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Multi-Tasking a ‘Life Passion’ For HEI’s Busy Penny Asbell Despite her extensive list of professional credits and global recognition in the ﬁeld of vision and ophthalmology, native New Yorker Penny Asbell, MD, FACS, MBA, FARVO, is excited about progress toward the goals she’s pursuing as chair and professor of the University of Tennessee Health Science Center (UTHSC) Department of Ophthalmology and director of the Hamilton Eye Institute.
Profile on page 3.
Surprising Swings in Momentum for Legislation On Surprise Medical Bills After months of hearings and negotiations, millions of dollars in attack ads, full-court press lobbying efforts and countless rounds of negotiations, Congress appeared to be moving toward a solution to the nation’s surprise medical bill problem. Sort of.
Story on page 5.
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Volunteer Hospital Pursues Partnership for Patients’ OB Needs Expectant moms have 24/7 increased level of care BY SUZANNE BoYD
Over the last decade, increasing hospital closures and shrinking budgets have led to declining access to hospital obstetric (OB) care in rural areas across the country. These closures increase the burden on women and families living in rural communities, who often must drive long distances for prenatal visits and delivery. According to the U.S. Census Bureau, there are over 28 million reproductive-age women living in rural areas of the United States but the number of hospitals in rural areas providing obstetric care has decreased over the past two decades. These hospital and OB unit closures mean rural women in labor increasingly face lengthy journeys to the hospital, sometimes even hours long. (CONTINUED ON PAGE 4)
What You Need to Know About Selling Your Practice Physicians across specialties are facing mounting legal and operational risks at the same time as healthcare systems and private equity investors are hungry to buy practices and take that risk off physicians’ hands – at unprecedented valuations. Forwardthinking physicians rightfully see the unique opportunity presented by this market, and many are quietly investigating the possibility of selling to private equity firms or health systems. But, while most physicians have a relatively good under- BY DENISE BUrKE standing of what it would be like to work for a hospital, arrangements with PE investors often remain more of a mystery (understandably so). Those considering the possibility of selling to private equity need to understand its history, the current market and what to do next.
What is Private Equity?
Private equity firms pool money from high net worth individuals, pension funds, institutional investors and other accredited investors into “funds” which then invest in privately held businesses. PE firms often field teams of highly experienced analysts and operators who will actively advise the companies they own in order to grow and then sell the company in three to seven years. Because the PE fund must eventuAND DAVID mArKS ally liquidate and return capital to its investors, it is essential to understand each PE fund’s “investment horizon” – which can drive whether they view a particular transaction as a short-term or long-term partnership with a business.
(CONTINUED ON PAGE 4)
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Multi-Tasking a ‘Life Passion’ For HEI’s Busy Penny Asbell BY JUDY oTTo
Despite her extensive list of professional credits and global recognition in the field of vision and ophthalmology, native New Yorker Penny Asbell, MD, FACS, MBA, FARVO, is excited about progress toward the goals she’s pursuing as chair and professor of the University of Tennessee Health Science Center (UTHSC) Department of Ophthalmology and director of the Hamilton Eye Institute. As a tenured professor of ophthalmology at the Icahn School of Medicine at Mount Sinai, New York, and demonstrably a master multi-tasker, Dr. Asbell distinguished herself as a clinician, academician, surgeon, scholar, lecturer, researcher and prolific author — as well as a dynamic leader and organizer. Her delight in multiple involvements is “a life passion,” she admits. “I love doing many things!” History bears out her claim. An early interest in science at the grade-school level led her to a BS in biochemistry from the University of Chicago, to the broadening experience of world travel, then to earn her medical degree – as first in her class – from State University of New York (SUNY). She pursued post-doctoral studies in internal medicine at Yale before being encouraged by her brother – an ophthalmologist – to give ophthalmology a try at New York University Medical Center. She enjoyed it so much that she also pursued fellowships at NYU, and cornea study at Louisiana State University Eye Center, before earning an MBA from Baruch College, New York, and completing the Executive Leadership in Academic Medicine program at Drexel University. She was drawn to the Midsouth in 2018 by the opportunity to apply her skills in organizational development and leadership as Chair for Ophthalmology at UTHSC. “Being a chair gives you a greater opportunity to make lives better, not just our patients, but also our faculty, staff and everybody involved.” She points with pride to UTHSC’s Hamilton Eye Institute (HEI), which offers not only patient care and an ambulatory OR for eye surgery, but also a research floor where both translational and clinical research are in progress. “This is an area that’s dear to my heart,” she said. “I’ve been very active in clinical trials that set the standard for patient care in certain areas, such as eye infections caused by a virus, herpes simplex virus infections and refractive surgery. Clinical trials give us an opportunity to take interesting and thoughtful ideas in clinical care and determine more definitively their ability to do what they’re supposed to be doing, as well as their safety. That’s how we make strides to improve patient care. “One of the things that I developed since I came here is having a specific area within our institute for clinical research. WESTTNMEDICALNEWS
