Revenue of $4.09B (-0.7% Y/Y) beats by $160M.
Tuesday, August 6, 2019
Monday, August 5, 2019
Philly Hospital The First To Be Stripped For Assets By Private Equity
The Hahnemann University Hospital campus in Philadelphia as of May 2009
A 171-year-old institution in Philadelphia could become a test case for if hospitals can be stripped for real estate assets by private equity.
Hahnemann University Hospital sits on a desirable plot of real estate in the north part of Philadelphia’s Center City and was purchased in 2017 by Joel Freedman and his private equity firm, Paladin Healthcare. A year and a half later, Freedman announced that Hahnemann was not profitable enough and would be forced to close, the Philadelphia Inquirer reports. The hospital is set to close in September.
Paladin has not spent any significant money on capital improvements since it purchased Hahnemann with a loan from Apollo Global Management’s financing arm, MidCap Financial, The American Prospect reports. Rather than sell the hospital business, Freedman is dissolving it and selling the campus’ buildings for their considerable real estate value.
The strategy is reminiscent of leveraged buyouts from private equity in other industries, such as Eddie Lampert’s troubled acquisition of Sears, but has not been practiced on medical facilities to this point, according to TAP. If Freedman succeeds in producing a return on Hahnemann’s real estate, some worry imitators will follow suit and imperil urban hospitals across the country. Presidential candidate Bernie Sanders has already commented on the issue and is planning a campaign event in mid-July in Philadelphia, TAP reports.
The state of Pennsylvania has issued a cease-and-desist order on closure operations until Paladin comes up with a plan for patients who rely on the hospital for care. That patient base is among the most vulnerable in the city, as nearly half of them are on Medicaid and over two-thirds are black and Latino, according to the Inquirer. Over 2,500 hospital workers will lose their jobs, and the emergency room has already begun turning away patients suffering from heart attacks or severe trauma.
“Hahnemann is the most significant of hospitals who serve the neediest communities, almost two-thirds of their patients require public assistance,” Philadelphia City Councilwoman Helen Gym told TAP. “They serve people regardless of [immigration] status, they serve the indigent. I am outraged, and I am angry at a system that would allow people’s lives to be left into the hands of profiteers and careless, reckless people like Joel Freedman.”
Community Health posts bigger Q2 net loss, but still beats Street forecasts
- Community Health Systems posted a wider net loss of $167 million on revenues of $3.3 billion in the second quarter of 2019.That’s a 7.3% decrease in revenue year over year from $3.56 billion in 2018, but slightly higher than Wall Street expectations.
- On a somewhat brighter note for the Franklin, Tennessee-based chain, CHS saw same-store admissions increase 2.3% and adjusted admissions increase 1.8% year over year in the quarter, bucking the recent industry slump in patient volume.
- As part of its ongoing divestiture strategy, CHS has entered into definitive agreements to sell three additional hospitals and is continuing to look for potential buyers as it trims the fat, the company said. The company now has 107 facilities, slightly higher than its goal of 100 before year’s end.
CHS has stabilized somewhat over the past year, selling of dozens of hospitals in order to pare down debt. However, the health system — one of the region’s largest employers — has yet to reverse its losses or become profitable again. Talk of bankruptcy has surfaced in recent weeks.
The system has faced a flurry of problems, including flatlining patient volume due to a gale force of provider headwinds, ongoing legal spats with Microsoftand the government, and a troubled 2014 acquisition of Florida-based Health Management Associates for $7.6 billion that turned sour after HMA was found guilty of false billing and physician kickbacks.
CHS revamped its corporate strategy as part of efforts to bring down its heavy debt load, which remained largely unchanged over the quarter at $13.39 billion. Over the past five years, CHS has shed more than 80 hospitals from its portfolio and continues to look for potential buyers.
Earlier this month, CHS completed the divestiture of two hospitals, 245-bed Tennova Healthcare-Lebanon in Tennessee and 167-bed College Station Medical Center in Texas, to Vanderbilt University Medical Center and CHI St. Joseph Health, respectively, as part of its sell-off strategy.
CHS also plans to focus more investments in populated areas in an attempt to improve performance and margins. By the end of 2019, 95% of CHS facilities will be located in areas with populations over 50,000 with better rates of employment (and, correspondingly, insurance), Wayne Smith, CHS’s CEO for over two decades, said last quarter.
Sloughing off hospitals and pivoting away from rural markets seems to have helped somewhat with CHS’ operations. Overall admissions were down 11.5% compared to the second quarter of last year, due to fewer facilities, but same-store admissions saw a slight uptick in the quarter. Additionally, same-store net operating revenues grew 4.9% year over year.
Competitors HCA Healthcare and Tenet also reported rising admissions in the quarter. But in the case of the Nashville-based behemoth HCA, it was for the 21st consecutive quarter.
