Issue link: https://beckershealthcare.uberflip.com/i/1161749
40 POPULATION HEALTH 40 CEO/STRATEGY Moody's: CommonSpirit's atypical dual- CEO model is potentially cumbersome By Ayla Ellison M oody's Investors Service assigned a "Baa1" rating to CommonSpirit Health's approximately $5.8 billion of proposed series 2019 revenue bonds on July 15. The credit rating agency weighed in on Common- Spirit's dual-CEO structure in a news release announcing the rating action. Chicago-based CommonSpirit was formed through the Feb. 1 merger of San Francisco-based Dignity Health and Englewood, Colo.-based Catholic Health Initiatives. Moody's said the "Baa1" rating reflects the "heightened execution, integration, governance and business risks of the combined organization." CommonSpirit operates 142 hospitals across the U.S., and Moody's said the health system's broad footprint and diversity of revenue streams some- what mitigate the challenges related to the complexity and magnitude of the merger. The credit rating agency specifically noted the potential chal- lenges of the health system's leadership structure. "The announced Office of the CEO structure (whereby each CEO has identified responsibilities and decision-making authority) of Common- Spirit is atypical and could be cumbersome, potentially effecting the rate of organizational and cultural change," Moody's said. Fitch Ratings assigned a "BBB+" rating to CommonSpirit's bonds on July 15 and also commented on the health system's co-CEO structure. The credit rating agency said it believes "significant operational oversight" is already occurring under the Office of the CEO structure, which supports Fitch's expectation for margin improvement in years to come. Fitch and Moody's both said CommonSpirit's outlook is stable. "Lloyd Dean and Kevin Lofton are very gifted leaders, and I'm confident they and CommonSpirit will thrive," said Scott Becker, JD, publisher of Becker's Hospital Review. n Why Democrats aren't blaming hospitals for healthcare costs By Emily Rappleye T he early rounds of debates suggest Democrats have decided on one issue: Insurance companies — and to some degree pharmaceutical companies — are re- sponsible for the United States' healthcare cost predicament, as Olga Khazan points out in a July 31 column in e Atlantic. Democratic presidential candidates includ- ing Sen. Kamala Harris, D-Calif., Sen. Ber- nie Sanders, I-Vt., Sen. Elizabeth Warren, D-Mass., Sen. Kirsten Gillibrand, D-N.Y., former Vice President Joe Biden and New York Mayor Bill De Blasio have all railed against payers in the debates, Ms. Khazan reported. However, she notes, this narrative has le out another major contributor to the problem: hospitals and physicians. Why have Democrats glossed over providers? One likely reason is the money, Ms. Khazan suggests. e American Hospital Association is a huge lobbying organization, she wrote. e American Medical Association and the American Hospital Association are, in fact, the fih and sixth biggest spenders on lobby- ing of any organization over the past decade, according to data from MapLight, a nonpar- tisan research organization. In 2019 alone, the AMA has spent $11.5 million on lobbying and the AHA has spent nearly $10.2 million. Meanwhile, MapLight data shows America's Health Insurance Plans has spent $5.1 mil- lion so far in 2019, the Blue Cross Blue Shield Association spent $3.5 million, and United- Health Group spent nearly $2 million. e spending of those payer organizations com- bined is roughly equal to that of the AHA. Notably, Mr. Sanders in July pledged to re- ject donations from political action commit- tees related to pharmaceutical and insurance companies and asked all Democratic con- tenders to do the same. He did not mention donations from organizations representing hospital or physician interests. n House launches rural healthcare task force By Emily Rappleye T he House Ways and Means Commit- tee on July 16 formed a healthcare task force for rural and underserved populations. A bipartisan panel of four representatives will hear from experts to understand the challenges associated with healthcare delivery in rural areas and underserved communities. It will use this information to explore policy options to address these challenges. The task force is led by Reps. Danny Davis, D-Ill.; Terri Sewell, D-Ala.; Brad Wenstrup, R-Ohio; and Jodey Arrington, R-Texas. "There is no question that our country is facing a serious crisis in ensuring that rural Americans have the same access to quality care and medical services as their urban and suburban counterparts, with over 90 rural hospitals closing their doors in the past three years, including two in my dis- trict in the last year alone," Mr. Arrington said in a news release. "That is why, now more than ever, it is critical we develop sustainable solutions to support those liv- ing in America's breadbasket and energy basin so that we, as a nation, can continue to maintain a safe, affordable and abun- dant supply of food and energy." n