Hello again hc_professional-ga,
As you indicated in your question, the long term acute care industry
has been going through quite a lot of turmoil in the past decade. Many
of the companies have suffered enormous losses and gone through
bankruptcy. Many have been involved with huge law suits. The Balanced
Budget Act of 1997 changed the rules for Medicare reimbursement so
that LTACs were no longer exempt from the Prospective Payment System.
These changes were to be phased in and went into effect on October 1,
2002.
While the industry was very resistant to these changes, as the reality
of these changes sinks in, some are finding new opportunities under
the new operating rules. The articles I’ve found will help you
evaluate these opportunities for yourself.
You specifically mentioned Vencor and Integrated Health System as
organizations that were heavily impacted. I investigated the current
status of these companies and discovered that Vencor went through
bankruptcy and when it emerged from it the company was renamed Kindred
Healthcare. I’ve included information about their currents status so
you can evaluate how they are doing for yourself.
I could not find a company named Integrated Health System. Instead, it
seems that this phrase is used to describe various vertical and
horizontal partnership and coordination schemes for a variety of
health care providers who choose to work together. I’ve included some
links to help you evaluate these organizations.
In investigating LTACs I also came across a lot of information about
the current state of acute care hospitals and additional niche types
of health care providers that are especially profitable that I thought
you might find interesting.
I hope you find this research helpful. Please ask for clarification on
any aspect of it if anything is confusing about what I’ve provided.
I wish you well for your project.
czh
===========================================
LONG TERM CARE ACUTE HOSPITAL (LTAC) TRENDS
===========================================
http://www.gbconsulting.com/articles/article_2002_07.htm
July 2002 -- The Future of Long Term Acute Care Hospitals under PPS
The Centers for Medicare and Medicaid Services (CMS) will be
implementing the new prospective payment system for Long Term Acute
Care (LTAC) facilities on October 1 2002. The Congress created this
segment of the post-acute hospital market under the same legislation
that exempted inpatient rehabilitation and inpatient psychiatric units
from the acute care Prospective Payment System (DRG's). Long Term
Acute Care facilities represent a broad grouping of clinical services
and are exempt from DRG payment, not because of clinical patient
needs, but rather because the facility maintains an average length of
stay of twenty-five days or longer. The exemption, meant to be a
temporary solution for facilities that cared for patients with longer
than expected lengths of stay, has lasted nearly 20 years and has led
to significant reimbursement variances among the 200 or more LTAC
facilities nationwide.
With the publication of the proposed rules, the methodology for
reimbursement is a compromise between traditional acute care PPS and
other post-acute service PPS models such as rehabilitation and skilled
nursing. Inherent in the model are two key variables, which drive
reimbursement. These are the facility rate and the acuity (case)
weight.
Should healthcare facilities consider LTAC?
Now that the proposed LTAC PPS rules have been promulgated, the time
is right for hospitals and health systems to question if they should
develop a Long Term Acute Care facility for their hospital/system.
Hospitals should evaluate their potential need for LTAC services in
light of the following:
------------------------------
http://www.rehabpub.com/features/112002/5.asp
November 2002 -- Opportunity Knocks
On August 30, 2002, the Centers for Medicare & Medicaid Services (CMS)
released the final rule on the implementation and reimbursement
methodology for the prospective payment system (PPS) for the long-term
acute care hospital (LTACH). Similar to PPS for acute rehabilitation,
this new payment system for LTAC hospitals translates into significant
changes for this industry. The new PPS, along with the existing rules
and regulations for LTACHs, can have significant implications for
acute rehabilitation providers.
The growth rate of LTACHs in the United States has been impressive.
From 206 LTACHs in October 1998, the numbers have risen to 270 in
2002, a 33% rate of growth that exceeds all other postacute venues,
such as rehabilitation units (7.1%), rehab hospitals (10.1%), and
freestanding skilled nursing facilities (1.7%).1 In the past year
alone, from January 2001 to January 2002, the number of LTACHs jumped
from 251 to 270, a rate of 7.5%.1 One of the reasons for this
proliferation is an increased demand for the services LTACHs provide
that cannot be fully met by other levels of care.1
The favorable reimbursement for LTACHs under PPS can work for or
against rehab providers. There is a significant demand for LTACH
services nationwide and reimbursement for new LTACH providers will be
better under PPS than it has been for the past several years.
