7/31/2019 Payers & Providers California Edition Issue of October 11, 2012

1/5

!"#$%&'!(()!*+(*!,!*+(*!%-!./-&'0!1!.'$234&'0!.5%6307389)!::;

Calendar

11 October 2012

E-Mailinfo@payersandproviders.comwith

the details of your event, or call(877) 248-2360, ext. 3. It will be

published in the Calendar section,space permitting.

California Edition

Dignity Health has experienced signicantnancial duress over the past year and willlikely have some hard choices ahead as itmoves forward with a non-hospital expansion

outside of the western United States.The San Francisco-based Dignity, whichearlier this year changed its name fromCatholic Healthcare West, reported earlierthis monthdramatic drops inits scal 2012nancialperformance.Both itsoperationalmargins andinvestmentreturns took

signicant hits.Dignitys net income for the scal year

ending June 30 was $132.5 million a drop ofnearly 85 percent from scal 2011s $950.5million. Operating income was downsignicantly, to $59.1 million from $242.7million in the prior year.

Overall revenues were at, at $10.5billion, compared to $10.3 billion in scal2011.

Dignity ofcials blamed the downturn onlower patient volumes and underpaymentsfrom Medi-Cal and Medicare.

Investment earnings took a bigger hit than

operating income: They totaled just $73.4million, down from $717.9 million in the prior

year, a drop of 90%. During Dignitys scalyear, the Dow Jones Industrial Average andNASDAQ were up about 3 percent.

Dignity operates 39 hospitals in

California, Arizona and Nevada, although thevast majority of them 32 are in the GoldenState. In recent month it has made somesignicant acquisitions outside of the hospital

market. Itspurchase inAugust ofHealthWorks,which operatesoccupationalhealth clinics in16 states,comes on top orecent

investments inambulatory surgical centers and imagingcenters with other corporate partners.

We are growing to work more closelywith doctors, insurers, employers, andindividuals to transform our health system anddeliver higher quality, moreefcient care, said Dignity Health ChiefExecutive Ofcer Lloyd Dean.

However, Dignitys lackluster nancialperformance has drawn the attention ofFitchRatings, which earlier this month downgraded

October 15-17

;/6300$"3/#3$8!>885/6!;$83'D$'#?!E7&!

G(*JIGJOJ?

;63"K!@&'&!00$"3/#3$8!$8!&F/=38/#3$8!$

WEBINAR Thursday, October 25, 2012 10 A.M., PDT

MEDI-CAL EXPANSION: 2014 AND BEYOND

Please join Lucien Wulsin, Executive Director of the Insure the Uninsured Project, and ElizabethBenson Forer, CEO of the Venice Family Clinic, to discuss the challenges of Medi-Cal expansionunder the ACA.

http://www.healthwebsummit.com/pp102512.htm

a HealthcareWebSummit Event co-sponsored by PAYERS & PROVIDERS

Continued on Next Page

http://www.cpca.org/index.cfm/learning-center/cpca-annual-conference/http://www.cpca.org/index.cfm/learning-center/cpca-annual-conference/http://www.cpca.org/index.cfm/learning-center/cpca-annual-conference/http://www.cpca.org/index.cfm/learning-center/cpca-annual-conference/http://www.cpca.org/index.cfm/learning-center/cpca-annual-conference/http://www.cpca.org/index.cfm/learning-center/cpca-annual-conference/http://www.cpca.org/index.cfm/learning-center/cpca-annual-conference/http://www.cpca.org/index.cfm/learning-center/cpca-annual-conference/http://www.cpca.org/index.cfm/learning-center/cpca-annual-conference/http://www.calhospital.org/disaster-planninghttp://www.calhospital.org/disaster-planninghttp://www.calhospital.org/disaster-planninghttp://www.calhospital.org/disaster-planninghttp://www.calhospital.org/disaster-planninghttp://www.calhospital.org/disaster-planninghttp://www.calhospital.org/disaster-planninghttp://www.calhospital.org/disaster-planninghttp://www.calhospital.org/disaster-planninghttp://www.cvent.com/events/transforming-the-health-care-landscape/event-summary-8465014f2dff466cb82e511096d9e2c7.aspxhttp://www.cvent.com/events/transforming-the-health-care-landscape/event-summary-8465014f2dff466cb82e511096d9e2c7.aspxhttp://www.cvent.com/events/transforming-the-health-care-landscape/event-summary-8465014f2dff466cb82e511096d9e2c7.aspxhttp://www.cvent.com/events/transforming-the-health-care-landscape/event-summary-8465014f2dff466cb82e511096d9e2c7.aspxhttp://www.cvent.com/events/transforming-the-health-care-landscape/event-summary-8465014f2dff466cb82e511096d9e2c7.aspxhttp://www.cvent.com/events/transforming-the-health-care-landscape/event-summary-8465014f2dff466cb82e511096d9e2c7.aspxhttp://www.cvent.com/events/transforming-the-health-care-landscape/event-summary-8465014f2dff466cb82e511096d9e2c7.aspxhttp://www.cvent.com/events/transforming-the-health-care-landscape/event-summary-8465014f2dff466cb82e511096d9e2c7.aspxhttp://www.cvent.com/events/transforming-the-health-care-landscape/event-summary-8465014f2dff466cb82e511096d9e2c7.aspxhttp://www.healthwebsummit.com/pp102512.htmhttp://www.healthwebsummit.com/pp102512.htmhttp://www.healthwebsummit.com/pp102512.htmhttp://www.calhospital.org/disaster-planninghttp://www.cvent.com/events/transforming-the-health-care-landscape/event-summary-8465014f2dff466cb82e511096d9e2c7.aspxhttp://www.cpca.org/index.cfm/learning-center/cpca-annual-conference/

