Becker's Hospital Review

May 2018 Issue of Beckers Hospital Review

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23 CFO / FINANCE S&P expects new rating criteria to be unfavorable for hospital districts By Alia Paavola S &P Global Ratings expects its revised rating criteria for nonprofit hospitals and health systems in the U.S. and Canada, which was published March 19, to have a nega- tive impact on nonprofit hospital districts. While the "vast majority" of standalone providers and health systems will not see a negative rating action, S&P expects 60 percent of hospital districts to be downgraded up to three notches, 10 percent of districts to see an upgrade and 30 per- cent of hospital districts to remain unchanged. In comparison, out of the 150 health systems and 350 stand- alone hospitals rated by S&P, the credit rating agency expects 70 percent of health systems and standalone hospitals to maintain their current rating, 10 percent to be downgraded and 20 percent to be upgraded. S&P expects the majority of health systems and standalone hospitals to remain the same because the revised criteria are very similar to the criteria published in December 2014. n Best Buy donates $20M to St. Jude Children's By Alia Paavola B est Buy, after raising money through a 12-week fundraising campaign, donated more than $20 million to Memphis, Tenn.-based St. Jude Chil- dren's Hospital, according to the Sun Current. All services for patients at St. Jude Children's are cov- ered free of charge. According to the Sun Current, this means Best Buy's contribution could help provide treatment for 68 acute-lymphoblastic leukemia pa- tients, 2,000 CT scans, 3,000 days in the intensive care unit or almost 13,000 days of chemotherapy. "The continued generosity of our corporate partners, celebrity friends and the millions of holiday shoppers who support our mission year after year is a blessing for which we are very grateful," said Marlo Thomas, national outreach director for St. Jude Children's. "It is because of their efforts that we are able to continue groundbreaking research and treatment." Best Buy has participated in the same fundraising cam- paign since 2013 and has contributed more than $60 million. n Charges for patient visits in hospital setting rose 28% from 2012-17: 6 findings By Kelly Gooch A white paper published by Fair Health examines increases in medical prices for certain procedure categories over a five-year time period. For the white paper, Fair Health analyzed its database of more than 25 billion privately billed healthcare claims to determine a med- ical price index for six procedure categories from May 2012 to May 2017. e six categories examined were: pa- tient-provider visits done in a professional setting outside the hospital, such as a physi- cian's office; patient-provider visits done in a hospital setting; medicine (procedures that are not considered patient-provider visits); surgery (procedures for which the physician bills the insurer or patient); pathology and laboratory, which includes procedures such as organ- or disease-oriented panels, drug testing, therapeutic transfusion medicine, microbiology and in vivo laboratory proce- dures; and radiology, which includes things such as X-rays, radiographs, ultrasounds and positron emission tomography. Within each category, Fair Health deter- mined the charge index — representing pro- fessional charges such as physicians' charges or technical charges such as equipment. It also determined the allowed amount index — representing what insurers pay. Facility fees were not included in the examination. Here are six findings. 1. e Fair Health Medical Price Index showed the allowed amount index for profes- sional patient-provider visits outside the hos- pital rose from an index value of 1.00 in May 2012 to 1.21 in May 2017. 2. e charge amount index for patient-pro- vider visits done in a hospital setting increased 28 percent, from an index value of 1.00 in May 2012 to 1.28 in May 2017. is was slightly higher than the 26 percent increase for allowed amounts for the same category. 3. Fair Health found the surgery allowed amount index grew only 2 percent during the studied time period, from an index value of 1.00 in May 2012 to 1.02 in May 2017, while the charge amount index for that category grew 3 percent. 4. e medicine allowed amount index grew from 1.00 in May 2012 to 1.17 in May 2017, and the pathology and laboratory allowed amount index grew from 1.00 to 1.07 during that time period. 5. e radiology allowed amount index grew from 1.00 to 1.07 from May 2012 to May 2017. 6. Fair Health concluded: "e FH Medical Price Index showed increasing costs over a five-year period in every procedure catego- ry, but the growth varied from 28 percent in median procedure charges for hospital [patient-provider visits] to 3 percent for sur- gery. Sudden rises and dips sometimes oc- curred, as well as more steady increases, but for all categories, the period was marked by an overall increase. e index also showed that, although charges and allowed amounts oen follow similar trends, differences sometimes occur." n

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