Therefore, as more LTACHs develop, the potential exists for a greater
number of referrals to acute rehabilitation. However, in markets where
LTACHs are overbuilt, LTACHs could siphon rehab patients to fill their
beds.
---------------------------
http://www.milestonehealth.com/ms.nsf/longterm.html
MileStone Healthcare can assist you with one of the most exciting and
fastest growing specialty programs in the post acute care market, the
Long Term Acute Care Hospital (LTAC). MileStone is probably the only
company with a track record that can help a healthcare provider
provide LTAC services themselves. We can lease, joint-venture, manage,
or consult with you. You don’t have to lease it away. An inpatient,
community based LTAC is designed to provide interdisciplinary and
comprehensive care for the acutely ill and/or medically complex
patients who have experienced a catastrophic illness or acute level
chronic disease.
Services Offered
An LTAC allows patients the time necessary to recover while providing
the
hospital reasonable reimbursement for these extended stays. The
ultimate goal achieved in this setting is for the medically complex
patient, once their condition has improved, to be discharged home or
to another appropriate setting. Licensed as a hospital and operated
under acute care regulations (including hospital level JCAHO
accreditation), an LTAC has a new PPS reimbursement effective October
2002. The reimbursement makes it financially feasible to hospitals to
offer LTAC services. Medicare patients need to have an average length
of stay of 25 days. The LTAC may be freestanding or structured as a
hospital within a hospital and provides all services which are
provided within a traditional acute care setting.
There are approximately 270 long-term care hospitals nationwide,
including freestanding facilities and hospitals within hospitals.
--------------------------------
http://www.mcknightsonline.com/
McKnight's Online is the online home of McKnight's Long-Term Care
News, the leading newsmagazine for those providing quality long-term
care throughout the continuum of care, including skilled nursing care,
subacute care, assisted living, seniors housing, adult day care and
home care.
==========================
ACUTE CARE HOSPITAL TRENDS
==========================
http://seattle.bizjournals.com/seattle/stories/2003/08/04/focus1.html
Puget Sound Business Journal (Seattle) - August 4, 2003
IN DEPTH: HEALTH CARE QUARTERLY
Good news and bad news... Wall Street gives hospitals a checkup
Seeking a clearer diagnosis of the financial condition of the nation's
acute-care hospitals, a key federal agency has turned to Wall Street
for a second opinion.
Relying on research reports from investment firms, the Centers for
Medicare and Medicaid Services (CMS) has produced a Health Care
Industry Market Update that examines hospital performance from a
perspective public policymakers normally wouldn't see -- that of stock
market analysts.
The update, which examines for-profits and not-for-profits alike,
concludes that acute-care hospitals face many challenges, but the
long-term prospects for the most fit among them are positive.
***** This is an overview of a recently issued 25 page report that
covers all of the issues you’re interested in regarding the current
status of for-profit hospitals.
------------------------------
http://cms.hhs.gov/reports/hcimu/hcimu_07142003.pdf
Centers for Medicare and Medicaid Services (CMS)
Health Care Industry Market Update
Acute Care Hospitals, July 14, 2003
SUMMARY
The publicly traded, for-profit hospital companies have improved
average profit nargins from 5.1% in 2001 to 5.7% in 2002. Broader
indicators of both the not-for-profit and for-profit hospitals show
average stable margins in the 3% to 5% range.
***** This is the full 25 page report that is summarized in the
article from the Business Journal. It provides a comprehensive
overview of the hospital industry and the current issues effecting
profitability. It includes lots of tables and statistical information
about the market and the key players in the industry and makes
projections for the future.
-------------------------------
http://cms.hhs.gov/reports/hcimu/default.asp
CMS Health Care Industry Market Update
The CMS Health Care Industry Market Update is a series of reports on
the health care industry. The latest issue covers nursing facilities.
Future reports will be added to this page.
***** You can find prior issues of the Acute Care Hospitals market
update reports here as well as reports on other healthcare industry
segments.
------------------------------
http://www.calnurse.org/cna/press/61103.html
June 11, 2003
America's 100 Most and Least Expensive Hospitals -- New Study Links
High Hospital Charges to Higher Profits
The full 48-page report and summary graphs and charts are available on
the CNA website at http://cna.igc.org/top200
The nation's most expensive hospitals are also the hospitals which are
racking up the highest average profits, according to a comprehensive
new research report by the Institute for Health and Socio-Economic
Policy (IHSP) commissioned by the California Nurses Association.
