Crain's Detroit Business - December 19, 2011 - (Page 13)

December 19, 2011 CRAIN’S DETROIT BUSINESS Page 13 Bloggers on the beat JAY GREENE: Like it or not, reform sets agenda Hospitals, physicians would expand Medicaid and businesses respondto 25 percent of the state’s ing to health care reform population from 20 per— formally known as the cent now and add thouPatient Protection and Afsands to the health insurfordable Care Act of 2010 ance rolls through the — influenced coverage of individual mandate and health care this year. state insurance exchange. I try to cover business Another major story in transactions and opera2011 had to do with Wartional changes in the ren-based St. John ProviJay Greene health care industry dence Health System. Durthrough the lens of health ing the year, St. John care reform, because the pending announced three joint ventures changes are so massive. The with physicians: in cardiology, neuchanges involve not just how much rology and surgery. St. John and the providers are paid, but also how physicians formed separate compacare is delivered . nies under a contract in which they While not all deals in 2011 were di- agreed to co-manage various hospirectly related to health care reform, tal departments. many were influenced by it. Under the contract, physicians reFor example, when the Detroit ceive hourly consulting fees for atMedical Center became a for-profit tending management and commithospital system on Jan. 1 — after it tee meetings and also are paid was acquired by Nashville-based financial bonuses for hitting quality Vanguard Health Systems Inc. — some and efficiency targets. experts said health care reform Forming co-management compamade the deal possible. nies is part of St. John’s plan to DMC CEO Mike Duggan has cited work more closely with physicians lack of access to capital and aging — a theme under health care reform infrastructure as primary reasons that encourages providers to coordito seek a buyer back in late 2010 and nate care more closely. early 2011, when the deal was anA big surprise of the year came in nounced. But most experts say Van- early October when Royal Oakguard chose to spend $1.5 billion on based Beaumont Health System made the DMC acquisition based on provi- public its contracting dispute with sions in health care reform that Blue Cross Blue Shield of Michigan. Beaumont wants the Blues to increase base rate payments 9 percent over the next three years. This is in addition to the 7.8 percent all hospitals in Michigan will receive under what is known as the “participating hospital agreement.” Blue Cross wants Beaumont to agree to value-based incentive contracts for the second and third years of the three-year contract. The incentives, which would reward Beaumont and its physicians for higherquality care, place some reimbursement at risk. While Beaumont supports incentive-based contracts, executives at the three-hospital system have said they will terminate participation with Blue Care Network effective Jan. 12 if Blue Cross does not increase its base reimbursement rate substantially. Executives from both sides said last week that some progress has been made in negotiations but a deal is yet to be made. Last week, St. John agreed to a contract addendum that would provide financial incentives for improving quality and patient care management. Senior Reporter Jay Greene’s blog about health care, insurance and the environment can be found at www.crainsdetroit.com/greene indiantrails.com 800-292-3831 RA TI NG ONE HUND R ED 100 CELEB Comfort and Luxury SAVE $100 00 OFF Contact Indian Trails for details. Must use this promotional code at time of booking: 2011CDB-DEC YE ARS CHAD HALCOM: Corruption, antitrust big topics Arctic Glacier InternaPublic sector corruptional Inc. of Canada and tion and private sector Cincinnati-based Home collusion were hot topics City Ice Co. also obtained for Detroit’s top corpocourt approvals in 2011 rate lawyers this year, for two settlements toand the chatter will only taling $26 million, for heat up in 2012 as the fednoncompetitive praceral government takes tices including allocatfurther action. ing specific retail cusA few of my legal beat tomers in the Southeast sources have been ready Michigan market. to declare 2011 “the year Chad Halcom Other attorneys said of the resurgent supplier” — or at least a strong rebound Detroit-area public corruption year for automotive suppliers to probes were a “high priority” and play a role in transactions like “at the top of the list” of most signifmergers and acquisitions or in icant issues tackled by the local lenon-bankruptcy litigation. Vari- gal profession this year, and should ous supply chain disputes tied to only gain more momentum in 2012. The FBI has subpoenaed records raw materials prices, dual-sourcing, the Japanese tsunami of last related to Turkia Awada Mullin’s March or other factors kept firms past tenure as Wayne County’s ecowith automotive practices busy nomic development chief and records connected to a $200,000 sevstarting in the first quarter. In the last quarter, about 30 class- erance payment she received — action lawsuits also rained on sup- and subsequently returned — when pliers following the first criminal in- she left that post to become CEO of dictment in an ongoing federal Detroit Metropolitan Airport in Sepinvestigation of anticompetitive tember. That investigation also inpractices over the past decade (See volves Wayne County Executive Dustin Walsh story, Page 17). In all, Robert Ficano and appointees in the top 10 grossing suppliers of his administration. Michigan Attorney General Bill metro Detroit were part of more than 450 federal lawsuits nation- Schuette’s office authorized more wide in 2011, compared with just than 100 criminal charges including bribery and embezzlement over 220 cases in 2010. But the auto industry didn’t cor- and misconduct in office against ner the market on antitrust action, various defendants, mainly mueither, as new lawsuits continued nicipal officials, through the pubto filter in throughout the year lic integrity unit formed at the ofagainst Blue Cross Blue Shield of fice earlier this year. A separate federal prosecution Michigan following a 2010 joint civil action by the U.S. Department of Jus- of former Detroit Mayor Kwame tice and Michigan attorney gener- Kilpatrick and four co-defendants al’s office over “most favored na- in a so-called “Kilpatrick entertion” charging agreements with prise,” including allegations of swapping contract awards for pohospitals throughout the state. litical favors, awaits a trial date next September. Large law firms losing local talent also continue to make for good gossip during the year. Southfield-based Fieger, Fieger, Kinney, Giroux & Danzig PC won more than $150 million worth of trial court verdicts against various corporations during the year, but also saw 10 of its 20 attorneys leave to form solo practices or join other law firms between January and August. Several of the attorneys told Crain’s that a set of performance targets and penalties including a $25,000 fine on attorneys who don’t try at least three cases per year was a factor in their departure. The long exodus that saw more than 100 attorneys depart Detroitbased Butzel Long PC had largely stopped by mid-2011, with headcount remaining steady at around 136 attorneys through the second half of the year. Compensation for partners also was given as a motive for many attorneys who left that firm in the past. One other hot topic I must mention: The Leahy-Smith America Invents Act of 2011, which converts the U.S. patent application system from a first-to-invent to a first-to-file system and mandates that U.S. Patent and Trademark Office establish three regional offices, including one in Detroit, “subject to available resources.” Local attorneys have said getting the resources for a Detroit office will remain a legislative priority. Reporter Chad Halcom’s blog on the legal business can be found at www.crainsdetroit.com/halcom Consultative Professional life insurance counseling in a non-salesy environment We work with our clients and their advisors to: Reduce estate and income tax Enhance fixed income yields Solve family and business issues Improve existing life insurance policies. B IRMINGHAM , M ICHIGAN 248.731.9500 WWW.S CHECHTER W EALTH . COM http://www.indiantrails.com http://www.indiantrails.com http://www.indiantrails.com http://www.crainsdetroit.com/greene http://WWW.SCHECHTERWEALTH.COM http://WWW.SCHECHTERWEALTH.COM http://www.crainsdetroit.com/halcom

Table of Contents for the Digital Edition of Crain's Detroit Business - December 19, 2011

Crain's Detroit Business - December 19, 2011

https://www.nxtbook.com/nxtbooks/crainsdetroitbusiness/20111219
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