This is a blog by a former CEO of a large Boston hospital to share thoughts about negotiation theory and practice, leadership training and mentoring, and teaching.
Is there something they teach in hotel school that suggests that having unusual water in conference rooms is good for business?
In a previous post, I noted the silliness of importing bottled water from 8000 miles away to serve in conference rooms. Today I saw water served in lovely carafes, with blueberries at the bottom.
Blueberries?
Well, perhaps someone thinks that because they are the number one fruit when it comes to antioxidants, putting them in the bottom of a bottle will persuade people to have conferences in their hotel. But I think that's stretching things a bit.
In our group, the first question was, "Do you think they washed them?" The second question was, "Do you think they are real?" Then, "Can you taste them at all?" Answer: No.
To follow up on yesterday's post about the CC6 Lean team, I had a few minutes today to drop by just as the group was getting engaged in fishbone diagrams. These are used to brainstorm in more detail the nature of major problems, looking at their components and then asking the "five why's" to conduct a root cause analysis.
As I walked into the room during a break, a couple of people mentioned to me that the morning session had been a lot tougher, emotionally, than yesterday's current state analysis. This is a common stage in the Lean process. It is relatively easy to map out the current state. When you start talking about why it exists, it is hard not to blame someone else in the room or someone who is not in the room. "If [name] only did this differently, we could solve the problem," is the common refrain I have seen in other rapid improvement events.
But, the idea of Lean is to focus on the problem and not the person. This is not about blame. It is about a workplace environment that has evolved over the years -- full of work-arounds and inefficiency and waste. By the time I left, the group was again smiling a bit more and collaborating on how to analyze the situation. Later, they will invent countermeasures to help undo the waste, setting goals and targets and timelines for the next steps.
Here is a short video about fishbones to give you a sense of the concept and how it progresses. Jenine Davignon from our business transformation group is leading the class. If you can't view the video, click here.
The roll-out of Lean at BIDMC continues throughout the hospital. A current project is to redesign the work flow on "CC6," one of our busiest medical/surgical floors. Although the staff has been working on this for several months, it can be difficult to find time during the workday to make improvements when nurses, patient care technicians, and others have full patient assignments. So, this week, we have taken two days aside for an improvement event, during which the staff will have dedicated time to look at their processes and experiment with improvements.
I dropped by for a short time today to watch people outline the "current state" of their work flow. A person in each job category prepared a step-by-step itemization of their daily routine. I offer a videotape of sections of this below. In order, you will see Stacey Adamson, physical therapist; Dawn Castro, resource nurse; Mike Crowley, unit assistant; and Laurie Phillips, case manager. You will also briefly see Jenine Davignon, a management engineer from our Business Transformation office, and Allison Wang, a college co-op student in that office. And finally Oscar Juarez and Sandra Espinosa, being reminded to post lunch breaks as part of a busy day in the work flow of a patient care technician.
I was impressed by the complexity of each person's job. I also began to see, as they presented their daily work, opportunities for reducing waste and improving the work environment and patient care. The team will undoubtedly find many more of those opportunities during this two-day session. If I can drop by tomorrow, I will report back to you.
Our hospital neighbors to the north in New Hampshire have just taken a decisive step that presents a healthy challenge to the so-called "medical Mecca" in Massachusetts. Steve Ahnen at the New Hampshire Hospital Association writes to say:
Yesterday, we launched our initiative to eliminate harm in New Hampshire's hospitals by the year 2015. While we are proposing to eliminate all harm, our efforts will be clearly focused on those instances of harm that could be prevented if all of the evidence based practices had been followed that are known to prevent that harm.
This is such a terrific effort. It is putting a stake in the ground for our hospitals and they are excited and ready to move forward. We have lots to learn and hope to share that learning as we go.
You can find a copy of the press release here. Excerpts:
CONCORD – In a new effort to promote better and safer care to patients, the New Hampshire Hospital Association and Foundation for Healthy Communities have announced that hospitals across the state will strive to eliminate harm to patients by 2015. To accomplish this goal, hospitals will work together to consistently follow the processes of care that have been proven to increase patient safety.