7/31/2019 Payers & Providers California Edition Issue of October 11, 2012

2/5

!"#$%&'!(()!*+(*!,!*+(*!%-!./-&'0!1!.'$234&'0!.5%6307389)!::;

Payers & Providers Page 2

Top Placement...Bottomless Potential

Advertise Here

(877) 248-2360, ext. 2

In Brief

CPCA LaunchesPatient Home Initiative

The California Primary CareAssociation has teamed with a

variety of private companies andthe NCQA in order to launch aninitiative that will focus on thecreation of patient-centeredmedical homes statewide.

According to CPCA ChiefExecutive Officer CarmelaCastellano-Garcia, the intent isreceive NCQA designation for all900 of its members, most of whichare community clinics.

The initiative builds on theteam-based approach to care thathealth centers have used as theirmodel for many years andleverages their existing strengths tobuild a sustainable standard for

health home activities andservices, Castellano-Garcia said.She added that a year-long pilotprogram moved about 150 clinicscloser to NCQA designation as apatient-centered medical home.

The initiative includestechnical support offered to theclinics, primarily in the form of anonline, cloud-based portal that canguide clinics through the NCQAapplication process.

The portal was created byArcadia Solutions, which isworking with Azara Healthcare toassist the CPCA in the initiative.

Care Harbor TreatsAbout 4,000 Patients

Care Harbor, a not-for-protorganization that provides healthcareservices to uninsured and low-income patients in large groups,treated nearly 4,000 patients during

Continued on Page 3

NEWS

MEET YOUR FELLOW READERS

Need to promote a conference? Your brand? Payers &Provider!se-mail list for all editions is available for youmarketing needs. Reach out to more than 12,000healthcare professionals who read our publications. CClaire Thayer at (877) 248-2360, ext. 3 or e-mail her clairet@mcol.com.

the ratings on Dignitys $3.5 billion in debtfrom A+ to A.

According to Fitch. Dignitys nancial

performance has been compressed sincescal 2009. Overall nancial metrics lag'A'

category medians and are not expected toimprove materially over the near term, Fitchsaid in a statement. It noted that Dignity also

will assume more risk as part of its overallplans in growing its operations.

Dignity (Continued from Page One)

Premium Increases Are ModeratingBoth Aon, Segal Project Relatively Calm 2013

Two new surveys by national healthcarebenet companies concluded that premiumincreases are at their most moderate levels inyears, but they have differing conclusions

about trends for 2013 and beyond.Although the surveys conducted by theNew York-based Segal Co. and Illinois-basedAon Hewitt both agree that health planpremiums will see mid to high single-digitincreases in 2013, there was some variance inhow their data was interpreted.

Segals data forecasts that health planpremiums will increase an unweightedaverage 8.7% in 2013, with increases rangingfrom 7.9% for health maintenanceorganizations to 10% for fee-for-serviceindemnity plans. Preferred providerorganizations, one of the most popular plans,

forecast an 8.3% increase.According to Aon Hewitt, premiums are

forecast to increase 6.3% in 2013. That is upfrom the 4.9% increase reported in 2012, butsignicantly lower than Segals numbers. Theaverage healthcare cost per employee was$10,522 per employee in 2012, up from$10,034 in 2011.

