Regional News/Midwest: UnityPoint Health reports operating margin surged in 2013, and other news

UnityPoint Health, a 12-hospital system based in West Des Moines, Iowa, reported an increase in operating surplus in 2013, in part attributable to higher reimbursement from Medicaid and its value-based contracts.

The not-for-profit group saw a 34.5% year-over-year increase in operating surplus during fiscal 2013, which ended Dec. 31. It reported $82.6 million in operating income on $2.8 billion in revenue, compared with $61.4 million on $2.7 billion in revenue during fiscal 2012.

Patient service revenue from Medicaid reimbursement was nearly 16% higher in 2013 than it was the prior year. The system pointed to a 2011 policy change in Iowa that levied an annual tax assessment on certain hospitals to fund Medicaid and obtain federal matching dollars. However, a portion of those funds were returned to hospitals in the form of higher Medicaid reimbursement that is now closer to the cost of providing care.

A similar policy exists in Illinois, where UnityPoint has two hospitals. Medicaid reimbursement from Illinois nearly doubled year over year.

UnityPoint also reported that it recognized $7.8 million in revenue from value-based contracts, a significant increase from only $2.3 million in 2012. Its value-based contracts include its Trinity Pioneer ACO, which began operating Jan. 1, 2012; a commercial accountable care organization in partnership with Wellmark Blue Cross and Blue Shield, which was formed April 1, 2012; and a Medicare shared-savings ACO, which was accepted into the program July 1, 2012.

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Philips Healthcare temporarily has suspended production at its medical imaging facility in Highland Heights, Ohio, while it works to improve its quality control processes.

Philips stopped production voluntarily, but the shutdown was prompted by process-related issues that federal regulators identified during a recent inspection, according to a statement Philips e-mailed to Crain's Cleveland Business.

However, “there is no indication” that those issues have affected the safety of the medical imaging machines made at the facility, according to the statement. Philips makes CT scanners and molecular imaging machines in Highland Heights.

“Our customers can remain confident in the safety of our products,” the company said in the statement.

The U.S. Food and Drug Administration has previously chided Philips' Highland Heights facility for failing to meet standards the agency sets for medical-device manufacturing processes.

The FDA in 2011 sent Philips a warning letter pointing out several flaws in the processes that the facility used to prevent and correct manufacturing problems that could arise.

Philips did address those problems, according to another letter the FDA sent in 2012. In that letter, however, the FDA promised to keep an eye on the facility.

—Chuck Soder, Crain's Cleveland Business