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carondelet

Arizona Hospital And Healthcare Association Adds Carondelet CEO To Board

The Arizona Hospital and Healthcare Association (AzHHA) is pleased to welcome James K. Beckmann, Jr., President and CEO of Tucson-based Carondelet Health Network to the AzHHA Board of Directors.

As a member of the AzHHA Board, Mr. Beckmann will provide leadership and representation on behalf of the collective interests of hospitals and the patients they serve throughout Arizona.   Carondelet Health Network is Southern Arizona’s only Catholic, not-for-profit healthcare network, which includes four hospitals and serves a three-county region of 1.3 million residents.

“We are delighted that Jim has joined the AzHHA Board, and look forward to the insights and experience he brings to our Association,” said AzHHA President and Chief Executive Officer Laurie Liles.  “With his diverse career in the healthcare and insurance industries, Jim’s perspective will be particularly valuable given Arizona’s dynamic healthcare environment.”

“At Carondelet, we certainly recognize that strengthening healthcare, locally and regionally, requires our active participation,” said Beckmann.  “For that reason, it is a privilege for me to join the efforts of the Arizona Hospital and Healthcare Association’s Board of Directors in ensuring Arizonans have a vital and valuable healthcare system available to all in the future.”

Jim Beckmann joined Carondelet Health Network as President and CEO in October 2011.  Prior to coming to Tucson, he served as Senior Vice President for System Support Services at Carondelet’s parent ministry, Ascension Health, based in St. Louis, Missouri. Ascension Health is the nation’s largest Catholic, not-for-profit healthcare system, providing care in more than 1,400 locations in 21 states.

In his Ascension role, Jim had executive management responsibility for Ascension Health’s supply chain, risk management, corporate responsibility, operational resources and Facility Resources Group.  Prior to joining Ascension Health in 2003, Beckmann had an extensive career in the insurance industry.

Beckmann was born in Columbus, Georgia, and grew up in Louisville, Kentucky. He earned a bachelor’s degree in Economics and Applied Mathematics from Centre College in Danville, Kentucky, and an MBA from the University of Tampa in Florida.

The AzHHA Board has 15 members.

For more information on Arizona Hospital and Healthcare Association, visit AzHHA’s website at azhha.org.

Lawsuit Dropped To Prevent AHCCCS Hospital Payment Cuts

Lawsuit Dropped To Prevent AHCCCS 5% Hospital Payment Cuts

The Arizona Hospital and Healthcare Association (AzHHA) Board of Directors voted Tuesday to drop the lawsuit against the Arizona Health Care Cost Containment System (AHCCCS) to prevent a five percent cut in hospital payment rates.

After thoughtful consideration, the AzHHA Board of Directors decided it would be in the best interest of all the parties involved to move forward and work together in partnership with policymakers to strengthen Arizona’s healthcare delivery system.

“This is a challenging time for hospitals and patients as a result of a prolonged recession and budget cuts to healthcare programs,” said AzHHA President and Chief Executive Officer Laurie Liles. “As we look ahead, we know the state and Arizona hospitals will continue to face economic challenges and we look forward to working with state leaders like Senate President Steve Pierce to prepare for the future and grow our state’s economy.”

“I’m glad to hear the Association is dropping this lawsuit. We need to stop looking back and instead look ahead to find solutions to the crisis in health care.  These are complex issues and we need to work together.  I’m tired of a shotgun approach to fixing things.  We must look at the big picture,” says Senate President Steve Pierce.

Arizona hospitals have struggled in recent months as they care for an increasing number of uninsured patients who turn to hospitals for emergency treatment.  In the last quarter of 2011, the amount of charity care hospitals provided increased by 75 percent over the same period in 2010.

For more information on AzHHA, visit their website at azhha.org. For more information on AHCCCS, visit their website at azahcccs.gov.

AzHHA Conference - AZ Business Magazine July/August 2011

AzHHA Conference Addresses Challenges Facing Health Care Industry

The health care industry has undergone its fair share of challenges in the past, but 2011 has proven to be an exceptionally tough year. The difficult climate has set the stage for the Arizona Hospital and Healthcare Association’s (AzHHA) Annual Membership Conference, which will tackle the challenges head-on with the all-too appropriate theme, Between a Rock and a Hard Place.

“This year’s conference theme is applicable to many of the challenges facing the health care community today … including the implementation of health care reform, shrinking revenue streams, and the state and national budget woes,” says LeAnn Swanson, vice president of education services for AzHHA. The conference also will cover relevant topics such as advocacy, patient safety and quality, and governance.

The goal of the event, which will take place Oct. 20-21 at the Buttes Resort in Tempe, is to engage AzHHA’s members and keep them educated about pertinent issues affecting the industry. This year’s timely message is sure to make an impact on the audience of chief executive officers, hospital administrators, physician and nurse leaders, hospital trustees, operational leaders and all other members of the hospital family.

