Healthcare Roundup: Aetna's Investment Hit, Hospital Closure Wave, Cigna's Posh New Plans, and More
Aetna takes an investment hit from financial crisis -- The health-insurance giant said it lost $120 million in its investment portfolio due to widening credit spreads on its fixed-income investments, and took another $70 million hit from its holdings of debt securities issued by the now-defunct Lehman Brothers and Washington Mutual. It also sold $42 million worth of securities at a loss. [Source: WSJ Health Blog]
Financial crisis to prompt wave of hospital closures? -- Anne Zieger, writing at FierceHealthcare, predicts that the credit crunch may lead to "a wave of [hospital] closures that hasn't been seen in decade." Hospital finances are in precarious shape, with many institutions adopting risky strategies in order to keep the money flowing (see below). [Source: FierceHealthcare]
Cigna launches decked-out individual plans -- The nation's fourth-largest health-insurance company, Cigna, is rolling out frilly new plans for individuals and small businesses that offer perks such as gym discounts, acupuncture coverage and 24-hour health-information lines. Cigna has long shunned the individual-insurance market, offering coverage only where required by state law to enter various markets. [Source: WSJ Health Blog]
Medical devices "finished," Medtronic VP says -- The future of medical devices is bleak because the gizmos are "palliative" and not "restorative," Medtronic SVP Stephen Oesterle told a conference. Although his remarks appear to have been deliberately hyperbolic, Oesterle went on to note that many best-selling devices originated overseas, and became big products largely because of easy "risk capital" in the U.S. [Source: WSJ Health Blog]
Hospitals using investment cash flow for capital projects -- A new study by A.M. Best suggests that hospitals are increasingly financing capital improvements with investment income. As a result, many are rebalancing their portfolios to favor cash and short-term investments. The strategy could threaten their long-term viability. [Source: Healthcare Finance News]
Hospital bond-buyback offers threaten liquidity -- More than two dozen hospitals rated by Moody's have issued $8.4 billion in bonds with pledges to buy them back if no one else will. The promises could put hospitals on the hook with only days or hours to repay their creditors. Three nonprofit systems have already honored such buyback provisions. [Source: Modern Healthcare]
Massachusetts Blues launch e-prescribing incentives -- Blue Cross and Blue Shield of Massachusetts will require doctors to file prescriptions electronically by 2011 in order to qualify for bonus payments. The nonprofit insurer said it will offer financial assistance to some doctors to cover the estimated $1,000 to $3,500 cost per doctor of installing e-prescribing systems. [Source: Boston Globe via kaisernetwork.org]
Hill Democrats to introduce health IT bill next year -- An aide to House Speaker Nancy Pelosi said the Democrats will draft legislation requiring doctors to adopt electronic medical records in the next session of Congress. Details are scarce, but lawmakers appear to be considering using the Medicare stick by threatening to withhold reimbursement from doctors who stick to paper records and color-tabbed folders. [Source: kaisernetwork.org]
Sermo-Bloomberg deal taps doctors' insights for finance -- The Facebook for physicians, Sermo, struck a deal with Bloomberg that allows traders on Bloomberg terminals to access discussions among Sermo's 90,000 doctor members and in some cases to pose them questions. Sermo CEO Daniel Palestrant casts the deal as a shot across the bow of medical-information brokers such as Gerson Lehman. [Source: Healthcare Finance News]
Massachusetts cost-containment council threatened -- Days after Pennsylvania reported that a similar agency will cease to exist on Nov. 1, the Massachusetts Health Care Quality and Cost Council is threatened with closure. [Source: Boston Business Journal via FierceHealthcare]
