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15 November 2011

Midwest Edition
Calendar
November 15
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Walmart’s New Target: Primary Care
Retailer Aims to Transform Local Medical Practice
Walmart is apparently intending to create a network of cheap, quality primary care clinics throughout its thousands of stores, according to a story on NPR on Nov. 9. The country’s largest retailer confused the issue, however, by putting out a statement later that day denying the thrust of the story. John Agwunobi, M.D., president of Walmart Health and Wellness, said the document on which NPR based its report was “overwritten and incorrect. We are not building a national, integrated, lowcost primary care health care platform.” That comment left open the question of what Walmart is actually doing. The company has long been interested in using its thousands of store locations and brand muscle to offer basic health services. In 2007 it announced plans to open 400 instore clinics. It built only 140 of them. Other retailers, such as Walgreens and CVS, have far more retail clinics. There are about 1,300 store-based clinics in the country, according to Merchant Medicine, a Minnesota research rm. Walmart has 4,400 retail locations in the U.S. and employs 1.4 million Americans, making it the largest private employer. It got its start in Arkansas and has more than 1,000 locations in the Midwest. Walmart’s request for information from vendors, downloadable from the NPR web site, states that the company “intends to build a national, integrated, low-cost primary care healthcare platform that will provide preventative and chronic care services that are currently out of reach for millions of Americans. Walmart intends to do this in an affordable and accessible way while maintaining or improving quality outcomes.” It is reaching out to potential partners “who have a care model or capability that can help dramatically drive down the cost of care.” The company says it aims to become “the largest provider of primary healthcare services in the nation” by driving down the cost of services and products while maintaining a high quality of care. Services to
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December 4-7
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January 6-8
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Thursday, Nov. 17, 2011
E-Mail info@payersandproviders.com with the details of your event, or call (877) 248-2360, ext. 3. It will be published in the Calendar section, space permitting.

12 P.M. CST

! !

The New Deal: Private Equity In Healthcare M&A ! Please join Shane Passarelli, senior vice president of the Healthcare Finance Group, and
James Unland, President of the Health Capital Group, to discuss the movement of private equity funds into the acquisition of hospitals and where this trend may be leading:

http://www.healthwebsummit.com/ppma111711.htm

a HealthcareWebSummit Event

co-sponsored by

PAYERS & PROVIDERS

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Payers & Providers
Top Placement... Bottomless Potential

NEWS
Walmart (Continued from Page One)

Page 2

Advertise Here
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In Brief
Internal Medicine Group is Bought by NorthShore System
NorthShore University Health System has acquired a 15-physician practice in Highland Park, Ill., in the wealthy northern suburbs of Chicago. Ravinia Associates in Internal Medicine will join a growing number of phycisians practices that have thrown their lot with NorthShore. The practice is close to NorthShore’s Highland Park Hospital, and only six miles from Lake Forest Hospital, which was acquired by Northwestern Memorial HealthCare, a rival to NorthShore. NorthShore now has about 740 doctors in its physicians group. Robert Block, M.D., president of the physicians group, said Ravinia Associates needed to get out from under rising operational costs and the problems of administering the practice. NorthShore could run the practice more effectively than the doctors themselves, he said.

Medicaid Cutbacks in Wisconsin to Affect 65,000 Poor People
Wisconsin lawmakers passed a measure last week that would exclude 65,000 people -- half of them children -- from the state’s indigent care programs. The vote in the Joint Finance Committee split 11 to 4, with all Republicans voting in favor of the cutbacks and all Democrats voting against. Medicaid covers about one fth of the population in Wisconsin, or 1.2 million residents. The administration of Gov. Scott Walker, a Republican, wants to trim benets for about 250,000 residents, raise premiums for

