new jersey chapter

November/December 2008 • vol 55 • num 3

•NewJerseyDelegationInRussia! HFMAGetsFirstHandLookatRussianHealthcare See page 7

•RecollectionsandReflections: ATributetoJoanneE.Finley,M.D.,M.P.H. See page 17

•2008AnnualInstituteaSuccess See page 42

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Who’s Who in the Chapter .........................2The President’s Viewby Joe Dobosh, MBA ......................................3

From the Editorby Elizabeth G. Litten, Esq................................4

Focus on Ethics..........................................21New Members ............................................27

Focus on Finance ......................................30Certification Corner...................................31Job Bank Summary ..................................34People Watching .....................................34Mark Your Calendar ..................................40Advertiser Focus........................................48

focus•advertisers•focus•features•

focus•points•focus•cover•

HFMA Gets First Hand Look at Russian Healthcareby Cheryl Cohen, FHFMA, MBA, John Dalton, FHFMA & Janet Turso .............................................. 7

When Might You Need an A/R Swat Team?by James Yarsinsky, CPAM ............................................................................................................. 15

A Tribute to Joanne E. Finley, M.D., M.P.H......................................................... 17

CFO Member Spotlight:Rich Smith, Solaris Health System........................................................................... 24

Member Spotlight: Michael Alwell, FHFMAby James Yarsinsky, CPAM ......................................................................................................... 25

The HFMA Value Propositionby Thomas Albanesi, Jr., FHFMA, CPA ............................................................................................. 28

Bringing Healing to the Homeby Mark Dumoff .............................................................................................................................. 32

Impact of Energy Efficiencyby Steven Goldenberg, Esq. and Andrew Kaplan, Esq. ..................................................................... 35

NJ HFMA Annual Financial Statements................................................................. 36

More Than 545 Get in the Spirit at the2008 Annual Instituteby Tracy Davison-DiCanto, MBA ...................................................................................................... 42

Chery Cohen, John Daltonand Janet Turso in front ofMoscow’s Basil-Assumption

Church

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Publications CommitteeJohn Manzi, Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .IMA ConsultingElizabeth G. Litten, Esq., Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fox Rothschild LLPAl Rottkamp,MBA,Vice Chair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Professional ServicesSteve Aaron . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ARC Group AssociatesLynn Chiantese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .New Jersey Hospital AssociationMark P. Dougherty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Johnson Controls, Inc.Dennis P. Hancock . . . . . . . . . . . . . . . . . .New Jersey Healthcare Facilities Financing AuthorityJoan Hendler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Remex, Inc.Laura Hess, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NJHFMARhonda Maraziti . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .WithumSmith + BrownWilliam McCann . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Healthfirst NYDavid A. Mills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Deloitte ConsultingHelen Oscislawski, Esq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Fox Rothschild LLPErum Raza, Esq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Fox Rothschild LLPJames A. Robertson, Esq. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Kalison McBrideRoger D. Sarao, CHFP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . New Jersey Hospital AssociationJames Yarsinsky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expeditive

NJ HFMA Chapter OfficersPresident, Joseph J. Dobosh, Jr., MBA . . . . . . . . . . . . . . . . . . . Children’s Specialized HospitalPresident-Elect, Brian P. Sherin, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . Besler ConsultingSecretary, Mary T. Taylor, MBA, FHFMA . . . . . . . . . . . . . . . . Southern Ocean County HospitalTreasurer, Lisa R. Hartman,MPH . . . . . . . . . . . . . . . . . . . . . . . . Princeton Healthcare System

NJ HFMA Board MembersMichael Alwell, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Atlantic Health System

John Brault, CHFP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Englewood Hospital & Medical Center

Lindsey S. Colombo, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Raritan Bay Medical Center

Mary M. Cronin, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Besler Consulting

Tracy Davison-DiCanto – Junior Board Member . . . . . . . . . . . . .Princeton Healthcare System

Dennis P. Hancock . . . . . . . . . . . . . . . . . .New Jersey Healthcare Facilities Financing Authority

Marilyn A. Koczan, FHFMA,MPA, CPAM . . . . . . . . . . . . . . . . . . . . . . . . .Meridian Health System

Anthony T. Orlando . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Englewood Hospital & Medical Center

Michael A. Richetti, CPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Chilton Memorial Medical Center

David J.Wiessel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Ernst & Young, LLP

DanWillis – Junior Board Member . . . . . . . . . . . . . . . . . . . . . . .Children’s Specialized Hospital

Caitlin C. Zulla, CHFP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .MD-X Solutions

Sean J. Hopkins – Ex-Officio . . . . . . . . . . . . . . . . . . . . . . . . . .New Jersey Hospital Association

NJ HFMA Advisory CouncilCheryl H. Cohen, FHFMA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Pantheon Capital

Dorothy Lindstrom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Somerset Medical Center

John Manzi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .IMA Consulting

Richard C. Parker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .CBIZ KA Consulting Services

Who’s Who in the Chapter 2008-2009ChapterWebsite . . . . . . . . . . . . . . . . . . . . . . . .www.hfmanj.org

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The President’s View . . .

As you receive this issue, I am at the mid point of my term as Chapter President and,with six months to go, there are still several goals to accomplish. In October, the annualinstitute was the most attended and successful in the thirty-two year history of the event.I want to thank the Co-Chairs of the event, Tracy Davison-DiCanto and John Brault andthe full committee for all of the time, coordination and determination they devoted inmaking it successful. In addition, I would also like to thank the vendors for their support,and the speakers for their excellent presentations.

The Institute may be completed; however, there is still a number of activities going onin the chapter. Some upcoming events include:

• The quarterly Chapter meeting on January 13, 2009 at the Woodbridge Hilton. Thisis a joint meeting with the NJ Chapter of AAHAM and our PFS and PAS Committees.

• The quarterly Chapter meeting on March 10, 2009 at the Woodbridge Hilton, presented by the Chapter’s CARECommittee.

• The Chapter Golf Outing on May 7, 2009 at Fiddler’s Elbow.• The Education Committee continues to find topics and speakers. Keep a lookout for details in the Chapter’s Pulse

weekly e-mail.

Other projects in process:• The Chapter’s website will be getting a face lift in the very near future.• Conducting our first ever webinar coordinated by our Education Committee.• Planning a New Member Breakfast early in 2009.• Recruitment of committee chairs and co-chairs for the 2009/10 Chapter year.• Selection of topics for submission to National HFMA for Yerger Awards by April 1, 2009

Finally, on behalf of the Officers and Board of Directors, we wish you a very happy and healthy holiday season and awonderful 2009!

Sincerely,

Joe Dobosh, MBAPresident, New Jersey Chapter of the Healthcare Financial Management Association

Joe Dobosh

makingconnections

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Dear Readers:

We do not often have the opportunity to reflect upon the contributions of asingle person in changing and shaping health care policy within New Jersey, letalone on a national level. This year-end issue includes a tribute to the lateJoanne Finley, M.D., M.P.H., who served as New Jersey Commissioner ofHealth from 1974 through 1982. I am very grateful to current CommissionerHeather Howard and her staff for quickly responding to my request for an“official” Department of Health and Senior Services biography and photo, toJohn Dalton for alerting me to the sad news of Dr. Finley’s death and empha-sizing the significance of her life, and to John Reiss for all of his help in put-ting together the tribute. I also appreciated and was moved by each contribution submitted by those who workedwith Dr. Finley in New Jersey.

I had not yet begun my own career as a New Jersey health care attorney when Dr. Finley concluded her tenure at theDepartment, but, shortly after I chose health care law over tax law (at the wise suggestion of former CommissionerLen Fishman, then a partner at the firm I would join) in 1989, I began understanding the impact of Dr. Finley’swork. Now, nearly twenty years later, and long past the demise of the New Jersey rate setting system, I am awed bythe depth and breadth of the health payment reform legacy Dr. Finley has left behind.