I’m really excited about expanding our clinical research opportunities, and we are already doing that with the dedicated space, and hiring clinical coordinators to help us move trials forward.” Her growing department has recently added four new faculty members on the clinical side and one on the research side — “which gives us even greater opportunity to address the needs of our patients and the world at large,” she said. She points to exciting areas being explored and developed — inspired by ongoing research efforts by UTHSC’s Siamak Youselfi, PhD, that use artificial intelligence as a tool to detect glaucoma. Dr. Asbell describes other efforts to develop biomarkers — minimally invasive methods to better define, diagnose and treat dry eye and other diseases. Current studies are examining proteins in tears to determine neurological diseases like Alzheimer’s. She also cites recent discoveries that identify methods of addressing macular degeneration, the leading cause of significant vision loss in the U.S. — among them gene therapy to grow new retinal tissue. “I think we will defi nitely see new
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opportunities to maintain vision and also to correct it, in cases of macular degeneration,” she said. She outlines current plans for the Vision 2020 CME event that HEI will host in April — an objective meeting for medical education on research and clinical care, featuring world-renowned speakers from Europe and the U.S., including FDA leaders in devices and pharmaceuticals for eye care. This large-scale summit conference will demonstrate, she hopes, a commitment among experts, clinicians and researchers to collaborate and to foster a growth mentality toward innovation in order to universally protect and improve vision for all. In addition to pursuing and sharing advancements in research, Dr. Asbell’s other priorities include mentoring and mission work. One role of an academic medical center, she believes, is “to grow new people who become collaborative, committed to a team approach for professional care, and who demonstrate the core values of integrity and dedication.” Mentoring is key to the discussion and sharing of those core values with student volunteers, residents in training and medical students beginning their careers, she stresses. In fact, the personal achievement she values most, among multiple honors and awards, is the enjoyment of mentoring residents and students who go on to establish their own successful and productive careers. “Nothing could be more delightful than having the opportunity to be a part of their career growth, and see that they’ve become productive, dedicated individuals providing great medical care.” In further support of core value development, she has implemented a commitment to global missions that allow residents and participating faculty to help other parts of the world that may have less sophisticated or less available medical care. “It also allows our residents to see and learn ways of treating patients, sometimes without the most sophisticated
Is the missing
equipment; so it’s a win-win for everybody,” she said. Their recent mission, to impoverished areas of the Dominican Republic, enabled her team to diagnose and treat more than 100 patients, in some cases performing cataract surgery that enabled patients to see within 24 hours. “It’s very rewarding and very helpful to that community, in terms of teaching skills they could continue to use even after we left. This is an area I want to expand to allow for more global missions.” She applauds the strengths of Midsouth hospitals and healthcare providers: “One of the things that jump out as a real quality of excellence is the collaboration between the specialties – not only different sub-specialties of ophthalmologists, but between other departments and other specialists. That is really one of the positives of the medical community throughout West Tennessee in all of the hospitals – the collaboration.” Another positive she notes is “a commitment to unmet medical needs, regardless of insurance or financial concerns.” This is reflected at UTHSC as well, where “the Hamilton Eye Institute and the Department of Ophthalmology are committed to taking care of everybody who shows up.” A wife and mother of two grown children—including an ophthalmologist daughter who also teaches, Dr. Asbell enjoys spending her free time at the gym, walking wherever possible — to work, in Overton Park and other area parks — and listening to music that reflects the rich musical history of the Delta, as shared by her favorite station, WYPL- 89.3 FM. Enthusiastic about the support she enjoys from a great team of faculty, residents, administrative and professional staff, Dr. Asbell reminds colleagues and others within the Midsouth medical community that UTHSC’s HEI and ophthalmology department are here to collaborate: “When you or your patients have questions, we’re here to answer them. Feel free to reach out to me at 901-448-1911. I’m happy to help.”