“Hospitals in our state have made great strides in making improvements to quality of care,” said Steve Ahnen, president of the New Hampshire Hospital Association. “With this initiative, we’ll continue that work with an even more ambitious purpose and timeline.”
While there are no uniformly accepted definitions, “harm” in the Eliminate Harm Initiative refers to an injury associated with medical care that requires or prolongs hospitalization and/or results in permanent disability or death.
. . . Greg Walker, chairman of the Foundation for Healthy Communities and CEO of Wentworth-Douglass Hospital in Dover, said, “The boards of trustees of both the New Hampshire Hospital Association and Foundation for Healthy Communities unanimously passed a resolution to make this happen, and the CEOs of all 26 acute care hospitals are ready.”
A statewide steering committee will spearhead the N.H. Eliminate Harm Initiative and identify which aspects of harm hospitals will be targeted for elimination. Several hospitals are represented on that committee. Hospitals in New Hampshire already have been working for several years on improving patient care, including efforts to decrease infection rates through a campaign to promote hand washing among health care providers. Hospitals also are decreasing harm in the operating room by using a patient safety checklist before and during all procedures. Hospitals receive guidelines and tools that are used statewide to help them measure their progress.
“Our hospitals are poised to deliver the best health care in the country,” said Bruce King, immediate past chair of the NHHA board of trustees and CEO of New London Hospital. “The residents of New Hampshire are counting on us.”
As I was waiting to teach the second half of a Boston University MBA class (HM710, here) last night, I heard a student near the end of the first half saying that doctors would never focus on quality and efficiency improvements until the fee-for-service payment system ended and was replaced with a global, or capitated, payment system.
This, of course, is not so. You can look at our record and that of many hospitals to see dramatic improvements in quality and enhancements in efficiency under a fee-for-service payment system.
Our experience is that finances and methods of payments are not highly motivational to health care providers in the hospital setting. Instead, people are motivated by a genuine desire to improve the quality and safety of health care delivery. The problem is often a lack of knowledge of process improvement, requiring some training and encouragement from clinical leaders. Fortunately, once learned, there is a virtuous cycle between those activities and efficiency and cost-effectiveness.
So, while capitation may have important attributes, let's be careful not to underestimate the good intentions and ability of doctors and nurses to achieve worthwhile things under other payment regimes.
The acquisition of the Caritas Christi hospital system by the Cerberus private equity company continues to generate press here in Boston, and well it should given the size and importance of the transaction. Indeed the Boston Globe has a special section on this, which is updated as it publishes stories and editorials.
As I have noted before, the purchase has a lot to recommend it (including stability of pension funds, investment in under-capitalized hospitals, and tax revenues to municipalities and the state), but it also raises challenging public policy issues that the Attorney General, DPH, and the Court have to address. I have been trying here to outline some of those based on what I have learned about this issue.
Many of my colleagues in the non-profit hospital world have expressed confusion about how such a transaction is possible in a world of decreasing reimbursements, where even non-profits have trouble achieving a positive bottom line. I provided a general perspective here, and in a post below, I talk about how the use of a non-cash expense, depreciation, can provide a financial return to investors.
After I wrote that post, a colleague in the finance world wrote to say that there is another aspect of depreciation that I had neglected to mention that produces additional cash flow to the private equity firm. This is a financial tool that provides no benefit to tax-exempt hospitals, and so I again present it for the benefit of my non-profit colleagues and other interested readers. (Not being an accountant, I cannot claim expertise on all these matters: I trust CPAs reading this will correct any errors I make.)
Under the US tax code, firms can use accelerated depreciation for tax purposes. What does this mean and why is it helpful? Why does it give the private equity firm an additional incentive to dispose of property more quickly?
Let's say that you have acquired $10,000 dollars of furniture, which you plan to depreciate over its useful life. If that useful life is 10 years, you would take an accounting expense for 1/10 of the furniture's cost each year, or $1,000. (This assumes no salvage value at the end of the useful life.)
Under accelerated depreciation, for tax purposes, you get to write off more of the asset's value in the early years. In year one, for example, you could claim an expense of $1429.