“Arizona hospitals and health systems find themselves in a time of both challenge and change,” Swanson says, “and the 2011 annual membership conference is designed to help your organization meet these challenges and changes head-on with instructive knowledge and a hopeful spirit.

“The conference is brimming with energizing and stimulating speakers providing the latest information and insights on the issues you care most about, to ensure your time away from the office is time well spent,” Swanson adds.

The event will begin with a keynote session titled, “From Success to Significance,” presented by Nido Qubein, president of High Point University and chairman of a national retail company. Qubein brings with him a rags-to-riches story of perseverance and business triumph, and will share a powerful message about the fundamentals that contribute to success.

“We are in difficult times and the future is challenging on many levels,” Qubein says. “Today’s health care professional is faced with a myriad of hard decisions that demand tenacity and experience.”

Following Qubein’s keynote will be the conference’s general session titled, “Healthcare Reform: Where are We Now, Where are we Going?” presented by Len Nichols, PhD., the director of the Center for Health Policy Research and Ethics and a professor of health policy at George Mason University.

Joe Tye, CEO and head coach of Values Coach, a consulting, training and leadership coaching company, will lead the informative session “The Florence Prescription (for hospitals and health care)” that will challenge audience members to reignite the spirit of the electrifying Florence Nightingale and her health care pioneers. Tye promises to bring his audience back to basics by reminding them of the importance of focusing on things such as employee engagement and patient satisfaction.

“They will learn specific strategies for building a culture of ownership, which is ultimately the only sustainable source of competitive advantage,” Tye says. He adds that attendees “will be challenged to think as deeply about the cultural blueprints of their hospitals as they do about blueprints for new buildings.”

John Foley, founder and president of CenterPoint Companies, which provides business performance training to Fortune 500 corporations, professional associations and educational organizations around the world, will close out the conference with a presentation on maximizing performance excellence.

There are also a few changes in store for the 2011 event. The conference no longer will feature an awards luncheon and instead will introduce the Honoring Our Professionals of Excellence (HOPE) Award. Deserving members of the health care community will receive recognition for their work, including a Caregiver Award, presented to an individual or care-giving team that has shown commitment to the delivery of quality care; and the Healthcare Leader Award, given to a deserving hospital executive or trustee who has demonstrated a history of noteworthy leadership at the state and/or national level.
The highly informative conference has been a benchmark event for AzHHA, helping to keep members educated and ready to face the challenges ahead.

“Times are difficult and budgets are tight, but your team still needs continuing education to stay current on the latest regulations and trends in the health care industry,” Swanson says.

Fortunately, AzHHA’s educational outreach efforts don’t end with the annual conference. The organization also hosts a multitude of webinars and other events throughout the year to keep their members informed and prepared in the dynamic health care industry.

“I have a depth of admiration for AzHHA and its members and I am most grateful for the continuing valuable work that they do to contribute to a better tomorrow for us all,” Qubein notes.

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AzHHA’s 2011 Annual Membership Conference

Oct. 20-21
The Buttes Resort
2000 Westcourt Way
Tempe, AZ 85282
azhha.org

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Arizona Business Magazine July/August 2011

 

AzHHA’s New President And CEO Laurie Liles - AZ Business Magazine Sept/Oct 2010

AzHHA’s New President And CEO Is Ready To Tackle The Industry’s Challenges

A familiar face has been named the new president and chief executive officer of the Arizona Hospital and Healthcare Association (AzHHA). Laurie Liles assumed her new role on Sept. 7, succeeding John Rivers, who will be available as a consultant until his retirement becomes official in January.

Selected by the AzHHA board of directors on June 3 after an extensive national search, Liles is a natural for the position, having most recently served as senior vice president of public affairs for the organization. In that role, Liles was the association’s chief lobbyist, putting her in charge of legislative and regulatory advocacy, and making her a familiar face at the state Capitol.

In fact, when she joined the association in 1991, Liles already was well known and respected at the Legislature. She was an intern at the Arizona House of Representatives in 1985, and in 1986 joined the House research staff. It was her first real job coming out of college, where she had majored in political science at Northern Arizona University.

The years at AzHHA that Liles spent lobbying lawmakers have given her a solid foundation for the tasks ahead. She also worked closely with the chief executive officers of AzHHA-member hospitals throughout the state.

“My role as chief lobbyist has given me a great deal of exposure to the challenging issues our members face,” Liles says. “It also enabled me to advance their interests with the regulatory entities they interact with.”

While she savors the experience and knowledge she gained as a lobbyist, Liles doesn’t plan on visiting the Capitol on a regular basis anymore.

“As the head of an advocacy organization, I will be ultimately responsible for accomplishing our advocacy goals,” she says, adding she will work closely with her staff and her replacement, who will tend to the day-to-day duties of lobbying.

Myriad challenges lie ahead, but No. 1 on Liles’ list is not unique to hospitals or the health care industry: the economy.

