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Midwest Edition

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the details of your event, or call(877) 248-2360, ext. 3. It will be

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WEBINAR Wednesday, June 13 2012 Noon CST

PATIENT FINANCE: ISSUES & PATHWAYSPlease join Mitch Patridge, chief executive officer, CSI Financial Services, Rick Tsupros,president, Matchpoint Solutions. and Ron Shinkman, publisher, Payers & Providers, to discussthe thorny issue of patient finance and debt collection. More Info @:

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a HealthcareWebSummit Event co-sponsored by PAYERS & PROVIDERS

Illinois Close To Charity Care DealBill Was Heavily Influenced by Hospital Lobbying

The Illinois Legislature has sent to Gov. PatQuinn a bill that would put tighter restrictionson hospitals for charity care spending in orderto maintain their property tax exemptions, but

also expands the denition of such outlays.The state Senate passed the bill on May

29 by a 31-27 vote. The House approved thebill four days prior by the proportionallysimilar margin of 60-52.

The bill requires hospitals charity carelevels equal or exceed the value of theproperty tax exemption.

Tax exemptions for not-for-prot hospitalsin Illinois have come under re in recentyears. Three hospitals last year lost propertytax exemptions from the Illinois Departmentof Revenue. That agency had followed criteriaset forth by the Illinois Supreme Court in

2010, when it had upheld a lower court rulingrevoking some of the tax exemptions forProvena Health. In those cases, the court andagencies had ruled that the providers did notfurnish enough charitable care to theircommunities in order to offset the millions ofdollars in annual property tax exemptions theyreceived.

The charity care spending median amongIllinois hospitals is 1.4% of revenue,compared to a nationwide median of 6.6%,according to the trade journal Modern

Healthcare. A 2011 compensation survey byPayers & Providers indicated that Illinois hadthe largest number of not-for-prot hospitalsamong Midwestern states whose chief

executive ofcers earned $1 million or a morea year in compensation.

The legislation that nally got the nod wasthe product of intense lobbying by the IllinoisHospital Association. In addition tobuttonholing lawmakers, the IHA blitzed theradio airwaves with commercials suggestingthat if tax exemptions were overly scrutinized,they would lead to hospital closures. The spotsincluded emotional appeals such as a blaringambulance, a wailing child and a terriedparent screaming my baby is sickanyonehelp, please!

And the IHA also contributed heavily to

state ofceholders, spending nearly $400,000in the months running up to the bills passage.

As a result, the bill allows for theredenition of charity care to includecommunity benets like healh fairs, and thecost of medical training and research both ofwhich hospitals had been criticized forincluding in their charity care calculations. Italso allows providers to make donations toother charitable healthcare organizations to

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In Brief

Missouri MedicalSchool Dean To Retire

Under A Cloud

The University of Missouri MedicalSchools dean is stepping downafter being caught in a swirl ofMedicare fraud allegations. Robert Churchill, M.D.,announced he will retire inOctober. Churchill is a 25-yearuniversity employee and formerchairman of UMs radiologydepartment. He was named dean in2009.

Churchills decision to retirecame after the firing of twouniversity radiologists who hadallegedly relied on residents toperform diagnoses, which is aviolation of Medicare rules.

Although Churchill was notimplicated, he said he decided tostep down in order to minimizedistractions.

One of the fired radiologists,Kenneth Rall, M.D., had left themedical school in the 1980s afterbeing convicted of misdemeanorembezzlement charges as part of acheck-kiting scheme involving apartnership. He had faced potentialMedicare fraud charges as well, butthe charges were dismissed.Churchill rehired him in the late1990s. The other physician isMichael Richards, M.D. Both havebeen the targets of a months-long

investigation by the U.S. Attorneysoffice in Kansas City.

Walgreens, OptumRXExtend Pact

Retail giant Walgreens hasexpanded a strategic partnershipwith pharmacy benefit manager

Continued on Page 3

NEWS

Charity (Continued from Page One)

Continiued on Next Page

MEET OUR READERS!

Need to promote a conference? Or your brand? PayersProvider!se-mail list for all editions is available for yourmarketing needs. Reach out to more than 12,000healthcare professionals who read our publications. Caour advertising director Claire Thayer at (503) 226-985e-mail her at clairet@mcol.com.

KHI Gets $4M Regional Health GranWill Be Used to Study New Apportionment Method

boost their outlays, which will be averaged inthree-year increments.

This will enable hospitals to continue

investing in their communities by providingservices, enhancing access to care, improvingquality, purchasing new life-savingtechnology, upgrading facilities, educatingphysicians and other healthcareprofessionals, and conducting medicalresearch, said IHA President MaryjaneWurth.