Speaking of legacies, it is with great excitement, anticipation, and relief (yes, all three) that I announce the imminentre-design of our Chapter’s website. My publications committee co-chair, Al Rottkamp, has demonstrated a tenacityand generousness of time and effort not often seen in volunteers, let alone highly skilled, extremely busy volunteers,and the Chapter Board has approved his recommendation for website upgrades. I am optimistic that I will be writ-ing to you in early 2009 with details on the improved look and functionality of our New Jersey Chapter website!Thank you, Al, Laura Hess, John Manzi, Joe Dobosh, Tracy Davison-DiCanto, Brian Sherin, and the other Boardand publications committee members who have helped launch this project.

Regards,

Elizabeth G. LittenEditor

From the Editor . . .

4 Focus

Elizabeth G. Litten

6 Focus

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Focus 7

From September 5-14, 2008, three New Jersey chaptermembers and two guests participated in an HFMA delegationto Russia for a professional interchange with their Russianhealthcare colleagues. Sponsored by People to People, the 39person delegation was led by Joyce Zimowski, Senior VicePresident at Unity Health System, Rochester, NY and Dr. JoeAbel, Director of Professional Development at HFMA, West-chester, IL. In total, there were 28 delegates and 11 guests,including five delegates and one guest from HFMA-UK.Founded by President Eisenhower in 1956, People to PeopleInternational’s driving purpose is to enhance internationalunderstanding and friendship through educational, culturaland humanitarian activities involving the exchange of ideasand experiences directly among peoples of different countriesand diverse cultures. Last year, HFMA President RichardClarke led a similar delegation on a visit to China.

Delegates spent two days meeting with professional col-leagues in Moscow followed by two days visiting a districthospital and private clinics in St. Petersburg. The schedulealso allowed time for cultural activities including tours of RedSquare and the Kremlin in Moscow and the Hermitage ArtMuseum and Peterhof, the summer residence of the tsars, inSt. Petersburg. For many, the cultural highlight of the trip wasa Friday evening performance of Tchaikovsky’s “Swan Lake”ballet at the Hermitage Theater. Garden Staters includedCheryl Cohen and Frank Kimchick, Ann and John Dalton,and Janet Turso. The purpose of this article is to summarize the professional interchange and to provide insights into the

challenges and opportunities facing Russian healthcare sinceMikhail Gorbachev’s “perestroika” precipitated the 1991 col-lapse of the Soviet Union.

The Russian Federation as a NationEven without the former Soviet socialist republics, the

Russian Federation is the largest country in the world, andone of the most sparsely populated. Stretching from the BalticSea in the west to the Bering Sea in the east, Russia spans 11time zones and is twice the size of the United States. Its pop-ulation of 143 million (less than half that of the U.S.) isdeclining at a rate of 800,000 per year and is projected todrop to 125 million by 2025 according to the Center forStrategic and International Studies. With 10 million people,Moscow is the Federation’s capital and largest city. Adding in5 million who reside in the surrounding region, Moscow

continued on page 8

HFMA Gets First Hand Look atRussian Healthcareby Cheryl Cohen, FHFMA, MBA, John Dalton, FHFMA & Janet Turso

New Jersey delegation at Red Square: Janet Turso, FrankKimchick, Cheryl Cohen, John Dalton, Ann Dalton.

Cathedral of Spilled Blood

continued from page 7

accounts for more than ten percent of Russia’s population.Located on the Gulf of Finland at the east end of the BalticSea, St. Petersburg is Russia’s second largest city with 4.7 mil-lion residents, and endures sub-arctic winters.

While the Russian birth rate is comparable to that of otherEuropean countries, its population is declining more rapidlydue to its higher death rate. Unlike the United States, freemedical care is a constitutionally guaranteed right for Russiancitizens. The Table below compares 2006 life expectancy atbirth for Russia, the United States and the United Kingdomas reported in World Health Organization statistics:

National Research Institute of Public HealthThe delegation’s first meeting was at the National Research

Institute of Public Health of the Russian Academy of MedicalSciences in Moscow. Founded in 1944, its main objective isimplementation of research projects in public health, health-care economics and management, and introduction of thebest healthcare business practices. Academician Shepkin andhis staff led the delegates through a two part presentation,focusing first on an overview of the Russian healthcare econ-

omy, then moving to a discussion of key health indicators andthe need for quality assessment and quality improvement.

Shepkin noted that Russia currently ranks towards the bot-tom of the list of developed nations with regards to healthcareoutcomes, a principal reason for healthcare reform becomingone of four major government initiatives. Funding for this sec-tor is being increased at a rate greater than the rate of growthin the federal budget. The National Research Institute is delv-ing into 12 research program areas, and Shepkin walked thedelegates through one that is receiving a lot of focus: reducingmortality from cardiovascular disease. Shepkin pointed outthat three conditions account for 83.2% of deaths in theRussian Federation:

1. Cardiovascular diseases – 56.9%;2. Tumors (cancer) – 13.2%; and3. External reasons (accidents) – 13.1%.

He complimented the U.S. for discouraging tobacco use,noting that smoking and alcohol abuse are two leading rea-sons for Russia’s poor health status. He expects that theResearch Institute’s work should result in raising the averagelife expectancy to 70 years for men and 80 years for womenby 2020. Normal retirement age is 60. Mortality rates for can-cer are considerably higher than Western Europe due to latediagnosis, with cancer being at an advanced stage when dis-covered, and the lack of contemporary treatment methods.

Shepkin concluded by citing the three primary issues fac-ing Russian healthcare:

1. the amount and level of healthcare guaranteed by thegovernment and expected by citizens is not in line withthe financial resources available;

2. medical providers are frequently under-equipped andpoorly trained; and

3. the medical insurance system needs reform.

Professor Lendenbretton then discussed the status of thehealthcare system. The healthcare sector currently employs600,000 professionals, or 40 per 10,000 population, with 29per 10,000 being clinical professionals. More than 3,000 hos-pitals and clinics have shut down during the past 15 years, leav-ing the country with 5,000 hospitals and 6,000 clinics. Thereare 32 million inpatient admissions annually with an averagelength of stay of 13-14 days, which includes the admittingexam and post-acute convalescent period. Also included in theaverage length of stay calculation are psychiatric and tubercu-losis cases, which account for 15 percent of the occupied bedson any given day.

He pointed out that financing for Russia’s healthcare sys-tem basically comes from taxpayers, whether throughemployer contributions to the Federal Compulsory Health

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November/December 2 0 0 8

Life Expectancy at Birth (years) Russia U.K. U.S.

Male Life Expectancy 60.1 77.0 75.5

Female Life Expectancy 73.2 81.3 80.4

Basil-Assumption Church, Moscow

Insurance Fund, individual payments (both official and ille-gal), and group and individual health insurance. The officialportion of individual payments is patient co-payments as apercentage of charges for the service. The illegal payments arethose made directly to a physician to gain better access to care.

Professor Lendenbretton expressed his opinion that higherlevels of financing result in better care as measured by lifeexpectancy, adult and infant mortality, and other key healthindicators. He supported his opinion with World Health Or-ganization (WHO) data showing that, for countries thatspend less than $800 per capita, infant mortality rises. He ishopeful that the increased levels of spending will improveRussian health status as incentives are provided for betterquality care, not just higher volumes of encounters. The tablebelow compares per capita health spending and expendituresas a percentage of gross domestic product for Russia, theUnited Kingdom and the United States in 2003:

Following the Research Institute staff presentations, JohnDalton reviewed some U.S, key health indicators, placingmajor emphasis on the five leading chronic care conditions.Dalton noted that 90 percent of U.S. health expenditures onadults (excluding dental care, medical equipment and supplies)are spent to treat persons with chronic conditions. Asthma isthe leading chronic condition. He pointed out that obese indi-viduals are at higher risk for the next four conditions (hyper-tension, osteoarthritis, heart disease and diabetes). Dalton stat-ed “We Americans are getting bigger every year,” referencingrecent data that the percentage of obese Americans hasincreased from 15% of adults in 1980 to 30% in 2007. ChrisCalkins, Chairman of HFMA-UK, reviewed similar data for

the U.K., noting that health care accounts for 34% of govern-mental expenditures. The average waiting time from a generalpractitioner referral to first treatment is 18 weeks.