Now, you obviously can't do this on your taxes for the entire useful life, as you would end up expensing more than the value of the asset. Indeed, in the later years, the tax depreciation expense has to slow down (see chart).
So what does this mean? This goes back to the request of some competing hospitals to the AG that would require Cerberus to hold on to the Caritas Christi assets for seven years, as opposed to the three years to which Cerberus has committed. If the firm has to hold on to its assets for a longer period, it starts to lose the advantages of accelerated depreciation. It is to its financial advantage to dispose of assets more quickly. That seems to be a simple (and perfectly legal) result of the US tax system.
By the way, the next firm to purchase the assets gets to do the same, all over again -- using the new purchase price as the basis for the original cost of the assets.
On that point, maybe someone out there can advise on one last item: What cost basis can Cerberus use for the assets it seeks to depreciate? I do not believe that the firm is actually making a cash payment to someone to acquire the hospitals. After all, the Archdiocese is not an "owner" in the financial sense, like a shareholder would be, since this is a non-profit corporation. It cannot receive funds from a purchase that could then be used for other functions of the Church. As best I understand, Cerberus is making cash commitments -- e.g., for pensions and capital investment -- to the hospital system in return for ownership, but I think that is different from making an asset purchase.
So once Cerberus owns the Caritas hospitals and their associated medical equipment, computer systems, furniture and other capital assets, are the assets valued at their original cost, or can the private equity firm re-value them at replacement cost? Clearly, that will make a difference in the potential to generate cash flow through depreciation. If you know the answer, please provide a comment.
I'm just back from the Hub on Wheels, where BIDMC staff volunteered their time to provide emergency medical services to the thousands of riders traversing Boston on a beautiful fall day.
A light story today, in the social media arena. If you are on Facebook, you either love or hate FarmVille. I mainly find it annoying when friends tell me they have bought a virtual bushel of virtual soybeans or some such thing. And truly, I just don't get the whole point. But over 18 million people play it every day.
There are 62 million active users -- roughly the population of the United Kingdom (which, by the way, has a total real -- not virtual -- farming workforce of about half a million).
Anyway, Shane Snow has published this post comparing Farmville with Real Farms. We learn, for example, that the average Farmville player is a 43-year-old woman and the average farmer is a 57-year-old man. And so on. It is strangely interesting.
As many Bostonians prepare to ride in the Hub on Wheels this weekend, my friend Honora sends a picture of the perfect mid-ride snack from Cycle Oregon 2010. Just what you need for the second 35-mile leg!
The proposed acquisition of the Caritas Christi system by the Cerberus private equity firm continues to be in the local news. Today's lede:
Caritas Christi Health Care executives have told union negotiators they will shutter St. Elizabeth’s Medical Center in Brighton and Carney Hospital in Dorchester if they can’t close a deal for the six-hospital chain to be bought by a New York private equity firm.
And further down in the story:
Caritas representatives asked for concessions from the nurses union, including a wage freeze, but no agreement was reached, the two said. The executives also urged more nurses to take an early retirement program introduced last spring. Compare this to what was reported in this story just one year ago:
With economic pressures on Massachusetts hospitals starting to ease, the strongest recovery may be taking place at an organization that was one of the weakest financially: Caritas Christi Health Care.
By aggressively cutting costs and boosting revenue from medical care, the Boston-based Catholic hospital chain is on track to post operating income of $31.1 million for the fiscal year ending Sept. 30, compared to a $20.4 million loss last year.
The anticipated swing of more than $50 million has been achieved through a series of moves, Caritas officials said. The chain consolidated operations at its six Eastern Massachusetts hospitals, cut jobs and froze salaries, negotiated higher reimbursement rates from insurers, and recruited more specialists to perform more complex - and profitable - procedures. A new urology group, for instance, has performed hundreds of prostate operations this year.
....Unlike some other hospitals, which have resisted union organizing efforts, Caritas signed an agreement with the Service Employees International Union to permit “free and fair’’ elections. Groups of employees at St. Elizabeth’s and Caritas Carney subsequently voted to join the union. Although the labor contracts are likely to boost expenses, de la Torre said he is sympathetic to workers who live in the same communities Caritas hospitals serve.