“The recession has been hard on everyone, and hospitals are no exception to that,” Liles says. “Our members continue to provide high-quality care, and the challenge going forward is to maintain that quality as resources become more and more precious.”

Arizona’s fiscal crisis is expected to continue for the next few years, Liles says, and as the state slowly recovers hospitals will be particularly vulnerable to any government-imposed cuts to Medicare and the state’s Medicaid program, the Arizona Health Care Cost Containment System (AHCCCS). The question remains how the state will pay for ever-expanding AHCCCS rolls. Enhanced federal matching funds, which faced some opposition in Congress, would ease the burden.

A close second in priorities is implementation of the new federal health care reform law. Fortunately, Liles has maintained a close working relationship with Arizona’s congressional delegation, particularly staff members who deal with health care issues. In addition to e-mails and phone calls, Liles has made it a practice to meet in Washington, D.C., with congressional members a couple of times a year.

Norm Botsford, chairman of the AzHHA board of directors, cited the federal health care law when he announced Liles’ appointment.

“The state’s health care community and citizens will be well served by Ms. Liles’ leadership as we begin the process of implementing the historic health care reforms signed into law by President Obama.” he stated.

But one of the challenges facing Liles and hospital administrators throughout the state does have a silver lining. Asked what good news hospitals can expect in the year ahead, Liles took a long pause before saying: “The really positive news for health care is the increased coverage that the federal health reform legislation brings. Having 32 million more Americans who previously had no insurance be covered is a positive development, but with it comes challenges of providing care for them.”

http://azbigmedia.com/tag/september-october-2010-2

AzHHA’s 2010 Annual Membership Conference - AZ Business Magazine Sept/Oct 2010

AzHHA’s 2010 Annual Membership Conference Is Aimed At Helping Members Prepare For Change

With the health care field on the brink of a major upheaval, the Arizona Hospital and Healthcare Association’s (AzHHA) 2010 Annual Membership Conference offers members information on what to expect in the future.

The theme, Bringing the Future into Focus, incorporates a mix of topics and speakers intended to appeal to a diverse hospital audience. Attendees will hear from leading economists, patient safety experts, health care visionaries and others.

LeAnn Swanson, vice president of education services for AzHHA, says the conference is the ideal venue to bring the new health care reality into full focus.
“Some of the best minds in the industry will be providing hard-hitting education and thought-provoking commentary,” she says. “This conference is intended for the entire hospital family, including the C-suite leadership team, hospital trustees, legal counsel, operations, quality, patient safety, human resources, and marketing officers.”

This year’s conference, Oct. 14-15 at The Buttes Resort in Tempe, kicks off with a keynote session featuring Lowell Catlett, Ph.D., regent’s professor, dean and chief administrative officer at New Mexico State University’s College of Agricultural, Consumer and Environmental Sciences. He will speak on the present and future of the economy.

Catlett notes that economic downturns are common — with 14 recessions during the past 80 years — and provide a means for society to re-balance what it deems to be important.

“Every recession leads to a spurt in new business starts, reformulation of business practices and new technological adaptations,” he says. “This current pause is no exception as we focus on what we value most. Get ready for phenomenal growth in health care, energy and lifestyle markets. For those willing to embrace the opportunities, the next decade will be successful beyond any in history.”

Immediately after Catlett’s presentation on Oct. 14, the general session will feature Ron Galloway, director of the documentary “Why Wal-Mart Works and Why That Makes Some People Crazy,” and the newly released “Rebooting Healthcare.” His topic, Wal-Mart and the Future of Healthcare, covers in-store health care clinics that offer everything from eyeglasses to flu shots to urgent care.

Galloway says the discount retailer aims to leverage its 4,000 stores into the largest force in American health care.

At the Oct. 15 breakfast meeting, sponsored by the American College of Healthcare Executives (ACHE), Chris Van Gorder, president and CEO of Scripps Health in San Diego and ACHE 2010-2011 chairman, will offer a look at Scripps’ medical response team. Van Gorder will describe the team’s efforts in the Hurricane Katrina-ravaged Gulf of Mexico, San Diego after its massive wildfires and quake-stricken Haiti.

Concurrent breakout sessions will look at the key drivers of physician behavior and the natural tension that exists in doctor-hospital relationships; trends and technologies that are “re-forming” health care in unexpected and beneficial ways; and the notion of being in a health care bubble with a high potential for a correction over the next five years.

The closing session will feature John Nance, author of “Why Hospitals Should Fly,” which was named the 2009 book of the year by the ACHE. Based on his book, Nance offers some solutions to the patient safety and quality-care crises that resonate deeply with all health care audiences.

The conference also will feature AzHHA’s annual awards luncheon, and a president’s reception that will give attendees an opportunity to say goodbye to the organization’s longtime president and CEO, John Rivers, as he nears retirement. The reception also will serve to introduce AzHHA’s new leader, Laurie Liles.

