Becker's Hospital Review

30 CFO / FINANCE UPMC Expands International Operations With 50% Stake in Rome Hospital By Ayla Ellison P ittsburgh-based UPMC has ex- panded its Italian operations by acquiring a 50 percent ownership stake in Salvator Mundi Internation- al Hospital, a 75-bed private hospital in Rome, according to the Pittsburgh Post-Gazette. UPMC, which will jointly own the facility with Rome International Hospital Man- agement Srl, will lead clinical operations at Salvator Mundi International Hospital. UPMC will name the hospital's CMO and COO, system spokeswoman Wendy Zellner told the Pittsburg Post-Gazette. UPMC has had operations in Italy for more than 20 years and currently runs a radiotherapy center in Rome, a trans- plant hospital in Palermo, an outpatient diagnostic and wellness center in Carini and a health center in Tuscany, accord- ing to the report. n Study: Acquired Hospitals May Experience Decline in Operating Margins, Revenue Post-Transaction By Alia Paavola O n average, acquired hospitals experience a two-year decline in op- erating margins, revenue and expenses, according to a survey con- ducted by Deloitte Center for Health Solutions in collaboration with the Healthcare Financial Management Association. The study analyzed more than 750 hospital acquisitions that occurred be- tween 2008 and 2014 and asked 90 hospital CFOs about their transactions to learn how mergers and acquisitions affect a hospital's performance. Here are six insights from the study. 1. Acquired hospitals collectively saw a decrease in operating expenses post-transaction; however, operating revenue declined at a greater rate. On average, this trend lasted two-years. 2. The report suggests changes in revenue and capital investments post-trans- actions as a factor leading to the trend of declining operating margins. 3. Nearly 80 percent of acquiring entities made significant capital invest- ments into the acquired facilities. 4. Thirty-one percent of executives from acquired hospitals sought out merg- ers to improve their access to capital. 5. Forty percent of executives from acquiring hospitals sought out M&A to increase their market share. 6. When CFOs were asked how much of their financial goals were reached through M&A, 40 percent of respondents said they achieved at least 25 per- cent of their goal. n Physicians Call Anthem's New Imaging Reimbursement Guidelines 'Arbitrary and Unwise' By Morgan Haefner T he American College of Radiology, a Reston, Va.-based professional medi- cal society, argued Anthem's new im- aging policy for hospital-based MRI and CT scans is "arbitrary and unwise," according to a Richmond Times-Dispatch report. Here are five takeaways. 1. On July 1, Indianapolis-based Anthem end- ed coverage of hospital-based MRIs and CT scans without prior approval in Indiana, Kentucky, Missouri and Wisconsin, and ex- panded the policy to Ohio Sept. 1. Hospitals will need to submit a precertification request for any patient receiving an MRI or CT scan at the facility, and in most cases the imaging service will only be covered at the hospital if Anthem deems the request medically neces- sary, among other factors. 2. e payer will expand the policy to Califor- nia, Connecticut, Maine and Virginia March 1, according to the report. e widespread policy change aims to incentivize the use of cheaper alternatives at freestanding facilities. 3. Virginia Health Information, a nonprofit organization providing health information to businesses and consumers, said an MRI of a knee provided at a physician's office cost $597 in 2015. Comparatively, the same scan cost $1,678 at a hospital the same year. 4. While costs for MRIs and CT scans are gen- erally higher in hospital settings, Julian Walk- er, a spokesperson for the Virginia Hospital & Healthcare Association, told Richmond Times-Dispatch, "Decisions about advanced imaging tests that patients need to diagnose and treat an illness or injury should be made with patient interests in mind. Decisions by insurers to restrict where patients are permit- ted to receive a necessary medical procedure fail to meet that standard." 5. A Bon Secours Richmond (Va.) Health System spokesperson told the publication the system is talking with Anthem to under- stand possible implications of the policy. e spokesperson added, "Bon Secours firmly be- lieves the selection of the proper setting for imaging services should be a medical deci- sion, rather than a business decision." n

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