The bill has been roundly criticized byhealthcare advocates, who contend it willprovide incentives to hospitals to spend les

money to assist uninsured patients.Along with the charity care changes,

the legislation also contains a $1-a-packtobacco tax that is projected to raise morethan $350 million a year for Illinoisbeleaguered Medicaid program.

Gov. Quinn is expected to sign the bilinto law.

The Kansas Health Institute was recentlyselected from eight organizations across thecountry to lead a $4 million public healtheffort.

The project will help agencies nationwideimplement cross-jurisdictional sharing, orregional approaches to service delivery. Gianfranco Pezzino, KHIs project co-director, said the money, given in part by theRobert Wood Johnson Foundation, will bedivided into two components.

Half will be given to KHI to run the

national program ofce for the project. Thesecond half will be distributed to up to 18

grantees.The goal of the program is to assist

counties teaming up across the country thatare working on regional efforts to improvequality and efciency and reduce costs.

KHI will provide technical support andreceive and distribute information about all ofthe projects.

This is the rst time there is a majornational undertaking like this that looks at theway public health services are provided,Pezzino said.

There are currently two major types ofpublic health programs, Pezzino said. One the home rule approach in which services aprovided essentially from within thecommunity. The second is consolidation.Under this system, a handful of countiesfunds are consolidated into one board ofhealth, which oversees efforts for all of theareas.

Pezzino said the pilot is trying to ndsituations between the two extremes that areneither purely home rule nor consolidation.

One model is regional cooperation, used inKansas. Here, regions have jurisdiction overtheir own area, but they agree to share someservices like an epidemiologist among thecounties.

There is an economy of scale in manyservices that can be achieved by consolidatresources, he said. In the middle is wherewe are going to see a lot of innovation and ware more interested in those that arent readyto embrace consolidation but nd themselvunable to provide essential services with thenances they have.

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NEWS

In Brief

OptumRX. The firms PBM serviceswill continue to be made availablethrough 7,800 Walgreens outletsthroughout the United States.

This is a great opportunity toensure our current and prospectivecustomers have a broad range ofoptions, including access to

premier retail outlets likeWalgreens, to help meet theirhealth care needs, said OptumRXChief Executive Officer DirkMcMahon. Walgreens andOptumRx share a commitment toquality, safety and affordability forall our customers.

The agreement betweenWalgreens and OptumRX wasdescribed as multi-year, but a

join t st atement issued by the firmsdid not provide any specifics.

Walgreens is based nearChicago. OptumRX is a subsidiaryof Minnesota-basedUniteHealthcare.

University of MichiganPerforms 500th

Ventricular AssistImplant

The University of Michigan Center forCirculatory Support has performed500 implants of a left ventricular assistdevice in cardiac patients.

The recipient, an Ann Arbor highschool teacher, is awaiting a hearttransplant.

For patients in severe chronic oracute heart failure, heartassistingtechnology can offer a gateway tobetter long-term quality of life, saidKeith Aaronson, M.D., medicaldirector of the heart transplantprogram and Center for CirculatorySupport.

The center was the rst inMichigan to implant the assist devices.Currently, 110 patients have themimplanted. The one-year survival ratefor the center is more than 97%.

Cardinal Delves Into RedevelopmenDetroit Provider Pact Includes Urban Renewal

Medical services giant Cardinal Health is

teaming up with Detroit Medical Center andHenry Ford Health System to help bringurban renewal to the beleaguered Motor City.

The two providers have agreed to long-term distribution agreements with the Ohio-based Cardinal. As a result, Cardinal willrelocate a medical products distributioncenters from Romulus, Mich. to Detroit,bringing the city 140 jobs.

Cardinal also plans to build a 273,000-plus-square-foot distribution center in Detroit,contingent on incentives it can obtain fromthe Detroit Browneld RedevelopmentAuthority and the Detroit City Council.

Construction could begin late this year and becomplete by the end of 2013.Ofcials suggested the project could

jumpstart redevelopment in Detroit, whichhas been ravaged by the shrinking andoutsourcing of domestic automotiveproduction over the past 40 years. The cityspopulation has dropped by half since the1950s.

Healthcare as the center of urbanredevelopment has taken off in recent years,starting with a project in Fresno, Calif. morethan a decade ago.

Henry Ford Health System is deeply

committed to the revitalization of the midtoarea and is pleased to be collaborating onwhat we envision as the rst step in a majoredevelopment effort, said Nancy SchlichtHenry Ford Healths chief executive ofcerWe're thrilled to be making progress andexpect that this project will lead to furtherdevelopment not only in the areas ofwarehousing and ofce space but also in reand residential space.

According to Donald P. Groth, DetroitMedical Centers vice president of materialresource management, the hospital hadwanted to leverage its long-term business

relationship with Cardinal into somethingmore meaningful.This new facility will fulll Cardinal

Health's commitment to relocate its Michigbased distribution operations within the Citof Detroit, which was part of the negotiatioof the DMC agreement, Groth said. We aexcited our 20-year partnership will continand the relocation will be an opportunity fonew construction within the midtown area.