Both Aon Hewitt and Segal ofcialsattributed a combination of the economicclimate, extremely conservative budgeting forhealthcare expenditures and cost-shifting forthe relatively low premium increases.

As actual results materialized, employers

have seen some stabilization in employment

levels, less severe impact of high cost claimsa general movement towards consumer-driveplans and greater clarity around the averagecost impact associated with healthcare

reform, said Tim Nimmer, Aon Hewitts chihealthcare actuary. As a result, 2012premiums were offset to reect the better thaexpected historical experience.

Segal mostly concurred with Aon Hewitndings. According to its survey, 86% of itsrespondents said that implementing AffordabCare Act requirements in 2012 primarilymandatory preventative care coverage hadcost impact of 2% or less.

And while Segal projected 2013 increasthat are higher than Aon Hewitts, companyofcials believe it is part of a trend toward codeceleration. It projects that premium

increases for most health plans will be aboutone percentage point lower than what wasexperienced in 2012.

However, Segal was unable to afxprecise drivers.

While medical and prescription drugtrends are projected to decelerate in 2013, wdont know if deceleration is a long-term trenor a temporary result of current economicforces, said Edward Kaplan, a Segal seniorvice president and head of its healthcarepractice. We question whether medical carthat is being delayed or avoided could lead thigher rates of undetected or untreated

conditions in the future.

7/31/2019 Payers & Providers California Edition Issue of October 11, 2012

3/5

!"#$%&'!(()!*+(*!,!*+(*!%-!./-&'0!1!.'$234&'0!.5%6307389)!::;

Page 3Payers & Providers

Longer ALOS!*

Advertise Here

(877) 248-2360, ext. 2

*For our ads, not your hospital

In Brief

its most recent event in Los Angeleslate last month.

The free clinic, which wasconducted at the Los Angeles SportsArena just south of downtown L.A.,provided basic healthcare servicessuch as pap smears andmammograms, as well as dental and

vision care. More than 4,300clinicians and allied healthcareprofessionals volunteered their time.

Putting together a free clinic ofthis magnitude is no simple task, butthis is a prime example of what'spossible when the public and privatecommunities come together to servethose in need, said Care HarborPresident Don Manelli.

The recent Care Harbor sessionwas conducted in collaboration withL.A. Care Health Plan, the Medi-Calmanaged care insurer, as well ashospital operator Dignity Health, theCalifornia Endowment and LosAngeles County Supervisor Mark

Ridley-Thomas, whose districtincludes the downtown L.A. area.

Childrens HospitalReceives HHS Medal

Childrens Hospital of Los Angelesreceived the Silver Medal of Honoraward from the U.S. Department ofHealth and Human Services inrecognition of its organ and tissuedonor programs.

The medal is awarded to anydonor program that has a donor

conversion rate of 75% or greateramong living donors and 10% after apatients death.

Organ donation is the onepositive thing that can come out oftragedy the donor is giving anotherfamily and another child a secondchance at life, said Nancy Blake,CHLAs director of critical careservices and liaison toOneLegacy, the organ procurementagency Los Angeles area.

Altogether, the HHS 22 hospitalsin L.A. for their organ donationprograms, and 13 received silvermedals.

NEWS

Contexo Media is an independent provider of revenue-enhancing solutions for medical practices

to maximize their coding, reimbursement and compliance efforts. Thousands of health care

professionals rely on Contexo Medias coding books, software, eLearning and educational

workshops to stay on top of critical updates across the fast-changing medical landscape.

To learn more about our products and services,

visit our website at www.contexomedia.com

19144

Kaisers Halvorson Will Retire In 2013Has Led Organization For More than a Decade

George Halvorson, the longtime chiefexecutive ofcer of Oakland-based KaiserPermanente, announced he will retire at theend of next year.

Although known as a blunt talker,Halvorson slipped his retirementannouncement into the sixth paragraph of aletter to employees sent out last week.

When I joined (Kaiser), I told the boardthat I would commit toserving one decade, and I said they couldcount on me for that time frame. I picked adecade, in part, becauseI thought it would take

about that long to makethe kinds ofcontributions that Iwanted to make,Halvorson said in theletter. I also picked adecade because I was55 years old at the timeand I had long plannedto retire at age 65.