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What You Need to Know About Selling Your Practice, continued from page 1
Volunteer Hospital Pursues Partnership for OB Needs, continued from page 1
According to recent data from Preqin, due to record low interest rates, PE funds are currently sitting on nearly $1.5 trillion in so-called “dry powder,” or cash with a mandate to invest and achieve returns. In light of recent projections which estimate that healthcare spending may approach $4 trillion this year alone, PE funds are hungry for opportunities to invest their dry powder in a market which they expect to continue to boom – and to be resistant to recession. Many PE funds, however, recall the lessons learned in the 1990s, when a similar mandate to invest dry powder in healthcare resulted in overly optimistic valuations and the eventual downfall of eight of the top 10 practice management companies – which once boasted billions of dollars in revenues. In this new, second wave of private equity investment in healthcare, there is greater insistence that healthcare companies develop internal controls and accountability, as well as appropriate incentive programs and equity opportunities to attract and retain the physicians and other providers who are essential to maintaining – and growing – the company’s bottom line.
Expectant mothers in Northwest Tennessee no longer have those issues because access to a board-certified Obstetrician is available 24 hours a day at Volunteer Hospital in Martin. In October, Volunteer followed the lead of its sister facility, Jackson Madison County General Hospital and formed a partnership with the largest dedicated OB/GYN hospitalist provider in the country, OB Hospitalist Group (OBHG) of Greenville, South Carolina to implement an OB Emergency Department. West Tennessee Healthcare’s Volunteer Martin and Jackson Madison County General Hospitals are the only two facilities in West Tennessee to have dedicated Emergency Departments for OB patients. An obstetrics emergency department (OB-ED) replaces the labor and delivery nurse triage and converts emergency services for pregnant women to a department that works in conjunction with the main ED. It is staffed by a board-certified OB/GYN physician. For women who would normally be sent to labor and delivery for emergencies after 20 weeks, an OB-ED offers them a chance to see a hospitalist physician relatively soon after presentation. Staffing the OB-ED program requires around-the-clock physician coverage as well as at least one specialized labor nurse, which most ED triage units already have in place. Most OB-EDs are in the same space hospitals use for labor and delivery triage An OB hospitalist refers to an OB/ GYN who has minimal outpatient and elective surgical responsibilities, and whose primary role is to care for hospitalized obstetric patients and to help manage obstetric emergencies that occur in the hospital. As the nation’s largest and only dedicated OB/GYN hospitalist provider, OBHG is a recognized leader in elevating the quality and safety of women’s healthcare. Through this partnership, Volunteer Hospital has an OB clinician in the hospital 24/7. This reduces delays in emergent OB/GYN care, improves outcomes, reduces wait times and increases patient satisfaction compared to traditional triage models. In addition, OBHG hospitalists are available around the clock offering collaborative, non-competitive support for local OB/GYN physicians. “There have been two hospital closures in our market which have resulted in patients leaving the West Tennessee area for women’s services,” said Donna Barfield, Chief Nursing Officer at Volunteer Martin. “When an OB patient is experiencing a complication or has a concern, she Donna Barfield can present to our OBED located in our Maternity Center where she will be promptly seen and
What’s Hot Right Now?