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be offered include clinical care, diagnostics, “If I was a primary-care physician (or preventative care, and wellness products. association) I would boycott Walmart, and The RFI provides a list of chronic diseases direct my patients away from their pharmacy,” Walmart wants to tackle, among them Dwyer said. diabetes, asthma, obesity, COPD, Glen Stream, M.D., president of the osteoporosis, HIV, arthritis, kidney disease, American Academy of Family Physicians in and high cholesterol. Its list of preventative Leawood, Kan., said he would be “gravely and diagnostic interests run a full gamut of concerned that this is going to fragment care. services. At a time when we now clearly understand According to an article in the McKinsey that people having a source of comprehensive Quarterly from 2002, Walmart effectively and continuous care in one location is a revolutionized the retailing industry, with feature that improves quality of care and pricing and productivity benets that spread drives down costs.” throughout the U.S. economy – known as the Retail analysts are skeptical. “It is a very, Walmart Effect. Its innovations in information very different business than retailing,” said technology, supply-chain management, Colin McGranahan, an analyst with Sanford distribution set the pace. And it also became Bernstein. “It requires extremely different famous for hardball tactics with suppliers that competencies, not many of which Walmart sliced their prot margins while making them has today. It’s a business and a market that lots dependent on Walmart for sales volume. of very smart people have tried to streamline With a market share of 9% in general over time, and it’s ummoxed most of those merchandise in 1987, Walmart enjoyed a folks.” productivity advantage of 40% over its Walmart as a corporation and employer competitors, measured by real sales per has a troubled history in the healthcare arena. employee. By 1995 it had Long notorious for not offering attained a share of 27% and health insurance for the vast enjoyed a productivity premium majority of its low-wage of 48%. employees, it indirectly steered Walmart’s primary-care them toward Medicaid and concept is “a really ambitious indigent care programs. For many re-imagination of what you can years Walmart offered insurance do in a retail clinic,” said Bob to part-timers only after two years Kocher, M.D., a former of employment. Under external McKinsey consultant, White pressure, the company altered that House advisor, and Brookings requirement to one year in 2006. Institution scholar, in a In October the company William M. Dwyer conversation with NPR. “It backtracked from that policy, Healthcare Futurist should lead to better prices for saying new part-time workers who patients. Health-care is one put in fewer than 24 hours a week place where prices seldom fall would be ineligible for insurance, and there’s not much competition around while premiums would go up steeply and value.” coverage would be slimmed down. William M. Dwyer, a healthcare futurist “The current health care system is based in Kansas City, Mo., said the Walmart unsustainable for everyone and, like other concept “doesn’t look the same as the CVS or businesses, we've had to make choices we Walgreens play. wish we didn't have to make,” said Walmart “It could take retail medicine to a whole spokesman Greg Rossiter. new ‘Steve Jobs’ era, particularly in primary Walmart’s U.S. sales have been stagnant for care,” he said.! “They will not be hesitant to the past two years. Some commentators hire physician assistants and nurse suggested that moving into health clinics practitioners and get the cost down would be a way to attract more shoppers into dramatically.” the store who would buy general If Walmart brought the same tactics to bear merchandise. on medicine as in general retailing, with the Walmart is being advised in this process by same result, it could be devastating not only PricewaterhouseCoopers. A copy of all for suppliers but also for traditional physicians submissions is to be directed to a director at practices, especially in rural areas where PwC whose name and email address appear Walmart has a strong presence. on the RFI.

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Payers & Providers
Longer ALOS!*

NEWS

Page 3

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Family Docs Weigh in on Exchanges
AAPF Asks that Consumer Needs Come First
The American Academy of Family Physicians estimates that health insurance exchanges will reduce the number of uninsured in Illinois by 5% between now and 2020. Gordana Krkic, vice president of government relations for the Illinois Academy of Family Physicians, said the introduction of state health insurance exchanges is likely to cause painful disruptions for many in the health insurance industry. But family physicians are well-positioned to drive and shape health exchanges and other consumer-oriented insurance reforms. State legislatures will be grappling with creation and implementation of the exchanges in the sessions that begin in January. The Illinois legislature intended to take up the issue in its veto session in October and November, but so far no bill has been passed. Health insurance exchanges are among the keystone innovations in the Affordable Care Act. Each state is called upon to built an online exchange where families and small employers may comparison shop for health plans, and gure out what subsidies they may qualify for. States have wide leeway to decide how comprehensive or how passive their exchange may be. States that don’t enact qualifying legislation and build their own exchange will be swept into a federally operated exchange. The AAFP has developed eight principles for that call for 1. fair representation of stakeholders; 2. enhanced access to and payment for the patient-centered medical home, or PCMH; 3. standardized contracting; 4. primary care targets; 5. robust primary care-based essential benets; 6. presumption of eligibility; 7. rewards for quality; and 8. protection for consumers and physicians. Meanwhile, the insurance industry lobbyists have said that exchanges should focus on affordability and efciency and not pursue an active purchaser model. In a comment letter to the Centers for Medicare and Medicaid Services in advance of the Oct. 31 deadline, America’s Health Insurance Plans asked federal regulators to allow the widest range of state exibility in establishing and regulating the insurance exchanges.

In Brief
others, and terminate coverage for a year if a family misses a payment. This year federal payments will fall because of a reduction in federal aid to the states. That leaves the state government on the hook for a larger share of the total expenses. The proposals are intended to save $298 million a year. A single parent with two children who earns more than $27,795 a year would have an annual premium of $1,390, compared to $120 before the change. State Rep. Tamara Grigsby, a Democrat from Milwaukee, predicted that many poor families would leave the program because they don’t have enough money to pay the new premiums.

