WEST: $400 billion price tag for Calif. single-payer proposal
A California bill that would eliminate health insurance companies and provide government-funded health coverage for everyone in the state would cost $400 billion annually and require significant tax increases, according to a state legislative analysis.
Much of the cost would be offset by existing state, federal and private spending on health coverage, the analysis found, but total healthcare costs would increase by an estimated $50 billion to $100 billion a year. That's a massive sum in a state where the entire general fund budget is $125 billion.
The bill would guarantee health coverage with no out-of-pocket costs for all California residents, including people living in the country illegally. The state would contract with hospitals, doctors and other providers and pay the bills for all residents similar to the way the federal government covers seniors through Medicare.
MIDWEST: CHS rejects $2.4 billion buyout bid for its hospitals in Fort Wayne
Community Health Systems has rejected a $2.4 billion buyout offer for its eight Fort Wayne, Ind., hospitals, saying the proposal was inadequate by at least $1 billion.
CHS was first approached about a potential buyout in November by 10 doctors who formed a group called Fort Wayne Physicians to negotiate a deal, CHS said.
The proposed offer of $2.4 billion was significantly below the valuations that 30 other hospitals that CHS is selling have fetched so far, CHS said in a statement.
CHS Chief Financial Officer Thomas Aaron said the system is getting about 12.5 times earnings before interest, taxes, depreciation and amortization for its divestitures.
With annual EBITDA estimated by J.P. Morgan at about $350 million at the eight Fort Wayne hospitals, the $2.4 billion offered falls more than $1 billion short.
The Fort Wayne hospitals, known as the Lutheran Health Network, are CHS' most profitable. They generate annual revenue of about $1.1 billion, J.P. Morgan estimates.
Struggling CHS has been divesting hospitals and other assets to reduce debt of $15 billion. The hospital company, the nation's second-largest investor-owned system with 155 hospitals, posted a net loss of $1.7 billion in 2016.
MetroHealth making smaller hospitals a focus
Cleveland-based MetroHealth's 12- and 16-bed hospitals coming online next year will join the ranks of a series of other so-called "micro-hospitals" opening around the country. These small 24/7 inpatient facilities are designed to fill service gaps in hyper-local markets that couldn't support a full-scale hospital.
In a $25 million project, MetroHealth plans to add single-occupancy patient rooms to its Cleveland Heights and Parma facilities, which already have an emergency department and services including lab, pharmacy and radiology. With the addition of 12 beds in Cleveland Heights and 16 in Parma, the facilities will each become community hospitals-a term MetroHealth CEO Dr. Akram Boutros prefers to micro-hospital.
Both of the facilities are former HealthSpan urgent-care sites and medical offices. The HealthSpan dissolution last year has allowed MetroHealth to expand quickly and at a relatively modest cost. In addition to taking on these sites, MetroHealth hired many of the physicians that had been part of HealthSpan's medical group.
—Lydia Coutré, Crain's Cleveland Business