Federal Compulsory Health Insurance FundOn Tuesday, the delegation met with the Federal Compul-

sory Health Insurance Fund (CHIF) to obtain insights intohow Russian healthcare is financed. The Fund’s Director point-ed out that Russian citizens have a constitutional right to “freemedical care of proper quality.” Established in 1993 by federallegislation, the Fund is supported by a single social tax onemployers and self-employed individuals that amounts to 3.1percent of wages and salaries. The tax revenues are splitbetween the Federal Fund (1.1%) and regional funds (2.0%) ineach of the federation’s 85 regions. The CHIF received $7 bil-lion last year, and that amount is scheduled to double over thenext three years. It is the primary channel for medical insur-ance to employed citizens. Medical insurance for unemployedcitizens, retirees and children is funded by contributions fromthe regional authorities, and the per capita amounts allocatedvary widely among the regions.

Over 140 million people are covered, nearly 100 percent ofthe eligible population. The mixed funding source requiressignificant interaction with regional authorities. More than60 percent of the population covered is not employed (i.e.,retirees, children, non-working parents). The Director dis-cussed the need for the CHIF to set standards or benchmarksfor specific medical services, and to compile records on indi-vidual’s use of health services. The CHIF is working closelywith the Ministry of Health which is developing a strategicplan for Russian healthcare through 2020. In so doing, theyare studying the models used in other developed nations andevaluating experience under various models.

In reforming Russia’s healthcare system, a change is need-ed from financing institutions to funding specific services.That will require developing a system of medical and eco-nomic standards to benchmark costs. Second, resources areneeded to track payments that are adequate to cover the costfor services provided and to confirm that services provided arenecessary. CHIF staff believes that this would eliminate theunofficial gratuity payment system. CHIF staff are quitefamiliar with the U.K.’s National Health Service (NHS) andappeared to be leaning towards that model. Their perceptionof the U.S. system is that it is very expensive, but they like thefreedom of choice feature.

A highly interactive question and answer session provideda clearer understanding of the challenges and opportunitiesfacing our Russian peers. Observations made included:

� Russia does not have high quality healthcare yet; how-ever, the economy has been growing at a rapid pace,and that helps provide increased funding for healthcare;

continued on page 10

Focus 9

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Health Spending, 2003 Russia U.K. U.S.

Per capita health spending $400 $2,317 $7,711

Health spending as % of GDP 5.6% 7.8% 15.2%

John Dalton addresses the National Research Institute of PublicHealth on “U.S. Health Quality Indicators.” Delegation co-leader Joyce Zimowski in foreground.

� Putin has made healthcare an integral part of evaluatingthe performance of regional governors;

� We are trying to improve healthcare quality and one ofthe ways is through surveys;

� Doctors are doctors everywhere – they are spendthrifts;� Behavioral health services are funded at the regional

level, not by the CHIF, as is funding for drug abuse andsexually transmitted diseases;

� We are seeing competition among insurance companiesto expand their covered lives, but they can’t influencequality at present;

� The number of visits or number of patient days do notalways reflect the quality of services received; we needto develop a common denominator for the unit of ser-vice rendered that reflects patient acuity and the inten-sity of services provided;

� If a physician errs, the injured party cannot sue for mal-practice since there are no benchmarks;

� IT systems are poorly developed in many regions; thisnow is becoming a major priority;

� It has been difficult recruiting people to work in thehealthcare sector.

Phyllis Cowling, FHFMA, President and CEO of UnitedRegional Health Care System. Wichita Falls, TX, made apresentation on how healthcare is funded in the UnitedStates, and was followed by Chris Calkins who made a simi-lar presentation on NHS funding in the U.K.

The concluding discussion provided illuminating insightsinto the cultural context within reform is proceeding. Seventyyears of Soviet rule produced in a culture where individualsare reluctant to stand up for their personal rights. OlderRussians are accustomed to having decisions made for them.Russia needs to develop competition among providers andimplement incentives to improve quality. Clearer standards

are needed to specify government obligations with respect tohealthcare access, amount of care and quality, while recogniz-ing that the government can’t provide everything.

Vsevolozhsk Central District HospitalWednesday morning, the delegation departed St. Petersburg

by bus to visit the Vsevolozhsk Central District Hospital, 10kilometers east near Lake Lagoda in the Leningradsky Region(St. Petersburg was Leningrad during Soviet times). The sur-rounding countryside was flat, with an occasional single fami-ly home and plenty of communal living. The roads were ingood condition, but there was only one two lane road toVsevolozhsk, and it had a lot of traffic. The delegation wasdropped off at a building that looked as if it had been builtprior to World War II. We later learned that it was built in1982 towards the end of the Soviet era. None of the delegateswould have identified it as a hospital building. The city was inthe midst of a sewer outage, but Hospital staff had kept a fewtoilets available for delegates needing to use the facilities afterthe long bus trip.

Dr. Tatiana P. Zebode, Chief Physician and Hospital Ad-ministrator of the Vsevolozhsk Central District Hospital wel-comed the delegation and provided an overview of the hospi-tal’s organization and operations. Dr. Zebode has been work-ing within the healthcare system in this district for 30 yearsand noted with pride that the hospital is located on the “Roadof Life,” the supply line to Leningrad during the 900 days ofthe Nazi siege. She was joined by the District’s Director ofSocial Services, who oversees education, health and welfare inthe District. The hospital is one of the oldest medical institu-tions in the Leningradsky Region. It started in 1884 as a clinic,

continued from page 9

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November/December 2 0 0 8

Left to Right: Chris Calkins, Chairman, HFMA-UK, Academi-cian Shepkin, head of NRIPH, Delegation Co-Leader JoyceZimowski. Shepkin is accepting gifts from the delegation to thankhim for his hospitality. continued on page 12

Vsevolozhsk Central District Hospital in the LeningradskyDistrict

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Focus 11

but has grown into a full service community hospital serving217,000 people (179,000 adults, 37,600 children) in the Cen-tral District’s 20 municipal areas. The local economy includes aFord plant and a Nokia tire factory, small manufacturers andagribusiness.

Healthcare consumes 40% of the Region’s budget of 4 bil-lion rubles ($160 million), of which the hospital receives 500million rubles ($20 million), accounting for 15% of the hospi-tal’s annual budget. Roughly 60% of the hospital’s funding isprovided from the CHIF, with the remainder coming frompatient payments. Prior to 1994, when the CHIF was created,100% of the hospital’s funding came from the region. Thehospital budget is allocated as follows: 75% wages and salaries;10% materials purchases; 10% inpatient nutrition; the remain-ing 5% is for everything else, excluding equipment. The hospi-tal is reviewing the opportunity to outsource certain depart-ments, such as housekeeping and laundry, to reduce expenses.

Capital expenditures are funded separately. Last year, 30million rubles ($1.2 million) came from Moscow, 12 millionrubles ($480,000) came from local government and 8 millionrubles ($320,000) came from various grants and programs.

Dr. Zebode described the four levels of care provided in theRussian delivery model:

1. Health Station (13 in the district) – staffed by one doc-tor and one nurse, health stations are established when asettlement reaches a population or 500;

2. Ambulatory Center (8 in the District) – services includegeneral practice, gynecology, pediatrics and dentistry.

3. Polyclinic (6 in the District) – typically staffed by 25 spe-cialists including ophthalmology, gastroenterology, etc.,can perform blood tests and electrocardiograms; and

4. Hospitals (3 in the District) – the hospitals have a totalof 990 beds and deal with all major specialties at moreacute stages of illness.

