Monthly Archives

July 2016

President’s Message

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Dear HFMA South Texas Chapter Colleagues, I am honored to serve as President of the South Texas Chapter for the 2016-2017 year. I want to thank the membership for the privilege of leading the chapter this year. I also want to thank outgoing President, Clint Owen, for his dedication and innovative ideas over the last year. Clint has set some very high standards, demonstrating what it takes to lead with passion and commitment. As a testament to Clint’s and last year’s board’s leadership the South Texas Chapter was awarded four awards at last month’s ANI Annual Chapter Awards Dinner — A Multi-Chapter award for the Region 9 networking event; A John M. Stagl Silver Award of Excellence for education; A Bronze Award of Excellence for membership growth and retention and a Helen M. Yerger Award for membership. As our new year begins the one thing that stays constant is change! Our chapter has, and will continue, to make significant changes to ensure we deliver — what you — our members need to be successful both personally and professionally. With a strong board, officer team and committee volunteer base, I am confident we will continue to be an indispensable resource for our membership. I am excited to tell you about a couple of new offerings: We now have a South Texas Chapter smartphone app! The app will enable you to communicate with chapter members and get real time/interactive information from the chapter. You can search the app stores for “hfma south…

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Millennials Force Healthcare in Digital Direction

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Millennials raised in the digital age with the convenience of online services are driving healthcare providers to change how they engage with patients and improve the customer service aspect of care. While older generations value in-person communication and cultivating relationships with medical professionals, millennials desire a different approach. Accustomed to instant gratification, millennials don’t want to phone in for an appointment and then wait weeks to see a doctor. Nor do they like to be locked in to health plan network restrictions. They often will search online for healthcare information, even before seeing a doctor. A key finding in a global survey of over 3,000 people is that millennials tend to select doctors based on referrals from family and friends. But while older patients express dissatisfaction directly to doctors, millennials share unsatisfactory experiences with friends, often on a social network. The survey also revealed that this generation is likely to trust social feedback, handing providers another challenge. Not only do providers need an online presence, they must monitor and manage their social reputation. Millennials aren’t tied to the notion that they must have one specific doctor; they don’t develop personal relationships with them. For standard checkups and consultations, some don’t feel the need to see a doctor at all, opting instead to see a physician assistant or nurse practitioner. They don’t want to spend hours at a doctor’s office for minor medical complaints. Part of this is due to millennials being generally healthy; pressing health concerns typically are for accidents…

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The Hospital Accelerator Model

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Evolving reimbursement models, the Affordable Care Act and the activation of patients as consumers are among the major drivers of anticipated disruption to the provider landscape. This shifting financial, regulatory and patient preference has led to not only industry veterans attempting to recalibrate ways of doing business, but has also notably attracted outside entrepreneurs and capital vying to establish a presence in a massive industry ($1.5 trillion was spent on hospitals, physicians and clinics in 2013, according to the Kaiser Family Foundation) that historically has had large barriers to entry. StartUp Health reported  that capital flows for digital health increased from $1.2 billion in all of 2010 to $4.7 billion in the first three quarters of 2015. Despite all the above tailwinds, however, adoption of new business models has been relatively slow. A number of factors must be overcome, including: Cultural Differences: Many new entrants come from outside industries, such as technology. Current health care leaders may question new players’ understanding of the intricacies of health care, including fund flows, the level of control any one entity has over an entire episode of care, privacy, compliance, etc. New entrants, for their part, may view incumbents as slow adopters who have not faced the sort of innovation-driving market competition seen in other industries. Both viewpoints have merit. Financial Incentives: While the Centers for Medicare and Medicaid Services (CMS) is moving toward value-based reimbursement models such as shared savings or capitated payments, many (if not all) regions of the country are still…

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Agency Options for Hospital Finance Better than Ever

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Today is a good day to be an issuer in the bond market. With paltry returns available through government bonds and investment-grade paper, fixed income investors are reaching for yield and aggressively bidding for nearly all non-investment grade municipal bond credits, including hospitals. However, not all hospitals are a good fit for tax-exempt bonds. Restrictive covenants, transaction and borrower size, and cost of the issuance are a few factors that may make a public bond issue unfeasible. Fortunately, there is a low-rate, long-term, covenant-light solution. The U.S. Department of Housing and Urban Development (HUD)/Federal Housing Administration’s (FHA) Section (Sec.) 242 program and the U.S. Department of Agriculture’s (USDA) Community Facilities (CF) program both made significant capital contributions to hospitals during 2015. Further, each program made strides toward becoming more user friendly, specifically with HUD’s new loan documents and USDA’s emphasis on processes and uniformity. Until recently, the FHA Sec. 242 program used closing documents, covenant package and regulatory agreements that were created in 1973. This led to some of the terminology and legal concepts being outdated. The antiquated documents resulted in closing delays and additional costs, as a borrower and its lender counsel would have to negotiate changes to update and revise language. In 2016, HUD introduced a new set of documents that are expected to be finalized later this year. Although the documents do not introduce sweeping changes, much of the terminology and standard loan document provisions have been included. The changes should help alleviate the closing delays that…

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