Michigan Senate Bill Would Authorize Basic Health Exchange
The Michigan Senate last week approved a bill authorizing creation of a health insurance exchange. Gov. Rick Snyder, a Republican, indicated he was in favor of the bill, which creates a minimal, basic exchange that meets the requirements of the Affordable Care Act. Under the bill, families and businesses of less than 50 people could shop online in an environment comparable to Orbitz.com or Travelocity.com. The state would create a sevenmember board to oversee the online marketplace. A toll-free phone line would answer questions from consumers. The Republican bill goes against the wishes of many conservatives and Tea Party afliates who eschew any cooperation with the federal law, which they hope will be overturned by the U.S. Supreme Court. But Snyder pointed out that such a bill lets the state take charge of its own destiny, rather than letting the federal government impose a more bureaucratic solution. If the law is overturned, the exchange can quietly be allowed to expire.

Employer Insurance Hits New Low
More Now Covered Through Government Plans
The percentage of Americans who get health insurance through their employers dropped to a new low of 44.5% in the third quarter, a Gallup poll revealed last week. The causes were the high rate of unemployment and underemployment, plus the declining number of employers who offer a health plan to their workers. In 2008, when Gallup rst surveyed the rate of insurance coverage, the rate was 49.8%. It has been sliding steadily since. Over that period the rate of uninsured rose from 14.6% to 17.3%, the highest on record. Those covered by a government health plan (Medicare, Medicaid, military or veterans plan) went from 22.9% to 25.1%, down slightly from a peak of 25.7% earlier this year. At the same time that the rate of insurance coverage has declined, the quality of that coverage has also taken some hits. Many employers, desperate to stem the steep rise in expenses associated with employee healthcare, are thinning out their plans or asking employees to absorb more of the cost burden. Providers sometimes nd that patients don’t have the nancial means to contribute their share, whether through copays, coinsurance, or deductibles. The Affordable Care Act attempts to cover more people by offering subsidies to people so they can buy private insurance, or obtain coverage through Medicaid. The percentage of 18- to 26-year-olds who don’t have health insurance has gone down, mainly because of a part of the law that allows them to be covered on their parents’ policies. At the same time, the rate of uninsurance has risen among those aged 25 to 64. The poll was part of the Gallup-Healthways Well-Being Index. The survey was conducted by telephone interview between July and September, contacting 90,070 adults in all 50 states.

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Payers & Providers

OPINION

Page 4

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Monitor Specialty Pharmaceuticals
Health Plans Have Tools to Match Drugs to Patients
Employers and health plans are quickly employer that wants to make sure these expensive awakening to the extraordinary cost of drugs reach patients who will benet—and not specialty pharmaceuticals. This category of used needlessly on others who will not—can ask drugs, which treat cancer, rheumatoid arthritis, its health plan these questions: multiple sclerosis and other complex diseases, * How much are we spending on specialty already costs $64 billion annually, or 22% of pharmaceuticals? Plans that try to measure this all pharmaceutical spending. Development of cost are best prepared to manage it. New tools new drugs, plus an aging workforce facing can help identify spending on specialty drugs, as chronic and acute conditions, are contributing well as the pharmacogenomic tests that help to annual cost increases of 16%. determine appropriateness for a specic patient. In many instances these specialty drugs are * Is the plan spending on the right therapies prescribed for individuals for whom they won't today and as growth accelerates in the future? work – at a yearly cost of as much as $80,000. Evidence-based tools can help plans and The genetic makeup of a person or tumor providers support their policies for coverage and may indicate whether the drug will be effective appropriate use. Ask whether your plan is using or cause damaging side effects. A growing an automated system to ensure that when a number of pharmacogenomic tests are physician orders a specialty medication it is in available to help determine which patients are accordance with evidence-based guidelines for candidates for certain drugs. that diagnosis. But ensuring that the * How is the plan managing appropriate testing is done high demand for the exploding continues to be a challenge. number of pharmacogenomic Consider the anti-tumor diagnostic tests? Tests to drug Herceptin, originally used determine whether a patient is a in late-stage breast cancer and genetic match for a certain now also used for some earlytreatment are coming onto the stage types of cancer. Sales market so rapidly that it is tripled to $1.2 billion per year nearly impossible for physicians from 2001 to 2006, at up to to be aware of them all. The $60,000 per patient. goal of managed care is not to Meanwhile, it was reduce the use of tests, but becoming clear the drug rather use them where needed worked in only 25% to 30% of to optimize their impact. It breast cancers that had high would be short-sighted to deny levels of HER2 protein. By an appropriate $200 test that 2006, guidelines called for could determine whether an By Matthew Zubiller $80,000 cancer drug will be standard HER2 testing in patients with invasive breast cancer to effective; in turn, it would be determine the drug's wasteful and cause unnecessary appropriateness. Even so, a 2009 review of suffering to use a powerful therapy if a test could medical literature suggested that HER2 testing determine in advance that it would not work. was underused, translating into potentially * Do physicians, patients, labs and payers have millions of dollars in unnecessary costs and all the information they need at the point of care distress for patients who endure difcult to help choose the right tests and perform them? treatments that are futile. The best programs use decision support via Quantifying and controlling total spending automation and notications at the point of care, on specialty pharmaceuticals is difcult for with evidence-based criteria as the basis of that health plans because many are injected or support. infused in the doctor's ofce and, therefore, billed under the medical benet, rather than Matthew Zubiller is vice president of advanced the pharmacy benet. diagnostics management at McKesson Health Health plans can take steps to manage costs Solutions. Reprinted and excerpted with and quality by using tools that support permission from Business Insurance [May 30, appropriate decisionmaking and utilization. An 2011]. © Crain Communications, Inc.