Along with the conference, during the upcoming year AzHHA also will offer a series of webinars and other events of interest to members of the hospital and health care industry, as well as representatives of the business community, Swanson says. The emphasis will be on compliance-related topics, including rules and regulations of the Centers for Medicare and Medicaid Services, the Health Insurance Portability and Accountability Act (HIPAA), and the Federal Emergency Medical Treatment and Labor Act, also known as EMTALA.

To learn more about upcoming education opportunities from AzHHA and to register for conference events, visit www.azhha.org/educational_services and click on education events.

    Arizona Hospital and Healthcare Association’s
    2010 Annual Membership Conference

    Oct. 14-15
    The Buttes Resort
    2000 Westcourt Way, Tempe
    www.azhha.org

Arizona Business Magazine Sept/Oct 2010

State Budget Cuts Will Hit Arizona Hospitals - AZ Business Magazine Sept/Oct 2010

Despite Restoring Some Funds, State Budget Cuts Will Hit Arizona Hospitals

It was looking pretty grim at 1700 W. Washington St., as Gov. Jan Brewer and a badly splintered Arizona Legislature struggled to cobble together a state budget that would have the appearance of being balanced.

Taking a follow-the-money tactic, policymakers targeted programs such as education and health care that annually receive large sums of taxpayer dollars. The budget Brewer and Republican lawmakers put together, addressing a $3.2 billion shortfall for fiscal year 2011, sent shock waves throughout the health care community.

The Arizona Hospital and Healthcare Association (AzHHA) estimated the cuts would reduce hospital revenue by $1.15 billion in state and federal funds in FY 2011, which began July 1, and cost the overall health care community $2.7 billion. For example, the budget package eliminated coverage under the state’s Medicaid program — Arizona Health Care Cost Containment System (AHCCCS) — to 310,500 adults and children, and eliminated KidsCare, ending health care coverage for 47,000 children. KidsCare provides low-cost insurance for the children of parents who earn too much to qualify for Medicaid, but are still considered the so-called working poor.

Before the ink was dry on the bills the governor had signed, officials learned that the landmark health care reform bill passed by Congress prohibited such budget cuts under the threat of losing federal funds. So lawmakers passed another bill to restore money stripped from AHCCCS and KidsCare. Failure to have taken the follow-up action, officials said, could have cost Arizona more than $7 billion in federal money for health care.

AzHHA strongly supported the governor’s push for a temporary 1-cent sales tax increase, which voters approved by a 64 percent to 36 percent margin. The tax increase remains in effect until May 31, 2013, and is expected to generate about $3 billion over three years to protect education, public safety and health and human services from further cuts.

Despite avoiding a funding disaster, hospitals still are forced to deal with a considerable loss of government dollars. Laurie Liles, president and CEO of AzHHA, says hospitals sustained $50.1 million in cuts to the Disproportionate Share Hospital (DSH) program, which provides special funding to hospitals that treat a significant number of AHCCCS and uninsured patients. The state cut $16.7 million, resulting in a loss of $33.4 million in federal funds. The federal stimulus act of 2009 matches state dollars three-to-one for DSH, so when the state trims $1 from the program, the total loss is $4.

Hospitals also lost some $37.3 million in funding for graduate medical education, which helps pay for physician instruction programs.

“There is no funding for 2011,” Liles says. “That is a huge loss for Arizona, considering the significance of our physician shortage.”

In addition to those losses, the Legislature authorized AHCCCS to reduce all provider payments, including those to hospitals, by up to 5 percent for fiscal 2011.

“We don’t know what percentage cut that hospitals will receive,” Liles says. “Hospitals are planning on the full 5 percent, but we’re hoping it will be somewhat less.”

Since 2008, Arizona hospitals have sustained several hundred million dollars in payment cuts and freezes, which impact hospital employees — medical and non-medical, Liles says. The association has been monitoring how its member hospitals are dealing with the recession.

“We have found that hospitals are managing through a variety of ways,” Liles says, “with some staffing reductions, delays in capital construction and services to the community. Hospitals have had to make some very hard choices about services. Strategies that hospitals have been forced to employ affect all Arizonans.”

For example, Liles says, when hospitals are underpaid, either by AHCCCS or Medicare, hospitals shift those costs onto commercial health plans to make up the difference.

“We call that cost shift a hidden health care tax,” she says. “That results in higher premiums for businesses and families. We all end up paying for the cost shift that hospitals are forced to make.”

Liles, who previously was the chief lobbyist for AzHHA, says she spent a lot of time over the past few years visiting with legislators regarding the impact of the hidden health care tax.

In 2009, the Arizona Chamber Foundation, an affiliate of the Arizona Chamber of Commerce and Industry, determined that all purchasers of health care coverage pay 40 percent more for hospital care through commercial insurance as a result of underpayments from AHCCCS and Medicare, Liles says.

