Flotte’s Notes on

Alabama Medicine

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Flotte’s Notes on Mobile are now being updated on Mod Mobilian: (www.modmobilian.com)

Alabama Public Health

· Alabama has had one of the highest infant mortality rates in the nation (it ranked 3rd-highest in 1996), owing in part to widespread poverty.

· The state's from heart disease of 305.5 per 100,000, compared to the national rate of 258.2. Alabama also ranked above the national rate in death rates from cancer, cerebrovascular diseases, accidents, traffic fatalities, and suicide.

· Smoking prevalence was 25.3% of adults age 18 and older in 2000. The rate of death from lung disease for 2000 was 72.5 per 100,000 people.

· The mortality rate from HIV infection was 4.6 per 100,000 population, lower than the national average of 5.3 per 100,000 population for 2000. There had been 6,706 documented AIDS cases reported through 2001.

State Funding

Medical Schools

· In 2007, the State legislature’s bond proposal called for $46 million for UAB, with another $20 million or more promised by the governor. UAB already receives the bulk of the health care dollars that are appropriated for the state of Alabama by both the federal government and the state. In addition, it receives additional funds from Medicare and Medicaid agencies for UAB's role as a teaching hospital. In fact, Children's Hospital receives 51 percent of its operating budget from Medicaid. Resources from the Hurricane Katrina disaster appropriations and the federal Office of Homeland Security were to be directed to establishing a network of first responders and tertiary-care centers. – Randy Brinson, PR 6/3/2007

· While Georgia spent about $7 per capita on medical education and has four medical schools, the state of Alabama spent $22 per capita on medical education. But the mission scopes of both the Medical College of Georgia and the University of Mississippi Medical Center involve providing indigent care for the residents of their states, relieving some of the burden on local governments. In Alabama, outside of Cooper Green Hospital – which serves the indigent needs of Jefferson County, and is funded by the county government -- there are no state or county health care networks to deal with indigent care on a systematic basis. – Randy Brinson, PR 6/3/2007

Medicaid

· Medicaid, which gets most of its $4.2 billion budget from the federal government, is slated to receive more than $470 million from the state during the current budget year, by far the largest single amount in the $1.8 billion General Fund budget. – PR 11/1/07

o Medicaid had received extra money from the federal government for 11 counties affected by Hurricane Katrina, but that revenue will not be available for fiscal 2009. In all, Alabama is expected to receive $135 million less in federal Medicaid money for fiscal 2009. The General Fund would be unable to cover Medicaid increases on its own. Any Medicaid shortfall would have to be made up by extra taxes, a higher federal match, cuts to services or a combination of those options.

· 988,678 people were eligible for Medicaid benefits in fiscal year 2006. – PR 11/28/07

· Alabama Medicaid Commissioner Carol Hermann-Steckel backed away from an earlier estimate that Medicaid needs $199 million to maintain services in the state through 2009, saying the agency is still trying to calculate the figure. Legislators criticized the commissioner for not having an estimate of the agency's needs Hermann-Steckel said the agency is in negotiations with the federal government over funding. The commissioner and the committee members both agreed that the state has one of the more limited programs in the nation in terms of services offered to recipients. – PR 11/1/07

· Almost 16,000 Alabamians — including nearly 2,000 in Mobile and Baldwin counties — are being dropped from Qualifying Individual Program, or QI-1, because Congress did not reauthorize it. Even if it is renewed, there are no more federal funds to continue the program for the rest of the fiscal year. Under the program, the state Medicaid agency used federal dollars to pay for Medicare Part B premiums for qualified elderly and disabled people. – PR 7/9/08

· Alabama sought about $21.2 million for the 2008 fiscal year that began in October, and started spending based on that request. The agency did not learn until June 20 that it would only get $11.7 million, and the state had already spent about $13 million. – PR 7/9/08

AllKids / SCHIP

· All Kids is the Alabama version of SCHIP – Children’s Health Insurance Program. The program covered more than 68,000 children in 2007. In Alabama, the federal government picks up about 78 percent of the program's cost. Alabama does not include adults in the program.

· A recent study by Families USA, a Washington, D.C., advocacy group in favor of widening the program, estimated that 107,000 Alabama children still lack insurance. – PR 9/22/07

· Alabama has never spent all of its SCHIP funding. According to the Alabama Medicaid office, there are between 12,000 and 15,000 eligible children who are not enrolled. – PR 11/18/07

PEEHIP

· The Public Education Employees Health Insurance Plan (PEEHIP) covers about 220,000 people, including current workers, retirees and dependents. PEEHIP covered 45,642 retirees on their hospital and medical plan.

· There are $20 billion in expected retiree health care costs for state employees and educators over the next 30 years.

· The $417 million already in a trust fund for education employees won't cover 5 percent of future retirees' costs. The creation of educators’ fund and another for other state employees earlier this year already has knocked off $2.1 billion from the cost for education employees.

· Voters in June 2007 approved establishing two trust funds for retirees, one for educators and another for other state employees. The creation of the funds, along with the state putting $417 million into the education fund, reduced the state's education liability from $14.5 billion to $12.5 billion. The reduction comes out of the money put into the fund and expected investment returns over the next 30 years. $50 million was placed in the new fund to cover other retired state employees.

· States are required to detail their unfunded health care liability under new accounting rules adopted by the Governmental Accounting Standards Board in 2004. The panel's ratings play a significant role in determining a state's bond rating, as well as its ability to borrow for projects such as a $1 billion school bond issue approved by the Legislature earlier this year. The state will start selling the bonds in December, and rating agencies are scheduled to meet with state officials later this week. Bronner said the liability reduction would help the state find buyers.

Alabama Medical Laws and Regulations

PAs/CNRPs

· For a surgical specialty no more than two PAs per physician are allowed.

· If the mid-level practitioner will work at a site away from that of the physician (“remote site”), an application for each such site must be made and approved.

· Remote site rules apply to a physician’s primary practice location when the physician is not present and the mid-level practitioner is seeing patients.

· A CRNP or a PA may not write prescriptions for controlled substances.

· When the collaborative practice with a CRNP or the registered practice with a PA is terminated for any reason, the Board of Nursing must be notified promptly about the CRNP and the Board of Medical Examiners about the PA and physician.