At the start of the last decade, private equity interest in healthcare practices focused on urgent care, dermatology, anesthesia, dental and ophthalmology. More recently, however, there has been a surge of interest in orthopedics, urology and gastroenterology. Investors realize that the recent surge of available capital can enable them to facilitate growth in these specialties to larger service areas, as well as provide capital to expand infrastructure to prepare for value-based payments and invest in new ancillary services and technology.
Structuring a PE Deal
The structure of a PE deal can take various forms. Most states do not allow PE funds and other nonphysicians from owning medical practices. As a result, the most common way a PE fund will invest in a practice is by forming a practice management company which will acquire the non-clinical assets of a seller (e.g., equipment and leases) in exchange for a purchase price and the agreement to lease those non-clinical assets back to the practice in exchange for a management fee. When considering one of these transactions, there are numerous factors you need to consider: • Will the selling physician be re-
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quired to continue to own the medical practice? If so, what protection will be given to the seller from being named in malpractice or other lawsuits? • How long is the selling physician required to continue working in the practice? Under what circumstances can he or she be terminated? • Will the seller have to agree to restrictive covenants such as a non-compete? How long will the non-compete last, and how broad will it be? What happens if things do not work out, and the seller is terminated? • How much cash will the physician receive at closing, as opposed to some period after closing? How certain is it that the selling physician will actually receive that cash? Who will keep the accounts receivable from work performed before the deal is finalized? • What are the tax consequences of the transaction to the seller? • Will the seller have an opportunity to invest alongside the PE fund in the management company? If so, what are the terms of the equity investment? • How much autonomy will the physician retain over decisions in their practice? Are there advisory committees to ensure that employed physicians’ voices are heard?
Comparing the Deals
PE investors typically pay a higher up-front price for physician practices than hospital systems, in part because PE investors are not subject to some of the laws that restrict hospital payments to referring physicians. In the current market, it is not uncommon to see practice valuations as high as 10-12 times EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) for larger group practices – although singlephysician practices will rarely see multiples of EBITDA that high. Post-transaction, physicians should expect to receive compensation based on a percentage of their personal production and, often, a share of practice profits. Although their employment compensation will be less in the short-term than what it was before the transaction, they will have received attractive up-front payments and, hopefully, an additional upside opportunity in the form of equity or bonuses. Because the goal of these transactions is to bring together PE investors’ business acumen in professionalizing and scaling the non-medical functions of a platform (e.g., marketing, capital expenditures and buildouts, payor negotiations) with clinically talented physicians, the potential upside for both parties can be significant. Over time, physicians in successful platforms may even see their employment compensation approach pretransaction levels – which is on top of their equity upside opportunity. By comparison, hospitals, which are not allowed to share profits from certain ancillary services (e.g., lab, radiology, (CONTINUED ON PAGE 6)
treated by an experienced Board-Certified OB/GYN. This improves quality of care and patient outcomes.” This new service enhances patient safety as well as care by ensuring that a board-certified physician specializing in obstetrics and gynecology is in the hospital and immediately available at all times, 24 hours a day, seven days of the week, every day of the year. The OB hospitalist program’s additional support also means consistent care for unassigned or uninsured patients, rapid response for emergency care and quicker consults for gynecological emergencies in the ED or surgery. “Having an OB/GYN hospitalist program at Volunteer Hospital means pregnant women can be confident an experienced obstetrician will be delivering her baby, even if her own provider can’t be present,” said Barfield. “In addition