“We believe strategic investments in our transfer program, Accountable Care Organizations, service lines, and access points are driving stronger same-store volume and net revenue performance,” Smith said in a statement. “We also believe that continued execution of these strategic initiatives, along with effective expense management, will lead to incremental growth in the back half of the year.”
But CHS’s next big debt payment is due in 2021, and investors and analysts have aired doubts the operator will be able to pony up. That dwindling confidence contributed to CHS’s lowest share price ever: $1.92 apiece Aug. 2, down from a peak of almost $53 in 2015.
The company also reported a high net loss, of $118 million last quarter, on slightly higher revenues of $3.38 billion, sparking some rumbling from financial analysts about impending bankruptcy.
But the quarter’s results don’t spell doom for the 107-bed hospital operator just yet. CHS surpassed consensus Wall Street earnings and revenue estimates for the three months ended June 30. Additionally, operating cash flow was strong in the quarter at $132 million, up from $12 million in the same quarter 2018.
CHS expects revenues of $12.9 to $13.2 billion in the year and a net loss per share between $2.00 and $1.65. CHS execs will discuss the results Tuesday morning at 11 a.m. ET.
Conundrum: Why Isn’t Killing 22 People ‘Mental Illness’?
In the wake of this weekend’s double mass shootings — one that claimed 22 lives in El Paso, Texas, another that left nine dead in Dayton, Ohio — debate surged again over whether these incidents reflect some kind of failure by the mental health establishment.
In remarks Monday morning, President Trump blamed “hatred” and “mental illness” for the weekend shootings. But, perhaps anticipating this reaction, Sen. Chris Murphy (D-Conn.) took to Twitter on Sunday to argue that “4 out of 5 mass shooters have no mental illness diagnosis, and half showed no signs on a prior, undiagnosed illness.”
And then he made a political point: “Framing this as just a mental illness problem is a gun industry trope. Period. Stop.”
That prompted a variety of reactions from others on Twitter. Some agreed that it was a valuable point, in no small part because linking such events to mental illness serves to stigmatize everyone with a mental illness.
Others, however, questioned how it’s possible that someone can kill a dozen or more strangers, more or less at random, and yet this doesn’t in and of itself indicate a mental illness. “So a healthy person does this?” asked one Twitter user.
Although Murphy did not cite his sources, one could have been a much-cited 2016 review by forensic psychiatrists James L. Knoll IV, MD, and George D. Annas, MD, MPH, of SUNY Upstate Medical University in Syracuse New York.
In their review, Knoll and Annas acknowledged that the public and the media find the question hard to resist. As they put it rhetorically, “After all, who but a madman would execute innocent people in broad daylight, while planning to commit suicide or be killed by police?” But they then went on to cite research indicating that, in fact, only a minority of mass shootings (however defined) have been perpetrated by individuals with recognized mental disorders.
“Few perpetrators of mass shootings have had verified histories of being in psychiatric treatment for serious mental illness,” they wrote. Although post hoc analyses indicate that they are full of rage and may harbor “fantasies of violent revenge” for real or imagined offenses against them, these may lie entirely beneath the surface until they put the fantasies into action.
“Such individuals function (perhaps marginally) in society and do not typically seek out mental health treatment,” Knoll and Annas wrote. “Thus, in most cases, it cannot fairly be said that a perpetrator ‘fell through the cracks’ of the mental health system. Rather, these individuals typically plan their actions well outside the awareness of mental health professionals.”
Although mass shooters may not meet DSM-5 criteria for a recognized disorder, “they do have an ill-defined trouble of the mind for which the mental health field has no immediate, quick-acting ‘treatment,'” Knoll and Annas acknowledged.
So it’s understandable that mental health professionals would object to suggestions that they are somehow at fault for mass shootings. Yet, surely they don’t think that gunning down a dozen random strangers can ever be normal or rational. People continue to ask the “who but a madman” question.
MedPage Today put it to Knoll in an email Monday. His response was, in essence, that it’s simply the wrong question.
“In my opinion, this is an intellectual sidestep that avoids contemplating more difficult questions. It is the path of least resistance, leading us away from the more relevant issues,” he said. “[P]sychiatrists, and particularly forensic psychiatrists, understand that dark and depraved acts are frequently committed for other reasons besides mental illness — indeed, most often committed for other reasons.”
“Do we solve the matter by labeling it ‘mental illness’ and calling for greater scrutiny of ‘troubled’ individuals?” he continued. “I believe we solve nothing, and even risk making matters worse. This mindset makes us vulnerable to creating new, but misguided, laws. It furthers the medieval notion of equating mental illness with ‘evil’ or criminal behavior. Individuals who carry out these acts, very often, do not see themselves as mentally ill whatsoever or in need of treatment.”