Dr. Zebode noted that the Hospital’s proximity to St.

Petersburg has facilitated recruitment of specialists for mostmajor specialties. There are 280 doctors in this facility, 550 inthe entire region. Additionally, there are 1,500 middle servicepersonnel, whose salary structure is quite low. There is ashortage of these middle service personnel. As a point of ref-erence, the average salary for workers in Russia is $1,000 permonth. Recently, the physicians’ entire salary structure wasrevamped, from a level, low salary, to achievement, resultsbased pay. Physicians can earn quarterly bonuses based onoutcomes.

Russian doctors complete six years of university educationand a one year internship to become a general practitioner orsurgeon. Anesthesiologists require two years of supervisedinternship before being allowed to practice. There are manda-tory continuing education courses over five year periods.Clinical personnel also attend medical colleges; some for 2-1/2 year programs and others for four year programs. Likedoctors, there are continuing education requirements everyfive years to maintain competency. Staffing ratios are 2.5nurses per physician for most hospitals. In the ambulatorycenters, the staffing ratio is 4 nurses per physician. There is ashortage of nursing assistants. Doctors still make house calls,but the government is trying to discourage them.

Dr. Zebode addressed quality of care from a number ofaspects. She noted that the Russian government is working onestablishing national standards of care for various conditions. Pa-tient records are reviewed by experts from the CHIF as part ofthat initiative and fines averaging 7% of the operating budget areimposed for care that does not meet standards. Currently thestandards vary among the regions and there is need to stan-dardize these to manage the quality of care. The Federal govern-ment is trying to work towards this end. Dr. Zebode believes thatspecialists should be licensed to specified standards of practice,with treatments conforming to national standards. Dr. Zebodecited the top priority of improving outcomes for cardiovascular

continued from page 10

Dr. Tatiana Zebode, Chief Physician and CEO, shows delegatesthe x-ray suite. Cheryl Cohen in center foreground.

Examining Room

12 Focus

November/December 2 0 0 8

disease, noting that mostof the improvement mustresult from patient educa-tion and lifestyle changes.She also noted that therehas been some medicalmalpractice activity in theregion though this is stillrare. In these suits, themedical provider entitieshave been found liable andpaid for mistakes. The pre-sumption is that thepatient is always right. Na-tional standards wouldhelp mitigate hospital lia-bility.

Legal immigrants can become eligible for participation in themedical insurance programs. Illegal immigrants have to pay forservices. However, the hospital is required to provide treatmentin emergency situations. When asked where immigrants comefrom, Dr. Zebode responded, “Uzbekistan, Tajikistan, Ukraine– republics of the former Soviet Union. They come here becauselife is better!”

The delegation concluded the professional exchange with atour of the hospital that produced a clear appreciation of thechallenges facing Russian healthcare. Older delegates likenedthe facility to a U.S. community hospital pre-Medicare. Thetechnicians in the X-ray suite wore radiation badges to mon-itor exposure, but the equipment was antiquated. The dayhospital housed four beds in each patient room. The bedsresembled cots, and an IV pole hung next to each bed. A tourof the surgical floor led past a small, minimally equippednursing station and six-bedded rooms. Again, the beds resem-bled cots, and, when oxygen is needed, a cylinder is wheeledin and hooked up. IT support is minimal. High tech equip-ment is lacking. The impression formed was that of healthcare professionals struggling daily to provide needed care

under challenging conditions.As the tour concluded, Cheryl Cohen mentioned that the

delegation was pleased to see two women holding such impor-tant positions. With a smile that lit up the room, Dr. Zeboderesponded, “Only a woman would take on a job this tough.”

MEDI Clinic, St. PetersburgThursday morning, the delegates visited and toured the

MEDI Clinic facility on upscale Nevsky Prospect, St.Petersburg’s equivalent of Chicago’s “Magnificent Mile.”Following the tour, the delegates met with executive staff ofthe clinic and the MEDI Company Group. The privatelyowned company consists of 18 clinics that provide dentistry,cosmetology, plastic surgery, laser surgeries and family medi-

cine in St. Petersburg and Moscow. The clinics target theirservices to different patient income levels (referred to as elite,business class, and economy class). The elite facility that thedelegation visited includes the St. Petersburg Dental Institutewhich provides professional development and skill buildingprograms, research and publishing and post-graduate educa-tion. It is the only State accredited post-graduate dental pro-gram in Russia. Equipment includes two tomography ma-chines, for taking pictures of the jaw and teeth. There are twosurgical suites, with a third currently under construction. Thisclinic also includes a full service dental lab capable of manu-facturing dental prosthetics (metal and non-metal) and inlays.

Delegates found the facility to be spotlessly clean and wellequipped. Several commented that the dental suites were betterequipped than their own dentist’s offices, with all dental recordson-line. There are licensure requirements, with State standardsthat must be met. Every practitioner must be licensed, and eachclinic must renew its licenses every five years. Annual audits areperformed by the State.

The clinics strive to provide faultless, competent medicalcare through the use of a team of specialists using the most

4 bedded room, day hospital

Nurses Station, Surgical Floor continued on page 41

Focus 13

November/December 2 0 0 8

revenue enhancement & recovery

governmental reimbursement & compliance services

medicaid assessment & enrollment services

charge process review & management

revenue enhancement & recovery

governmental reimbursement & compliance services

medicaid assessment & enrollment services

charge process review & management

50 Millstone Road | Building 200, Suite 230 | East Windsor, NJ 08520 | (609) 918-0990

November/December 2 0 0 8

Focus 15

An accounts receivable (A/R) crisis slowly creeps up atmost hospitals, even though signs are evident that the revenuecycle is lagging and breakdowns in workflow and processes arenumerous.

But, it usually takes some singular event or developmentthat proves, once and for all, that receivables are getting outof hand and immediate, help is needed to reduce A/R – andrejuvenate a flagging A/R process.

Signs You Need Emergency A/R Help?There are many signs that point to the need for a concert-

ed, focused effort to work down aging receivables. Perhapsthe starkest sign of all is when 28 percent or more of your A/Rhas aged more than 90 days (an industry benchmark). Beforeyou ever get to this point, however, look out for other warn-ing signals that your A/R is creeping up to an unmanageablestate:

• Your A/R accounts are timing out regularly. Thirdparty insurance carriers set deadlines for filing claimsand if you don’t submit in time, you won’t get paid. Ifyou don’t submit in time, or properly, the amount of un-claimed reimbursement will creep up to a “breakingpoint.”

• Cash flow problems. You’ve just flipped the calendarand year-end is nearing and your cash flow is not whereit should be – and your A/R days are 10-14 days higherthan last year. This is the time you need to quickly, sys-tematically lower your A/R and improve cash flow – notto mention improve your bond rating and show the hos-pital board that things are under control.

• Computer conversions gone awry. Switching to newsoftware or even more involved computer conversionswreak havoc on accounts receivable. Traditionally, A/Rdays spike up 10 A/R days outstanding due to conver-sions and take awhile to come back down to pre-conver-sion levels.

Other important, yet less blatant signs include: high staffturnover rate, growing number of denials, a breakdown in thepatient registration process, and simply, just an immense volumeof unmanageable claims for the patient financial services staff.

Arming the A/R Swat TeamHandling an A/R crisis should be swift, focused and han-

dled by a pool of resources that are focused on accounts that

are the source of the A/R crisis. In other words, tacklingaging A/R should be a separate project and not added to thestaff ’s current workload.

Here’s a step-by-step approach to quickly lowering yourA/R:

1) Appoint the most seasoned patient financial servicesprofessionals to work on high dollar accounts.

2) Work aged accounts in descending dollar order.3) Gather all untimely-filed accounts — determine which

ones can be appealed and, most importantly, determinethose that have little chance of payment and write themoff.

