Big Money At Stake For Florida Hospitals In Next Year’s Budget

As state lawmakers prepare to determine the specifics of an $87 billion budget, hospitals are ready for the annual fight over state funds.
But this year’s negotiations, already off to a slower start, are likely to also be tangled by lower revenue, higher Medicaid costs and the political fallout from the state’s worst school shooting, which continues to rattle the Florida Legislature.
A top Senate leader said Tuesday both chambers had agreed on allocation numbers for the overall components of the state’s budget, including $543.6 million more in health and human services, which includes five state agencies. But the big-picture numbers only start the messy process of negotiating how those dollars are spent.
Both the House and Senate had rolled out plans earlier this month that diverged on healthcare spending, primarily how to compensate hospitals for Medicaid care. The House plan would preserve additional Medicaid payments, known as automatic rate enhancements, to 28 hospitals that currently serve a larger percentage of Medicaid patients. But the Senate plan would redistribute the $265 million in additional inpatient funds to all of the state’s hospitals instead, decreasing the amount of money those 28 hospitals receive.
The Senate’s proposed shift would disproportionately affect some of South Florida’s largest institutions — including Miami’s Jackson Memorial and Broward Health, which would lose $59 million and $17 million, respectively, according to an analysis by the Safety Net Hospital Alliance of Florida. Tampa General would lose $14 million, and Nicklaus Children’s Hospital in Miami and Johns Hopkins All Children’s in St. Petersburg, which each see about 70 percent of patients covered by Medicaid, would lose $10.5 million and $5 million, respectively.
But major for-profit hospital chains would see their reimbursements rise under the redistributions: the Hospital Corporation of America, which operates nearly 50 hospitals in the state, could see its reimbursements rise more than $40 million. Baptist Health South Florida, a nonprofit group of hospitals, would also come out ahead, according to the Safety Net Hospital Alliance.
The budget proposals have remained stalled since they were both passed Feb. 8, waiting for legislators to name budget conferences to begin the negotiating process between both chambers. But the process of agreeing on the funds could prove to be messier this year than most.
The Legislature has committed to hundreds of millions in additional expenses to address the shooting at Marjory Stoneman Douglas High School in Parkland, where 17 people were gunned down two weeks ago. Legislators are still trying to determine how to balance spending in the overall budget with the Parkland package, which will funnel at least $400 million in initiatives for gun control, school safety and mental health. The state is also expecting about $167 million less in corporate taxes than previously estimated after revenue estimates were revised, and in health care, legislators have to also tangle with about $100 million more than expected in Medicaid costs from the previous year.
Those numbers could affect overall budget discussions and the pace at which legislators come to an agreement on spending as a whole.

“When you take $400 million and put it towards necessary efforts, that creates challenges in other areas of the budget,” said budget chair Sen. Rob Bradley, R-Fleming Island, when he announced the allocations agreement Tuesday. “We’re up to that challenge.”

But those discussions are unlikely to directly influence discussions about hospital funding, which largely deals with redistributing the same amount of money in one pool, said Lindy Kennedy, vice president of the Safety Net Alliance. “I don’t see it impacting it directly, as the two chambers line up their priorities.”
For the session to end on time, lawmakers must come to an agreement on the budget by March 6, providing for a three-day waiting period before it can officially be passed. The session is scheduled to end March 9.
Source: Tampa Bay Times
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Advocates Seeking Better Access To Health Care For Veterans

State Senator Rene Garcia and a group of veterans and vets’ advocates are asking the Legislature to move legislation that seeks to increase health care access to Florida’s veterans.
The bill would create the Veterans Care Program within the Agency for Health Care Administration, which would work to get federal money to help find alternative health care options for veterans in the state.
Senator Garcia says it’s need because for some veterans, VA services aren’t easily accessible.

“We don’t want to take anything away from the VA. We want to make sure that we enhance and give and work in conjunction with our federal partners to ensure that, especially those that live in rural areas, have access to quality care and most importantly choice,” said Garcia.

While the bill is steadily moving through the Senate, it’s stalled in the House.
Advocates hope the language can be tagged on to another bill to help push it through the finish line.
Source: WJHG
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Jupiter Medical Center Seeks To Nearly Quadruple The Size Of Its Cancer Center

Jupiter Medical Center seeks to nearly quadruple the size of its cancer treatment center and has received a $25 million donation for its cancer treatment center from an unidentified donor.
The 207-bed nonprofit hospital wants to expand its 20,000-square-foot cancer treatment center by 54,300 square feet.
Now known as the Foshay Cancer Treatment Center, the expanded facility would be renamed the Anderson Family Cancer Institute.
Davis & Stokes Collaborative designed the three-story building that would house the expanded cancer treatment center.
The new building would rise on a surface parking lot with 32 spaces. Jupiter Medical Center just bought 6.1 acres north of its campus at 1240 Old Dixie Highway for another parking lot and additional facility development.
Steven Seely, vice president and chief operating officer of Jupiter Medical Center, told the South Florida Business Journal that construction of the expanded cancer treatment center could start in May and conclude by September 2019.
Source: The Real Deal
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Hospital Consolidation Has Spotty Track Record, Experts Say

Healthcare investors and executives talk up the benefits of mergers, promising better quality and lower costs.
Health economists are not so sure.
Policy wonks threw a dose of reality on the enthusiasm of the recent merger wave, as they gathered at the National Health Policy Conference in Washington this week. Evidence presented suggests that bigger is not necessarily better in healthcare, and that less competition amounts to higher costs and poorer patient outcomes.