Knoll pointed out that there is little mental health professionals can do with or for individuals who don’t want their help. “Mental health treatment has its limits, and is not traditionally designed to detect and uncover budding violent extremists,” he told MedPage Today. He also commented that creating a diagnosis of “mass shooting disorder” would have no value.
Other authors have made similar arguments, mainly to make the case that formal psychiatric screening isn’t likely to identify those likely to commit massacres. In a 2015 article, Jonathan Metzl, MD, PhD, and Kenneth MacLeish, PhD, both of Vanderbilt University in Nashville, Tennessee, recounted the cringeworthy history of previous attempts to develop profiles of would-be mass murderers. Whereas now the Angry White Male Loner theory is prominent, the picture was literally darker not that long ago. “In the 1960s and 1970s, by contrast, many of the men labeled as violent and mentally ill were also, it turned out, black,” they wrote.
More broadly, Knoll said, “every day we ignore the social and cultural aspects of this phenomenon, we put off making substantive, positive changes. I believe the challenge before us is to distinguish sensationalized media portrayals and single case examples from the large swath of individuals suffering from serious mental illness in this country who have nothing to do with mass shootings.”
Addressing those social and cultural aspects, Knoll also noted that the wave of mass shootings that began in the late 1990s must have some propellant besides guns and mental illness, both of which have existed for a long time. He fingered the media as one.
“It seems difficult to deny that the media coverage since the late 90s” has made it certain that those who commit heinous crimes become celebrities, he said. Knoll noted the development of an online “Columbiner culture” glorifying the Columbine High School shooters.
He put it this way in his email to MedPage Today: “If it is the case that a cultural script is a driving force behind the media and social propagation of mass shootings, a central prevention effort becomes how to halt or change the script? Here is an area where social change, perhaps beginning with today’s youth, may work to replace the script with a better one, or at least make the current script unappealing or obsolete.”
Portable Ultrasound Can Help for Bedside Heart Evaluation
Bringing handheld ultrasonography devices to the patient’s bedside clinical assessment helped in diagnosing heart conditions, a meta-analysis indicated.
With transthoracic echocardiography as standard reference, diagnostic parameters of focused cardiac ultrasonography (FoCUS) were compared with those of standard point-of-care clinical assessment for the detection of:
- Left ventricular dysfunction (left ventricular ejection fraction less than 50%): sensitivity 84% and specificity 89% with FoCUS vs 43% and 81%, respectively, with clinical assessment
- Valvular disease of at least moderate severity: 71% and 94% for FoCUS vs 46% and 94% for clinical assessment
- Pericardial effusion: 98% and 95% for FoCUS vs 48% and 62% for clinical assessment
“These findings suggest that the addition of FoCUS to clinical assessment enables greater point-of-care detection of clinically important pathology that could otherwise be missed by routine clinical assessment,” wrote Benjamin Hibbert, MD, PhD, of the University of Ottawa Heart Institute in Ontario, and colleagues in Annals of Internal Medicine. “Thus, we provide further credence to the growing body of literature demonstrating that diagnostic yield improves when physicians incorporate FoCUS into their bedside patient evaluation.”
But, the group cautioned,”FoCUS-assisted examination may help rule out cardiovascular pathology in some patients, but it may not be sufficient for definitive confirmation of cardiovascular disease suspected on physical examination.”
The findings were based on nine studies from both inpatient and outpatient settings. Results for pericardial effusion came from just one study, however.
Handheld ultrasonography can yield structural detail of the heart, cardiac valves, and chambers; and it also provides information about cardiac function. Its advantages include the portability of devices, the absence of ionizing radiation, the relatively low cost, and the immediate results available.
“Despite these apparent advantages, the inherent pitfalls of FoCUS-augmented examination must be equally recognized,” the investigators cautioned. “This technology, no matter how robust, is not a replacement for astute clinical judgment and adjudication of clinical information. Like the results of any diagnostic test, including physical examination, FoCUS results should be carefully interpreted in the context of pretest probability.”
In general, the literature points to a better diagnostic yield for handheld ultrasound in finding regurgitant valve lesions than stenotic lesions, which can be partly attributed to the integration of color Doppler but not spectral Doppler in most FoCUS devices, noted Nir Flint, MD, and Robert Siegel, MD, both of Cedars-Sinai Medical Center in Los Angeles, in an accompanying editorial.
Handheld ultrasonography has been addressed in guidelines from both the American Society of Echocardiography and the European Society of Cardiology.
The nine studies included in the meta-analysis were all single-center, prospective studies with a median sample size of 84 participants. Average age among the studies was a median of 64 years.
Hibbert and colleagues acknowledged that the different reports they included came from variable clinical settings, and that skill levels were not uniform — the people performing FoCUS ranged from medical students to attending physicians.