· To establish a collaborative practice, the CRNP must apply to the Nursing Board and the physician must notify the Board of Medical Examiners (BME) that a collaborative agreement is contemplated. Initial and temporary approval is granted by the ABN. Final approval for the collaborative practice is granted by the Joint Committee.

· Refer to 540-X-8-.08, Requirements for Collaborative Practice by Physicians and Certified Registered Nurse Practitioners, and 540-X-7 Assistants to Physicians, accessible through the Newsletter Links section at www.albme.org

· The Board of Medical Examiners has established a set of procedures that a qualified PA can perform. In certain instances, a physician may request that a registered PA be allowed to develop certain skills beyond the basic ones learned in PA training. Upon approval by the BME, the PA may study and train in these skills and, when the PA demonstrates competence to the satisfaction of the BME, the privileges are extended.

Alabama Health Care Law

· Alabama uses a national (as opposed to statewide or community) standard of care – Ala Code §6-5-548 (2005)

Tort Reform

· Alabama did enact a cap of $400,000 in 1987, but the state Supreme Court struck down the limit shortly after, saying it was unconstitutional.

· According to a 2003 study by the Insurance Department, the latest one available, plaintiffs were successful in 37 percent of medical liability cases in 2002 and the total awards of all 54 trials that year was $30.6 million.

· The insurance study noted that Alabama's courts and Legislature revised the rules on expert witnesses in medical liability cases to limit the circumstances in which a plaintiff may go before a jury, which has resulted in fewer medical liability cases being filed in Alabama.

Alabama Medical Economics

· To be covered by even limited Medicaid programs in Alabama, one of the lowest-paying states in the country, a couple can earn no more than about $15,000 a year -- roughly the federal poverty level.

· Federal government grants to cover the Medicare and Medicaid services in 2001 totaled $2.1 billion; 695,195 enrollees received Medicare benefits that year.

· At least 13.1% of Alabama's adult population was uninsured in 2002.

· Health care costs in Alabama grew an average of 6.4 percent a year between 1991 and 2004, slightly below the national average of 6.7 percent, according to the Kaiser Family Foundation's State Health Facts Web site (www.statehealthfacts.org). – PR 10/30/07

Hospitals

· Alabama had 107 community hospitals in 2001; there were 16,627 beds and 684,923 admissions.

· Hospital personnel included 17,216 registered nurses. Alabama had 218 physicians per 100,000 population in 2000.

· The average per capita expense to hospitals in the state for care in 2001 was $1,269.

· The Alabama Hospital Association has estimated that the 1997 Balanced Budget Act, which forced billions of dollars in Medicare cuts, has wreaked havoc with hospitals in the state. More than two-thirds of the state's 115 hospitals have operated in the red over the last few years, the association reports.

· Federal tax records show that some nonprofit hospitals in the state are indeed hemorrhaging red ink. Baptist Medical Centers in Montgomery, for example, where the low-income patient level is about double that of Mobile's private hospitals, reported a $29 million loss in fiscal 1999, tax returns show.

Alabama Health Insurers

· Blue Cross/Blue Shield of Alabama

· HealthSpring currently owns and operates Medicare Advantage plans in Alabama, Florida, Illinois, Mississippi, Tennessee and Texas and also offers a national stand-alone Medicare prescription drug plan. HealthSpring is based in Nashville. In 2000, Healthspring purchased a sinking Nashville, Tenn.-based HMO owned by Baptist Health System and immediately began to right the ship. In 2002, Healthspring acquired Alabama HMO The Oath.

Other Alabama Healthcare Companies

HealthSouth

· HealthSouth Corporation (HLS) operates 95 inpatient rehabilitation hospitals, 15 long-term acute care hospitals, 80 outpatient rehabilitation satellites facilities and 12 home health agencies.

· HealthSouth was involved in a corporate accounting scandal in which its Chief Executive Officer, Richard M. Scrushy, was accused of directing company employees to falsely report grossly exaggerated company earnings in order to meet stockholder expectations.

· At the company's height, it recorded nearly $4.4 billion in revenue, dominated the rehabilitation services market and employed more than 50,000 people at 2,000 facilities in every state of the U.S. along with its facilities in the United Kingdom, Canada, Australia, Puerto Rico and Saudi Arabia.

· By 2006 HealthSouth completed its recovery and relisted its stock on the New York Stock Exchange under the symbol HLS. The company currently operates one division: inpatient rehabilitation. The company formerly operated an outpatient rehabilitation, surgery center and diagnostics division.

· HealthSouth was incorporated in 1984 as Amcare Inc. by its founder Richard M. Scrushy. The company opened its first facility in Little Rock, Arkansas and one in Birmingham later that year. In 1985 the company changed its name to HealthSouth Rehabilitation Corporation. In 1986 the company went public with its IPO on the NASDAQ Stock Exchange under the ticker symbol HSRC. At the end of the company's last investor roadshow in New York City before its IPO, Scrushy received a standing ovation from the investment bankers in attendance, an extreme rarity. In 1988 the company moved to the New York Stock Exchange and became listed under the symbol HRC. By 1990 the company had expanded to 50 facilities across the US. HealthSouth finished out 1992 with $400 million in annual revenue. In 1993 the company made its first large acquisition when it bought 28 hospitals and 45 outpatient rehabilitation facilities from National Medical Enterprise for around $300 million in cash. In 1994 HealthSouth announced it would buy fellow Birmingham based ReLife for $180 million in stock.

· Throughout the mid-1990s, HealthSouth expanded rapidly through mergers and aquistions. In 1995 the company changed its name to HealthSouth Corporation. In 1995 HealthSouth announced that it was going to build a new headquarters on US Highway 280 in Birmingham.

· In 1995 the company entered the surgery center business with its $155 million acquisition of Surgical Health Corporation. One month later the company acquired Novacare's entire rehabilitational hospital business for $215 million in cash. In 1996 the company expanded into diagnostics with its purchase of Health Images Inc. HealthSouth made its largest acquisition yet when it purchased Horizon/CMS for $1.8 billion. After the acquisition, HealthSouth sold the assets it did not need to Integrated Health for $1.15 billion in cash. HealthSouth continued on its acquisition spree through 1999 by purchasing the majority of Columbia/HCA's surgical division.

· In 2001 the company announced it would, along with Oracle Corporation, build the worlds first all digital hospital on its corporate campus. The 13 story structure was meant as a replacement for its aging Medical Center in downtown Birmingham.

