"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Tuesday, October 28, 2014

The New Scarlet Letter, "E"

I just read an article on Texas Health Presbyterian's (THP) drop in revenue since since October 1, 2014.  Their revenue was down 26% or $8 million dollars for the first 20 days of the month.  As you will recall, THP is the hospital where Thomas Duncan, the first patient diagnosed with Ebola in the US, first presented himself in the THP ED and subsequently died on October 8th.  Two nurses who cared for Mr. Duncan then tested positive for the Ebola virus.  They have since been released from the hospital.  

The THP ED visits are down 53% and their average daily census fell by 91 patients over the same period.  One of the OBs at THP reported that since October 1, 15 of his patients chose to deliver their babies at other hospitals and not deliver at THP.  If the lingering fears continue and patients continue to seek care elsewhere, this hospital may not be able to recover from such losses.  What a tragedy if that happens.

Monday, October 27, 2014

Do You Know What Could Be Done With $4 Billion?

Over the weekend, I read an article in the Washington Post as to the cost of the 2014 mid- term elections.  The total price tag is projected at $4 Billion.   That's right, "B" as in Billions.  Fortunately, when I watch television, it mainly consists of programming that I have recorded so I don't have to watch paid political advertisements.  But, when I do catch one on live TV, it's never about what the candidate will do if elected; it is an announcer talking about the horrible things that the candidate's opponent stands for.  In these commercials, the announcer is even gifted in using their best voice of doom when describing the opponent, but then the same announcer turns cheery once the candidate and his or her family appear on the screen. 

Early on in the election cycle, the candidates may focus on what they plan to do or what they have accomplished.  Quickly thereafter, the candidates and incumbents alike end up in the gutter trashing each other with out and out lies.  If we are lucky, we may get a half truth on occasion.  The entire process sickens me.  

Talk about campaign finance reform, I have some suggestions.  Instead of spending ridiculous amounts of money on campaign advertising, severely limit such spending especially if the ads are negative in nature. With the amount of legitimate hunger and homelessness in today's world, the need for greater interest in the pursuit of studies in science technology, engineering and math among our youth and the need to cure devastating diseases, wouldn't the $4 Billion be much better spend elsewhere than on paid political announcements?  Of course, it would, but as long as those seeking and holding office benefit from such advertisements, change will never happen.  

Friday, October 24, 2014

Treating and Caring For Ebola Patients in Maryland

Below is a message from Carmela Coyle, President of the Maryland Hospital Association, regarding the latest on the care of patients in Maryland who may have been exposed to the Ebola virus.  On behalf of the Western Maryland Health System, I want to offer my most sincere thanks to Governor O'Malley and Secretary Sharfstein on rapidly establishing a treatment strategy.  Patients will be initially evaluated and cared for in whichever hospital that they present until they can be transferred to one of three designated hospitals in Maryland / DC.  The first preference of treatment will be a one of four federal facilities, but if they are not available, Johns Hopkins, University of Maryland and Med Star Washington Hospital Center are the newly designated centers.  

Hospitals across the State continue to prepare, train, educate and drill should a patient with symptoms for Ebola present at an Emergency Department, but the designated center concept is a good one.  With these three hospitals, a greater focus can occur with equipment allocation, training and CDC support rather than trying to provide the preceding to 40 other acute care hospitals throughout Maryland.  Leadership acted quickly and correctly.

MHA Update, Friday, October 24, 2014

Thursday, October 23, 2014

Refinancing Our Bonds

In 2006, we financed the new hospital through a bond offering with HUD's FHA 242 Hospital Financing Program.  We went to the traditional rating agencies and couldn't get an investment grade rating at the time due to the amount of debt that we would be incurring.  HUD was more than happy to assist, and the process went much better than we had expected.  

The only issue was the continuing oversight of WMHS required by HUD's bond covenants.  They required WMHS to submit a number of transactions for approval, i.e. anytime we changed our bylaws, made a major change (like joining the Trivergent Health Alliance), etc.  Earlier this year, we began to pursue the refinancing of our bonds, although the HUD relationship was far less onerous than anticipated.  

We contacted Standard and Poor's and they agreed to assess WMHS for an investment grade rating.  Kim Repac and I presented to the rating analysts from Standard and Poor's in September, and we were approved for a BBB stable rating, which is investment gradeOnce the approval was received, a lot of work began between the WMHS team, our attorneys and our consultants.  Kim and I flew to Boston last week and presented to financial and investment analysts.  Then, the next day we did a webinar for analysts from all over the country.  Lots of questions regarding our perspective on health care, our value- based care delivery model and how it differs from volume-based care, and even some questions on Ebola.  


When we first presented  the concept of refinancingto our board, we were told by our consultants that we could expect a 4% savings, depending where the interest rates were at the time.  We set a target of 10%, which would have been around a $25 million net present value (NPV) savings.  By the time we went out to the market this past Tuesday, interest rates were very favorable and the result was a NPV of $47.1 million dollars or a 19.94% savings of refunding the bonds.  Through this refinancing, we will save WMHS $47 million over the next 20 years and reduced the average life of the bonds by two years and reduced our new hospital debt by $94 million from $333 million to $236 million.  All in a day's work!

