Becker's Hospital Review

22 CFO / FINANCE Mayo Clinic adds Mexico hospital to care network By Leo Vartorella R ochester, Minn.-based Mayo Clinic added Centro Médico Puerta de Hierro in Guadalajara, Mexico to the Mayo Clinic Care Network, a group of inde- pendent health systems that work closely with Mayo to improve quality standards. Centro Médico Puerta de Hierro operates five hospi- tals and other facilities in the Guadalajara metropoli- tan area. As part of the network, the system will have access to a database for medical information created by Mayo Clinic specialists that offers medical protocols and treatment recommendations, electronic consulta- tions and second opinions with Mayo physicians. For complex cases, Mayo specialists will be available via live video conferences. "By providing a second medical opinion, we at Centro Médico Puerta de Hierro are now capable of provid- ing our patients the advantage of broader diagnostic results supported by the advice and expertise of Mayo Clinic," said Alejandro Gil Luna, general director of the hospital operator in Mexico. "Mayo Clinic specialists are not only prestigious in the U.S., but around the world." n Allina Health's investment losses bring 92% drop to annual net income By Ayla Ellison A llina Health's revenues increased in 2018, but the Minneapolis-based health system ended the year with lower operating income and net income than in the year prior, according to audited financial documents released March 13. Allina reported revenues of $4.4 billion in 2018, up from $4.2 billion in 2017. The boost was attributable to higher net patient service revenue, which climbed 5.7 percent year over year. The system's operating expenses totaled $4.3 billion in 2018, up from $4 billion a year earlier. Expenses grew across sev- eral categories, including supplies and salaries and benefits. Allina ended 2018 with operating income of $86.3 million. That's down 42 percent from 2017, when the system report- ed operating income of $148.2 million. After factoring in nonoperating items, including a $59.6 mil- lion investment loss, Allina's net income tumbled 92.4 per- cent year over year to $22.4 million in 2018. n Bankrupt hospital chain's plan to offload 5 California clinics faces opposition By Ayla Ellison V erity Health, an El Segundo, Ca- lif.-based hospital chain that filed for bankruptcy last year, is selling its as- sets. However, a proposed deal to divest five of its clinics has hit a snag. In February, Silicon Valley Medical Devel- opment, an affiliate of El Camino Hospital in Mountain View, Calif., bid $1.27 million to purchase five of Verity's clinics, according to the Silicon Valley Business Journal. e tenta- tive deal, which must be approved by a bank- ruptcy court, is facing opposition from some workers and a major insurer. Unionized workers oppose the deal because it doesn't include job protections for them. e five clinics employ 146 members of SEIU-United Healthcare Workers West, all of whom are expected to lose their jobs when the sale closes. Affected workers will be al- lowed to reapply for their jobs using an on- line portal set up by El Camino Hospital, ac- cording to the Silicon Valley Business Journal. Cigna is also opposing Verity's tentative agreement to sell the five clinics. In bankrupt- cy court documents filed March 12, Cigna ar- gues Verity failed to give adequate notice of the proposed sale. Based on a supplement to the asset purchase agreement filed by Verity on March 8, Cig- na's provider agreements with the five clinics will end when they are sold. e proposed sale date does not give Cigna enough time to notify patients of the change. "Adequate, advance notice of the proposed sever- ance of any clinic from the Cigna Provider Net- work must be provided in order to ensure that patients, covered individuals in the community and healthcare providers are smoothly transi- tioned from the clinics and are not economically prejudiced through no fault of their own," stated Cigna's objection to the sale. "Indeed, recogniz- ing the potential negative impact on enrollees and others, California law requires no less than 60 days' notice of any termination/discontinua- tion of a contract with a provider group." Cigna said it needs additional time to notify its members of the changes. "To be clear, Cigna does not seek to compel the assumption and assignment of the Cigna Pro- vider Agreements as part of the sale. Rather, it seeks adequate time to notify its members that the clinics will no longer be in-network as of a date certain," stated the insurer's objection. In a statement to Becker's Hospital Review, Sil- icon Valley Medical Development President Bruce Harrison said a new contract is being negotiated with Cigna and other insurers. "All health insurance provider contracts are either part of the asset purchase agreement or, due to notification deadlines, will be sepa- rately entered into by SVMD," he said. "Both processes aim for continuing coverage for pa- tients at the new clinics. In addition to Cigna, there are two other insurance payors (Unit- edHealthcare and HealthNet) with whom SVMD is negotiating separate contracts." n

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