4) Re-bill as many claims as quickly as possible.5) Work with large groups of accounts simultaneously.

For example, gather 50 accounts from the same payer,contact the payer and ask them about them all at once.Caution: don’t work one claim after another.

6) Leverage your provider representative to help you getpaid.

While some of these steps seem obvious, most patientfinancial service departments just don’t have the manpowerresources to handle an A/R emergency.

Focused A/R Team Pays OffSome hospitals will decide to manage A/R emergencies

themselves, but this is often difficult and unrealistic with exist-ing workloads. Rather than outsourcing — and having to workwith off-site staff on separate computers and systems — manyhospitals opt to “in-source,” bringing in a dedicated, profes-sional team of patient financial services experts and directors towork on-site and execute an A/R swat team approach.

An Expeditive Case StudyFor Charles J. Santangelo, Executive Vice President/CFO

for Susquehanna Health inWestern Pennsylvania, in-sourcingwas a blessing in disguise when his department underwent acomputer conversion that began adversely impacting A/R.Mr. Santangelo’s department decided they needed a six-per-son Expeditive team to come in and handle a massive A/Rcleanup. Eight months later, not only was A/R under control,but cash was not just flowing, but gushing.

“The results produced from the efforts of Expeditive andour patient account teams were that Susquehanna Health

by Jim Yarsinsky, CPAM

When Might You Need anA/R Swat Team?

continued on page 16

November/December 2 0 0 8

16 Focus

Hospitals collected $18.7 million of targeted A/R over thecourse of the project. Staff members were professional,friendly and worked well with the Susquehanna HealthPatient Accounting staff,” says Mr. Santangelo.

During the course of the effort, the lead Expeditive personworked with Mr. Santangelo to keep him abreast of progress;weekly and monthly reports showed money coming in,accounts resolved, and detailed A/R summaries by payer anddescending balance.

Stop Wheel SpinningWhen A/R ages to the point of no return, hospitals need

to recover cash quickly and work down aging receivables.Hiring an in-sourced “swat team” allows CFOs and directorsto oversee an A/R operation that can quickly get into the sys-tem, resolve issues with laser focus and get out with morecash in hand and a rejuvenated and improved revenue cycle.

About the AuthorJim Yarsinsky, CPAM, is president of Expeditive, L.L.C. He canbe reached at jyarsinsky@expeditive.com.

Tips for Moving On

Once you’ve employed a “swat team” to handle out-of-control A/R, your department can work on more long-term issues to lower accounts receivable, such as:• Develop job aides and scripts for employees to help

them resolve key accounts (promptly).• Institute daily work drivers, which are reports given

to all of your follow-up staff, showing outstandingaccounts and a time frame in which they should beresolved.

• Always put your most skilled and experienced staffon the highest-dollar accounts.

• Have management review performance on follow-up work in process.

• Prioritize work.• Train employees (account follow-up staff should

also know which accounts to focus on).• Establish work volume and quality goals.• Vigorously pursue the collection of all A/R in excess

of 45 days.

November/December 2 0 0 8

Focus 17

The 1970s were sentinel years inhealth care in New Jersey, witnessing theimplementation of the Health CareReform Act (1971) and giant leaps inhealth planning and facilities licensure.These efforts were directed by the thenCommissioner of the New Jersey StateDepartment of Health, Dr. JoanneFinley, who passed away on October22nd in Townsend, Maryland.

Dr. Finley, the first woman StateCommissioner of Health, was appointedby Governor Brendan T. Byrne and tookoffice on June 17, 1974.

Antioch College awarded her bac-calaureate degree in public administra-tion and economics with honors in1944. Following graduation, she was ad-ministrative assistant to CongressmanGeorge E. Outland of California andserved as his campaign manager in 1948.

In 1951, she received her Master of Public Health degreefrom Yale University of Medicine. For several years she washealth education director for a Maryland health associationand was field training supervisor of graduate students in soci-ology at the University of Maryland. Prior to receiving hermedical degree from Case-Western Reserve University in1962, she also was executive director of an organization pro-moting prenatal and postnatal education of parents in metro-politan Washington, D.C. She was board certified in Preven-tative Medicine and Public Health.

For more than five years, beginning early in 1963, Dr.Finley filled positions of increasing responsibility in Ohio.She was research director of the Cleveland Health GoalsProject, medical deputy commissioner and acting commis-sioner of health for that city, and project director for one ofthe first neighborhood health centers funded by the Office ofEqual Opportunity.

She served as director of health planning for thePhiladelphia Department of Public Health, and later she was

vice president for medical affairs for theBlue Cross Association of Greater Phila-delphia; director of public health in theNew Haven Department of Health, Con-necticut, and a faculty member of the YaleUniversity School of Medicine’s Depart-ment of Epidemiology and Public Health.

JOANNE E. FINLEY, M.D., M.P.H.:RECOLLECTIONS ANDREFLECTIONS

I met Joanne at her first meeting withthe State Health Planning Council. AsPresident of the Comprehensive HealthPlan Agency of New Jersey, I served exofficio on the Council. Joanne was brim-ming with ideas for changes to the State’shealth planning system, certificate ofneed and, of course, for implementingthe system for making payments for New

Jersey hospitals and nursing homes. During the summer of1974, probably because I was the only economist serving onthe public bodies with which Joanne was involved at the time,she asked me to participate in or chair various committeeslooking at several of her ideas. When she was Health Commis-sioner for the City of New Haven, she had been in contactwith John Thompson, Bob Fetter and their crew at Yale whowere developing diagnosis (which they call diagnostic) relatedgroups to identify outliers in treatment patterns. Their goalwas to see why some patients appeared to get excessiveresources devoted to their care. Joanne, in her inimitable way,asked the question “Well, could that be used for payment?”,and sent me up to the Yalies to find out.

After spending a couple of days at Yale being walkedthrough their DRG methodology, I reported back to Joannethat, while most of the DRGs were not statistically stable, Ithought that with appropriate payment methodologies, theycould be used as a measure of resource use for patient care, andtherefore for costing such care. Joanne, Dave Wager and I spent

A Tribute toJoanne E. Finley, M.D., M.P.H.

continued on page 18

NJ Commissioner of Health1974 – 1982

November/December 2 0 0 8

18 Focus

many hours talking through whether it was a good idea, andJoanne decided that we should apply for one of the grants fromthe Bureau of Health Services in the Social SecurityAdministration (which was running Medicare at the time) tosee if we could fund an experimental payment methodologybased on the DRGs. The rest is history, thanks to the devotedefforts of a large number folk who worked on the project afterwe obtained the grant, headed by Michael Kalison, who devel-oped the details for the system over the next several years.

What may be less well known is that was only one small aspectof Joanne’s interest in developing systematic approaches to pub-lic heath in the State. Not only was she an enthusiastic support-er of population-based health planning, long banished from thescene but a useful way of identifying the needs of potentialpatients (and appropriate wellness programs), but she was a greatadvocate of implementing health planning through the certificateof need program. As with many things, she experienced ups anddowns in her efforts to implement certificate of need, the mostnotable down being her failure to impose it on physician-basedfacilities, and her most notable success being the approval of cer-tificates of need before a hospital could close or move its location.She was a devoted advocate for underserved populations, and herefforts to keep hospitals in underserved areas using CON werenotable. She also succeeded in closing the first hospital inMorristown, New Jersey as a result of months of negotiations.

On the more traditional public health side, Joanne wasinterested in bringing to bear the tools of health planning andresource allocation to the public health care programs. Forexample, she wanted to see health planning methods used tointegrate etymological studies with public health programs,including vital statistics.

While Joanne is probably best remembered for her innova-tive work in introducing DRGs as a payment methodology,the breadth of her interest in changing the way all publichealth services were provided was truly astounding. She wasone of the smartest people I have ever met, and beneath asomewhat acerbic exterior, she had a heart of gold.