to board certification, OBHG team members have received special training in advanced fetal monitoring, risk management, operative delivery, coding and compliance and advanced cardiac life support. “This new service underscores Volunteer Hospital’s commitment to quality in our maternal care program. Having an OBED improves patient access to specialist care and enhances patient safety and outcomes,” said Darrell Blaylock, CEO Volunteer Hospital. “These highly experienced obstetricians provide care for patients who come in through Darrell Blaylock our dedicated emergency department with an obstetric emergency and for those who have no physician.” To further enhance Volunteer Hospital’s OB program, certified nurse midwife, Beckie Johnson has joined West Tennessee Medical Group. She has over 9 years of experience delivering babies at Volunteer Hospital and was previously a Registered Nurse in our Maternity Center. She will continue to see patients in the outpatient setting and will receive assistance from the OBHG in the hospital setting, if needed. “Jackson Madison County General Hospital has partnered with OB Hospitalist Group for several years. With more than 150 programs nationwide, OBHG is the largest dedicated OB/GYN hospitalist provider and their program has become the industry standard for excellence,” said Barfield. “Our program utilizes a core group of eight Board-Certified OB/GYN’s from the OBHG group that work on a rotating schedule. This group of physicians has been warmly received by patients, our community, and hospital staff. The comments we have received from patients and their family members have been overwhelmingly positive.” westtnmedicalnews
Surprising Swings in Momentum for Legislation On Surprise Medical Bills from
KAISER HEALTH NEWS
After months of hearings and negotiations, millions of dollars in attack ads, fullcourt press lobbying efforts and countless rounds of negotiations, Congress appeared to be moving toward a solution to the nation’s surprise medical bill problem. Sort of. Surprise bills, the often-exorbitant medical bills that come when a patient doesn’t realize they’ve been seen by a provider outside their insurance network, have in recent months been viewed as public enemy No. 1 on Capitol Hill. Two committees, the Senate Health, Education, Labor and Pensions (HELP) Committee and the House Energy and Commerce Committee, have been working on plans and announced a compromise Dec. 8. Later that week, the House Ways and Means Committee followed suit by announcing its solution, though details are few. It’s been a heavy lift for lawmakers in both parties who are trying to balance the competing needs of powerful stakeholders, factions within their ranks and consumers stuck with high bills. With an election year fast approaching and polls consistently showing health care costs are a high priority for voters, the push for action has intensified. Time Is Not Of The Essence Despite the rushed way some committee members announced the agreement Dec. 8 — issuing a press release on a Sunday before any official bill text was released — it’s now unlikely that Congress will consider the package before it wraps up work for the year. HELP Committee Chairman Lamar Alexander (R-Tenn.) signaled as much Monday in a press release in which he promised to do everything he could to keep the surprise medical bill issue at the top of the congressional to-do list for 2020 — until it’s solved. “The only people who don’t want this fixed are the people who benefit from these excessive fees,” he said. Still, the recent signs of progress are significant, even if final passage happens early next year, said Loren Adler, the associate director of USC-Brookings Schaeffer Initiative for Health Policy, a research group. Even if Congress punts it to February or March, “there’s a decent shot of getting it done,” Adler said. “It would be pretty darn embarrassing if Congress doesn’t pass it after talking about it this long and it being such an egregious problem.” Compromise Bill The HELP/Energy and Commerce legislative outline shows movement toward compromise on several fronts, from omitting the controversial “all-payer claims database” ― a federal repository for health-pricing information ― to adding more public health provisions. westtnmedicalnews
“We know that pushing legislative action into 2020 pushes the work into a difficult presidential election year and makes it harder for Congress to act. This would dramatically increase the odds that Congress will fail to enact meaningful legislation to ban surprise medical bills and fail our nation’s families,” Frederick Isasi, executive director of the advocacy group Families USA, said in a written statement.