“We look for more of the same,” she says.

Hospitals are counting on Congress to continue funding AHCCCS at an increased level.

“We have shared our concern with our congressional delegation,” Liles says. “The enhanced federal medical assistance percentage is absolutely vital to Arizona.”

The increased funding amounts to about $480 million — money needed to cover the expanded AHCCCS population — that the state is mandated to continue covering as a result of national health care reform. Without additional federal funding, Liles wonders: “How are our Legislature and governor going to pay for that? We are concerned about the care we provide. There are only so many places our state can cut.”

By The Numbers: Health Care Cuts

  • $50.1 million in cuts to the Disproportionate Share Hospital (DSH) program
  • $37.3 million in funding for graduate medical education
  • AHCCCS can reduce all provider payments by up to 5 percent

Arizona Business Magazine Sept/Oct 2010

Rona Curphy - AZ Business Magazine Sept/Oct 2010

Rona Curphy, President And CEO Of Casa Grande Regional Medical Center

Rona Curphy
President And CEO
Casa Grande Regional Medical Center
www.casagrandehospital.com

As president and CEO of Casa Grande Regional Medical Center, Rona Curphy has moved to the top of the medical field thanks to her years of dedication.

From 2002 to 2009, Curphy served as the chief nursing officer at the nonprofit community-based hospital in Casa Grande. When she was asked to be interim CEO in February 2009, she jumped at the new experience. Curphy saw it as an opportunity to grow in her profession and to learn new skills. About five months later, Curphy was named Casa Grande Regional Medical Center’s official president and CEO.

As president and CEO, Curphy works to ensure that the hospital implements the strategic plans adopted by the board of directors.

“My duties are making sure we meet our mission, our vision of organization, making sure people are on top of strategic goals, engaging partners, providing the best quality health care environment for them to practice in, and making sure the staff has a great environment to work in,” Curphy says.

Curphy emphasizes that in her role she tries to be a visible and active community member. She sits on the chambers of different cities, on an economic development board and attends events so the hospital will be viewed as a part of the community.

Although Curphy currently does not hold a position on the Arizona Hospital and Health Care Association’s (AzHHA) board or committees, she has been very active with the organization in the past. While serving on the patient safety committee, Curphy looked at new patient initiatives throughout the state.

“I had to look at everybody’s concerns and issues as we made decisions going forward,” Curphy says.

She also served on the Campaign for Caring committee, where she ended up chairing one of four task forces. On the government affairs committee, Curphy helped give legislators ideas on what stands the hospital and health care community wanted them to take on issues. She points out that AzHHA is an important organization to the community and to hospitals.

“AzHHA is our voice across Arizona,” Curphy says. “Having one voice where lots of members can give ideas, gives us opportunities to work with the Legislature to get things done.”

Curphy says another key benefit of AzHHA is that it offers the opportunity to network nationwide. But Curphy adds, a big challenge AzHHA faces is being able to successfully manage networking events during a very busy time in the health care industry. With all of the new legislation on health care being written and passed, it is easy to get caught up in focusing solely on the issues, rather than the networking aspect of the organization, she says.

Curphy wants to see more members take advantage of the opportunities that AzHHA presents, and to get involved in the events the organization hosts. In addition, Curphy says AzHHA has to focus on maintaining and recruiting new members, “… and making sure (the organization is) not too costly for members, or difficult for members to participate. If they make the cost too much, there will only be a few members, and the end result doesn’t allow for great networking.

“I think it is up to (AzHHA) to get out to member hospitals, to get people out there to say, ‘Get involved,’” Curphy says.


arizona Business Magazine Sept/Oct 2010

Good Samaritan Hospital at sunset

Massive Budget Cuts Have Arizona’s Hospitals And Health Care Industry Closing Ranks

As bad as 2009 was, the health care industry in Arizona is still bracing for the worst. So says John R. Rivers, president and chief executive officer of the Arizona Hospital and Healthcare Association (AzHHA), whose organization, along with others, lobbied unsuccessfully against massive legislative reductions totaling $2.7 billion to the Arizona Health Care Cost Containment System (AHCCCS) and Arizona Department of Health Services’ budgets for fiscal 2011.

The cuts were part of an effort by the Legislature to dig the state out of the deficit hole it finds itself in.

“I can’t predict who is going to do what in response to these cutbacks, but I can tell you that every person in Arizona will be affected by these cuts in some negative manner — either though higher insurance premiums, more overcrowding in hospital emergency rooms, reduced services provided by hospitals or even some hospital closures,” Rivers says. “The impact of these cuts will be far-reaching and long-lasting.”

Hospitals alone stand to lose $1.15 billion in the fiscal year that starts July 1.

“Our focus and energies must be on the daunting challenge of dealing with the negative impact on patient care as a result of the budget cuts recently enacted in Arizona,” says Peter Fine, president and CEO of Banner Health. “These cuts will result in reductions of $2.7 billion in health care spending, including scheduled cuts of more than $1 billion to Arizona hospitals in 2011. This will place tremendous pressure on the state’s hospitals.”