Higher labor costs as a result of unionizing will be offset by more than $30 million in annual cost savings, said chief financial officer Mark Rich, including by having groups of specialists treat patients at more than one hospital, and by merging physicians’ administrative functions. “There’s no one silver bullet,’’ Rich said.
At tonight's Annual Meeting, the BIDMC Board of Directors presented the ninth annual Robert M. Melzer Leadership Awards to three individuals who have been instrumental in “leading constructive, lasting and all-embracing change” at our medical center.
The Leadership Awards – named in recognition of Bob Melzer’s contributions here as former Chair of the Board and interim CEO in 2001 – are an opportunity for the board to celebrate a select few among our physicians, nurses, staff and lay volunteers. This year’s awardees are Elena Canacari, Joanne Pokaski and Paula Ivey Henry. These are the scripts of the presentations for each award.
At the end is a short video clip of the first two recipients' remarks. (I couldn't get the third because I was on stage.)
Elena Canacari, RN, CNOR, Director of Perioperative Services Presented by Marsha Maurer, Senior Vice President, Patient Care Services, and Chief Nursing Officer
I could not be more pleased to be here announcing Elena Canacari, Director for Perioperative Services, as a winner of this year’s Melzer Leadership award. For those of you who don’t know Elena, let me describe the scope and importance of her work at BIDMC.
Elena has a long history at both the Beth Israel and Deaconess hospitals, and has been Director of Perioperative Services at BIDMC for the past seven years. Her scope of responsibility spans two campuses and includes 38 ORs, three post-anesthesia care units, preadmission testing, OR scheduling, central processing, and a business unit with a total of more than 500 FTEs. These are areas which see high volume, pose high risk, and include some of our most expensive capital facilities and equipment, and priority services.
Two years ago, our organization experienced a wrong site surgery. You are all aware of this event – it presented a great challenge for the organization. Elena was an ever steady guiding force after that event, ensuring that staff involved in the event were supported, and that not only the OR, but the entire organization learned from this event. She led substantial changes to what is now called our “Universal Protocol.” This included developing a standard “scripted” timeout, and implementing this new standard throughout Perioperative Services. Part of that work was making sure the entire team is engaged and pauses for a “moment of reverence” before the incision. The “Universal Protocol” has since been rolled out to every procedural area in the medical center.
Elena has also been the leader of ongoing weekly “safety huddles” among perioperative leaders, and coordinator of quarterly interdisciplinary safety grand rounds, routinely attended by as many as 400 perioperative services staff.
Elena’s colleagues are so impressed with her that they nominated her for, and she won, the OR Manager of the Year Award, 2009, from OR Manager Magazine. Here is what her colleagues said about her.
Dr. Mark Callery, Chief of General Surgery, described a leader who has “an innate sense of professionalism, team leadership, even-handedness, and equity at all times.”
Dr. Malcolm M. DeCamp, former Chief of Cardiothoracic Surgery wrote: “I simply could not do my job without Elena’s advice, tutelage, expertise, wisdom, skill, sweat equity, and business savvy.” He describes Canacari as” the ‘glue’ that holds the entire surgical enterprise together.”
Nurse managers of the east and west ORs and perianesthesia areas agree that “Elena’s every word and action is grounded in integrity and trust. She offers strength and support during change with a clear focus and direction.”
In addition to her leadership in patient safety, Elena is also a seasoned and accomplished operations leader. She has inspired her team to produce record improvements in OR supply management, room turnover times, scheduling and OR utilization efficiencies, and employee safety and satisfaction.
Elena’s contributions at BIDMC are not the end of the story. She is a National Patient Safety Foundation Fellow – partnering with people across the country around safest practices. She is also an active member and leader in AORN affording our organization important opportunities to participate in national forums and leading change at the national level.