It includes Senate protections against surprise bills from air ambulances, while adopting most of the House’s approach to hospital bills, down to preserving the House’s title for that section. “A sign of a compromise is that nobody particularly loves it,” Adler said. Over the past few months, the biggest debate around remedies for surprise bills has centered on how to determine payment for out-of-network doctors and hospitals. One group wanted an arbitration process while the other sought a benchmark system. It seems neither side got exactly what they were seeking. Under benchmarking, the government would set a compensation rate for providers when they see out-of-network patients. The most popular proposition was one that paid a “median in-network” rate, when doctors are paid in the middle of the range of what others in the area are paid by insurance companies for the same service. The other idea was independent dispute resolution, or arbitration. The provider and insurer bring their best offer to a third party, who chooses between the two. Generally, employers and consumer advocates favor benchmarking. Hospitals and doctors’ groups, especially those backed by private equity firms, pushed for arbitration. The compromise approach tracks closely with legislation advanced by the House Energy and Commerce Committee: a median in-network benchmark with an arbitration “safety valve” where either side can bring a bill to arbitration if it’s more than $750. Previous versions allowed arbitration only for charges over $1,250. “I think what we’ve seen come out recently is probably what a reasonable bettor would have predicted,” said Benedic Ippolito, a research fellow in economic policy studies at the American Enterprise Institute. This proposal is seen as more favorable than earlier HELP Committee drafts to providers because it allows them to go
to arbitration for more bills, but to these stakeholders, it’s not enough. “Without an arbitration mechanism that applies to a legitimate number of claims, the concerns raised by the provider community will persist,” read a statement from Envision Healthcare, a physician staffing firm. A large number of surprise bills are generated by physicians employed by such staffing companies, which are often backed by private equity firms. The business model allows these doctors ― often specialists including emergency medicine and radiology, among others ― to set their own rates because they don’t work for the hospital. The American College of Surgeons, Federation of American Hospitals, Association of American Medical Colleges and Greater New York Hospital Association have also pushed back. To be fair, plenty of groups have come out in support of the compromise. A message from the Energy and Commerce Committee noted 27 patient and consumer advocate groups that signed a letter of support. James Gelfand, a senior vice president at the ERISA Industry Committee, which represents large employers, said the compromise isn’t what his constituents would have written to solve surprise medical billing, but he thinks it’s still important to pass, and parties who keep demanding changes are just trying to stall. “We hate arbitration, and we believe the changes made to please ‘team arbitration’ will raise costs tens of billions of dollars,” Gelfand said. “But we support the bill. We want to get it across the finish line.” The blueprint offered by the Ways and Means Committee is considered friendly to providers because it lays out a system similar to arbitration and favors a go-slow approach. A press release from panel Republicans indicated that stakeholders need to “stay at the table and debate these ideas” into the new year. To some, it felt like a delay tactic.
Money And Momentum Political muscle could also factor into the measure’s momentum. Money from private equity has been flowing into the debate, from millions of dollars spent on commercials and online ads, to campaign donations. According to OpenSecrets data, Rep. Richard Neal (D-Mass.), the chairman of the Ways and Means Committee and one of the voices calling for more time on surprise billing, received $29,000 this year from Blackstone Group, the private equity firm that owns TeamHealth, a physicianstaffing firm. This was the first year ever that Blackstone was in Neal’s top five donors. Rep. Kevin Brady (R-Texas), that panel’s ranking member, received $45,000 from Welsh, Carson, Anderson and Stowe, the private equity firm that owns several staffing companies, including US Acute Care Solutions, U.S. Anesthesia Partners and US Radiology Specialists. U.S. Anesthesia Partners was one of Brady’s top contributors last year as well, giving $56,250 in the 2017-18 cycle. Sen. Bill Cassidy (R-La.) has been one of the strongest proponents of an arbitration safety valve on the HELP Committee. He received $68,900 from Blackstone and $66,300 from Welsh, Carson, Anderson and Stowe. Neither Alexander nor Sen. Patty Murray (D-Wash.), the ranking member of HELP, reported similar donations from private equity firms. The same was true for Rep. Frank Pallone (D-N.J.), the chairman of Energy and Commerce, and Rep. Greg Walden (R-Ore.), the ranking member of that committee. Looking to the future, many questions still need to be answered about how these proposals will shape up. “Whether this is a good or bad solution to surprise medical billing will depend on how the arbitration system evolves over time,” Ippolito said. Kaiser Health News is a nonprofit news service committed to in-depth coverage of health care policy and politics. And it reports on how the healthcare system — hospitals, doctors, nurses, insurers, governments, consumers — works. In addition to its website, its stories are published by news organizations throughout the country. Its website also features daily summaries of major healthcare news.