The AzHHA position is that the budget cuts not only will devastate Arizona’s health care community, but also cripple the state’s economy. Arizona’s hospital community employs approximately 73,000 people and contributes $11.5 billion to the state’s gross product. In a recent report, the Seidman Research Institute at the W.P. Carey School of Business at Arizona State University estimated the budget cuts would result in a loss of 42,000 jobs across virtually every segment of the Arizona economy.

Those job losses, Rivers says, “will worsen Arizona’s economic downturn and flies in the face of legislators’ efforts to create new jobs and revitalize the state’s business climate.”

The health care sector would suffer the greatest loss of jobs, totaling an estimated 19,600 in 2011. Employment losses also would hit such categories as arts and entertainment, construction, finance, manufacturing, mining, real estate, retail, transportation and warehousing, according to the ASU report.

Other startling numbers from the report indicate that real disposable income would be reduced by $1.74 billion — approximately $200 per capita — and the state’s population would shrink by 10,000.

Even before the Legislature took final action, St. Joseph’s Hospital & Medical Center already was dealing with the state’s budget implosion.

“Because we are the largest hospital in Arizona, and treat more AHCCCS patients than any other private hospital, these cuts have been devastating to us,” says Linda Hunt, service area president of Catholic Healthcare West (CHW) Arizona and president of St. Joseph’s. “The Legislature cut more than $14 million in funding to our hospital alone between mid-December and February. Part of these cuts wiped out funding for our graduate medical education program, which trains more than 200 medical residents in 10 different clinical specialties. We now have to make up the deficit. In addition, our charity care costs continue to increase, we are seeing more uninsured patients in our ER, and we are seeing more mentally ill patients in the ER because they have nowhere else to get help.”

Hunt’s concern for the most vulnerable members of society is echoed by Betsey Bayless, president and CEO of Maricopa Integrated Health System (MIHS), which operates the Maricopa Medical Center.

“About 65 percent of our patients are on AHCCCS, and we operate the Valley’s largest psychiatric inpatient hospital, Desert Vista, in Mesa,” Bayless says. “Furthermore, patients without coverage will seek care only when their conditions worsen, thus driving up emergency room demand — the most costly means of caring for illness and disease.”

Further putting a human face on the budget cuts, health care coverage is being eliminated for 310,500 low-income adults and 47,000 children, and mental health treatment ends for 36,500 adults and children.

Hospital officials fear their emergency rooms will be inundated by additional waves of the uninsured. Emergency rooms are federally mandated to screen and stabilize all patients, without regard to their ability to pay for care. In 2008, Arizona hospitals provided approximately $392 million in uncompensated care to uninsured patients. Hospitals make up the loss by absorbing or shifting costs to commercial health plans, which then charge businesses and individuals higher health insurance premiums, AzHHA maintains. The cost-shift, coupled with further cuts in AHCCCS hospital payment rates, amounts to a hidden tax on health care consumers, according to AzHHA.

The budget cuts also eliminate the KidsCare Program, which provides medical services and preventive health care for children of families who cannot afford insurance. Ending the program saves the state $22.9 million, but costs the state $95.5 million in federal matching funds, for a total loss of $119 million to the state’s health care system. Hospitals will lose $44 million in revenue, AzHHA says.

Of extreme concern to the medical community is a measure on the November ballot that targets Proposition 204, which was approved by voters in 2000. Prop. 204 expanded eligibility for AHCCCS, but the new ballot measure asks voters to deny eligibility to an estimated 315,000 individuals who benefited from the 2000 proposition. Under the ballot proposal this year, the state would save $765 million, but would lose $1.5 billion in federal matching funds, for a total reduction of $2.3 billion to the Arizona health care community. Hospitals alone would lose an estimated $851 million in revenue.

To cope with reduced funding, MIHS has limited new hires and is formulating plans to address these unprecedented budget cuts.

“Moreover,” Bayless says, “we recognize this is not our problem alone. Rather this is a community-wide issue, and I have been reaching out to other health care leaders about ways we can work together to best care for our Valley residents.”

Hunt says St. Joseph’s employees have provided dozens of ideas on how the hospital can operate more efficiently, while preserving patient safety and quality care.

“We are looking at a wide variety of community, academic and business partnerships, and are re-evaluating our strategic plan to add more focus on the service lines that are most needed in the region,” Hunt says. “We are a ‘destination hospital’ for many complex illnesses and will continue to bring patients in from around the country and around the world. We will also advocate strongly for the state to provide services for the most needy and encourage our leaders to see health care as a vital contributor to the state’s economic recovery.”

As for its next step, Rivers says AzHHA will work to guard the funds that escaped the budget axe.

