News

Hospital profit margins reach 6-year high

After a bumpy ride, US hospitals reported recorded record profits in 2004, the last year American Hospital Association financial performance data is available. "Indications are," USA Today reports, "that 2005 performance was just as good." Hospitals reported average profit margins of 5.2 percent, according to the AHA's Rick Wade. Wade says only about 25 percent of member hospitals are in the red, a drop of about 5 percent over a year ago. A good year on Wall Street, decreases in …

Kaiser Permanente employees arrested in fraud case

Two contract employees working at Kaiser Permanente's South Bay Medical Center have been arrested by Los Angeles police and charged with stealing patient medical and financial information. The company is warning 25,000 customers that their personal health information may have been compromised. The fraud was discovered after the pair began using stolen credit numbers to purchase high-end home appliances and clothing online. The two allegedly kept copies for themselves when photocopies were …

Benefits of interfacing computers to medical devices

Cain Medical CEO Nicholas Cain gives a quick run down of the advantages of connecting medical devices to electronic medical records systems and CPOE systems in a guest Op-Ed on the Health Care IT Guy's blog. His list of advantages for doing this in the ICU setting includes increased efficiency, reduced transcription errors during the data collection process, improved diagnosis support and the ability to remotely monitor patients. As Cain points out, there is no need to wait for these …

New development in stolen tissue transplants case

Patients at several North Carolina hospitals have been notified that they may have received tissue transplants using samples stolen from New York. Biomedical Tissue Services of New Jersey is under FDA investigation for allegedly removing bone and tissue from corpses without permission. Companies which bought supplies from BioMedical, including New Jersey's LifeCell and Florida's Regeneration Technologies, were the vendors involved. There is some suspicion that many more people may be …

'Mixed successes' of Medicare Part D

In a column today, The Wall Street Journal's David Wessel looks at the Medicare Part D experiment and concludes that so far the benefit is not paying off quite as well as supporters in government had hoped. The benefit is a free market approach to a major problem, and that's all good, Wessel writes. However, a majority of seniors remain confused about the benefit and appear to be blaming Washington. The problem to a large degree is that the benefit's designers "overlooked …

SPOTLIGHT: Aetna CEO Ronald Williams


Newly-appointed Aetna CEO Ronald D. Williams becomes a relative rarity in the healthcare industry--an African-American in a senior management position. Williams, who was named as the replacement for outgoing CEO Jack Rowe, is profiled in today's Hartford Courant. Williams held senior jobs at WellPoint Health Networks and its subsidiary, Blue Cross of California, before coming to a troubled Aetna. He earned a Master's degree from the Massachusetts Institute of Technology in 1983. Article

ALSO NOTED: 2 dead of bird flu in Turkey; Humana snags CorpHealth; and much more...

> The Turkish government reports that two teenagers in Turkey have died after contracting bird flu. Tests are being conducted to see if the strain involved is the H5N1 virus. Article

> Humana picks up CorpHealth in a deal valued at $54 million. Article

> Small Bone Innovations …

Spending on hospital construction near all-time high

The current hospital boom is the "biggest in half a century" and likely to continue for the next four years. New hospital construction is at an all-time high, according to USA Today. According to Census Bureau data, the industry has spent in the area of $100 billion on new construction over the past five years. Spending is projected to hit a record $23.7 billion in 2006.

The newspaper examines the boom in the construction of new high-tech facilities in major metropolitan …

eICU patent dispute examined

As noted in yesterday's trends issue, you can expect the eICU concept to gain momentum this year as the increased availability of the technology makes implementing systems more affordable for providers and systems make their way into other departments. The most well-known player in this emerging field, Baltimore-based VISICU, has been exchanging legal shots with Cerner in a patent dispute over the past six months. Cerner, which sees the obvious market potential in remote monitoring …

Kansas City launches email consultation pilot

Blue Cross and Blue Shield of Kansas City has launched a pilot program that allows members to consult with their physicians via email. Blue Care and Blue Advantage plan members will be able to contact their physicians for consultations on non-urgent medical matters. As many as 500 physicians are expected to be participating in the project by the end of 2006. RelayHealth will provide the technology and manage the compensation plan for participating physicians.