Finalized Healthcare Price Transparency Rule Unveiled from
KAISER HEALTH NEWS
Hospitals will soon have to share price information they have long kept obscured — including how big a discount they offer cash-paying patients and rates negotiated with insurers — under a rule finalized in November by the Trump administration. In a companion proposal, the administration announced it is also planning to require health insurers to spell out beforehand for all services just how much patients may owe in out-of-pocket costs. That measure is now open for public comment. “What is more clear and sensible than Americans knowing what their care is going to cost before going to the doctor?” said Joe Grogan, director of the White House Domestic Policy Council. The hospital rule is slated to go into effect in January 2021. It is part of an effort by the Trump administration to increase price transparency in hopes of lowering health care costs on everything from hospital services to prescription drugs. But it is controversial and likely to face court challenges. When that rule was first proposed in July, hospitals and insurers objected. They argued it would require them to disclose propriety information, could hamper negotiations and could backfire if some medical providers see they are underpriced compared with peers and raise their charges. Shortly after the final rule’s release, four major hospital organizations said they would challenge it in court. “This rule will introduce widespread confusion, accelerate anticompetitive be-
havior among health insurers and stymie innovations,” according a joint statement from these groups, which made clear their intent to soon “file a legal challenge to the rule on the grounds including that it exceeds the administration’s authority.” The statement was signed by the American Hospital Association, the Association of American Medical Colleges, the Children’s Hospital Association and the Federation of American Hospitals. Insurers also pushed back. “The rules the administration released today will not help consumers better understand what health services will cost them and may not advance the broader goal of lowering health care costs,” said Scott Serota, president and CEO of the Blue Cross Blue Shield Association, in a statement. Requiring disclosure of negotiated rates, he said, could lead to price increases “as clinicians and medical facilities could see in the negotiated payments a roadmap to bidding up prices rather than lowering rates.” The rule, he added, could confuse consumers. It’s also a potentially crushing amount of data for a consumer to consider. However, the administration said it hopes the data will also spur researchers, employers or entrepreneurs to find additional ways of making the data accessible and useful. The amount of information the rule requires to be disclosed will be massive — including gross charges, negotiated rates and cash prices — for every one of the thousands of services offered by every hospital, which they will be required to update annually. In a nod to how hard it might be for
What You Need to Know About Selling Your Practice, continued from page 4 drugs), typically pay physicians a set rate per relative value unit. This is less likely to vary with overall practice performance, and so may be a better option for practices with less growth opportunity and lower profit margins. In addition, hospitals with longer operating histories can, depending on one’s perspective, assure physicians of either long-term stability and peace of mind, or accumulated red tape and bureaucracy. In addition to more up-front money and long-term upside opportunity, in some cases, a private equity option may provide physicians more autonomy over the operation of their practice, with potential opportunities to participate in physician committees or business development roles. With greater flexibility, PE platforms are often more receptive to creative ideas.
Going From Here
If you want to further explore a PE opportunity, start by building a team. Reach out to reputable investment bank6
ers and legal, tax and financial advisors with demonstrated experience handling private equity transactions in the healthcare space. Bankers and law firms, in particular, want to help sellers get ready ahead of time because it makes their own lives easier. They will often take calls and meetings offtheclock in exchange for the opportunity to work with those proceeding to a sale. Much like staging a house before a sale, an experienced deal team will help you put your best foot forward before you open the doors to potential bidders. The opinions expressed in this article are intended for general guidance only. They are not intended as recommendations for specific situations. As always, readers should consult a qualified attorney for specific legal guidance. Denise Burke and David Marks are partners with Waller Lansden Dortch & Davis, LLP who provide legal counsel to the healthcare industry. They can be reached at email@example.com and firstname.lastname@example.org