Yes, Elena is an outstanding leader and very deserving of this award. To sum it all up I need to tell a little story about this event. As it happens, this evening falls in the middle of what I knew to be Elena’s annual vacation, so it took a bit of scheming to get her here. In the course of this I was talking to her husband, Don. I could tell he was fretting a bit about pulling this off. He said to me, “Marsha, Elena is like steel.” I knew exactly what he meant. She has the strength, the durability, the solidity, the integrity, and the foundational importance of steel – and she has brought all of that to her role as a leader in perioperative services.
Joanne Pokaski, Director of Workforce Development Presented by Lisa Zankman, Senior Vice President, Human Resources
Joanne has been at BID almost six years. In that time, she has developed quite a few programs that have had a profound effect on our workforce.
This started with the recognition that BIDMC had a need to fill positions for which there was a skill shortage in the workplace while many of our employees wanted to advance their careers, but were blocked by the lack of credentials and the inability to go to school while working full time. This seemed like an opportunity for a win/win for the medical center and its employees.
In the beginning, Joanne started nursing and surgical tech programs by collaborating with a community college to bring academic courses on site at BIDMC. BIDMC selected applicants from current employees and provided loans to pay for the classes and clinical practicums on site. If graduates worked for two years as a nurse or surg tech, the loans were "forgiven".
This model worked so well that other pipeline programs were created for medical lab technicians (a grant Joanne wrote for the Massachusetts Workforce Competitiveness Trust Fund was awarded for $500,000), research administrators (now over 2/3 of current research administrators are graduates of this program) and patient care techs (the second class of 10 students is now completing their training).
In addition, the Boston Foundation granted BIDMC $500,000 to create an Employee Career Initiative which brings community college classes on site to prepare employees for college level work. In addition, there are academic and career counseling services for all employees.
In the past year, the Workforce Development Team has also added GED, ESOL and US citizenship classes.
These efforts have touched over 700 BIDMC employees and they have been done with a staff of only three people in addition to Joanne. This year, BIDMC was given the Gould Award from Associated Industries of Massachusetts -- a prestigious award only given to one company per year for their efforts in employee education and workforce development. This external recognition validates the achievements that have been made for BIDMC. Joanne's accomplishments will make an impact on BIDMC for years to come.
Paula Ivey Henry, PhD, Vice Chair of the Board of Trustees and Chair of the Patient Care Assessment and Quality Committee Presented by Paul Levy, President and CEO
One word consistently crops up when the subject is Paula Ivey Henry and that word is enthusiasm. Since joining the ranks of BIDMC’s volunteer leadership five years ago, Paula has greeted every task and assignment we’ve put to her with such characteristic fervor that anyone would be hard-pressed to resist the urge to help. It’s this infectious brand of enthusiasm that makes her such a motivating leader, as Vice Chair of the Board of Trustees and most especially as the Chair of the Patient Care Assessment and Quality Committee, one of whose goals, ironically, is to ensure that enthusiasm is the only thing we spread at the medical center.
The Patient Care Assessment and Quality Committee, or PCAC as it’s known in BIDMC circles, was designed to support the medical center’s aspirations for clinical quality and safety and is one of the hardest working lay leadership committees, with its members meeting monthly and often dealing with technically complex and emotionally fraught issues. Paula has embraced both PCAC’s mission and her role as its chair with fierce conviction, devoting hours well beyond the confines of scheduled meetings to stay abreast and informed about some of the most important topics on the Board’s agenda. Aside from the overriding “enthusiastic,” her colleagues call her “thoughtful,” “dedicated,” and “open” with “a burning desire to make ours a better institution.”
Because she has successfully encouraged – not with hard-sell persuasion but with passionate inspiration – her fellow lay leaders to participate in creative thinking and analysis, which has helped our clinical and administrative staff to achieve measurable results in the quality and safety arena – and because we know her work to meet our goal of eliminating preventable harm to patients has only just begun, we are so proud to present Paula Ivey Henry with the Melzer Leadership Award for Leading Constructive, Lasting, and All-Embracing Change.
Here's the video. If you can't see the video, click here.
Luz, in our accounts payable department, was alert when this invoice came through and sent me the following note:
Hi Mr. Levy, Good morning. I have attached a copy of an invoice from Azkit Publishing, that has no po. But it has your name listed. Please review and approve.