“We will develop a proposal that protects these health care programs either through new revenue sources or requiring that existing revenue sources earmarked for these programs are used for their intended purposes — not just dropped into a black hole in the general fund,” he says.

Outgoing AzHHA Leader John Rivers Talks About The Past, Present And Future Of Health Care In Arizona

After more than 23 years as president and CEO of the Arizona Hospital and Healthcare Association (AzHHA), John Rivers announced he will be stepping down in January of next year. Arizona Business Magazine asked Rivers about his tenure at AzHHA and the challenges facing the health care system.

How has the Valley and state’s health care industry changed in the 23 years you’ve helmed AzHHA?
Health care in Arizona barely resembles what it looked like 25 years ago when I first arrived. In fact, I think it is better in every respect. Hospitals in particular are more sharply focused on cost-containment strategies, physician integration, patient safety and, of course, providing cutting-edge medical care to their patients. Hospitals have also made giant strides in better management of their human resources, particularly nurses, who are the heart and soul of good hospital care.

How has AzHHA’s mission changed over the years to adapt to the Valley and state’s evolving health care industry?
Our primary mission remains political advocacy, although the complexity and difficulty of doing that well has increased exponentially. The tremendous diversity among types of hospitals, and the even greater diversity of personalities among our CEOs, requires a great deal of adaptability on the part of the association CEO.

What are some of the biggest challenges you see facing the health care industry today?
All of us in health care are facing tremendous uncertainty about our future. Congress is on the verge of re-writing the book on government’s role in health care, and at the state level we face the greatest budget crisis in our history. With the federal and state government already purchasing about 70 percent of the hospital care in Arizona, our world will no doubt change dramatically. At a minimum, our future will require us to be more accountable, more transparent and more integrated. Also, we’ll see a seismic shift away from the revenue enhancement model to a cost-control model.

What would you say are some of AzHHA’s greatest successes over the past 20 years?
I think we have been very successful in our political advocacy and our record more than speaks for itself in that regard. More than that, I tend to define our success in terms of achieving our mission with competence and integrity — and keeping our focus on what is best for health care in Arizona and what is best for the patients served by our institutions.

Do you plan to stay involved in health care, and how?
I will definitely stay involved in a number of charitable and community service activities in which I currently participate, but I have no plans to remain involved in health care except as a citizen who cares profoundly about all that we do. I’ve spent the past 40 years of my life in health care, 25 of them in Arizona, and it’s time for me to move on and enjoy life in ways that I have not had time to do up until now. There’s more to life than driving to the office each morning and I intend to live my other dreams while I am still in good health and able to do so.

www.azhha.org

Arizona Business Magazine

January 2010

Hospitals And Health Care Organizations Are Making Tough Decisions To Ride Out The Recession

Hospitals And Health Care Organizations Are Making Tough Decisions To Ride Out The Recession

After a decade of significant growth, the Valley’s health care industry has become an economic driver for the state. During this severe economic downturn, however, the health care industry busted the myth of being recession proof. But that doesn’t mean it’s recession battered.

Health care organizations have weathered the economic turmoil better than most industries in Arizona. For example, the Arizona Department of Commerce reports that in July, year-over-year job losses in health services stood at 1 percent, or 3,200 jobs. That was the slowest rate of loss of any major industry group in the state.

Nonetheless, hospitals and other health care organizations are feeling the effects of the recession and are working diligently to match revenue with expenses.

“Overall, the financial picture for Arizona’s hospitals is somewhat improved from the third and fourth quarters of 2008, despite decreases in volume,” according to Jim Haynes, vice president, finance, and Chief Financial Officer for the Arizona Hospital and Healthcare Association. “That improvement is not due to better payment from payers, like the federal and state governments. It is directly linked to the steps hospitals took in late 2008 to contain and cut costs in response to the economic environment.”

Case in point: Linda Hunt, service area president for Catholic Healthcare West Arizona, which includes Chandler Regional Medical Center, Mercy Gilbert Medical Center and St. Joseph’s Hospital and Medical Center, says many local hospitals are facing state and federal funding cuts, as well as dealing with growing numbers of people who are uninsured. In addition, admissions in some specialty areas are down because people are waiting longer to seek health care and are canceling or putting elective surgeries on hold.

Catholic Healthcare West also has seen a decrease in donations. Many donors are either curtailing their commitments or making smaller donations.

“The health care industry is strained just like any business,” says Hunt, who continues to serve as president of St. Joseph’s. “Financially we’re facing cuts, plus we don’t know what health care reform is going to bring, so we don’t know what our future is going to be. That’s stressful for the industry across the board.”

To deal with the economic slowdown, Catholic Healthcare West started making cutbacks and implementing cost-saving measures last September. St. Joseph’s reduced travel and catering expenses by 35 percent for a cost savings of $780,000 in fiscal year 2009. The hospital also became more diligent about the use of linens and replaced disposable pillows with sanitary reusable pillows, saving $90,000 in FY 2009. The hospital’s management team also took a 2 percent or more pay cut to help save jobs.