Halvorson spentnearly two decades asCEO ofHealthPartners,the Minneapolis-based

health plan, beforeassuming leadership ofKaiser in 2002. He has been a bitof an iconoclast within his ownorganization. Whereas most of Kaisers seniormanagement are physicians or hold IvyLeague degrees, Halvorson earned abachelors degree and MBA from tworelatively obscure colleges in Minnesota.Nevertheless, he took an organization oftenderided as a second-rate to other hospitals andmedical groups in California during the 1970sand 1980s and catapulted it to the top ranks ofproviders. Kaiser routinely scores high in

quality surveys from organizations as thediverse as the NCQA and Consumer Reports.Kaisers Thrive campaign also makes it one

of the best-branded healthcare organizationsin the nation.

Besides being one of the most visibleadvocates of healthier lifestyles for AmericanHalvorsons signature achievement will likelbe the launching of a comprehensive andintegrated electronic medical records systemwhich ofcials say helped it make dramaticquality gains and boosted patient satisfactionover the past decade. Kaiser completed therollout of KP HealthConnect in early 2010.

Halvorson has been quite proud andprotective of Kaiserssystem. In a presentation he

delivered to a nationalconference of healthcarenance executives last Junehe openly griped aboutICD-10 the voluminousexpansion of medical codeset to launch later in thisdecade.

"I hate ICD-10. It drivme crazy, Halvorson said a question-and-answersession after this speech,which focused onencouraging healthier

lifestyles. The primary reasofor his dislike of ICD-10 is h

belief it was designed with a paper-based system in mind, suggesting th

it could prove difcult for Kaiser to make thetransition without having to undertake majochanges to KP HealthConnect.

No successor to Halvorson has beennamed. He announced his departure with 1months notice in order to ensure a smoothtransition.

Kaiser Permanente has been a greatplace to work for me, said Halvorson, whonoted he would focus on initiatives to promoworkplace diversity after he left theorganization. I have very much enjoyed thelast decade.

George Halvorson

http://www.contexomedia.com/http://www.contexomedia.com/

7/31/2019 Payers & Providers California Edition Issue of October 11, 2012

4/5

!"#$%&'!(()!*+(*!,!*+(*!%-!./-&'0!1!.'$234&'0!.5%6307389)!::;

Payers & Providers PageOPINION

When Is Healthcare A CellPhone?Takes on Delivery, Economics Not Always Applicabl

Chris Rangel, a hospitalist, writes at

RangelMD.com, where this post originally

appeared.

)!?005&!@A./-&'0!1!.'$234&'0!30!

B5%6307&4!&2&'-!C75'04/-!%-!./-&'0!1!.'$234&'0!.5%6307389)!::;D!E8!/885/6!38432345/6!05%0"'3B#3$8!30!FAA!/!-&/'!GF(>A!38!%56H!5B!#$!(+!

05%0"'3%&'0ID!?#!30!4&632&'&4!%-!&J=/36!/0!/!.KL!/##/"7=&8#)!$'!/0!/8!&6&"#'$83"!8&M06#&'DE66!/42&'#30389)!05%0"'3%&'!/84!

&43#$'3/6!38N53'3&0OGPQQI!*>PJ*@R+

38S$TB/-&'0/84B'$234&'0D"$=

U/36389!/44'&00OP(P!VD!W$66-M$$4!X/-)!Y53#&!ZZ5'%/8H)!;E!A([+[

X&%03#&

MMMDB/-&'0/84B'$234&'0D"$=

L/"&%$$H

MMMDS/"&%$$HD"$=\B/-&'0B'$234&'0

CM3##&'

MMMD#M3##&'D"$=\B/-&'0B'$234&'0

]43#$'3/6!Z$/'4Y#&2&8!CD!

7/31/2019 Payers & Providers California Edition Issue of October 11, 2012

5/5

MARKETPLACE/EMPLOYMENTPayers & Providers Page 5

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. 2Or e-mail: advertise@payersandproviders.com

Or visit: www.payersandproviders.com

*New England Journal of Medicine, 2004.

SEEKING A NEW POSITION?

CAN HELP.

We publish advertisements for those seekingnew career

opportunities for just $1.25 a word.

If you prefer discretion, well handle allresponses to your ad.

Call (877) 248-2360, ext. 2, or e-mailadvertise@payersandproviders.com.