“Consolidation, of course, is not the same as integration,” Katherine Ho, associate professor of economics at Columbia University, said. “One hospital system buying up more hospitals doesn’t necessarily lead patients to shift into one entity which generates scale.”

The end of 2017 saw a slew of mergers and partnerships and into 2018, as the industry hunts for efficiencies amid competition and rising prices. The year ended with the proposed CVS Health buy of Aetna and opened with a splashy partnership between Amazon, Berkshire Hathaway and J.P. Morgan.
The volume of hospital mergers picked up steam in 2010. Nearly 40% of the 1,412 hospital mergers that occurred from 1998 to 2015 were concentrated from 2010 to 2015.
While the volume has ebbed and flowed since 2012, its activity is pacing steadily. Large systems have been especially active; there were eight transactions of health systems with nearly $1 billion or more in revenue announced last year, according to Kaufman Hall.

Promises and Evidence

Hospitals look to consolidation for leverage in negotiations with insurers. If two providers merge, they in theory have the upper hand to walk away from payers, which want to build out a valuable provider directory for customers.
When promoting merger deals, hospitals tout how efficiencies will create better savings and outcomes.

For example, amid the Care New England-Partners merger deal, Brigham Health President Dr. Betsy Nabel said, “By combining the talent, experience, and resources of our two organizations, we will achieve more integrated, coordinated care offered conveniently — in the right place at the right time — improving outcomes and reducing the rise in healthcare costs.”

Several strings of evidence suggest otherwise. If you’re the only game in town, there are fewer incentives to improve. Data points cited at the conference include:
A report finding that prices increased 28.4% to 44.2% after a merger between Sutter Health and Summit Medical Center.
A study of hospital competition finding patients in the least competitive areas experienced 1.46 percentage points higher mortality rate from acute myocardial infarction than the most competitive markets.
An analysis of the merger between Evanston Northwestern and Highland Park hospitals that found four out of five insurers increased prices substantially after the 2000 merger.
Nathan Wilson, economist in the antitrust division at Federal Trade Commission, presented data highlighting how concentration in cardiology markets was associated with a 5-7% increase in the likelihood of death in some populations.

Antitrust Ideas

Regulators have blocked several big healthcare mergers in recent years, including hospital tie-ups.
The Trump administration has not waded in as of yet, but with the big proposed pairings announced at last year’s end, they will have to soon.
Antitrust laws need more teeth, and should be bolstered not just across markets but also within markets, at both the federal and state levels, according to Ho.
Other ideas floated at the conference include breaking up existing monopolies and imposing conduct remedies, limits to avoid anti-competitive behavior.
But these moves also have the potential to hurt patient care.

“In healthcare, if you try and unscramble eggs, you have to think about a reasonable disruption of care,” Wilson said.

And the FTC may not be able to keep up.

“I think the prospect for antitrust to disrupt entrenched provider positions is not enormous,” Wilson stated. Even blocking a “very vanilla merger” is a costly endeavor, he added.

“All future deals need to be assessed on individual merits,” Wilson said. “It’s entirely possible we might see evidence that some given transaction, either horizontal or vertical, will be associated with benefits. But maybe we should be adjusting our priors about the likelihood of that.”

Source: Healthcare Dive
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Palm Beach County’s Newest City To Get Its First Medical Facility

Westlake, a new city under development in northwest Palm Beach County, has approved its first medical facility.
The city recently approved the site plan for a 10,379-square-foot, free-standing emergency department, with room to add a 2,000-square-foot medical office building. It would be at 16400 Persimmon Blvd., which is at the corner of Pratt Whitney Road.
Minto Communities, the master developer of the residential community at Westlake, will sell the 5.66-acre site for the medical facility to Universal Health Services. UHS owns Wellington Regional Medical Center. Patients in need of emergency medical care could visit the facility in Westlake for treatment and, if they need to be admitted for overnight care, they would be transferred to the hospital.
Construction should start by the end of this year. Minto couldn’t say when it would be completed.

“This is our first significant non-residential project to date at Westlake and the first major expansion of Wellington Regional Medical Center outside of its current campus,” said Minto VP John Carter. “In the early stages of our community development for Westlake, we have started the process of creating essential services for our future residents and those who already live in the surrounding communities.”

Minto has been approved to build 4,500 homes and about 2 million square feet of commercial space at the 3,800-acre community. The first phase, with 325 homes, is currently under development. It’s also working on plans for a town center.
Source: SFBJ

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