Another caveat was that most studies were judged to be at high or unclear risk of bias or applicability.
“These results support the role of FoCUS in ruling out clinically significant cardiovascular pathology in patients at low suspicion of disease; they also show the inability of FoCUS to provide definitive confirmation of cardiovascular disease strongly suspected on physical examination,” the researchers nevertheless concluded.
Perhaps the addition of machine learning algorithms to this technology can improve accuracy, especially for novice users, Flint and Siegel suggested.
In the end, since “70% of echocardiograms in Medicare patients are ordered by noncardiologist providers, incorporating HHU [handheld ultrasonography] in the primary care setting could greatly improve downstream work-up and cost-effectiveness,” according to the editorialists.
The study received no industry funding.
Hibbert, Flint, and Siegel disclosed no conflicts.
Primary Source
Annals of Internal Medicine
Secondary Source
Annals of Internal Medicine
Psychiatry Abstracts: Abundance of Spin
Over 50% of trials in psychiatry/psychology journals contained some reporting bias
More than half of abstracts from randomized clinical trials (RCTs) published in top psychiatric journals from 2012 to 2017 included some form of spin, according to a qualitative analysis.
Among 116 RCTs with primary endpoints failing to reach statistical significance, 56% still designated the experimental therapy to be beneficial, or steered the focus away from the primary outcome to make the results appear more favorable, reported Samuel Jellison, of Oklahoma State University Center for Health Sciences in Tulsa, and colleagues.
Specifically, a quarter of the abstract results sections focused on a positive secondary outcome in lieu of the primary measure, 21% omitted a nonsignificant primary endpoint to highlight an alternative outcome that was significant, and 13% claimed non-inferiority for a nonsignificant outcome, they wrote in BMJ Evidence-Based Medicine.
Others used phrases like “trend toward significance” (13%) or directed attention towards subgroup analyses instead of the primary outcome (13%), they added.
“Doctors … could be reading a recent study over a drug or therapy and they could believe, based off the way the results are framed, that the study achieved some significant outcome that was super helpful to patients, and in reality it wasn’t,” Jellison told MedPage Today. “That can then translate into changes in clinical practice or follow-up studies to verify these results, which could then lead to a decline in patient care or a waste of research resources.”
In the 1990s, a group of 30 experts created the Consolidated Standards of Reporting Trials (CONSORT) to address suboptimal accuracy in the reporting of clinical trials. The checklist of standards for reporting was updated in 2010, and provides a list of essential items that should be included in abstracts.
“Studies comparing the accuracy of information reported in a journal abstract with that reported in the text of the full publication have found claims that are inconsistent with, or missing from, the body of the full article,” according to the statement. “Conversely, omitting important harms from the abstract could seriously mislead someone’s interpretation of the trial findings.”
The presence of spin in the abstract is particularly important because in many cases, such as when an article is behind a firewall or requires membership to view, this is the only information that clinicians can access, the statement noted.
Jellison emphasized that the current study was not intended to single out psychiatry research as a particularly prevalent source of bias; he noted that it seems to be an issue that “infiltrates” nearly all journals. In prior studies, spin was detected in nearly 50% of reporting in oncology trials, a quarter of reporting in anesthesiology trials, and more than half of abstracts of cardiology trials.
Jellison’s group searched PubMed for RCTs published in JAMA Psychiatry (17 trials), the American Journal of Psychiatry (13), the Journal of Child Psychology and Psychiatry (15), Psychological Medicine (26), the British Journal of Psychiatry (28), and the Journal of the American Academy of Child and Adolescent Psychiatry (17). Jellison and one additional author evaluated the presence of spin in the studies after being trained to detect it.
Overall, spin was mostly found in the abstract results section (21%), the abstract conclusion section (49%), or both (15%), as well as in the title (2%).
Of 57 trials with spin in the abstract conclusions, about one-third claimed benefit from a significant primary outcome but ignored others; 26% said an experimental therapy was beneficial due to a significant secondary endpoint; and 19% asserted non-inferiority when they reached a nonsignificant endpoint, Jellison and colleagues reported.
Others concluded they reached a goal without prespecifying it as an objective (12%), said a therapy was beneficial based on a subgroup analysis (5%), or highlighted the magnitude of difference between two comparators without a significant P-value, they added.
While 12 articles in the analysis reported industry funding, but among them, funding was not associated with the presence of spin (odds ratio 1.0, 95% CI 0.3-3.2), the authors reported. The finding was in line with previous research.
Jellison said this analysis was limited because evaluating the presence of spin across trials was subjective, and the findings may not be generalizable across all psychiatric journals.
His group suggested that journal editors invite reviewers to comment on the presence of spin pre-publication.
Jellison and co-authors disclosed no relevant relationships with industry.
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