---------------------------------
http://www.chcf.org/press/view.cfm?itemID=21193
California Healthcare Foundation
July 23, 2003
California Emergency Departments Generate Hospital Admissions Critical
to Hospital Profitability
On average, emergency departments generate 20 percent of a hospital's
net profits.
The average non-trauma emergency department (ED) in California
generates 20 percent of a hospital's profits, according to a new study
commissioned by the California HealthCare Foundation (CHCF) and
conducted by the USC Center for Health Financing, Policy and
Management. The issue brief California's Emergency Departments: Do
They Contribute to Hospital Profitability? can be found online through
the link below.
=================================
SPECIALTY / NICHE HOSPITAL TRENDS
=================================
http://www.gao.gov/new.items/d03683r.pdf
US General Accounting Office
April 18, 2003
Specialty Hospitals: Information on National Market Share, Physician
Ownership, and Patients Served
***** This is a 20 page report that gives a through overview of this
niche market segment. See short articles below referring to this
government report.
-------------------------------
http://www.premierinc.com/frames/index.jsp?pagelocation=/all/advocacy/issues/108/03/other/specialty-hospital-gao-report-0503.htm
New government report says specialty hospital boom is endangering
financial health of general hospitals
Physician-owned specialty or so-called 'niche' hospitals, which make
up less than two percent of acute care facilities in the U.S., are
commanding a greater share of less costly (i.e., more profitable)
patients, according to a new government report. Such a trend, the
General Accounting Office (GAO) says, renders it "more financially
difficult for general hospitals to...serve all of a community's needs,
including charity care, emergency services, and public health
emergency response…" Because they receive fixed, lump-sum payments for
given diagnoses (regardless of specific patients' conditions),
specialty hospitals stand to gain---and in fact, do---by treating
patients who are less ill than their peers at general hospitals. In
effect, the report concludes, niche hospitals are stripping more
profitable patients away from general community hospitals. GAO
declined to speculate on the clinical or economic impact of its
findings.
-----------------------------
http://www.dental.am/2003e/01/168.html
http://www.journalstar.com/business.php?story_id=68851
www.cnn.com/2003/HEALTH/08/07/specialty.hospitals.ap/ (no longer
available)
August 7, 2003
Specialty hospitals give general institutions heartache
While specialty hospitals have long existed, traditionally they were
nonprofit centers for treatment, research and teaching of a certain,
often especially challenging type of medicine. Now, they are geared to
make money, and their owners often include doctors who can direct some
of their own patients to these institutions.
Since 1990, the number of specialty hospitals nationwide has tripled
to 92, with another 20 in development, according to the study.
--------------------------------
http://www.bizjournals.com/pittsburgh/stories/2001/09/24/daily31.html
Pittsburg Business Times
September 27, 2001
Rehab hospitals outearn other health care sectors
Rehabilitation hospitals have the highest income levels among the
hospital-based health care sectors in Pennsylvania, according to the
Pennsylvania Health Care Cost Containment Council.
Rehabilitation hospitals' average total margins stood at 10.7 percent,
far above the 3.2 percent average total margin for the state's general
acute care hospitals.
------------------------------
http://www.post-gazette.com/pg/03232/212970.stm
Pittsburg Post-Gazette
August 20, 2003 -- Outpatient surgery centers show much higher profits
Financial difficulties that besieged many of the state and region's
general acute care hospitals last year didn't stunt profits at
free-standing outpatient surgery centers.
The state's 101 stand-alone surgery centers -- 88 of which are
for-profit entities, in many cases owned by physicians -- posted
average total profits $298,620 on average revenues of $2.52 million,
or roughly 11.85 cents for each dollar they saw.
The PHC4 survey said the number of stand-alone surgery facilities
operating in the state grew by 30 percent last year and has more than
doubled since 1995, from 39 to last year's 101. The number of visits
to the centers quadrupled, PHC4 said.
---------------------------------
http://milwaukee.bizjournals.com/milwaukee/stories/2002/06/17/editorial1.html
Milwaukee Business Journal
June 17, 2002 -- Hospital profits -- for whose health?
Milwaukee-area hospitals achieved earnings growth in the double-digit
percentages and beyond last year, and that's welcome news for an
industry that has labored at times to show profits. On the other hand,
when hospitals profit, we get concerned that their customers might be
overpaying.
