Becker's Hospital Review

10 10 The List Issue While 45 states prepared their budgets for the fiscal year beginning July 1, many faced significant shortfalls and called for special legislative ses- sions. A survey by Associated Press reporters found 22 states projected shortfalls for 2016 fiscal year, with Illinois leading the way with the largest budget gap. 4. The Patient Protection and Affordable Care Act has a few great points; note, however, the balance between taxes and the costs of government versus the increased coverage remains unclear. ere are a couple great points in the healthcare law that should not at any cost be repealed. In essence, the ability for people to obtain cover- age even if they have preexisting conditions and other certain other concepts are critically important. Despite its lack of popularity, polls have highlighted a complicated relationship between the American public and the PPACA, suggesting many people see the value in certain provisions of the law while not supporting the legislation in full. For instance, a Washington Post-ABC News poll found 54 percent of Americans oppose the PPACA, but 55 per- cent thought the Supreme Court should not block federal subsidies in King v. Burwell. However, the total billions of dollars spent by the government and the in- crease in taxes that comes with it compared to the benefits of the healthcare law thus far seem out of balance. In essence, the costs seem high and the benefits may be low. e impacts of these changes can have an overriding effect on the American economy. e increased taxes plus increased insurance costs mean a double hit to American incomes. In 2014, the percentage of money consumers spent on healthcare rose to a record high of 20.6 percent. Healthcare's piece in the consumer spending pie has grown for years, up from 15 percent in 1990, and it remains a big concern especially as baby boomers enter their retirement years. In the long run, higher taxes and greater insurer costs can harm con- sumer spending, which is a big part of the economic strength of the country, accounting for 70 percent of economic activity. 5. Epic seems to be taking over the world. Each day, we read about a different contract between a provider and Verona, Wis.-based Epic Systems, the largest provider of EMR services in the country. e company recently signed a $1.2 billion contract with Boston-based Partners HealthCare, mak- ing it the academic health system's biggest single investment to date. In Feb- ruary, Rochester, Minn.-based Mayo Clinic announced it selected Epic to replace its existing EMR and revenue cycle technology, which was formerly provided by Cerner. Additionally, Epic recently launched a new partnership with IBM Watson Health, the new dedicated healthcare unit of IBM. To- gether, the IT companies are partnering with Mayo Clinic to apply Watson's cognitive computing capabilities to EMRs. Please read "Epic Decoded" at beckershospitalreview.com. It is a fascinat- ing story about a very influential company that has relationships with some of the biggest names in healthcare, including: Oakland, Calif.-based Kaiser Permanente, Cleveland Clinic, Johns Hopkins Medicine in Baltimore, UCLA Health in Los Angeles, Arlington-based Texas Health Resources, Massachu- setts General Hospital in Boston, Mount Sinai Health System in New York City and Duke University Health System in Raleigh, N.C. 6. The antitrust case against Blue Cross Blue Shield is one to watch. It was recently reported that the Blue Cross Blue Shield Associa- tion and all 37 of its independently owned companies were sued in suits ad- vancing in a federal court in Alabama. e court consolidated claims into two plaintiff classes. One class reflects individuals and small employers, who allege Blue Cross consolidation has led to higher insurance prices and less competition. e second group of plaintiffs reflects providers stating that the Blue Cross consolidation has led to lower prices and reimbursement. ey essentially say that BCBS companies are able to buy services as a cartel for all practical purpose. Here, the case is interesting in that it survived a motion to dismiss and is backed by very significant lawyers. Blue Cross has previously been sued over the years on antitrust claims, and it is not clear where this will go. It is inter- esting in the context of the situation where there has been so much consolida- tion amongst insurance companies between Cigna, United, Aetna and Blue Cross such that in most states one or two is the dominant payer. 7. PPACA has not provided the benefits for nonprofit hospitals as expected. Many nonprofit hospitals, particularly systems, continue to perform pretty well. ere was, however, a very interesting statement within a recent Moody's report that clarified how the new health law has not been a tremendous boon for these hospitals. Hospitals in states that expanded Med- icaid were largely expected to benefit from more paying customers (unpaid bills fell 13 percent on average), but their 2014 operating margins did not increase any more than hospitals in the 22 states that did not expand Medic- aid, Moody's found. is is again an interesting story in that so much has been touted about the healthcare law and Medicaid expansion providing stability for hospitals and health systems, and it seems as though this may not be the case this far. A Moody's analyst said the finding by Moody's questions the political and in- dustry narrative that Medicaid expansion lowers bad debt and drives finan- cial improvements for hospitals. n 10 Largest For-Profit Hospital Systems By Erin Marshall Here are 10 of the largest for-profit hospital systems in the U.S., based on number of acute care hospitals. e list is based on data from the American Hospital Directory, which contains information from hospital cost reports submitted to CMS. Data was accessed June 29. Hospital cost reports are submitted to fiscal intermediaries about three months aer the end of a hospital's fiscal year, and the most common fiscal year ending dates are Dec. 31, June 30 and Sept. 30. Systems are listed in descending order based on the number of acute care hospitals. The company rankings total 10, although the list includes ties, which means there are more than 10 individual systems listed. 1. Community Health Systems (Brentwood, Tenn.) — 188 2. Hospital Corporation of America (Nashville, Tenn.) — 166 3. Tenet Healthcare (Dallas) — 74 4. LifePoint Health (Brentwood, Tenn.) — 56* 5. Prime Healthcare Services (Ontario, Calif.) — 32 6. Universal Health Services (King of Prussia, Pa.) — 28 7. IASIS Healthcare (Franklin, Tenn.) — 18 8. Ardent Health Services (Nashville, Tenn.) — 12 9. Capella Healthcare (Franklin, Tenn.) — 9 9. Steward Health Care System (Boston) — 9 10. National Surgical Hospitals (Chicago) — 8 *Figure includes acute care facilities within Brentwood, Tenn.-based Duke LifePoint Healthcare n

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