· The first of HealthSouth's accounting problems surfaced in late 2002 after Richard Scrushy sold $75 million in stock several days before the company posted a large loss. The SEC announced it was investigating Scrushy. In 2003, FBI agents executed search warrants at the company's headquarters after the company's Chief Financial Officer William Owens agreed to wear a wire in a failed attempt to get Scrushy to talk about the fraud.

· In 2003, HealthSouth and Scrushy were accused by the SEC inflating earnings by $1.4 billion. In 1996, Scrushy allegedly instructed the company's senior officers and accountants to falsify company earnings reports in order to meet investor expectations and control the price of the company's stock. In certain fiscal years, the company's income was overstated by as much as 4700 percent. The $1.4 billion represents more than 10 percent of the company's total assets.

· In June of 2005, Scrushy was acquitted on all 36 of the accounting fraud counts against him, most notably one count in violation of the Sarbanes-Oxley Act. But in June 2006, he was convicted on bribery charges, having stood accused of arranging $500,000 in campaign donations in exchange for a seat on a state hospital regulatory board.

· Following the raid at the company's corporate headquarters, the board of directors held an emergency meeting to terminate Scrushy as Chairman and CEO, and Bill Owens as CFO. Another issue was how it was going to come up with the cash for interest payments of senior bonds and principal payments due on a $344 million convertible bond. At the advice of its lender JPMorgan Chase, the company hired restructuring firm Alvarez & Marsal to bring its finances in order and immediately appointed Bryan Marsal Chief Restructuring Officer. By the end of 2003, the company had most of its finance back in order and was able to avoid Chapter 11 bankruptcy.

· Efforts were made at the corporate headquarters to remove the memory of Scrushy. The board removed Scrushy's name from the conference center, closed the company store and museum and opened the fifth floor executive offices to all employees, which under Scrushy, were kept away. The board also sold all but a few of the company's 11 corporate jets. The company halted construction of its Digital Hospital, for which building costs had doubled to $400 million. Jay Grinney was chosen by the board as the company's permanent CEO. Soon after the company restated earnings from 2000 to 2003. The company also sold or closed many underperforming facilities including its medical center division in its effort to return to profitabiity.

· In August 2006, the company unveiled its restructuring plan which included the sell, spin-off or other disposition of its surgery, outpatient, and diagnostic divisions along with a 1-for-5 reverse stock split to coincide with its relisting on the New York Stock Exchange under the symbol HLS.

· In 2007 the company sold its more than 600 outpatient centers to Select Medical Corporation for $245 million in cash.

· HealthSouth sold its surgery center division to private investment partnership TPG Capital for $920 million in cash and $30 million dollars equity interest in the newly-formed company Surgical Care Affiliates. The surgery center division is comprised of 139 outpatient surgery centers and three surgical hospitals. The new surgery center company is headquartered in Birmingham.

· HealthSouth sold its diagnostic division to the Gores Group for $47.5 million dollars. The newly formed company Diagnostic Health Corporation will remain in Birmingham.

· Offspring companies: MedPartners Inc. — a physician practice management company founded by Scrushy, today the company is known as Caremark Rx; Capstone Capital Corp. — a real estate investment trust founded by Scrushy; Diagnostic Health Corporation — former diagnostic imaging division; SourceMedical Solutions — healthcare technology systems founded by HealthSouth; Surgical Care Affiliates, Inc. — former surgery center division

· Previously affiliated companies: GG Enterprises (Hoover, Alabama) — founded by Scrushy's mother and brother; 21st Century Health Ventures (Birmingham) — founded by Scrushy and former HealthSouth CEO Michael Martin; MedCenterDirect.com (Atlanta) — HealthSouth bought 6.4 million shares of this hospital supplies company; Integrated Health Services Inc. (Sparks, Maryland) — a nursing homes and rehabilitation center company that Scrushy was a director of in the 1990s; HealthTronics Surgical Services Inc. (Marietta, Georgia) — Michael Martin was director while CFO at HealthSouth

· HealthSouth corporate website

· Birmingham News Special Report on the HealthSouth Scandal

· Source: Wikipedia

Caremark Rx

· Caremark Pharmacy Services, formerly known as Caremark Rx, was founded in 1993 in Birmingham as MedPartners, Inc by HealthSouth Corporation as a physician practice management (PPM) company. After going public in 1995, MedPartners quickly became the largest PPM company through many acquisitions.

· In 1996, MedPartners acquired Caremark International, which was founded as a unit of Baxter International and was spun off from Baxter in 1992 as a publicly traded company. MedPartners absorbed Caremark's PPM division and prescription benefit management (PBM) division and disposed of Caremark's rehabilitation hospitals to HealthSouth.

· In 1998, CEO Mac Crawford announced that MedPartners was exiting its PPM business and refocusing on its PBM business. In 2000, after it had sold all of its PPM practices, MedPartners changed its name to Caremark Rx. In 2001 Scrushy sold his remaining shares in Caremark and left its board to continue as Chairman and CEO of HealthSouth.

· In 2003, Caremark announced it was moving its corporate headquarters from Birmingham to Nashville. Many believe the reason behind the relocation was so the company could hide its HealthSouth past.

· In 2003 it merged with AdvancePCS to bolster its position within the PBM industry. Caremark currently has approximately 16,000 employees. It is the second largest prescription management and pharmaceutical services business in the United States.

· In March of 2007, Caremark merged with CVS Corporation to create CVS Caremark Corporation.

· Caremark provides PBM services to over 2,000 health plans, including corporations, managed care organizations, insurance companies, unions and government entities. Caremark operates a national retail pharmacy network with over 60,000 participating pharmacies, as well as 11 mail service pharmacies. Caremark operates over 70 specialty pharmacies.

· Source: Wikipedia

Mobile-Baldwin Health Care

· Medical Society of Mobile County

· Mobile County Medical Reserve Corps

· Almost 10% of Mobile’s workforce is employed in the healthcare sector.

· There are more than 850 physicians and 175 dentists practicing in the area, and nine hospitals with 2,850 hospital beds serving the Mobile Bay Region.

· All of Mobile County, like most of Alabama, was designated a physician-shortage area by the federal government. The county has about 195 physicians per 100,000 people, well below the national average of 274, according to the Council on Graduate Medical Education.