a consumer to add up items from such an a la carte list of prices, the rule also requires each hospital to include a list of 300 “shoppable” services, described in plain language, with all the ancillary costs included. So, in effect, a patient could look up the total cost of a knee replacement, hernia repair or other treatment. Insurers, under the proposed rule, would have to disclose the rates they negotiate with providers like hospitals. They would also be required to create online tools to calculate for individual consumers the amount of their estimated out-ofpocket costs for all services, including any deductible they may owe, and make that information available before the consumer heads to the hospital or doctor. It would go into effect one year after it is finalized, although it is not known when that will occur. Although consumer advocates say price information can help patients shop for lower-cost services, they also note that few consumers do, even when provided such information. Earlier this year, the administration ordered drugmakers to include their prices in advertisements, but the industry sued and won a court ruling blocking the measure. The administration has appealed that ruling. Nonetheless, Health and Human Services Secretary Alex Azar said the administration is confident. “We may face litigation, but we feel we are on sound legal footing for what we are asking,” Azar said. “We hope hospitals respect patients’ right to know the prices of services and we’d hate to see them take a page out of Big Pharma’s playbook and oppose transparency.” He and other officials on a call with reporters admitted they don’t have any estimates on how much the proposal would save in lowered costs because such a broad effort has never been tried in the U.S. before. Still, “point me to one sector of the American economy where having pricing information actually leads to higher prices,” said Azar. Azar cited some studies that show that when prices are disclosed, overall spending can go down because patients choose cheaper services. However, such efforts also generally require financial incentives for the patient, such as sharing in the cost savings. The proposed rule for insurers urges them to create such incentives, said Seema Verma, who oversees the federal government’s Center for Medicare & Medicaid Services. George Nation, a business professor at Lehigh University in Pennsylvania who studies hospital pricing, called the final rule and the insurer proposal “exactly a move in the right direction.” Among other things, he said, the price information may prove useful to employers comparing whether their insurer
or administrator is doing a good job in bargaining with local providers. Today, “they just see a bill and a discount. But is it a good discount? This will now all be transparent,” said Nation. Kaiser Health News is a nonprofit news service committed to in-depth coverage of health care policy and politics. And it reports on how the healthcare system — hospitals, doctors, nurses, insurers, governments, consumers — works. In addition to its website, its stories are published by news organizations throughout the country. Its website also features daily summaries of major healthcare news.
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GrandRounds The Jackson Clinic, Baptist Memorial Partner to Build Outpatient Center
JACKSON â€” The Jackson Clinic and Baptist Memorial Health Care have established a partnership to build and operate a new outpatient center in Madison County. The outpatient center will be located at the junction of U.S. Highway 45 and Passmore Lane in North Jackson. Construction of the new surgery center will begin after receiving certificate of need approval from the state of Tennessee. The Jackson Clinic and Baptist Memorial filed the letter of intent last Friday. Surgeries and procedures to be performed at the center include gastrointestinal, ophthalmologic, gynecological, general, plastic, urologic, pediatric as well as ear, nose and throat. Diagnostic heart catheterizations will also be performed at the center. The new outpatient center will give patients more choices, lower patient costs and shorten wait times for surgical procedures, and will provide greater access for patients in surrounding communities. It will create new jobs and generate additional revenue for the city and county according to Mark Allen, CEO of
The Jackson Clinic. Outpatient surgery centers have become an increasingly popular option for surgeries that do not require an overnight hospital stay. Each year, physicians
perform more than 23 million procedures in outpatient surgery centers; and, that number is growing as more patients choose the convenience, quality and lower cost of an outpatient setting. The
new outpatient center will be Medicare certified and accredited. The new outpatient center is expected to be completed 18-24 months after the certificate of need is approved.
West Tennessee Healthcare Welcomes Jonathan D. Braun, M.D.
JACKSON - West Tennessee Healthcare recently welcomed Jonathan D. Braun, M.D., vascular surgeon. Dr. Braun comes from Texas where he was a Vascular Surgeon at Michael E. DeBakery VA Medical Center, as well as serving as an Assistant Professor of Surgery at Baylor College of Medicine. He received his medical degree from the University of Texas and completed residency at the University of Arizona. He has also contributed articles to peerreviewed journals such as the Journal of Vascular Surgery and presented at national and regional conferences. In addition, he has served as co-author for Surgical CORE curriculum in carotid disease. Dr. Braun specializes in all aspects of the diagnosis and treatment of vascular disorders, including arterial, venous and lymphatic disorders. In addition to being a highly skilled surgeon, he is also committed to helping patients through non-surgical methods, including therapy and palliative care. His new medical practice is located at Jackson Surgical Associates, located at 395 Hospital Boulevard in Jackson.
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