Of course, it is a scam. I print it here in case others receive a similar document from this company.
I wrote below about the difficult policy issues faced by the Attorney general in the review of the proposed acquisition of the Caritas Christi hospital system by the Cerberus private equity firm, giving a more detailed example of one such issue here. In today's Boston Globe, Rob Weisman writes of a letter sent by several labor leaders to the Attorney General, refuting the points raised by several competing hospitals that wish to impose restrictions on the transaction. You can read the letter here.
Are the points raised by the other hospitals "simply [to] slow down any merger as a way to preserve their market share and to disadvantage Caritas," as asserted by the union leaders? Or, do the hospitals' arguments raise legitimate public interest concerns?
It is great to see the matter debated openly and completely, and the Globe provides an important public service when it posts the letter itself in addition to writing a summary story. Given the unprecedented scale of this proposed ownership shift, we are sure to see lots more give and take over the coming months.
At my annual physical exam last week, my primary care doctor employed a widely used web-based calculator to plug in cholesterol levels and other risk factors to estimate my likelihood of having a heart attack during the next ten years. I thought this was a neat idea until it produced an answer of 8%.
Wait, you mean I have a one in twelve risk of a heart attack over the next decade? That sounded really high. She calmly and thoughtfully explained that the main value of the algorithm was to help make a judgment about prescribing statins or other interventions that could lower risk. She also noted that anything under 10% at my age was a very good number.
So, I was going to write this post to tell this story and to make the point that these kinds of estimates can be shocking for the uninformed unless we have a context within which to interpret them.
I was also going to assert that the estimates give an impression of precision that may not be valid. What is the standard deviation around the estimate? How often is the actual estimate found to be true?
And, then, like a deus ex machina, the New York Times published this story about the very heart risk calculator that we had been using. The pertinent excerpt:
A new study finds that a widely used version of the ubiquitous heart attack risk calculator is flawed, misclassifying 15 percent of patients who would use it — almost six million Americans, of whom almost four million are inappropriately shifted into higher-risk groups that are more likely to be treated with medication.
Wow. So I revert to my doctor's excellent advice about diet, exercise, and other life style factors as the main things on which to focus over the next ten years.
With regard to the Cerberus private equity firm's acquisition of the Caritas Christi hospital system, I have been thinking about the request of a number of hospitals to the Attorney General that Cerberus should "commit to not selling Caritas for seven years instead of three"(see below.)
I came across a recent private placement memorandum (company not disclosed.) Here is what it says about this topic. I am not sure if this is the philosophy that guides the Caritas acquisition, but it is illustrative of the way in which private equity firms view the world:
The decision to exit an investment is based on a variety of factors, including the company's progress in achieving its potential, the General partner's view of an industry's competitive dynamics, the appearance of a willing buyer and the general state of the capital markets. The General Partner seeks to exit from a portfolio investment when it believes that the portfolio company has maximized or achieved a satisfactory level of operational improvement. Operational improvements may increase cash flow and allow the Partnership to realize a profit regardless of market conditions.
I read this as saying that imposing a seven-year requirement on sale of the hospital system or parts of it is likely to be a non-starter. Investors in a private equity firm expect that it will have flexibility to sell assets when it wants. While Cerberus has said it would not sell the Caritas assets for at least three years, that would be a minimum period needed to achieve operational improvements. Once you get past that length of time, you are more likely to have a going concern and you need to focus on the right moment to flip the investment to recover your capital and your profit.
I believe the concern expressed by the other hospitals is based on a fear that, if the retention time is short, the private equity group will under-invest in the Caritas hospitals and take the cash flow that emanates from the business to purchase physician practices and otherwise use the money to build market share. That larger market share would enhance the value of the overall business when the time comes to sell it to another buyer or to carry out an IPO.
I am not privy to financial projections or could say that this is the plan for Cerberus, but how could someone do it? It all rides on the existence of a major non-cash expense -- depreciation. If you take a hospital like BIDMC, with revenues of a billion dollars or so, a satisfactory operating margin might be $40 million, or about 4%. But our deprecation expense is, say, $65 million, so earnings before depreciation would be $105 million, or close to 11%.