· Most Mobile doctors are concentrated in more affluent neighborhoods, federal data show. The low-income parts of the county, where 167,500 people live, are served by only 21 doctors, according to the U.S. Health Resources and Services Administration.

· An estimated 65,000 people in Mobile County don't have health insurance.

· The for-profit Springhill Medical Center's chief executive officer spoke bluntly about what he said is USA's self-assigned commitment to uninsured patients. Many of those patients, CEO Bill Mason said, are uninsured by choice and could afford to pay more of their bills. "A lot of people who don't have coverage are just deadbeats," Mason said. "Instead of buying insurance, they go out and buy booze and cigarettes."

History

· The Medical Society of Mobile County was founded in 1841 when Dr. Josiah C. Nott became the first member and the Medical Society was incorporated.

· In 1854 the Daughters of Charity were forced from City Hospital on false charges of mismanagement, influenced by anti-Catholic sentiment. Outraged citizens subscribed a sum of money to build the sisters a hospital of their own and in 1855 Providence Infirmary opened. Within five years conditions at City Hospital had become so bad that the sisters were approached to take it over.

· The Medical College of Alabama in Mobile was begun in 1859 by Dr. Josiah Nott.

· Mobile Medical Museum (Heustis/Eichold Medical Museum): The collection of artifacts and documents began in 1962 with a gift donated by Patricia Heustis Paterson as a memorial to her father, James F. Heustis, M.D. (1828-1891).  Samuel Eichold, II, M.D. encouraged Mrs. Paterson to designate that her gift be used to start a museum in her father's name.  In 1983, the museum collection was moved to the lobby of USA's Mastin building and then the USA Springhill facility. In 2003, USA agreed to renovate the historic Vincent/Doan house at the entrance to Children's Park near the Children's and Women's Hospital.

Mobile Hospitals

· In 2005, The University of South Alabama and Infirmary Health System announced a strategic alliance. The Mitchell Cancer Institute was built on the Infirmary campus. USA and the Infirmary also pledged to work together to educate doctors, with USA students training at USA and Infirmary hospitals across the region. Infirmary Health System signed a 99-year lease on Knollwood Hospital.

· Combined, Infirmary and Thomas admitted 41.5 percent of all hospitalized patients in Mobile and Baldwin counties in 2002, the last year for which figures are available. USA admitted 19.5 percent of the all the patients in the two-county area.

Mobile Infirmary

· The Mobile Infirmary Medical Center, the largest non-government hospital in the state, is registered as a privately operated, not-for-profit organization.

· Infirmary Health System now controls Mobile Infirmary, Knollwood (Infirmary West) Thomas Hospital and North Baldwin Infirmary

o Infirmary Health System has leased North Baldwin Infirmary, a public facility, since 2001.

o A 2005 agreement between Thomas Hospital and Infirmary Health System includes a 49-year lease of the Fairhope hospital in return for Infirmary assumption of $44 million of Thomas debt as well as funding a new emergency department and additional patient rooms.

o In 2006 USA leased Knollwood Hospital to Infirmary Health Systems and it became Infirmary West Hospital

· Infirmary operates the only remaining in-patient psychiatric ward in Mobile. That ward had more than 1,000 patient admissions last year, half of whom were uninsured.

· In the late 1990s the 704-bed hospital and related, tax-exempt companies have made a total of almost $50 million in net income, or "surplus."

· Less than 2 percent of the Infirmary's patients over the last five years were considered charity cases and were not charged for their care, according to reports that all hospitals file with the state. Another 3 percent were uninsured and were billed but did not pay most of their charges. For the most part, these were written off as bad debt. In recent years, uncompensated care at the Infirmary has amounted to about $7 million a year in actual, unrealized revenue, according to Medicare Cost Reports and tax returns.

· The Infirmary is vulnerable to recent federal cuts because it handles the most Medicare patients in the city

· Chandler Bramlett, CEO since 1983, earns about $500,000 a year in salary -- one of the highest hospital executive salaries in the state and much more than others in Mobile and Baldwin counties, financial reports show. Medicare Cost Reports show the hospital's administrative expenses have been about 12 percent of its operating costs in recent years, higher than the ratio at other nonprofit hospitals in Mobile.

· Infirmary has a number of other subsidiaries, some of which are for-profit corporations and thus don't file publicly available tax documents, so it's hard to get a full picture of profitability. Infirmary officials say revenues this year for all subsidiaries will total $365 million.

· The Infirmary Foundation, a separate nonprofit corporation from the hospital, in fiscal 2000 gave more than $900,000 to causes, such as placing nurses in public schools and to the Dumas Wesley Center, which provides meals and shelter to low-income families. The foundation last year also gave about $349,000 to the hospital for new equipment and for some indigent care, tax records show

· Infirmary Health Systems Video

University of South Alabama

· When USA's medical school was founded in 1973, the idea was that all local hospitals would cooperate in staffing the school and training its students.

· USA in 1970 took over the struggling county general hospital, which had for years cared for most of the poor in the region, and renamed it the USA Medical Center.

· In 1987, the university purchased the old Providence Hospital near downtown for $4.5 million. The structure now is used for the USA nursing school and a family practice clinic.

· In 1990 the school bought the 152-bed Doctors' Hospital. Doctors was renamed USA Children's & Women's in 1996.

o Children's and Women's made about $9 million in fiscal 2000 and was expected to make more in 2001.

o Children's and Women's has, to some degree, deliberately focused on Medicaid. For years, the hospital had the exclusive contract for obstetrics and gynecology services for pregnant mothers covered by Medicaid. That may have caused many poor people in the community to think only of USA hospitals, other administrators said. That obstetrics contract has ended, and other Mobile hospitals and doctors are now free to recruit and accept those low-income patients.

o University of South Alabama trustees approved plans for a $67 million-plus expansion of USA Children's & Women's Hospital. – PR 3/15/08, 5/23/08

· Also in 1990, the university purchased Knollwood Hospital in west Mobile.

o In 1990, USA paid $38.5 million to a Tennessee company for Knollwood and Doctors hospitals The two purchases were designed to improve the demographics and bring in more paying patients, which they have done to a large degree.

o In 2006 USA sold Knollwood to Infirmary Health Systems and it became Infirmary West Hospital

· Once USA was a hospital owner, relations between it and other medical centers in Mobile chilled, as all sought to add new services and attract well-paying patients.