“We met with all the employees and they came up with great money-saving ideas,” Hunt says. “When all was said and done, employee suggestions helped save us more than $3 million a year. We are back on budget and that was our goal.”

Phoenix Children’s Hospital also has been prudent in pushing expenditures back. It cut administrative and advertising costs and stopped using traveling nurses, a move that saved the hospital $7.5 million a year. Bob Meyer, president and CEO of Phoenix Children’s Hospital, says they also have taken a hard look at attrition over the past eight months and have backfilled only 30 of 100 open positions. Phoenix Children’s $588 million expansion, which kicked off in 2008, has been scaled back, as well. Plans now call for shelling 1.5 floors of the 11-story tower for future growth.

“Given the economy and Medicaid reimbursement uncertainty (about 50 percent of kids in Arizona are on Medicaid), we have to be more conservative and push expenditures back,” Meyer says. “But even shelling floors will increase the number of beds we have from 345 to 486 when we open, which is what we need. Our patient volume is growing 15 percent a year and every bed in service is occupied almost 100 percent of the time.”

The tower’s first four floors will be completed in late 2010. Occupying the floors will be a cafeteria, kitchen, clinics, an imaging center and a retail pharmacy. The remaining floors of the tower are dedicated to the hospital’s Center’s of Excellence, clinical programs and private patient rooms. They will be finished in late 2011.

To keep Scottsdale Healthcare moving forward, President and CEO Tom Sadvary cut expenses and re-focused capital spending on medical technology, information systems and refurbishing projects. He also streamlined the management and executive team structure, creating fewer layers and a more agile organization. Green measures also were implemented at Scottsdale Healthcare’s three hospital campuses. Examples of the efforts include:

  • Replacing 40 pickup trucks with electric vehicles at all three hospital campuses.
  • Installing energy efficient lighting in three parking garages, saving approximately $82,000 annually.
  • Reducing natural gas consumption by 10 percent at its power plants.
  • Replacing 300 copier machines with new models that use 40 percent less energy.
  • Eliminating printed payroll notices, saving approximately $150,000 annually and some 200,000 printed notices.

Sadvary contends that Arizona’s health care industry remains healthy and strong despite reimbursement challenges, nursing and physician shortages, and the abrupt changes the health care industry has faced over the past two years.

“I’ve been in Arizona 23 years and I’m proud of the health care industry here and what we’ve done to grow talent, capacity and to improve the size and sophistication of services for patients,” he says. “Arizona knows how to step up and we will continue to do that despite challenges along the way. The health care industry is sensitive to the budgetary issues the state is facing. And while we are all trying to be efficient and frugal with resources, our costs are going up. We’re doing the best we can to manage and provide great care with no more dollars coming in from the state.”

Banner Health President and CEO Peter Fine is a firm believer that major changes are coming down the pike in reimbursement formulas for Medicaid and Medicare that will cause more pressure on local hospitals. If that happens, he says, hospitals will have to make very difficult choices on what services to provide and what services they can no longer afford to provide.

“With rising costs and so many cutbacks in health-care spending, it’s amazing that hospitals and physicians can prosper today, as well as forecast for the future,” Fine says. “Companies have to be flexible enough to embrace change and move with what’s happening environmentally. Banner demonstrates flexibility by making investments grow and starting new programs. We also have great leaders at all levels and we invest in talent management, so our people are developed and prepared to lead us through tumultuous times.”

In spite of the economy, Phoenix-based Banner Health is continuing to make investments and grow in the communities it serves. Banner recently invested $289 million to build a new, seven-floor, 200-bed patient tower and emergency room at Banner Thunderbird Medical Center in Glendale. It also invested $12 million to rebuild the old Banner hospital in Mesa and create the Banner Simulation Medical Center, the largest simulation training center in the nation. The 55,000-square-foot center opened in August and has 20 full-time employees who will train 1,200 to 1,500 medical professionals (nurses, physicians, surgeons, respiratory therapists) annually. The simulation medical center occupies the bottom nine stories of the building, with the top eight housing Banner offices.

Students at the simulation center train on high-fidelity, electronic mannequins that look like human patients and come in a variety of shapes and sizes. The mannequins have a heartbeat and they talk, burp, sweat and bleed. They also have medical maladies such as strokes and heart attacks, as well as give birth and “die.”

“Banner Simulation Medical Center is basically a hospital where we can train nurses to work and interact with 20 patients on a floor at a time,” says Dr. Marshall “Mark” Smith, senior director for simulation and innovation at Banner Health. “Nurses that graduate from medical school can manage one patient, not multiples. We now have the ability to train new nursing graduates to care for multiple patients without putting them at risk or overwhelming them. ”

www.chwhealth.org
www.phoenixchildrens.com
www.shc.org
www.bannerhealth.com
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