As the old saying goes, things roll downhill and Siemens was the straw that broke the camel's back here. Recently Siemens has been in the news with their own issues with restructuring and lay offs. There are other creditors including Clinical Laboratories of Hawaii, Ewa Beach, $3.9 million; SBM Site Services, McClellan, Calif., $723,391; Cerner Corp., Kansas City, Mo., $450,631.
One more hospital joining the ranks of Chapter 11 in order to say alive. At the brunt of the problem, same issue facing most hospitals with financial issues, not enough compensation from insurance companies, Medicare and Medicaid, and that story isn't changing.
I want to add a little commentary here, as I feel it somewhat fits here. Recently I have started this series to bring an awareness to all as to what is occurring in the hospital business in the US. The story about Century City Hospital's closure has been the most read story on this blog since it started 2 years ago. You can look on the blog to see the recently read popular stories and check this out. It has not left one of the top positions since posted. (Also as posted on Reuters)
It does make one wonder what is wrong with the system when a hospital that sits on the skirts of Beverly Hills, CA doesn't have enough money, and further, that it could not find someone to buy or offer any financial relief. I think this has something to do with the popularity of the post, as if they can't find any monetary assistance, where does that leave the rest of the hospitals? After having posted this article I decided to look further and get an idea of what is happening with our system and found many hospitals on the edge of insolvency, either filing for bankruptcy, trying to come out of bankruptcy, or making public their forward looking projections on what is in the till.
Some hospitals have been putting their debt out for auction.
With a little more research I found a couple more items of interest as relates to venture capitalists and where some of the investments are going and came up with this article. Over 135 million has been raised in Seattle with this firm to invest and build up to 39 new hospitals in India and Asia. It can't be any more clearer than this that the interest with investing in US Healthcare is in trouble.
The bar has also risen on venture capitalist investments in Bio-Tech, the opportunities are still there, but they are getting much more difficult to obtain, as there is a huge risk factor involved with much of the unknown about the business, and of course there's always the possibilities of some of this going offshore too. The FDA has began their new more conservative approach with approvals and having adequate information, which is not all bad as their job is to protect us as consumers, but with pressure from other countries granting approvals with perhaps a lower safety net, there's the rub. The good news in part is that there is a more global approach coming around with the sharing of information and being able to have enough information for an intelligent decision faster, but when it comes around to securing funds, the time element may not be as complimentary for the investors who are looking to see a return in a smaller time frame.
Tenet hospitals has been in the news of late since they too are a publicly traded company, one story showing losses, the sale of 3 hospitals in southern California to Prime Health Care, another facility in Florida sold, and not renewing the lease for the hospital in Los Gatos, and you can probably guess this is restructuring to cut losses and get back in the positive to continue to get and keep investors in the hospital system, again, these tactics are the result of reduced contract rates to keep the money generating facilities and cut losses with others.
When hospitals run out of money it effects everyone, patients, vendors, etc. and at some point in time the levels of being able to consume debt rolls out to all. Vendors needs hospitals to keep their business chain going, so at some point they draw the line when their own existence is threatened.
We keep hearing it over and over from hospital administrators about the shortage of money inherent today with hospital care, but yet these stories and financial issues continue, and frankly I wished there were less of this type of news around when it comes to health care as the only thing I gather here is just trying to bring an awareness to all as to what is happening around us so perhaps somewhere along the line folks and the government will pay attention and stop the vicious circle.
So how do the big guys do it? The big guys meaning the highly acclaimed medical centers and hospitals we do have? The Wall Street Journal took a look at that this week and presented some very interesting comments and views on which I commented. They too have some very vital overseas investments, branding for one. In addition, many of the facilities can charge 4 to 10 times more what another hospital might charge for the same procedure, again some of this comes back around to branding the credibility of the name.
On the same line, the large Not For Profit institutions are bankrolling some large funds these days but are they doing it by cutting and chopping on the amount of charity care they are supposed to provide in return for the tax breaks they receive, a good question to ponder with one chain being looked at by the Securities and Exchange commission. If some of this type of action is taking place, is this somewhat of what one could call a marketing move to force more charity care to those hospitals who are already struggling for their existence to keep up current profit levels?
It definitely could be a real possibility that somewhat goes on in the background without much notice until the money runs out. When the money gets short, we all turn to those who have and thus the investigations begin. Perhaps it a combination of both with again, the overseas investments making up for the shortage of insurance and Medicare compensation here.
The insurance contracts are not getting any better anywhere and many of the companies are working to solidify their marketing efforts in China and other countries, so down the road when the overseas market begins to boom, well, where does that leave us?
As buyouts and mergers continue, the hospital business is no exception to the rule and perhaps someday we may have but just a handful of hospital chains to take care of us. When you stop and think about it, that may not be too preposterous in thought with Mayo, Cleveland Clinics, Johns Hopkins, and Kaiser facilities all over the US and overseas too and the smaller facilities we have known end up being only that of a memory some day as the big fish continue swallowing the small. In the meantime, it is the true desire and hope that through the roller coaster ride we all on today, the the focus of good health care is not lost, and hopefully the transparent folks of the world will continue to keep this in the forefront before the "economic" decisions being made to day become the only ruling factor and more citizens face bankruptcy and vague and scrupulous billing efforts as a result of our failing system. Search out some of the other "Desperate Hospital" posts here and you can come to your own conclusions and thoughts.
On a similar note, here's what one patient did so he could have his heart surgery, identify theft out of desperation, "Desperate Patients"?
We could certainly use some Americans investing in other Americans today. BD
Hawaii Medical Center LLC filed for bankruptcy yesterday after one of its lenders threatened to freeze operating cash needed to keep its two hospitals open.
"We faced the threat that our lenders would freeze our cash, creating a liquidity crisis that would force the hospitals to shut down," said Danelo Canete, HMC's chief executive officer. "These filings will permit us to continue to serve our patients as usual while we remain on the path to financial stability."
However, the company has been unable to increase higher-paying private insurance referrals from specialists and primary-care physicians as quickly as the group expected. About 70 percent to 75 percent of patients are covered under lower-paying Medicare and Medicaid, HMC said.
Isle medical center in Chapter 11 | starbulletin.com | News | /2008/08/30/
It's all about payor mix. If you have a high percentage of Medicare/Medicaid (Hawaii 70%) you will go broke. The private sector has been propping up the failed government sector for years and it is an impossible business model as insurers put the squeeze on. Hospitals need to get lean and we need to admit how much it costs in our high tech environment. People are always surprised when they hear their local hospital is closing...they don't realize the connection between payment and survival. I think people think hospitals are like the police or schools and will always be there...even when underfunded.ReplyDelete
You are right, payer mix pretty well tells a lot of the story; however contracts negotiated down to lower rates don't help much either.ReplyDelete
I did this series to bring to the attention of all the seriousness of the financial areas that many are incurring. Bigger concerns also get money from overseas investments and collect higher fees too.
I also see hospitals that could really pick up the pace and upgrade their technologies too, but have not and still work everyone twice as hard chasing the old paper trails too.
Location has a bit to do with it, but as you can see from the series, Century City Hospital could not get a loan and closed, they are on the outskirts of Beverly Hills if that give some readers here an idea of where the hospital was, and they took care of many celebrities there and had robotic surgery, basically everything you would want, and they took insurance too, but still the contracts and reimbursements were under the limit of the amount of money that needed to come in.
So hospitals in affluent areas can have this happen as well.