Tuesday, October 21, 2014

That Was An Interesting First

I am currently attending a governance education meeting out of town with five board members.  At one of the breakout sessions on Sunday (The Total Cost of Health Care), the speaker was talking about value based care delivery being on the horizon for all US hospitals.  At the beginning of his presentation, he actually asked the attendees if they would be converting to value based care delivery at some point in the future or not.  I was surprised to see a number of hands that went up when asked if they were not.  (Are they in for a rude awakening?)

During his presentation, the speaker provided a few examples of some health systems around the country that are dabbling in value based care.  None of the examples were remotely close to what we are doing in Maryland.

After the session, I went up and introduced myself and explained what was going on in Maryland with value based care delivery.  I also relayed the experiences at WMHS over the last four years.  He was very impressed and asked if he could come and visit me in western Maryland. I said, "certainly".

This same speaker was then presenting the next morning to several hundred attendees at the General Session.  In the middle of his presentation, he asked where the attendees from Maryland were in the audience.  I, along with the five board members stood up.  He then started asking me questions about our care delivery model which led to me providing a detailed overview of Total Patient Revenue and value based care delivery to the audience.

The round of applause at the end of my overview was very nice.  There were a number of attendees who reached out after the presentation asking me for more information.  It was also interesting to be in different locations around the hotel yesterday afternoon hearing attendees talking about our model of care delivery at WMHS; some admiring the initiative that we took four years ago and others expressing a great deal of skepticism as to whether it would work in their hospital.  Interesting.

Friday, October 17, 2014

Have You Ever Lost Your iPad?

Earlier this week when I was in San Diego for a speaking engagement, I unknowingly left my iPad in the large hotel ballroom.  I had settled into my front row seat to hear our keynote speaker, Magic Johnson.  We then received word that he was going to be late because LA was socked in with fog so instead he would be our lunch speaker.  I then left the ballroom without my iPad and didn't realize until a few hours later that I didn't have it.  

After getting over that initial sick feeling that it was lost forever, I went to the Find My iPad app on my iPhone and began the tracking process.  The location came up immediately as being across from the hotel at Starbucks.  I remotely sounded the alarm on the iPad and made sure that it was also locked.  The iPad was then on the move further away from the hotel.  I sounded the alarm again.  I sent a message to the iPad with my cellphone number and another alarm.  Lo and behold as I started my trek to the lobby from the 35th floor, the tracking showed that the iPad was returning to the hotel.  I kept sending alarms.  

By the time I got to the Lobby, the tracking was showing that the iPad was back in the hotel.  I went to the front desk and asked about the iPad.  They didn't have it, but called Security to inquire about it.  The iPad wasn't in Lost and Found, but they would let me know if it was turned in.  I kept sending alarms the entire time, not sure if the alarm sounds and shuts off or keeps sounding.  

I then thought that I should go to the conference registration booth upstairs to see if they had it.  I sent another alarm just in case so I would hear it en route.  As I approached the registration booth, I could hear my iPad alarm sounding.  As soon as I walked up to the booth, they asked if it was my iPad and I said yes.  They said "thank God, the sounding of the alarm was driving them crazy."  I suggested that the next time they are in a similar situation, that they open it up and see the telephone number on the screen that they could have called.  They said that they hadn't thought of that.  We laughed and I was thrilled to have my iPad back.  

I never found out who had it out for coffee and a short walk outside the hotel, but quite frankly, I didn't care.  I had it back. The Find My iPad / iPhone app is a great addition and I would suggest that you familiarize yourself with it just in case.

Thursday, October 16, 2014

WMHS Is Ready—Just In Case

WMHS, like all hospitals and health systems across the country, is following the evolving situation surrounding the emergence of Ebola in the U.S.  As part of our continuous emergency preparedness planning, our team had already developed a response plan for a possible case of Ebola coming to our health system.  That plan was based on the  guidelines established by the CDC at that time, and the team was getting everything in place for an appropriate response.  

Since the first Ebola patient was identified in Texas, our team has accelerated its efforts to have us ready.  Our team is constantly monitoring the CDC’s advisories and is in close contact with state and other federal health agencies.  It is meeting regularly to update our plan as new information becomes available, making sure our plan is consistent with the latest guidelines.  

Our staff is accustomed to following strict infection control and prevention procedures and we have the necessary personal protection equipment (PPE) available.  The readiness team quickly developed additional training for physicians and staff to practice the proper way to put on their PPE and safely remove it.  We also are using the “buddy system” where a co-worker monitors the process to ensure the right procedures are followed.  Over 100 employees have already gone through the training over the past several days.  

WMHS is committed to maintaining the highest standards and most current protocols to minimize the risk of anyone contracting an infectious disease like Ebola.  I want to recognize the many members of our readiness team for their hard work to get us prepared for this and similar situations.  It is an exemplary group of professionals who are dedicated ensuring the health and safety of our patients and our caregivers.