John B. Reiss, Ph.D. JDPartner, Saul Ewing LLP

Dr. Finley achieved national notoriety for New Jerseywhen she heard of the work of two Yale professors, RobertBarclay Fetter and John Devereaux Thompson whom shebrought to New Jersey to introduce their revolutionary con-cept of paying for health care by diagnosis type (DiagnosticRelated Groups or “DRGs”). Dr. Finley’s interest became theimpetus for the Federal TEFRA law (Tax Equity and FiscalResponsibility Act) and resulted in the first application of

such a DRG system to all payers in our state (Chapter 83).Under Dr. Finley’s leadership, New Jersey became a “labora-tory of democracy” that tested the DRG experiment and itssuccess led to its adoption nationally in the federal Medicareprogram where it survives to this day.

This did not make her a popular Commissioner - changeis always difficult - but her actions were indeed transforma-tional, resulted in a stable hospital financial climate and,viewed in the context of our current hospital fiscal crises, per-haps a wiser course.

I served as Deputy Commissioner of Health from 1987 -1990 and was responsible for administering the DRG systemin New Jersey during its heyday. I had a front row seat towatch New Jersey’s DRG system lead to the adoption of thecritical premise that no New Jerseyan should be denied acutecare based upon their ability to pay for that care and theimplementation (under Dr. Rick Goldstein’s and Dr. MollyCoye’s administration) of New Jersey’s Uncompensated CareTrust Fund - the harbinger of today’s Charity Care program.

Although we no longer use DRGs for all payers in NewJersey, without Dr. Finley’s foresight and hard work, thereforms we are considering today to provide universal accessto health care for all New Jersey citizens would be elusive andwell beyond our reach. If we are successful, Dr. Finley’s visionwill deserve a significant part of the credit.

Dave KnowltonPresident & CEO, New Jersey Health Care Quality Institute

When Governor Byrne appointed Dr. Finley to serve as hisCommissioner of Health, this Philadelphia pediatrician leftIndependence Blue Cross to take on the unenviable task ofimplementing the 1971 health care reform act which had beenenacted during Governor Cahill’s term. Dr. Finley not onlycomplied by implementing SHARE to set 1974 payment ratesfor Blue Cross and Medicaid, she also had the vision to inviteJohn Thompson and his Yale colleagues to discuss a whole newconcept of paying by the case for particular diseases. ProfessorThompson convinced us that “If General Motors can cost outcars, hospitals can cost out patients.” That hypothesis becamethe basis for a Medicare waiver that resulted in New Jerseyimplementing all-payor DRGs beginning in 1979. I rememberit well – I had just been promoted to manager at Haskins &Sells (now Deloitte) and was assigned to the DoH as ProjectManager where I spent 1974-77 in Trenton responsible for thedesign and implementation of SHARE and the conceptualdesign of the all-payor DRG system. While Dr. Finley could beheadstrong and abrupt, and had an adversarial relationship

continued from page 17

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Focus 19

with Jack Owen and NJHA, her role in New Jersey was indeedtransformational. Indeed, Medicare’s subsequent adoption ofDRGs as the basis for its Prospective Payment System trans-formed hospital payments nationwide.

To give you some idea of how times have changed, I alwaysdreaded meetings with her, not because she could be stubbornand hard headed, but because she chain smoked filtered Kools –in her office. The longer the meeting, the thicker the blue haze.

John DaltonSenior Advisor, BESLER Consulting

We have all experienced times in our lives that when you arein “it” you don’t really know the significance of “it” until manyyears later. This was my experience with Joanne Finley. I was22 years old – just out of college and starting my graduatestudies in Economics. I was hired at the NJ Department ofHealth as a project staff person for a demonstration project todevelop a prospective payment system based on case mix. Wenow all know that this was the springboard for Medicare’sIPPS. We certainly did not know that at the time, but JoanneFinley did. She had the vision and surrounded herself by thetalent – Dave Wagner, John Reiss, Mike Kalison and laterBruce Vladeck – to make it happen. Since this was my firstprofessional experience, I did not realize how unusual all thiswas. It was 1977 – healthcare was still very male dominatedand I was given the opportunity to work for a professionalwoman that would show me that anything was possible if youwere passionate about your work and stayed focused on thegoal. I valued Joanne as my mentor and am grateful for theconfidence she had in me. She has no doubt left her mark inhealth policy, but she also has influenced so many of us in ourchosen careers. She will be greatly missed.

Jo SurpinPresident, Strategic Health Alliance, LLC

I think we all appreciate the enormity of the task that Dr.Finley faced in bringing an experimental case rate system toNew Jersey and using it as the basis for hospital reimburse-ment in the state and ultimately nationally. What may get lostin a review of her achievements is the fact that in pursuing an“all payer” system that included uncompensated care as partof the financial elements of a hospital, Dr. Finley was able toavoid New Jersey developing a two tiered system of hospitalcare-one for the rich and one for the poor. “Equal access tohigh quality care regardless of payer source” was a key element

of Dr. Finley’s agenda and one that she arguably achieved dur-ing her tenure.

Paul R. Langevin, Jr.President, Health Care Association of New Jersey

Joanne Finley was an extraordinary visionary who caremost about seeing to it that everyone had access to the high-est-quality medical care possible. Her public persona neveradequately reflected her wisdom, her compassion, her empa-thy, or her considerable wit. She could be difficult to work for,but we knew how desperately she cared.

Bruce C. Vladeck, Ph.D.Senior Health Policy Advisor/Executive Director,Health Sciences Advisory ServicesErnst & Young LLP

Shortly after she appeared for me as a witness in a rate caseinvolving Blue Cross, Dr. Finley sent along her application fora Medicare demonstration of "payment by the case", andasked me to consider heading up the team that would developthis system. Dr. Finley, who had been a student at Yale, recog-nized the significance of an academic idea (that had enjoyedlimited application in the area of utilization review). She want-ed to transform DRGs into a payment system that wouldfunction in the real world. To accomplish this, she placed herconfidence in a number of people, from the team of skilledsenior administrators who overcame political obstacles, to thetalented young people that I had the privilege of working withon the methodology. All of these individuals made importantcontributions to the success of this venture. Indeed, one ofDr. Finley's talents was her ability to attract individuals withthe skill sets necessary to bring her ambitious idea to life. Andall of these people shared something in common: excitementover the basic idea, and the opportunity to be part of impor-tant change. Indeed, DRGs became the fundamental buildingblock of a new language for the health care industry. But forall of these contributions (including my own), she must getthe credit for seeing the vision, and for the fundamental act ofwill: Before Joanne Finley, hospitals were reimbursed for theircosts by the day; after Joanne Finley, IPPS.

Mike KalisonPartner: Kalison, McBride, Jackson and Murphy, P.C.Chairman, Applied Medical Software, Inc.

A special note of thanks to Commissioner Heather Howard forher assistance and support in the collection of information forthis tribute.

