Becker's Hospital Review

Becker's Hospital Review June 2014

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Hospital Review June 2014 • Vol. 2014 No. 6 INDEX Table of Contents p. 6 CFO Roundtable p. 9 Financial Management p. 15 Clinical Integration & ACOs p. 28 Hospital Management p. 46 Transaction & Valuation Issues p. 52 Health Information Technology p. 59 Beyond the Basics p. 68 CEO Tenure and Hospitals' Value Do long-term or short-term CEOs differ when it comes to profitability? p. 46 9 Things for Hospital Boards to Consider in Transactions For hospital boards that have decided to take the M&A plunge, a few thoughts to keep in mind. p. 52 CFO Roundtable Four CFOs on their strategies for controlling costs, surviving compressed revenue and avoid- ing layoffs. p. 9 Building Brands and Networks: What Clinical Affiliations Mean for Providers and the Healthcare Industry By Helen Adamopoulos Above all, Rochester, Minn.-based Mayo Clinic aims to advance integrated and team-delivered care, according to David Hayes, MD, medical director of the Mayo Clinic Care Network. When considering how to expand Mayo's presence in a way that would promote integrated care, the organization's "My Best Investment": 9 Hospital Executives Reflect By Helen Gregg Major investments by hospitals and health systems, once concentrated in new facilities and construction projects, increasingly include mergers and acquisi- tions of other providers, including physicians; the implementation of new IT systems and investments in major projects and initiatives, according to a report from Moody's Investors Service. Below, nine hospital and health system leaders reflect on the best investments they have made, and how those investments paid off — financially or otherwise. Viewed in a vacuum, no other pro- gram in the U.S. healthcare system has been as influential during the past 50 years than Medicare. Medicare has mostly done what Pres- ident Lyndon B. Johnson and other social reformers had hoped it would do: provide healthcare access to the nation's oldest citizens. For hospitals and health systems, Medicare is the benchmark for all reimbursements, and depending who you ask, that may be a good or bad thing. According to the Medicare Payment Advisory Commission, the average Medicare margin for a U.S. hospi- tal in 2012 was -5.4 percent. That means for every dollar a hospital spent treating a Medicare patient, the hospital received a little less than 95 cents in return. Looking at MedPAC's data, hospi- tals that typically lose the most on Medicare patients are nonprofit, urban hospitals without a teaching program. Hospitals that perform the best are for-profit, rural hospitals and some major teaching hospitals. However, MedPAC noted that al- though most hospitals continued to lose money on Medicare patients, the average all-payer margin for hos- pitals reached a 20-year high in 2012. continued on page 28 continued on page 16 continued on page 15 Special Section: 150 Great Places to Work in Healthcare What if Medicare Were the Only Payer? By Bob Herman SAVE THE DATE! Becker's Hospital Review CEO Strategy Roundtable November 5, 2014 Ritz-Carlton Chicago, Chicago 40 Hospital & Health System CEOs Speaking Co-chaired by Scott Becker, Publisher, Becker's Hospital Review, and Chuck Lauer, Former Publisher, Modern Healthcare To learn more visit To register, visit

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