If you chose not to use that depreciation for the usual purpose of renewal and replacement of capital plant and equipment, then it would be available for other purposes, like those that worry the competing hospitals. You would only do that if you did not plan to hold on to the assets for a long time. If you were planning to be a long-term operator, you would try to invest an amount at least equal to depreciation because you would have a concern for the long-term viability of your hospital.
So, I think these other hospitals are proposing a longer retention provision for the Caritas assets as a way of indirectly dealing with this possibility.
Since a requirement for a longer asset retention period is unlikely, another way of dealing with this concern is to get an enforceable commitment from the buyer that it would invest an amount at least equal to depreciation for the length of the retention period. In that way, it would not be as possible to "milk" the asset base for competitive purposes.
If Cerberus already intends to invest in the hospitals in this manner, such a provision should provide little or no impediment to the deal going through. If the company does not commit, then the regulators need to do a full analysis to see if there is cause for concern about renewal and replacement of capital facilities and equipment in these hospitals, especially if the plan is to use depreciation proceeds for acquisition of market share.
It isn't often that you get to see an insurance company-hospital negotiation in progress, but here is a descriptive story from SouthCoastToday.com. The key quotes:
After seven months of talks, Southcoast Health System, the region's largest employer, and Blue Cross Blue Shield of Massachusetts, the state's largest private health insurance company, are deadlocked in negotiations over reimbursement rates for care rendered to Blue Cross policy holders at Southcoast facilities.
. . . Keith Hovan, president and CEO of Southcoast Hospitals Group . . . said Friday "We're tens of millions of dollars apart."
"It would be irresponsible for us to accept what's being offered," Hovan said.
. . . McQuaide said Blue Cross is trying to operate under state government-mandated insurance rate caps.
This is what happens when state regulatory authority is applied in an arbitrary fashion. (See previous posts on this matter, starting here and working backwards.) The effect of the state's action is to increase the disparity between the rates of the highest paid providers and those whose contracts happen to come up for renewal. Check this chart to see which hospital is being paid more in the Southcoast service area. Hint, it is not Southcoast's. (Those are the hospital rates: I am confident you would see a similar pattern on the physician side, too, were you to compare the rates paid to the Eastern MA dominant provider group.)
Questions: Why should Southcoast have to justify getting rates at parity with competing hospitals and physician groups? If the negotiations take over seven months, is the system broken even more than we thought?
What better way to celebrate the breaking of the Yom Kippur fast than to view these images of samples from our daughter's pastry school graduation project (Tante Marie's Cooking School).
The theme was Herb Garden, and the items included:
Sage and brown butter cakes with walnuts and fried sage leaves;
Lemon thyme madeleines;
Strawberry puff pastry tart with mascarpone filling, basil leaves and balsamic syrup; apple tart with a rosemary crust (top picture) and mint chocolate truffles (bottom picture).
I sense that a cookbook may be in the offing, but in the meantime, please send samples!
Wishing an easy fast to my friends and colleagues on Yom Kippur. My favorite description of the holiday: "Making the comfortable uncomfortable, and the uncomfortable comfortable."
Bostonians are torn by Derek Jeter's recent acting moment at home plate -- when he pretended to be hit by a pitch when the ball actually hit the bat. (See video below.) Of course, Red Sox Nation wants to hate the Yankees. The Nation wants to hate Jeter, too, as the embodiment of their arch-rivals, but there has always been a grudging admiration for this spectacular athlete. When he pulled off this feat, my unscientific survey suggests that more people than not in this town found real pleasure in how well he did it.
Bob Ryan at the Boston Globe offers his thoughts on the "morality" of this kind of move, in general and by Jeter.
But let's be clear. If it had happened in a game against the Red Sox, Derek would have been hung in effigy throughout the city. Just ask Alex Rodriguez after the 2004 ALCS game at Yankee Stadium. Even though ARod got caught.
Negotiation advisor, author, speaker; former hospital CEO, regional water and wastewater system CEO, and public utilities regulator. But above all, coach.
Is there something they teach in hotel school that suggests that having unusual water in conference rooms is good for business?