o In late 1990 and early 1991, USA and Infirmary each raced to buy up the Walshwood Avenue neighborhood that bordered the two hospitals off Spring Hill Avenue. The two hospitals ended up splitting the property, after they had bid up prices on the cul-de-sac. All but one of the houses were torn down. USA turned its part into a park and a driveway connecting Children's & Women's Hospital to Spring Hill Avenue. A Ronald McDonald House, for the families of seriously ill children, was set up near the thoroughfare.

o After the bidding war, in 1992, Infirmary blocked the entrance from Mobile Infirmary Drive to Center Street, which had been the most direct route to Children's & Women's.

o In 2004, USA opposed Infirmary's plans to devote 33 beds to a long-term acute care hospital within Infirmary's larger hospital. That plan was rejected by the state Certificate of Need Review Board, which reviews applications for some types of hospital expansions and changes. The unit, to be run by a Texas company, was designed to house a growing number of patients who stayed at Infirmary for long periods, and would have cut hospital losses associated with such long stays. But the business could have threatened USA's long-term acute-care hospital at Knollwood, which operates alongside the regular inpatient unit. In 2002, the Knollwood long-term unit had about 36 patients per day and had seen a 5 percent decrease in patient days over the previous five years. Infirmary said its unit would have cared for sicker patients.

· The USA Medical Center is considered the only Level 1 trauma center in the area

· At USA hospitals, which also are non-profit and tax-exempt, an average of 26 percent of its patients were uninsured in 2001. More than 60 percent of its patients have no insurance and can't or won't pay their bills, or are covered by Medicaid

· The Hospitals represent approximately half of total University revenues and expenses, which have remained relatively constant over the past four years. Operating hospital revenues and expenses for the last four fiscal years have not changed significantly.

· have not changed significantly USA hospitals, which care for three-fourths of the uninsured hospital patients in Mobile, have tightened up on their generosity and charge fees up front for some non-emergencies. In 2000 USA's hospitals had about $30 million in unrealized revenue from uninsured patients

· The Hospitals qualify as Medicaid essential providers and, therefore, also receive supplemental payments based on formulas established by the Alabama Medicaid Agency. There can be no assurance that the Hospitals will continue to qualify for future participation in this program or that the program will not ultimately be discontinued or materially modified. Revenue from the Medicaid program accounted for approximately 33% and 36% of the Hospitals’ net.

· patient service revenue for the years ended September 30, 2006 and 2005, respectively.

· The USA Medical Center last year had more than 29,000 visits to the emergency room. That's slightly less than Providence Hospital and the Mobile Infirmary, but the percentage of emergency room visits at USA is far greater than at any other hospital in town

· The USA Medical Center in north Mobile has long been known as the place where low-income or uninsured people go for care. Other hospitals have said they don't turn anyone away from the emergency room, and all local hospitals accept Medicaid, the government program for the poor. That's something many patients and people in low-income neighborhoods said they didn't realize.

· The medical college's faculty salaries are among the lowest in the country and it has fewer teachers per student than any public medical school in the Southeast.

· In 1983, the USA Medical Center closed its emergency room for eight straight weekends, saying it couldn't afford to take in so many non-paying patients. Providence and the Infirmary followed suit, leaving only Springhill open for much of that stretch. USA won more public funds because of the closing.

· USA receives about $10 million a year in county property tax revenue, plus about $5 million in extra cash from Medicaid. The state of Alabama also has agreed to pay $20 million to USA over the next decade, as a result of the university's role in a lawsuit against tobacco companies. And the university gets about $7 million from the state for physicians' teaching salaries.

· Local tax support, about 4 percent of the USA hospitals' total operating income, is far less than the national average of 14 percent, according to the National Association of Public Hospitals and Health Systems. Plus, the tobacco money has been set aside for the cancer center, and the Medicaid funding has been cut drastically in recent years.

· USA has required physicians to earn more of their salary from patient revenue, and to charge patients up-front fees for procedures.

· After several orthopedic surgeons left USA in 2001, in part because of salary complaints, the department called on the community for help. Letters were sent to more than 35 private orthopedic surgeons asking if they would be on call occasionally for emergency surgery at the busy USA Medical Center. Eleven put their names on the list and were called. Only four responded and showed up at the emergency room, USA records show.

· "If you have money, you don't want to be seen by physicians-in-training; you want to be seen by an experienced doctor that you know," Bramlett explained, referring to USA's College of Medicine and the residents who train at USA hospitals. "If you don't have full insurance, that's the price you pay. Teaching hospitals by their nature have to care for the indigent." While some USA medical faculty members agree with Bramlett's assessment, top university officials don't. They pointed out that some residents also train at the Infirmary. Moreover, university officials said, USA has only a voluntary social contract to care for a large share of the poor, and that commitment now must change.

· Compounding the problem, USA administrators argue, local ambulance services routinely transport most of the uninsured patients to USA hospitals, not just those patients with severe trauma who rightly should go to USA Medical Center's Level 1 trauma unit. Ambulance services here deny the claim, and say they take patients where they want to go, or to the nearest hospital, or to the most appropriate hospital depending on injury or illness.

· Between 1998 and 2001, the number of faculty at the medical college shrunk by almost a third, records show. Although it recruited 55 new members, 69 left or retired, university reports show. Two departments, ophthalmology and oncology, were shut down after top faculty departed. The oncology department has since reformed with the new cancer center.

· Reports from the Association of American Medical Colleges and from USA show that the average salary for USA's clinical faculty is $154,300, just above the 25th percentile for all U.S. medical schools. In half of the specialties at USA, the average faculty salary is below the 25th percentile.

· The university has been locked in a bitter dispute with the foundation that controls its endowment, estimated at $278 million. Much of that money, which initially came from Medicaid because of USA's large share of indigent care, could be used to offset USA's current losses. The $130 million in Medicaid money now controlled by the foundation also would quickly be eaten up by annual unreimbursed expenses, which have risen almost every year over the last decade, officials said.

· The collection rate for USA physicians in 2000 averaged 53 percent, compared to the national average of 68 percent for doctors' groups, according to the Medical Group Management Association.