How did hospital profits get so healthy so quickly? Revenue is rising
due in part to more aging baby boomers -- and their parents --
receiving hospital care, says the Wisconsin Health & Hospital
Association. Profits are up due in part to increased efficiencies,
hospital officials say.
------------------------------
http://hschange.com/CONTENT/554/
Specialty Hospital Building Boom Threatens General Hospitals
Competition Heats Up For Profitable Cardiac and Orthopedic Services
News Release
April 15, 2003
FURTHER INFORMATION, CONTACT:
Alwyn Cassil: (202) 264-3484
ASHINGTON, D.C.—General hospitals fear a rise in physician-owned
specialty hospitals will siphon off the most profitable patients,
leaving them with the sickest, costliest patients, according to a
study released today by the HSC.
While the United States has a long history of certain types of
specialty hospitals, including children's and rehabilitation
hospitals, stand-alone heart and orthopedic hospitals are relatively
new and growing rapidly. While no comprehensive national data exists
about the number of heart and orthopedic specialty hospitals, 11
specialty hospitals have emerged since 1997 in the 12 local markets
tracked intensively by HSC researchers. Other sources estimate that 50
to 100 specialty hospitals are operating across the country, with more
on the way.
------------------------------
http://www.hschange.com/CONTENT/552/
http://www.hschange.com/index.cgi?object=552
Center for Studying Health System Change
Specialty Hospitals: Focused Factories or Cream Skimmers?
Issue Brief No. 62 -- April 2003
***** You can find the report that the newspaper articles refer to at
this location.
===========================
VENCOR / KINDRED HEALTHCARE
===========================
http://www.bizjournals.com/louisville/stories/2001/04/16/daily38.html
April 20, 2001
Vencor emerges from Chapter 11; new name is Kindred Healthcare
It's been a rocky road for Vencor Inc. and especially for its former
stockholders, but the Louisville health care services company says
it's now ready to put that behind and concentrate on caring for more
than 36,000 patients in its nursing homes and hospitals.
The company said it also hopes to return to stability under a new name
and new ownership.
The former Vencor has completed the Chapter 11 reorganization plan
that was approved by a Delaware bankruptcy judge in March, it
announced in a news release. With its emergence, the company has
officially changed its name to Kindred Healthcare Inc., a publicly
owned company whose current stockholders are primarily Vencor's former
creditors.
---------------------------------
http://www.kindredhealthcare.com/
Kindred Healthcare is a nationwide provider of healthcare, primarily
through the operation of skilled nursing centers, long-term acute care
hospitals and institutional pharmacies.
--------------------------------
http://www.hoovers.com/free/co/factsheet.xhtml?COID=56976
Kindred Healthcare, Inc. (NASDAQ: KIND)
Kindred's golden oldies aren't the cash cows they once were. Kindred
Healthcare (formerly Vencor) is one of the US' largest long-term
health care providers. Kindred operates about 65 long-term acute care
hospitals in 24 states, and about 285 skilled nursing facilities in 32
states. Services include long-term intensive care, respiratory
services, inpatient and outpatient rehabilitation therapy, and
Alzheimer's disease care. In 1998, the company split itself into
Kindred and Ventas (a real estate investment trust, that owns the
properties and leases them to Kindred). The company filed for Chapter
11 bankruptcy protection in 1999 and emerged from bankruptcy in 2001.
Ventas owns about 25% of the company.
Ranking: #463 in FORTUNE 500
----------------------------------
http://louisville.bizjournals.com/louisville/stories/2003/01/13/story4.html?t=printable
January 13, 2003 -- Business First of Louisville
EXCLUSIVE REPORTS
Kindred, Ventas survived troubles of Vencor Inc.
***** This is a long article recapping the company’s history.
---------------------------------
http://finance.yahoo.com/q?s=KIND
Kindred Healthcare Inc. (KIND)
http://finance.yahoo.com/q/in?s=KIND
Industry: Health Care Services
***** You can review comprehensive company and industry profiles on
these websites.
----------------------------------
http://www.reallifehealthcare.com/rlh/news/story/7340169p-8284291c.html
September 1, 2003
Long-term Acute Care Hospitals
Long-term acute care hospitals evolved in the 1980s to fill a void in
discharge alternatives available to short-term acute care hospitals.
LTAC hospitals were DRG-exempt until October 2002. Now all new LTAC
hospitals will be reimbursed by Medicare under a new prospective
payment system/DRG system, with existing LTAC hospitals phased into
PPS over five years.