This is an idea that …

Physician-owned hospitals: A conflict of interests?

Texas is home to approximately half of the physician-owned hospitals in the country. Last year the Texas Hospital Association and the Texas Association of Business launched a series of unsuccessful bills in an effort to discourage new facilities. All but one of the attempts failed. Texas hospitals run by physicians will now have to inform patients of potential conflict of interest. Houston Town and Country, a 99-bed full-service facility operated by a consortium of 120 area physicians, is …

Deal near for ACS

A consortium of companies is nearing a deal to purchase consultancy Affiliated Computer Services (ACS) for more than $8 billion, according to The New York Times. The group behind the takeover is led by Texas Pacific and includes Bain Capital and the Blackstone Group. Dallas-based ACS counts General Electric, McDonald's and many healthcare companies among its clients. In particular, ACS is a specialist in transaction processing for many state Medicaid programs. In 2005 ACS reported …

SPOTLIGHT: Part D begins, with some problems


As you might expect, the Medicare Part D Drug coverage program, which started on January 1, has had some teething problems. There are reports that the computer system logging who has what coverage, run by pharmacy transaction company NDC, has incorrect data or is not accessible by pharmacists. Still, it's a little early to report on whether this is a set-up glitch or something worse. Report

ALSO NOTED: Rowe out at Aetna; Abbott suit granted class action status; and much more...

> Chutes & Ladders: Aetna's Jack Rowe, who led a remarkable turnaround at the company, will step down as CEO later this year. He will be replaced by current president Ronald A. Williams. Article

> Two new studies out this week find no evidence to support a theory that statins offer protection from cancer or heart disease. …

Editor's Corner


Welcome to FierceHealthcare in 2006. It's going to be an interesting year. Here are our top five trends to watch in 2006, along with some wildcards. - Matthew

NHIN, RHIOs and all that

For those of you keeping score of activity in the National Health Information Infrastructure (with its plethora of accompanying acronyms): pilot projects have now been funded; early standards have been announced; and Brailer's office has announced that it will attempt to properly count what the adoption levels of EMRs, CPOEs, et al actually are. But is this the year that the discussions behind the 100-odd RHIOs will bear fruit or, like the CHIN movement, will they die on the …

Medicare Part D, healthcare play out in an election year

It will escape no one's attention that 2006 is an election year. Many hopeful Democrats are looking at the rough 2005 "enjoyed" by the Bush administration and have decided that 2006 is shaping up to be the reverse of 1994 all over again. While it's hard to imagine the news for Republicans staying as bad as it's been, there are at least three areas where healthcare will play into politics this year. The most obvious is the roll out of Medicare Part D's drug coverage, about which there has …

New technologies changing healthcare processes

FierceHealthcare will be continuing to track the evolution of new technologies as they are adopted by healthcare organizations. Here are a few which, while not adopted much yet in America's hospitals and clinics, will see a great deal more prominence in 2006:

  • Tracking technologies: A mix of active RFID, WiFi, UWB and infra-red technologies are for the first time enabling cost-effective tracking of people and equipment in hospitals. More hospitals will …

The evolution of consumer-directed health plans

There has been much fuss about the HSA, with some estimates suggesting more than 1 million accounts were opened in 2005. But the majority of those have been opened by people who already had high-deducible plans. However, as companies like UnitedHealth Group, Aetna and Cigna push these consumer-directed plans to their mainstream employer clients, they are gong to face two challenges. The first will be to educate Americans about how to evaluate the healthcare services they are asking for …

Pay-for-Performance and how Medicare pays for care

Pay-for-performance (P4P) is the latest panacea that's supposed to overcome the cost problem, improve quality and remove practice variation. Medicare has leapt on this bandwagon, following the examples of pilots in California and Massachusetts. It's already rewarding hospitals (albeit only a tiny amount) for reporting quality information. This year we'll see the impact a full year of reporting has had on hospital quality. A similar program for nursing homes has had good success so …