Becker's Hospital Review

13 CFO / FINANCE Tenet to sell 2 Tennessee hospitals as part of $350M deal By Ayla Ellison T enet Healthcare, a 65-hospital chain based in Dallas, entered into a defini- tive agreement Dec. 12 to sell its hospi- tals and other facilities in the Memphis, Tenn., area to Methodist Le Bonheur Healthcare. Tenet is selling Saint Francis Hospital-Mem- phis, Saint Francis Hospital-Bartlett (Tenn.), the physician practices associated with the hospitals, and six urgent care centers to Memphis-based Methodist Le Bonheur. Tenet agreed to sell the hospitals and other assets for $350 million in cash, according to a Dec. 13 filing with the Securities and Ex- change Commission. The parties expect the transaction to close in 2020, pending regulatory approvals. After the transaction is completed, Tenet's Conifer Health Solutions subsidiary will continue to provide revenue cycle management services to the two hospitals. n Ascension's revenue climbs to $6.5B in Q1 of fiscal 2020 By Ayla Ellison S t. Louis-based Ascension saw revenues increase in the first quar- ter of its fiscal 2020, which ended Sept. 30, 2019, but the system ended the three-month period with an operating loss, according to financial documents. Ascension reported operating revenue of $6.5 billion in the first quarter of fiscal 2020, up 4.9 percent from $6.2 billion in the same period a year earlier. The health system said the revenue boost was attributable to a few factors, including the acquisition of the remaining interest in Bay Medical Sacred Heart in Panama City, Fla., in March. Ascension also saw patient volume rise due to the acquisition of Bay Medical and adding more employed physicians. During the three months ended Sept. 30, inpatient admissions, emergency room visits, inpatient surgeries and equivalent discharges increased. Ascension said outpatient volumes increased 2.4 percent year over year. Ascension's operating expenses climbed 4.5 percent year over year. The system's impairment, restructuring and nonrecurring losses totaled nearly $35 million in the first quarter of fiscal 2020. Ascension said the bulk of the nonrecurring losses — $23.9 million — were due to one-time termination benefits and other restructuring expenses. Ascension ended the first quarter of fiscal year 2020 with an operating loss of $23.1 million. That's compared to an operating loss of nearly $28 million in the same period a year earlier. n An equitable way to pay physicians? Structured salaries only, Mayo suggests By Molly Gamble M ayo Clinic's review of 2,845 physi- cians' pay suggests a structured, sala- ry-only compensation model, which the system has used for more than 40 years, effectively eliminates pay disparities. e Rochester, Minn.-based health system turned to a structured compensation program for physicians to remove financial incentives to deliver unnecessary or less-than-desired care, according to a Mayo Clinic News Network re- port published by the Morning Call. e mod- el contains no incentives or opportunities for bonus pay, and nonsalary compensation and benefits are consistent across the system's loca- tions and specialties. Cleveland Clinic and Kaiser Permanente also pay physicians salaries without incentives for volume of services performed. eir models stand in contrast to fee-for-service payments and arrangements, which can offer incentives for physicians to order more services than are best for patients. To assess compliance with its own compensa- tion model and whether it effectively rules out pay gaps, Mayo Clinic reviewed data — pay, demographics, specialty, full-time equivalent status, benchmark pay, leadership roles and other factors — for all permanent staff phy- sicians employed by Mayo Clinic in Arizona, Florida and Minnesota who held clinical roles as of January 2017. e system affirmed pay equity for 96 per- cent of the 2,845 physicians it reviewed. For those physicians whose salaries fell outside the predicted range, further evaluation found they actually had the appropriate compensa- tion — most oen due to unique or blended departmental appointments. Of the 115 phy- sicians with higher- or lower-than-predicted compensation, there was no correlation with gender, race or ethnicity. Mayo stands behind the findings as a call for healthcare organizations to systematically de- fine the drivers and incentives of physician compensation, assess whether they unfairly exclude or disadvantage certain groups, then develop more equitable processes. "Our analysis is unique and to our knowledge the first to demonstrate that a structured com- pensation model achieved equitable physician compensation by gender, race and ethnicity, while also meeting the practice, education and research goals of a large academic medical cen- ter such as Mayo Clinic," says Sharonne Hayes, MD, a Mayo Clinic cardiologist and the study's first author. "e analysis of this long-stand- ing salary-only model was reassuring, not only that it was equitable, but that we as an organi- zation adhere to our own standards." n

• Cover