· USA operates the region’s burn center.

o Dorothy Morris of Semmes, heir to her late husband's vast timber estate, bequeathed more than $10 million to the Shriners Hospital for Children to open a burn unit in Mobile. Morris did not have any children and wanted to leave her money to the Shriners since her husband was a member. The proposed burn center still needs approval from USA and officials on the national level of the Shriners organization. In addition to the money, the Morris family left a considerable amount of timberland in Mobile and Clarke counties to the organization. – PR 12/28/07

· USA's medical school in 2000 ranked 97th in country (out of 123) in National Institutes of Health research funding, a widely used measure of a school's research capabilities. The grants amounted to almost $11 million. The University of Alabama at Birmingham's medical college, by comparison, ranked 17th -- ahead of Harvard University's medical school -- and snared more than $140 million in NIH grants.

· Dr. Robert Kreisberg, an endocrinologist, became medical school dean in 2000 after Dean Charles Baugh died from cancer. Kreisberg was named the permanent dean in 2001. One of the founding faculty members of the USA medical school, Kreisberg had also served as dean from 1976 to 1980. He returned to USA as a troubleshooter and ruffled a lot of feathers during his stay, closing some departments and pushing doctors to see more patients to pull in money for the system. As dean and vice president, Kreisberg was not only responsible for the education of medical school students and residents but also is in charge of USA's three hospitals and the Health Sciences Foundation, a university affiliate that runs the practices for faculty physicians and pays much of their salaries.

o When Kreisberg returned to Mobile in 1999, the physician practice foundation had lost $17 million over four years. Between 2001 and 2005, the foundation lost only a total of $1.1 million.

· Veteran College of Medicine faculty member and administrator Dr. Samuel Strada was named interim dean of the USA School of Medicine following the retirement of Dr. Robert Kreisberg in 2006 and permanent Dean in December 2007. Strada has worked at USA since 1983.

· Dr. Ronald Franks is USA's vice president for health sciences

· The alliance with the Mobile Infirmary does not include the university's physician-practice group. Incorporated as a nonprofit, the group would remain under USA's management and control.

· The Department of Psychiatry at USA will effectively be contracted out and headed by Mobile Mental Health as of Jan. 1 – PR 8/21/07

Mitchell Cancer Institute

· The Mitchell Cancer Institute is being developed as a strategic alliance was announced between the University of South Alabama and Infirmary Health System. It is estimated to cost $100 million.

· The Institute’s building on the Mobile Infirmary campus will open in 2007-2008.

· In 2002, Director Dr. Michael Boyd started as the first and only employee. Before he joined the institute, Boyd worked for the National Institutes of Health for about 25 years. In 2007, Boyd donated $2 million to the MCI. – PR 9/20/07

· MCI has about 100 employees has received more than $125 million in charitable, state and federal funding.

· MCI will have an estimated $1 billion economic impact on the Mobile Bay area over the next decade. It will employ more than 700 professionals.

· MCI’s goal is to be designated a National Cancer Institute Comprehensive Cancer Center. There are 39 such centers nationwide, including the University of Alabama at Birmingham. About 50 other cancer centers nationwide are working for NCI designation. An institute must have at least $4 million annually in cancer-related research grants to be considered by the NCI, but the Mitchell institute will likely have to raise a minimum of two or three times that amount to hire the doctors and scientists needed to earn the Comprehensive Cancer Center designation. The Mitchell institute now gets about $1 million a year in cancer-related grants.

Providence Hospital

· Providence Hospital is a non-profit, tax-exempt institution loosely affiliated with the Roman Catholic Church

· Providence was founded by the Daughters of Charity in 1854

· In 2006 Providence announced a partnership with the Houston-based M.D. Anderson center. As part of that partnership, some physicians associated with the hospital are evaluated by M.D. Anderson and submitted to a credentialing process. Those who are approved become part of the Physicians Network, meaning their treatments are in line with the center's, and it gives them access to M.D. Anderson resources.

· While Providence Hospital it self contributes to a number of community causes, the Providence Foundation's $138,000 in gifts in 1999 all went for "development and expansion of Providence Hospital and its related organizations," its latest-available tax returns show. A separate fund-raiser collects money for Camp Bluebird, a therapeutic camp for adult cancer victims.

· Providence has a sister company called Seton Medical Management (Seton Health Care of South Alabama) that owns and manages physicians' practices. While most U.S. hospitals have gotten out of the physician-practice business, Providence's organization has hung on, despite losing about $4 million a year for the last two years. Hospital officials say they don't want to drop Seton, because it helps funnel patients to Providence.

· Providence Hospital, and Seton Health Care of South Alabama, is an affiliate of St. Louis-based Ascension Health, the largest nonprofit medical system in the nation.

o Sacred Heart Hospital in Pensacola and St. Vincent’s Hospital in Birmingham are also affiliates.

o Ascension Health is a nonprofit, tax-exempt company formed in 1999 by the merger of the Daughters of Charity National Health System and the Sisters of St. Joseph Health System. The company operates almost 80 Catholic hospitals, nursing homes and psychiatric wards in the United States.

o Ascension, which also advertises a mission statement of care for the poor, notes on its Web site that about 2 percent of its overall operating expenses go to health care for poor patients who can't pay. The company and its hospitals and related organizations also provide about $200 million in other community services.

· About 8 percent of Providence patients were not charged for services or were written off as debt. That has amounted to about $9 million a year in unrealized revenue.

o “For years, some Mobilians have grumbled that Providence moved to west Mobile in 1987 to make more money and to get away from the low-income demographics surrounding its old location at Spring Hill Avenue and Catherine Street, near downtown. Hospital reports filed with the state reflect that Providence now handles far fewer charity cases than it did in 1985 and 1986. Providence executives said the institution did not move west to shirk its mission but was simply following the movement of the city's population base. The hospital on Airport Boulevard, which has the same number of beds as the old hospital, still is able to fulfill its mission to the poor through a number of other routes, officials say” – PR1/01

· Providence Hospital Video

Springhill Medical Center

· Springhill Medical Center is the only for-profit, taxable hospital in Mobile

· Springhill Medical center was founded in 1975 by Dr. Gerald Wallace. His wife, Celia Wallace, became the chairwoman and CEO in 1986, and is the sole shareholder.

· Springhill provides about $5 million per year in uncompensated care to uninsured patients.

· Springhill elected to become a for-profit, taxable company when it was started in the 1970s. The idea was to earn profits for the founders and expand into a regional chain. The chain idea never materialized.