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20 Focus

CHAIRMAN/EMAIL/ CO-CHAIR/EMAIL/ SCHEDULED MEETING LOCATION BOARDCOMMITTEE PHONE PHONE DATES/TIMES LIAISON

Jeff Noonan Maria Facciponti First Tuesday of the Month Mike AlwellCertification jnoonan@md-x.com mfacciponti@armds.com 9:00 AM Conference Calls mike.alwell@atlantichealth.org

201-786-6015 973-614-9100 Attendee Code: 8412570 973-656-6949

CARE (Compliance, Audit, Tom Flynn Nancy Graham First Thursday of the Month conf. calls mostly Tony OrlandoRisk, & Ethics) tflynn@humed.com ngraham@beslerconsulting.com 9:00 AM Saul Ewing Office, Princeton anthony.orlando@ehmc.com

201-996-5611 732-392-8243 Attendee Code: 7165283 for face to face meetings 201-894-3280

Sue Bonfield John Reiss First Friday of each month Caitlin ZullaEducation bonfields@deborah.org jreiss@saul.com 9:00 AM Saul Ewing Offices czulla@md-x.com

609-893-1200 x5580 215-972-7124 Attendee Code: 7719071 in Princeton 201-444-9900

Tony Consoli Jeff Weinstein Third Tuesday of each Month Mary CroninEvents & Networking anthony.f.consoli@marsh.com jlw717@aol.com 5:30 PM Woodbridge Hilton mcronin@beslerconsulting.com

973-401-5223 908-806-8222 Attendee Code: 7090412 732-839-1217

FACT (Finance, Julius Green Tony Panico First Wednesday of each Month To alternate between in Mike RichettiAccounting, Capital jgreen@parentenet.com apanico@withum.com 8:30 AM person and conf. calls; michael_richetti@chiltonmemorial.org& Taxes) 215-972-2352 973-898-9494 x430 Attendee Code: 2916514 locations TBD 973-831-5202

Tracy Davison DiCanto John Brault First Tuesday of each Month Joe DoboshInstitute 2008 tdavison-dicanto@princetonhcs.org john.brault@ehmc.com 9:00 AM Conference Calls jdobosh@childrens-specialized.org

609-430-7796 201-894-3099 Attendee Code: 3322355 908-301-5455

Bill Schweber Fourth Friday of each month Lindsey ColomboMaterials/Procurement bschweber@ptcmedsol.com 9:30 AM New Jersey Hospital lcolombo@rbmc.org

917-523-7079 Attendee Code: 3427858 Association 732-324-6031

Membership Services/ Deborah Shapiro Rosemary Nuzzo Third Wednesday of each Month Dennis HancockDirectory dshapiro@wfs-services.com rosemary.nuzzo@atlanticare.org 9:00 AM Conference Calls dhancock@njhcffa.com

201-617-7100 609-383-2114 Attendee Code: 6752870 609-292-8585

Oliver Arcilla Eileen Smith Second Thursday of each Month New Jersey Hospital Marilyn KoczanPatient Access Services oarcilla@childrens-specialized.org ESmith@meridianhealth.com, 9:30 AM Association mkoczan@meridianhealth.com

908-301-5518 732-530-2564 Attendee Code: 5084608 Board Room 732-897-7126

Laurie Grey Lisa Schaaf Second Friday of each Month New Jersey Hospital Lindsey ColomboPatient Financial Services lgrey@princetonhcs.org lschaaf@certifiedcollection.com 10:00 AM Association lcolombo@rbmc.org

609-620-8383 800-220-9300, ext. 116 Attendee Code: 7182515 Board Room 732-324-6031

John Manzi Mike Alwell Joe DoboshPolicies & Procedures jmanzi@ima-consulting.com mike.alwell@atlantichealth.org jdobosh@childrens-specialized.org

484-832-0044 973-656-6949 908-301-5455

Kevin Pleasant Dan Willis Second Thursday of each Month St. Peter's Univ. Hospital Dave WiesselProaction kpleasant@accurohealth.com dwillis6@optonline.net 9:00 AM Finance Dept., 1st floor conf. room david.wiessel@ey.com

732-383-4994 908-301-5458 Attendee Code: 6104186 950 Hamilton Street 732-516-4520

Elizabeth Litten Al Rottkamp First Thursday of each month Fox Rothschild John ManziPublications ELitten@foxrothschild.com ajcr123@aol.com 9:15 AM 997 Lenox Dr. Bldg 3 jmanzi@ima-consulting.com

609-896-3600 609-584-6508 Attendee Code: 4172885 Lawrenceville, NJ 484-832-0044

•Who’s Who in NJ Chapter Committees•2008-2009 Chapter Committees and Scheduled Meeting Dates

For more information on our committees, including each committees’ goals and objectives, please visit our website at www.hfmanj.org.NOTE: Committees have use of the NJ HFMA Conference Call line. The call in number is (866) 459-4772.

If the committee uses the conference call line, their respective attendee codes are listed with the meeting date information below.

November/December 2 0 0 8

Focus 21

Part 1: When You Have to Do ItMost discussions about downsizing focus on the legal, eco-

nomic, or psychological issues raised by this practice. These areessential concerns, but we rarely consider how or why downsiz-ing is also an ethical issue. The next two columns are anattempt to redress that problem. Here, we'll consider your eth-ical responsibilities if you are the one charged with giving thebad news. In the second column, we'll look at what you oughtand ought not to do if you are the one being downsized.

WHAT'S IN A NAME?Downsizing refers to a company's decision to reduce its

workforce for reasons other than poor performance, criminalconduct, or unethical behavior on the part of those being letgo. The word is a euphemism meant to soften the blow asmuch for the company as much as it is for the soon-to-beeliminated. There is nothing wrong with making a difficulttask easier to bear. In fact, there are good ethical reasons fordoing so, as we'll soon see. Still, there is no getting around thefact that downsizing is a type of layoff, with all that thisimplies. The ethical manager will keep in mind what is reallygoing when he or she is charged with letting good people go.

WHY DOWNSIZING IS AN ETHICAL ISSUEAnytime we’re faced with a decision that can affect the rights

or well-being of others, we're looking at an ethical issue. Nomatter how strong the justifications for reducing the workforceare or seem to be, laying off loyal and productive employees isan upsetting experience for all concerned, and those on thereceiving end face not just financial but psychological injury.

How so? For many of us, the workplace isn't just a placefor work; it's where we develop and maintain some of themost important relationships we have. During the week, wespend more time with co-workers than with our families, andfor better or worse, work is how many of us define ourselvesand give meaning to our lives. Getting laid off compromisesall of these things, so managers should think of downsizing asa deep and painful trauma for those being let go, and not as amere set-back or reversal of fortune.

Yes, downsizing has legal implications, and it is understand-able that companies want to minimize their liability when theydownsize. Yes, there are economic matters to consider, which

makes downsizing a managementissue, too. But at its core, downsizing is an ethical issue, andthe good manager is concerned not just with protecting thecompany's financial and legal interests but with honoring thedignity and integrity of the human beings who work on thefront lines and who are the lifeblood of the organization.

DOING IT THE RIGHT WAYI propose the following management guidelines for down-

sizing ethically:

1. DO IT IN PERSON.This seems obvious thing to do, but I'm surprised by the

number of reports I've heard about employees who weredownsized on the phone or by e-mail. Managers who use thismethod claim it makes the whole thing it easier to deal with.Yes...but for whom? Certainly not for the employee being letgo. As uncomfortable as it is to end someone’s employment,the right thing to do is to have a private conversation with himor her in person. The ethical principle of respect for othersrequires nothing less.

2. DO IT PRIVATELY.Respecting others means honoring their wishes and values,

and it is reasonable to assume that most people would preferto have troubling news delivered in private. This means inyour office, with the door closed. I've heard of managers whobroke the bad news at the employee's cubicle within earshotof everyone in the vicinity. Again, one would think that thiswould be a matter of common sense and common decency,but apparently neither is all that common.

3. GIVE THE PERSON YOUR FULL ATTENTION.Interrupting the conversation to take phone calls, check your

BlackBerry, or engage in other distractions isn't just rude. It tellsthe other person that the matter at hand isn't all that importantto you and is yet another violation of the principle of respect.The impulse to turn your attention to less troubling matters isunderstandable, but along with the privileges of being a manag-er come responsibilities, and downsizing with integrity is one ofthe most important obligations you have.

•Focus on Ethics•

Ask the Ethics Guy®!Downsizing 101

by Bruce Weinstein, Ph.D., The Ethics Guy®

Bruce Weinstein

continued on page 22

November/December 2 0 0 8

22 Focus

4. BE HONEST, BUT NOT BRUTALLY SO.Must you always tell the truth, the whole truth, and noth-

ing but the truth? Yes, if you're giving sworn testimony in acourt of law, but beyond the courtroom the duty to tell thetruth is constrained by the duty to minimize harm. In practi-cal terms, this means being forthright with the employee butalso choosing with the care the words, tone of voice, anddemeanor you use. Compassion – literally,"suffering with'

someone–honors the dignity of your employee and speaks tothe better part of your nature.