Cardinals distribution center is alsoexpected to serve the rest of Michigan, as was northern Ohio and northern Indiana.

KHI (Continued from Page One)

be, like TB which doesnt affect nearly asmany people as it used to.

The second factor is the increase inmoney that came to states to enhance pudisaster preparedness after 9/11. Expectaof public health were beefed up and wfunded by the federal government.

Years later, the departments are tryingure out how to continue providingpreparedness and other services as budgcontinue to shrink. Pezzino said that mothan 50 percent of local governments hadecrease or suspend public health activithis past year.

Things are very tight and more in cplaces than others, he said. We are beiasked to do more and have greaterexpectations, but budgets arent increasinsomething has to give.

Pezzino is hoping the pilot project whelp communities learn to work togethermore with less. TAMMY WORTH

The KHI received a Robert Wood Johnsongrant in 2005 to initially develop the standardsfor such a regional model.

The need for change in the way publichealth is delivered stems from two majorchanges that have occurred over the pastdecade or so, Pezzino said.

The rst is the shift from provisionalhealth to population-based health. Publichealth used to be thought of as care for thepoor, providing immunizations and ghtingailments such as tuberculosis and sexuallytransmitted diseases.

The new model is more focused ondisease prevention by population. Its usuallybased on the environment people are in.

The best interventions we can put inplace are those to keep kids from starting tosmoke in high school or eat better or buildcommunities that will keep people active,Pezzino said. Some of the things we used tofocus on are less important than they used to

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Health policy in the United States has oftenbeen described as being made up of thetripartite of quality, access and cost. The CEOof a former company I worked with used to saythat you can only optimize two of the three.This is relevant to the current discussion of theAccountable Care Act, its subsequentreplacement, or a continuation of the statusquo.

QUALITYAmericans believe their

personal doctor, hospital andinsurance plan are good, but about

one-third think the national systemis full of waste and leaves too many people out.The fact that America has outspent the rest ofthe world as a percent of GDP is well known.

When people question what we get forthat high investment, we seem to stumble overour answers. I would argue that the wholeworld depends on the investment anddiscovery in our leading academic medicalcenters (where training of a signicant numberof global physicians also occurs), and the hugeinvestments in innovation from private U.S.pharmaceutical and medical devicecompanies. The breakthroughs against the

leading causes of death in the past 50 years arestunning compared to the rest of history.

ACCESSFor many years, Americans have been

troubled that we have such a high rate ofuninsured, about 15% or 50 million citizens,especially compared to other well-developedcountries.

Going back to President Truman, wehave tried to pass national legislation to bridgethis gap over and over again. President Obamashowed courage in taking on this task onceagain, and it is a lightning bolt issue amongst

our leading political parties.Depending on where you stand,

President Obama is viewed either as a hero orvillain for this effort. Our problem has alwaysbeen trying to gure out who is going to pay forthe expansion of access to the uninsured.

COSTThe impetus for the HMO Act of 1973 was breaking the cost curve, among other things.Needless to say, national health expenditureshave grown at a rate of almost three times theGDP since then. Not anymore. A byproduct of

the national debate over the ACA is the healthscrutiny of the rate of growth of health expensThe year of insolvency for Medicare (expected2024) keeps bouncing around. Most analysts though, there is a nite limit to how long Medcan last under its current reimbursement syste

Recently, Connor Sen (Minaville.com) bloTen years ago, for every one retiree there wepeople entering the U.S. workforce. Ten yearsnow, for every person who enters the workfor

there will be 10 new retirees.The pyramid will be stood o

head. Insolvency of the popularfederal program will create

generational friction of the higheorder. The 2012 Milliman Medical Index repothis month that the average annual cost foremployer covered health insurance for a famifour is now $20,000. Employer coverage is bthe best payer in the system, so this is not just the high rates of Medicare growth anymore.

THE FUTUREHospitals have already morphed away frominpatient acute care and provide community cthrough free-standing sites, home care and evretail medicine. Many have establishedrelationships with local physicians and insure

have bought them. Hospital beds will be lessimportant in the future for most Americans, bumore important to the few critically ill citizenneed them.Physicians are not as happy today as theirforefathers who entered this profession. Somedoctors are even encouraging their children toother careers or retiring early themselves.Nonetheless, physicians make up the human that is needed for an advanced modern healthsystem.

With shortages rearing their heads bygeography and specialty, this will be a neededfor the health system far into the future. I susp

there will be a decline of the role of Insuranccompanies. But that is a topic for another day

OPINION

Peering Into Our Healthcare FutureHow Our Future Policy And The ACA !May Fare

William M. Dwyer is a Kansas City-based

consultant. He is a member of the Payers &

Providers editorial board.

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