· Springhill Medical Center Video

· Strategic partnerships with Infirmary Health Partners and Providence Hospital in conjunction with a network of more than 150 physicians and dentists helped Dr. Robert Lightfoot establish Victory Health Partners in 2003 to care for underinsured patients.

o Victory's organizers must come up with an estimated $1 million to set up the clinic, and another million every year to operate it.

o Providence Hospital has agreed to provide hospital services when necessary, although officials acknowledged that the caseload may amount to only a few per month. Lightfoot said he hopes that the Mobile Infirmary Medical Center and Springhill Medical Center also "will step forward."

o Patients must have no health insurance, including Medicaid and Medicare, and must show proof that their income is less than 200 percent of the federal poverty level. For a family of three, that's less than $29,200 a year or $560 a week. The clinic will charge people for health services according to their ability to pay.

· The Mobile area also has the Franklin Primary Health Centers' nine clinics, as well as the Mostellar Clinic in Bayou La Batre.

o The federally funded clinics mostly serve uninsured and Medicaid patients.

o The Franklin clinics receive about $3.4 million a year in federal funds.

o The central location is on Martin Luther King Jr. Drive in Mobile.

· Ozinam Pharmacy in Mobile provides prescription medication at little or no cost to the poor.

Hospital Property Tax Exemptions

· Except as noted, this information came from William Rabb’s series “Burden of Care” in The Mobile Press-Register, January 2001

· Courts have ruled that hospitals can qualify as tax-exempt under Section 501(c)(3) of the U.S. tax code if they simply provide health care, don't blatantly deny care and don't have shareholders who reap profits - no matter how little charity care the hospitals actually provide. State courts have ruled that the federal exemption qualifies a hospital for further exemption from state and local property taxes.

· Both Providence and the Infirmary are linked with smaller, for-profit health care and health-care-support companies that do pay income and property taxes. And both hospitals' bottom lines have receded somewhat in recent years as federal budget cuts and managed care have taken a toll. Their most recent tax returns, though, show they were still millions of dollars in the black, and the two hospitals had more than $140 million in net assets. At Providence and the Infirmary, the percentage of low-income patients is less than half the average for all non-profit, non-government hospitals in Alabama.

· There was a time when most hospitals were required to provide a certain amount of charity care. Almost all hospitals in southern Alabama were built with some government funds, under the Hill-Burton Act. The post-World War II law encouraged hospital construction in underserved areas. But it required charity care only for a limited number of years. All local hospitals satisfied their obligations years ago.

· In the 1930s, the Alabama Legislature passed a law that appeared to exempt hospitals from property tax -- as long as at least 15 percent of their business was for charity patients. In 1963, Mobile County Tax Assessor Arnold Debrow attempted to collect more than $580,000 in property taxes from Providence, the Infirmary and the now-gone Blessed Martin de Porres Hospital. The move was seen as one way to get the hospitals to treat a larger share of indigent patients. The hospitals took Debrow to court, and a local judge ruled that other state and federal laws -- not the 15-percent threshold law -- apply to non-profit hospitals. The effect of the ruling was to give hospitals a total tax exemption, income and property, simply because they call themselves "non-profit, tax-exempt.” The Internal Revenue Service essentially made the same interpretation as Hocklander in a landmark 1969 ruling, and courts around the country since then have made similar decisions. In 1996, the Alabama Supreme Court ruled that the not-for-profit Vaughn Regional Medical Center in Selma was free from paying property and income taxes. In 2001 the IRS said hospitals have to provide only limited community benefits, such as accepting Medicare and Medicaid patients, to qualify for total exemption. Hospitals do not even have to operate an emergency room to qualify.

· The Port City Medical Clinic Board was set up by legislation in 1955 to grant property tax waivers to most hospital properties. Similar to the industrial development boards that grant tax breaks to industry, the clinic board was established to encourage the building of hospitals and clinics in communities that needed them. It allows Springhill to pay no taxes on most of its growing complex of medical and office buildings off Dauphin Street near Interstate 65. Springhill does pay about $50,000 in annual property tax, but that is on a convention center that is not related to the medical mission. It also issues bonds for area hospitals, for example it issued a $100 million bond for Infirmary Health Systems in 1998.

Other

· Plaintiffs' lawyers have paid the Mobile-Pascagoula firm N&M Inc. and its co-owner, Heath Mason of Grand Bay millions of dollars to test and locate thousands of plaintiffs for asbestos and silicosis cases. The testing companies, especially those from the Mobile area, have been accused of using dubious medical criteria to mass produce plaintiffs, up to 90 percent of whom, say critics, have no symptoms of disease. In 2001 and 2002, a Providence radiologist was paid $263,470 for what his testimony shows were hastily produced, mass readings of X-rays. His statement that he hadn't really diagnosed the disease, despite his signed diagnoses -- punched a hole in a 9,875-plaintiffs lawsuit being litigated in federal court in Corpus Christi. His account of his work for N&M has been cited in testimony before the U.S. Senate Judiciary Committee, as well as in stories by The New York Times, the Associated Press and the National Law Journal, to name a few. Mason's company and others like it, such as Mobile-based Respiratory Testing Services Inc., are hired to conduct these screenings by law firms. The first of these was started by former union officials who worked at Ingalls Shipbuilding, where exposure to asbestos was common prior to the early 1970s. Mason is the stepgrandson of Jewel D. "Jerry" Pitts, a Grand Bay man who operated Pulmonary Testing Services Inc. That firm tested tens of thousands of people for asbestosis, but ceased doing business in the mid-1990s after being accused in a lawsuit by asbestos manufacturer Owens Corning of fraud and having rigged testing procedures to ensure positive findings. - PR

Baldwin County Health Care

· In Bay Minette in Baldwin County, a group of volunteer doctors started a free clinic in 1998, said Dr. Bill Goetter, one of the founding physicians.

· Providence Hospital paid $1.8 million for 25 acres on Alabama 181 south of Baldwin County 64 in Daphne. The hospital plans to build a medical park on the property, according to Lee Metzger , director of real estate for Providence.

· Infirmary Health Systems is planning to purchase 100 acres north of I-10 and west of Alabama 181 from TimberCreek Land Co.

Thomas Hospital

· A 2005 agreement between Thomas and Infirmary Health System includes a 49-year lease of the hospital in return for Infirmary assumption of $44 million of Thomas debt as well as funding a new emergency department and additional patient rooms.