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Payers & Providers

MARKETPLACE/EMPLOYMENT

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VICE PRESIDENT OF FINANCE
For more than 170 years Rush University Medical Center, located just west of downtown Chicago, has been leading the way in developing innovative and often life-saving treatments. Today Rush is a thriving center for patient care and research, in the midst of a transformation to recongure its campus and processes to support its vision of becoming the medical center of choice in Chicago and among the very best in the United States. Rush University Medical Center seeks a highly self-motivated and accomplished Vice President of Finance to oversee all activities of the Corporate Finance Departments of the Medical Center and Rush Oak Park Hospital. The academic medical center comprises Rush University Medical Center, Rush University, Rush Oak Park Hospital, Rush Health, Rush Children's Hospital and the Bowman Health Center, allowing for interaction with a wide spectrum of corporate hospital and university administrators, the board of directors, physicians and clinical staff. Reporting to the Senior Vice president/Chief Financial Ofcer of the Medical Center, you will be responsible for the following: • General accounting operations • Financial systems supporting corporate nance, decision support and budget ofce • Fund accounting; payroll; accounts payable and xed assets • Taxation compliance and reporting • University nancial affairs • External audits for federal and state funds and pension plans • Executive analysis on all nancial reports; knowledge of latest developments in the accounting eld • Joint venture nance • Mergers and acquisitions • External nancial reporting for obligated group Requirements: • • • • • Bachelor's degree in accounting/nance/business. CPA and/or MBA. Senior level nancial experience in an academic healthcare organization. Excellent leadership qualities. Progressive and innovative thinker. Ability to effectively interact with all levels of personnel.

To apply and learn more, please visit: http://www.jobsatrush.com/. Please reference job # 2011-1635, and mention Payers & Providers

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MARKETPLACE/EMPLOYMENT

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It costs up to $27,000 to fill a healthcare job*

will do it for a lot less.
Employment listings begin at just $1.65 a word Call (877) 248-2360, ext. 2 Or e-mail: advertise@payersandproviders.com Or visit: www.payersandproviders.com
*New England Journal of Medicine, 2004.

!VP OF MANAGED CARE
National Surgical Hospitals (NSH), a rapidly growing Chicago-based specialty surgical hospital company, is seeking a VP of Managed Care to strategically & operationally spearhead company managed care initiatives. The VP of Managed Care will:

• Develop, implement & manage the managed care strategic initiatives & contracting with national 3rd party payers
• Develop & implement sales & broker/consultant strategies

• Develop managed care strategic plans & marketing forecasts • Develop strategy to maximize the effectiveness of contractual agreements on quality,
nancial viability & customer satisfaction

• Plan & promote favorable public relations with payors • Maintain dialogue with managed care payors • Provide analysis & review of managed care contracts • Develop tools & processes to maximize the nancial return of managed care contracts • Track & trend outcomes from managed care contracts • Support individual facilities in contract administration & negotiations
Masters Degree in Health Care, Public Health or Business Administration preferred; min. 5 yrs. recent experience in a senior level position dealing with managed care strategies required. Must have demonstrated comprehensive knowledge of healthcare systems; existing relationships with large payors in terms of managed care contracting; highly developed communication & organizational skills; ability to work collaboratively & credibly with payors to achieve common objectives. Position is Chicago-based. Relocation will be required if not currently residing in the area. NSH offers a highly competitive compensation & benets package. For condential consideration, please e-mail resume to:

Susan Nash Director of Executive Recruitment E-mail Address: snash@nshinc.com
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MARKETPLACE/EMPLOYMENT SEEKING A NEW POSITION?

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CAN HELP.
We publish advertisements for those seeking new career opportunities for just $1.25 a word. If you prefer discretion, we’ll handle all responses to your ad. Call (877) 248-2360, ext. 2, or e-mail advertise@payersandproviders.com.

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