Credit ratings may fall further for healthcare companies if they give in to shareholder pressure to increase returns, with either stock buybacks or leveraged buyouts like the $33 billion deal that took HCA private last year, Standard & Poors said in a new report (See story on HCA, p. 12). Of the healthcare companies rated by S&P, three times as many have a negative credit outlook as have a positive one. If downgrades exceed upgrades again in 2007, it would be the first occurrence in back-to-back years this decade. The root of the pressure is the debt capacity that capital markets provide companies, S&P said. Healthcare providers also always face the threat that third-party payers that provide most of their revenue will find ways to cut reimbursements, S&P said. Although the reimbursement climate looks good for 2007, increased efforts to unload costs of care on consumers could become more of a problem in 2008, the ratings agency said. Medical-device makers and pharmaceutical companies also face the medium-term challenge of producing enough innovative new devices and drugs to fend off competitors and the loss of patent protection, respectively.
The American Medical Association will renew its push for expanded insurance coverage as part of its legislative advocacy agenda in 2007, officials said. While changes in tort reform and caps on damages in lawsuits remain the AMAs top priorities, the physicians group is committed to a dramatic reduction in the number of uninsured Americans, said Cecil Wilson, chairman of the AMAs board of trustees. We believe this needs to be a priority for this countryand to that end we are looking toward the next presidential election as an opportunity to gather momentum, Wilson said. Our goal is to change the system.
A name change and a new logo are scheduled to go into effect Jan. 8 at the Joint Commission on Accreditation of Healthcare Organizations, which will now be called the Joint Commission, or TJC for short. Executive Vice President for Development and External Relations Chuck Mowll said that there will be an effort to discontinue the use of the 18-syllable name as well as its five-letter acronym and jay-co pronunciation. Mowll said there was both a lot of history and recognizable brand identity behind Joint Commission, which refers to how in 1951 the American College of Surgeons, American Hospital Association, the American Medical Association and the Canadian Medical Association jointly created the commission to accredit hospitals. Regarding its new logo, Mowll said a grouping of four triangles represents the four cycles of improvement developed in the 1930s: Plan, do, study, act. Having the triangles form an arrow pointing upward represents movement and illustrates continuous improvement. In addition, Mowll said the commission is also adopting the phrase helping healthcare organizations help patients as an internal mantra and outside tagline.
Recent reform recommendations by the Medicaid Commission dont address the long-term-care fields reliance on Medicaid, the American Association of Homes and Services for the Aging said. The AAHSA backs a social-insurance model for long-term care to create a sustainable funding stream not contingent on federal programs or state budgets, said Larry Minnix, its president and chief executive officer. The HHS-appointed Medicaid Commission issued a final report on Dec. 29, 2006, containing recommendations it approved in November 2006 (Nov. 27, 2006, p. 8). Among other proposals, the commission recommended using tax incentives to encourage individuals and employers to purchase long-term-care insurance, and it said states should have more flexibility to design their Medicaid programs. Minnix said tax incentives alone wont cover the cost of long-term care. Other critics have said giving states more flexibility to manage Medicaid programs could lead to cost-shifting and denial of necessary care.
Hammes Co., Brookfield, Wis., bought a majority interest for undisclosed terms in Health Inventures, Broomfield, Colo., which develops and manages ambulatory surgery centers, surgical hospitals and diagnostic imaging centers. The deal allows Hammesone of the nations largest developers of healthcare facilitiesto expand into the growing market segment in partnership with physicians, a spokeswoman said. Our investment in Health Inventures is a key element in our continuing efforts to become a premier service provider to the healthcare industry on a global basis, said Jon Hammes, chief executive officer and managing partner of Hammes.
Hospitals added 95,000 workers in 2006, a 2.2% increase, for a total of 4.48 million workers, according to preliminary, seasonally adjusted figures from the Bureau of Labor Statistics. The increase was the largest 12-month gain since June 2003. In December 2006, hospitals added 10,500 employees, an increase of 0.2%. Physician office employment grew by 74,200 workers in 2006, up 3.5%, to 2.21 million. In December 2006, physician offices added 4,800, a 0.2% gain.
A story in the Dec. 18/25, 2006 issue (p. 6) overstated the estimated number of health savings accounts. There were about 1.4 million employees enrolled in HSA-qualified high-deductible health plans in 2006, and another 855,000 covered by HSAs in the nongroup market, according to an estimate from the Kaiser Family Foundation.
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