the merger. And patients and members will continue to receive services from their provider and health plan without interruption. The new organization will include medical and dental clinics, Park Nicollet Methodist Hospital in St. Louis Park, Regions Hospital in St. Paul, Lakeview Hospital in Stillwater, Minn., Hudson Hospital in Hudson, Wis. and Westelds Hospital in New Richmond, Wis. – TAMMY WORTH

IOM Claims $750B Wasted Annually
Cincinnati Children’s Cited as a Success Story
“If home building were like healthcare,” said a new Institute of Medicine report, “carpenters, electricians, and plumbers each would work with different blueprints, with very little coordination.” With physicians, hospital administrators and insurance companies on often diverging building plans, the idea that the healthcare system could fall apart like a badly built house is not surprising, according to committee members at a press conference last week. They called for collaboration across different sectors of the industry. The cost of an inefcient system is no small burden: the institute, a nonprot that advises the government, estimated that $750 billion was wasted on inefcient spending and care in 2009. But the solutions, according to the report, are not strictly nancial. In that report, “Best Care At Lower Cost: The Path to Continuously Learning Health Care In America,” a group of public health experts, physicians and scientists propose a strategy to make healthcare cost effective based on examples of best practices in health technology, leadership and administration. The 382-page report exhorts physicians to keep up to date with technology, hospitals to improve their management, patients to learn about the system to make more informed decisions and scientists to use stricter standards to evaluate their research. Eugene Litvak, one author of the report and head of the Institute For Healthcare Optimization, said that hospitals have not been maximizing their productivity. He cited Cincinnati Children’s Hospital, a case study in the report, and one of his organization’s clients, as a success story. By staggering the surgeons’ schedules more, for example, the hospital was able to decrease its physicians’ overtime and use more of the costly patient beds that were

HCSC, Lung Association Work On Asthma Initiative
The Health Care Services Corp. has teamed with the American Lung Association of the Upper Midwest to improve asthma care to children in Illinois and the Southwest. The Chicago-based HCSC operates Blues plans in Illinois, New Mexico, Oklahoma and Texas. It will work with the ALAUM to provide more coordinated care to 480,000 children with asthma, primarily through training at community clinics that treat at-risk children. The training will be

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IOM (Continued from Page One)
often left empty. The adjustment spared the hospital the need to spend $100 million on new beds. “These methods of operations management exist in every other industry – it’s only healthcare and education where they don’t,” Litvak said. The report also supports the highly debated use of nancial incentives to motivate doctors and others to be more efcient. The authors said the new federal Center for Medicare & Medicaid Innovation should take the lead in evaluating payment systems. A graph in the report shows that $210 billion was wasted on excess services in 2009, which the authors said could have been avoided by rewarding physicians and hospitals who cut down on unnecessary procedures and treatment. But the incentive model has met resistance in the healthcare industry, and some researchers have found that value-

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In Brief
provided via HCSC’s Healthy Kids, Healthy Families initiative, which aims to improve the health of 1 million kids. “Public health experts, schools, and healthcare providers recognize that poorly managed childhood asthma is a pressing public health and social problem,” said Paul Handel, M.D., HCSC’s chief medical officer. “We are dedicated to addressing this devastating disease…we believe that education is the key to managing asthma.”

based incentives do not signicantly affect the cost of services. John Goodman, head of the National Center For Policy Analysis, said in an interview that rewarding physicians in this way was not an appropriate method to address the issue. He said that health care providers should be able to choose how to run their own programs. “I don’t think that the demand side should try to tell the supply side what to do,” Goodman said. The IOM committee said that the U.S. was spending up to 17% of its GDP on health care, a far higher proportion than other developed countries, and with very little additional benet. That not only affects spiraling government spending on healthcare, but also siphons off resources that they said should be used for other public services such as education. (Provided by Kaiser Health News www.kaiserhealthnews.org).

Michigan Researchers Caution Against Tight Insulin Control For Children Undergoing Cardiac Surgery
University of Michigan researchers have concluded that controlling the blood sugar levels of pediatric patients undergoing cardiac surgery does not improve outcomes, The study demonstrates that children do not enjoy the same benefits adult cardiac patients do when their blood sugar is closely monitored and controlled. Overall, 980 pediatric cardiac patients undergoing cardiac bypass procedures ranging in age from newborn to 3 years were closely examined. It was the largest clinical trial ever involving cardiac pediatric patients. “This study seems to indicate that tight glycemic control should not be standard practice in pediatric intensive care units for children who have had cardiac surgery,” said Michael G. Gaies, M.D., a senior physician at the university’s C.S. Mott Children’s Hospital and the study’s lead investigator. “We will continue investigating new approaches to improve both short-term recovery and longer-term outcomes for children who need cardiac surgery.”