-----------------------------------
http://www.uow.edu.au/arts/sts/bmartin/dissent/documents/health/central.html
http://www.uow.edu.au/arts/sts/bmartin/dissent/documents/health/
CORPORATE HEALTH CARE
***** This is a large collection of articles, news reports and
resources compiled and maintained by Dr. Michael Wynne, an Australian
surgeon and whistleblower, who retired from the University of
Queensland in 1998. It is clear that he is a crusader against many of
the major players in corporate healthcare and he may offend some
readers. The information he compiled about the various players in the
healthcare industry is useful for tracking historical events,
legislation and corporate fortunes.
-------------------------------
http://www.uow.edu.au/arts/sts/bmartin/dissent/documents/health/
The Marketplace in the USA
The market:- The USA has led the world in establishing a competitive
health care marketplace. Big share market listed corporations have
come to dominate health care. They have altered the manner in which
care is provided and changed the culture of a caring community based
health service to that of the lowest denominator in the marketplace.
Companies prepared to misuse patients and defraud the system have
prospered at the expense of those which have not done so.
The USA is the only mature health care marketplace in the world and
illustrates how the competitive pressures for profits become so strong
that only those who are prepared to exploit the vulnerability of the
funding system and compromise their duty of care survive. The social
and cultural dynamics accomodate to the pressures in the marketplace
and the imperative to survive.
===========================
INTEGRATED HEALTH SYSTEM(S)
===========================
I could not find any information about a company named Integrated
Health System (IHS). I found only two health care providers that
include this phrase in their name.
http://www.maricopa.gov/medcenter/
Maricopa Integrated Health System
http://www.metronhealth.com/
Metron™ Integrated Health Systems
Integrated Health System(s) is used as a generic term to describe
vertical and horizontal organizational links among a variety of health
care providers. I’ve collected a few articles to help you review what
is happening in this area:
http://www.trendwatch2003.com/books/ihs_full.pdf
Integrated Health Systems: 2003 Managed Market Overview Series
***** This is a 52 page paper that gives you a very through
presentation of the IHS market and current trends. See Appendix 1 on
page 44 for the list of the Top 100 Integrated Health Care Networks
issued by the SMG Marketing Group.
-------------------------------
http://www.irmi.com/expert/articles/boone002.asp
June 2000 -- Integrated Health Care Delivery Systems' Challenges
Close to 850 integrated health care delivery systems (IDSs) exist in
the United States today. Currently, most systems are considered to be
in an evolving state of integration as they attempt to provide a full
continuum of services in a user-friendly, one-stop-shopping
environment that eliminates costly intermediaries, promotes wellness,
and improves health outcomes.
--------------------------------
http://www.managedcaredigest.com/index.jsp
The Aventis Pharmaceuticals Managed Care Digest Series™ is part of our
continuing commitment to provide you with the latest, most essential
information on the evolution of health care. The Series, available
online or in print, provides key benchmarking data that can help you
assess value, control costs, and develop business strategies.
***** See eIntegrated Health Systems Digest for 2003 You have to be a
member to access the current report but prior year reports are
available for your use.
http://www.managedcaredigest.com/edigests/is2001/is2001.shtml
---------------------------------
http://www.dekker.com/servlet/product/DOI/101081EEPAP120010757;DekkerSessionID=1ocWy1h0acd1EUO1uoTYFC862vrIUI7trDUrYXfQqqqNE2GIg5ei!450819651!-1062693110!7601!7002!606010535!-1062693109!7601!7002
Integrated Health Care Systems: New Trends, Emerging Models, and
Future Shocks
Integrating the continuum of healthcare providers both vertically
across different levels of care and horizontally within a level has
been an ongoing trend during the last two decades. The degrees of
success in these ventures, however, have varied greatly. Some emerging
models are incorporating more than traditional health organizations
and are embracing new methods of governance, structure, and financing
to reinvent the integrated holistic healthcare system of the future.
This e-paper provides an overview of these new trends, emerging
models, and future shocks.
----------------------------------
http://www.affinityhealth.org/object/Top_11.html
03/04/2003 -- Affinity Health System Ranked #11 Among Top 100
Integrated Health Care Networks Nationwide
For the past six years, Verispan (formerly SMG Marketing Group) has
ranked health care systems that have at least one hospital and provide
a continuum of care.
===============
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