Bradley J. Berg 206.447.8970 | [email protected] WSHA/AWPHD Health Care Leadership in Dynamic Times...
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Transcript of Bradley J. Berg 206.447.8970 | [email protected] WSHA/AWPHD Health Care Leadership in Dynamic Times...
Bradley J. Berg206.447.8970 | [email protected]
WSHA/AWPHD
Health Care Leadership in Dynamic Times
Collaborations and Partnerships--Opportunities, Limits and Barriers
The Edgewater Hotel
Seattle, WA
October 12, 2010
2Collaborations and Partnerships – Opportunities, Limits and Barriers
Introduction
Presentation will focus on collaborations and partnerships
involving public hospital districts
Collaborations may involve other public hospital districts
or other governmental entities, but may also involve
nonprofit and for profit hospitals and other types of health
care providers
Collaborations may take a wide variety of forms
3Collaborations and Partnerships – Opportunities, Limits and Barriers
Factors Motivating Collaborations
Reductions in payment and changes in payor mix
Reduction in demand
Increase in expenses
Inadequate supply of physicians and other trained personnel
Lack of capital for replacing/upgrading facilities and technology (including electronic medical record systems)
Health care reform encourages integration (Accountable Care Organizations, medical homes, bundled payments, payments for quality outcomes)
Increase in competition
4Collaborations and Partnerships – Opportunities, Limits and Barriers
Potential Responses
Do nothing
Get out of the health care business entirely
Substantially change or reduce the scope of services
Consider one or more collaboration options
5Collaborations and Partnerships – Opportunities, Limits and Barriers
Key Questions
What is your view of the future?
What is your vision for your hospital and health care
system and how can your mission best be served in the
future?
What is your financial strength?
What is your appetite for risk?
What is your need for control?
6Collaborations and Partnerships – Opportunities, Limits and Barriers
Key Evaluation Criteria—does the collaboration:
Maintain the hospital’s mission?
Maintain and expand services?
Improve quality?
Increase revenue and/or reduce costs?
Increase access to capital?
Increase access to specialized technology and personnel?
Reduce competitive threats?
7Collaborations and Partnerships – Opportunities, Limits and Barriers
Potential Collaborators
Public hospital districts
Other public health care providers
Nonprofit/for profit hospitals
Physicians
Community Health Clinics
Local governments
Payors
Others?
8Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Options
Contracts for specific services or involving specific service
lines
Joint venture agreements
Transfer of assets through lease or sale
Merger/Consolidation
Dissolution
9Collaborations and Partnerships – Opportunities, Limits and Barriers
Key Variables in Collaboration Models
Who owns the assets?
Who is responsible for funding capital?
Who has the right to receive revenue and who has
responsibility for liabilities and expenses?
Who owns the licenses and provider agreements?
Who employs the staff?
Who is responsible for governance and management?
10Collaborations and Partnerships – Opportunities, Limits and Barriers
Do PHDs Have the Legal Authority to Collaborate?
PHD Boards have broad statutory authority to decide
- What services are provided
- How services are provided
- Who services are provided to
- Where services are provided
11Collaborations and Partnerships – Opportunities, Limits and Barriers
PHD Statute Authorizes:
Providing services directly or by contract
Providing services through facilities located outside the
boundaries of the district
Providing services through ventures with other public or
private entities including through joint venture entities
12Collaborations and Partnerships – Opportunities, Limits and Barriers
PHD Statute Provides Additional Authority for Rural PHDs
Rural PHD is defined as a PHD whose boundaries do not
include a city with a population > 30,000
Authorizes
Allocation of health services among PHDs
Joint purchasing of equipment and technology
Joint contracting with payors
Other cooperative arrangements
13Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving Public Hospitals
Joint payor contacting
Cooperative agreements such as
Rural Health Care Quality Network
and Western Washington Rural
Healthcare Collaborative
Service line joint ventures and
agreements
Hospital management agreements
Physician employment
14Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
Snohomish County PHD No. 2
Swedish Health Services:
PHD agreed to lease all of its
health care facilities to
Swedish Health Services.
Swedish will operate the
hospital under its license.
The PHD is exploring other
activities beyond operating a
hospital.
15Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
King County PHD No. 4
PeaceHealth:
In the 1980s, PHD leased all of its health care
facilities to PeaceHealth. PeaceHealth operated
the hospital under its license. The lease was
terminated in the early 90s and PHD resumed
operations.
16Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
Mason County PHD No. 2
Harrison Medical Center:
New PHD formed for the purpose of collecting
taxes and contracting with Harrison to own
and operate an urgent care clinic within the
District
17Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
San Juan County PHD No. 1
Peace Health:
PHD closing its ambulatory care clinic and
contracting with PeaceHealth to construct a new
critical care hospital, which will be owned, licensed
and operated by PeaceHealth, and a new EMS
facility, which will be owned and operated by the
District
18Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
Grant County PHD No. 7
Wenatchee Valley Medical Center:
PHD contracts with Wenatchee Valley Medical Center
to operate a primary medical clinic and pharmacy
within the District
19Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
Grant County PHD No. 5
Mattawa Community Medical Clinic:
PHD contracts with a separate nonprofit
corporation to operate a Federally Qualified Health
Center Look-A-Like in the PHD’s facilities
20Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
Skagit County PHD No. 1/Skagit County PHD No. 304
During the 1990s the Districts operated their health care
facilities on a joint basis under a joint operating
agreement.
21Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving PHDs
Skagit County PHD No. 1
Skagit Valley Medical Center:
PHD acquired a large multi-specialty physician
practice and now employs all of the physicians
22Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving Public Hospitals
University of Washington/Northwest Hospital:
UW has become the sole corporate member of
the nonprofit corporation that owns and
operates Northwest Hospital and has been
granted certain reserved powers.
23Collaborations and Partnerships – Opportunities, Limits and Barriers
Collaboration Examples Involving Public Hospitals
Other examples
- University of Washington/Harborview
- Pacific Hospital and Preservation Development
Authority/Pacific Medical Centers
24Collaborations and Partnerships – Opportunities, Limits and Barriers
Public Hospital District Issues
1. Constitutional limitations
-- prohibition against gift of public funds or property
-- prohibition against lending public funds or public credit
-- prohibition against owning stock in any private company
-- requirement that public funds be used for public purposes
25Collaborations and Partnerships – Opportunities, Limits and Barriers
Public Hospital District Issues
2. Statutory limitations Relating to:
-- Appointment of a superintendent
-- Sale of real and personal property
-- Lease of real property
-- Open public meetings
-- Public records
-- Public bid
-- Prevailing wages
-- Conflicts of interest
26Collaborations and Partnerships – Opportunities, Limits and Barriers
Restrictions Relating to Outstanding Bonds
1. Bond Covenants
-- Restrictions on transfers of property
Unlimited tax general obligation bonds
Limited tax general obligation bonds
Revenue bonds
-- Restrictions on issuance of additional debt
27Collaborations and Partnerships – Opportunities, Limits and Barriers
Restrictions Relating to Outstanding Bonds
2. Federal Tax Law Limitations
-- Restrictions on change in use
of property financed
with the proceeds of tax-exempt bonds
-- Restrictions on management
agreements or services
agreements relating to the use of
property financed with the proceeds of
tax-exempt bonds
28Collaborations and Partnerships – Opportunities, Limits and Barriers
Government Approvals
1. Certificate of Need
2. Special Approval for sales to for profit entities
3. Licensing
4. State Auditor
5. CMS
6. Antitrust
29Collaborations and Partnerships – Opportunities, Limits and Barriers
Other Legal Issues
1. Labor Issues
-- Multiple unions
-- Jurisdiction of National Labor Relations Board
versus Public Employees Relations Commission
-- Compensation and benefits structures
-- Reductions in work force
-- Other?
30Collaborations and Partnerships – Opportunities, Limits and Barriers
Other Legal Issues
2. Medicare Reimbursement
-- Billing under a single provider
-- Other?
3. State Tax Issues
-- Business and occupation tax and requirements for
social welfare organizations
-- Property tax exemptions
31Collaborations and Partnerships – Opportunities, Limits and Barriers
Other Legal Issues
5. Restrictions on assignment of existing contracts
including significant payers
6. Other?
33Collaborations and Partnerships – Opportunities, Limits and Barriers 33
Contact Information
Brad Berg
Telephone: 206-447-8970
Email: [email protected]
Foster Pepper PLLC
1111 Third Avenue, Suite 3400
Seattle, WA 98101
www.foster.com