Report Follows Minn. Payer Profits
Plans Netted More Than $200M In Past Year
A recent report found that Minnesota health insurers reported net income of $230 million in 2011 on $7 billion of revenues. They would have earned more, but four of the plans capped Medicaid and MinnesotaCare underwriting income to 1% of premiums, or $103 million. The report is the 23rd annual Minnesota Health Market Review 2012 by Allan Baumgartner, a Minnesota-based analyst and consultant. He has analyzed markets in other states including Illinois, Texas, New York and California. The state’s Medicaid income totaled $165.8 million – 8.5% of premiums – and $60 million in income from Minnesota Senior Health Options, a program serving people receiving Medicaid and Medicare. HMOs also saw prots from employer plans. The report found that medical expenses went down, while premiums increased. The difference between group premiums and medical expenses increased from $48 in 2010 to $66 in 2011. The report also found that enrollment in county plans and HMOs fell by 5.1% in 2011. Even still, HMOs had a total of $1.743 billion in capital in 2011, enough to pay claims and overhead for more than three months without other revenue coming in. – TAMMY WORTH


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A Compendium Of Telemedicine Tips
Take These Steps When Implementing a Program
For many organizations, telemedicine offers the ability to improve access to medical services while potentially lowering the costs associated with the delivery of care. This objective aligns well with the national mandate to deliver efcient and effective care in a consistent and reproducible way. The implementation of a telemedicine program requires the active participation of physicians, clinical and management staff, as well as patients. Here are ve essential factors to consider when implementing a telemedicine system: implement, assess, manage, and provide managerial oversight to telemedicine. The role of telemedicine coordinator is to provide a single point of contact to manage the implementation from testing to ongoing utilization. This coordinator should work with the steering committee to develop all the policies and procedures for the clinical and medical staff members to follow when using the telemedicine system. They should also be responsible for executing the project plan, managing deadlines, troubleshooting equipment issues, and accessing technical support as well as responding to any concerns while telemedicine is adopted by the organization.

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1. Create and maintain a steering committee composed of a multi-disciplinary team of physicians and clinical and management staff. The purpose of this steering 4. Recruit and train staff who are By committee is to develop the mission interested in the implementation and Anna and vision of a telemedicine program utilization of telemedicine. Identify within the organization. All committee Grellert or recruit staff members who are members should embody the position of eager to embrace a new model of the organization that telemedicine is healthcare delivery. Look for staff simply a tool that supports quality and cost members who feel comfortable using the effective care. Initially, this steering technology, as well as working with patients committee should develop and update a via a computer monitor. As part of recruitment project plan with deadlines and budget and training processes, ask staff to participate variances and eventually create the policies on mock sessions. and procedures related to the use of the 5. Provide a feedback loop and a telemedicine program. The committee should communication plan for staff and patients. also serve as the communication hub for The organization should create an internal purposes. environment where the staff and patients feel 2. Establish strong physician leadership to advocate and provide telemedicine services. The steering committee should include physician leaders known by the medical staff for their commitment to improving the patient care experience and to the implementation of innovative care delivery systems. Committed physician leadership with strong communication and conict resolution skills will provide the medical staff personnel needed to introduce, implement, and embrace telemedicine among the organization’s practitioners. These physician leaders will need to identify the medical staff members who have the skills to manage patients via the telemedicine system in a manner that ensures a seamless interaction between the patient and physician. The patient should feel like the interaction was meaningful and addressed their needs. 3. Identify a telemedicine coordinator to comfortable providing feedback to the coordinator and/or steering committee. All staff involved or impacted by telemedicine should be surveyed frequently in the early stages of adoption and, at a minimum, on an annual basis. In addition, all patients should receive a satisfaction survey at the end of each telemedicine session. The results of the staff and patient surveys should be compiled and presented to the steering committee for discussion. A communication plan should be developed to share success stories and challenges that have been identied and already addressed.




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Anna Grellert is a manager with The Camden Group, a Caifornia-based national healthcare consulting firm.
Op-ed submissions of up to 600 words are welcomed. Please e-mail proposals to editor@payersandproviders.com


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