· Thomas Hospital has filed a construction application to build a 64-bed, $45 million expansion, including a new emergency room. The project, if approved by the State Health Planning and Development Agency, should be completed by the summer of 2008. A portion of the expansion is being funded by the Thomas Hospital Foundation, an organization that raises funds for the hospital. So far, the foundation has provided about $2 million. The rest is part of Infirmary Health Systems’ deal with Thomas. – PR 1/12/07

North Baldwin Infirmary

· Infirmary Health System, parent company of Mobile Infirmary, has leased North Baldwin Infirmary, a public facility, since 2001.

· The North Baldwin Health Care Authority supports the North Baldwin Infirmary with a 2-mill property tax. The tax is renewed every 20 years since it was established about 40 years ago. The money goes toward construction, equipment, operation and maintenance at health care facilities in the area, particularly North Baldwin Infirmary. In the past, the tax money has helped pay for new MRI and X-ray equipment at North Baldwin Infirmary, as well as a wellness center on the infirmary's campus and new patient beds at Oakwood Nursing Home. – PR 5/17/07

· North Baldwin Infirmary's 2006 fiscal year will end March 31 with a $3.6 million loss, William McLaughlin, the hospital's administrator said.

South Baldwin Regional Medical Center

· South Baldwin Hospital in Foley opened in 1958 with 35 patient beds and 12 newborn bassinets. 

· South Baldwin RMC is owned by Community Health Systems of Brentwood, Tenn..

· South Baldwin has added $26 million in improvements and more than 200 employees since 2000. A $6.5 million project was completed in 2006 adding 19,000 square feet. The hospital is now licensed for 112 beds. 

· Rich McAuliffe, assistant CEO in 2004 and 2005, returned in 2007 to become director of the facility. He replaced Stephen Pennington. – 12/28/2006

Mercy Medical

· Mercy Medical has served the Mobile and Baldwin areas since 1949, when the Sisters of Mercy established a convalescent home known as Villa Mercy in Daphne. The Sisters added rehabilitative, skilled nursing, hospice, and home-care services to its long-term care program. In 1987, they changed the name from Villa Mercy to Mercy Medical to better reflect the healthcare services they were providing.

· In 1993, Mercy Medical opened Mercy Medical Mobile (20-bed skilled nursing and hospice unit) and McAuley Place (60-unit assisted living community) on Dauphin Street, Portier Place (30-apartment Lifecare retirement community) opens on Old Shell Road, and Care Resource Center (in cooperation with Senior Citizen’s Services, Inc., Mobile).

Gulf Shores/Orange Beach

· In 2006, Orange Beach and Gulf Shores City Councils passed resolutions entering into a two-city agreement to solicit proposals from health care providers. Pensacola’s Sacred Heart and Mobile Infirmary joined with South Baldwin Regional Medical Center both submitted proposals. The city councils chose Sacred Heart's plan to build an outpatient surgery center.

o Orange Beach set aside 40 acres in its business park for a future hospital.

· The Gulf Shores City Council approved a $20 million revenue-sharing agreement for Colonial Pinnacle Craft Farms at Alabama 59 and Baldwin County 4 including a medical center in the middle of development. Colonial Properties sold four acres to Birmingham's Johnson Development, which will build the $15 million medical center and lease the facility to Sacred Heart Health System, possibly including a disputed outpatient surgery center. – PR 5/17/07

· Pleasure Island Ambulatory Surgery Center LLC, an affiliate of Pensacola’s Sacred Heart Health System had applied with the State Health Planning and Development Agency for a Certificate of Need (CON) to build its surgery center in Gulf Shores. The application was denied in April 2008. – PR 4/22/08

o Pleasure Island Ambulatory Surgery Center LLC. is a joint venture between eight surgeons and Sacred Heart Health System

o The company said the proposed $9.4 million facility would include three operating rooms and a dozen recovery beds.

o In February 2006, Pleasure Island Ambulatory filed a "letter of intent" with the state CON board. Orange Beach and Gulf Shores endorsed the proposal.

o According to Pleasure Island Ambulatory's state application, the expanding south Baldwin County market is expected by 2011 to add nearly 6,000 outpatient surgeries to 2005's 11,143. The facility would generate about $2.1 million in revenue in its inaugural year and more than $2.3 million in 2009.

o An administrative law judge issued a ruling in favor of Pleasure Island Ambulatory Surgery Center LLC's proposal in March 2008.

o Sacred Heart is proceeding with its Gulf Shores plan but may have to limit the center to physician offices and diagnostic services. Such uses, unlike surgery facilities, hospitals and nursing homes, don't require certificates of need.

o Pleasure Island has appealed the Certificate of Need Review Board's decision, which will send the matter to state court

· Infirmary Health System announced plan to move its Daphne surgery center, the Infirmary-Eastern Shore Outpatient Diagnostic and Surgery Center, to south Baldwin County.

o About 30 percent of the customers at Infirmary-Eastern Shore and Thomas Medical Center come from the southern end of the county, according to Infirmary lawyers.

· Pleasure Island Ambulatory filed a lawsuit against Infirmary Health System and the state health planning agency claiming that Infirmary Health System must go through Alabama's certificate of need permitting process to move its Infirmary Eastern Shore complex to south Baldwin County, but Montgomery County Circuit Judge Charles Price ruled in favor of Infirmary Health System in April 2007. Price dismissed the lawsuit in December 2007.

o In the order, Price wrote that the State Health Planning and Development Agency and Infirmary Health System showed adequate evidence that the decision not to require Infirmary to apply for a new certificate of need was consistent with the agency's prior handling of similar situations.

o Infirmary Health System argued that it and not Sacred Heart has been providing charity care in Baldwin County for years and therefore deserves the chance to recoup some of those loses. Sacred Heart, in its certificate of need application, said that of the $40 million in charity care the health system provided in 2005, $1.5 million went to Baldwin residents.

o The cities of Orange Beach and Gulf Shores joined the lawsuit with Pleasure Island Ambulatory, and have appealed the order.

Mobile/Baldwin Medical Personalities

Revised 6/15/08

Text Copyright 2008

Disclaimer: These Notes are not original. They are complied from various sources, primarily the Press-Register (PR), Mobile Bay Times (MBT), Lagniappe, The Harbinger, and websites. Citations are being added retrospectively. These Notes are for personal, educational use only. Address all comments and corrections to: admin@flotte2.com

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