We can't always make things better, but we shouldn’t makethings worse.

5. DON’T RUSH.A shock takes time to absorb. Imagine that your physician

tells you that you have a serious illness. Wouldn't you expecthim or her to allow the news sink in, rather than to summarily

dismiss you and call for the next patient?Being let go isn't as serious as getting a diag-nosis of cancer or heart disease, but it is still amajor, life-changing event. You owe youremployee the space to absorb the informa-tion, and you may have to explain more thanonce what is happening and why. You woulddemand nothing less if it were happening toyou, and you would be right to do so.

YOU VS. THE COMPANYThese guidelines assume that the organi-

zation has good reasons for downsizing--butwhat if you don't see things this way? Forexample, suppose your company believes thatit is necessary to shift its customer servicejobs overseas, and you believe that doing so isboth unethical and bad for business. In thiscase, you not only have a right to object; youhave an ethical obligation to object.

Does this mean that you should be pre-pared to give up your job on moral grounds?Not necessarily. Depending on your person-al circumstances, your duties to your familyor to yourself might justifiably override thevalue of making a statement by quitting.Even if you are committed to keeping asmany jobs in the U.S. as possible, this goalwill take time to achieve, and it may be eas-ier to do so from within the company thanfrom the outside.

The bottom line is important, but so arethe values of respect, compassion, and sim-ple human decency. The good managertakes all of these into account—always.

About the AuthorDr. Bruce Weinstein, The Ethics Guy, is a cor-porate ethics trainer and writes the ethics col-umn for BusinessWeek.com. He appears regular-ly on CNN. For more information, visitTheEthicsGuy.com.

continued from page 21

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Focus 23

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FOCUS: How did you get started? What is your education-al and professional background?

RICH: I graduated from Bryant College (now known asBryant University) with a BS in Accounting. I have workedin the healthcare industry my entire career starting with theState of New York performing Medicaid Audits. After com-pleting the CPA exam, I worked for Ernst & Whinney(Newark, NJ) on their Healthcare audit team. I was recruitedby Solaris Health System (formerly JFK Health System) in1986, and have spent the past 22 years working for Solaris.

FOCUS: Did you ever think all those years ago, that youwould be here, doing this today?

RICH: I knew I wanted to be in the accounting field, but Inever envisioned being in the Healthcare industry. Ernst &Whinney’s healthcare practice consisted of small number ofaudit clients in the early 1980’s, so most of us just starting outin public accounting were not eager to be assigned to Health-care. The firm’s goal was to be a major audit firm in NJ, so Iknew resources would be dedicated to building the healthcarepractice. E&W started recruiting Senior Executives from otheraccounting firms, which lead to significant growth of thehealthcare practice. It was exciting to be part of this growth, soI committed to being in healthcare full time, which eventual-ly lead to the opportunity at Solaris.

FOCUS:What new skills do you think are needed for risingCFOs?

RICH: The healthcare industry today requires today’s CFOto have skills and involvement in areas broader than the tra-ditional financial skills. I believe that financial executives needto learn the specifics of the healthcare industry, and under-stand what drives the value in this business. The changinglandscape requires the balance of maintaining financial goalswith the need to ensure resources are available to fulfill themission for the long term. CFOs need to embrace the com-mitment to quality/safety as transparency and consumerismcontinue to increase. The CFO must help senior managementin clinical operations accomplish their operating imperativeswithin the constraints of the financial pressures facing theorganization.

FOCUS: What are youhospital specifics–part of asystem? Describe your loca-tion, demographics andservices of your hospital

RICH: Solaris HealthSystem, located in Edison isa $500 million organization that consists of JFK MedicalCenter with 399 acute care beds and 94 rehabilitation beds,four Long-Term Care facilities (totaling 692 beds) and ShoreRehabilitation Institute (40-bed facility in Brick, NJ) which isjointly owned with Meridian Health System. MuhlenbergRegional Medical Center in Plainfield, closed as an acute carefacility in August 2008, but a Satellite Emergency Department(SED), Outpatient Services, Home Health Care, and theSchools of Nursing and Medical Imaging remain on the cam-pus. The hospital provides a full range of acute care services andis known for the NJ Neuroscience Institute, Hospice services,Bariatric services and rehabilitation’s Center for Head Injuries.

FOCUS: Can you tell us about your hospital's a)turnaround,B) new building, C) new infrastructure, d) new proceduresoffered?

RICH: Solaris has recently completed the process of closingMuhlenberg as an acute care provider, and we are now in theprocess of transitioning JFK to becoming more of a RegionalMedical Center, taking care of the Edison and Plainfield com-munities. While all inpatient services will be provided at JFK inEdison, the Plainfield campus will continue to operate the SEDand an Outpatient Ambulatory Care Center. The School ofNursing and Radiology recently moved into a new facility oncampus which now offers housing for students attending theschool. JFK is beginning the building process on the Edisoncampus of expanding the Emergency Department, inpatientunit (40 beds) as well as outpatient services (cardiac services).

FOCUS: What types of financing are utilized to meet thehospital's goals?

RICH: The System has recently utilized the Variable RateComp Program issued through the New Jersey Health CareFacility Financing Authority (NJHCFFA) for capital expansion

CFO Member Spotlight:Rich Smith, Solaris Health System

Rich Smith

November/December 2 0 0 8

Focus 25

FOCUS:Mike – please provide us with a short bio on your-self.

MIKE: I started my career in healthcare in 1984 when I washired as a phlebotomist at Morristown Memorial Hospital.After a couple of years in the lab, I moved from the clinical sideof healthcare to the business side, accepting an entry level posi-tion in the budget office. Over the years, I advanced throughthe ranks of the finance department where I held positions inbudget & reimbursement, cost accounting, and managed carecontracting. With the creation of Atlantic Health System in1996, I moved into the position of Director of Finance atMorristown Memorial. In 2000, I was promoted to the corpo-rate position of Director of Financial Compliance with respon-sibilities at all Atlantic Health facilities.

I am a member of the Morris County Chamber of Com-merce Government Affairs Committee, and NJHA’s CorporateCompliance Constituency Group.

Since joining the NJ Chapter of HFMA in 1995, I’ve servedon or chaired a number of committees and sub-committees andobtained the FHFMA designation.

I have an undergraduate degree in Finance from WilliamPaterson College and a Masters in Public Administration fromFairleigh Dickinson University. I live in Whippany, NJ with mywife and two children.

FOCUS: Mike, please talkabout your employer and yourduties there.

MIKE: Atlantic Health is thecorporate parent of Morristown Memorial Hospital andOverlook Hospital.

Morristown Memorial Hospital, a 551 bed acute care majorteaching hospital located in Morristown, NJ, performs the sec-ond most heart surgeries in the New York metropolitan area.Overlook Hospital a 504 bed teaching hospital in Summit, NJ,is the regional leader in comprehensive stroke care and neuro-sciences, and was the first hospital in the Northeast to offerCyberKnife treatment.

Along with a 78-bed comprehensive rehabilitation and skillednursing facility, the Atlantic Health hospitals offer specialties inpediatrics, orthopedics, cancer care, rehabilitation medicine,women's health, cardiovascular care and neuroscience.

As the system’s Director of Financial Compliance and mem-ber of the Corporate Compliance Management Committee, myultimate responsibility is to ensure that our billing and codingpractices are compliant with Medicare and Medicaid regula-tions. Over the past couple of years I have had to develop poli-cies and procedures and educational programs related to the

Member Spotlight:Michael Alwell, FHFMA

by James Yarsinsky, CPAM

Michael Alwell

projects; this program was utilized twice over the past five years.We also completed interest rate swap transactions (fixed payand total return swaps) to take advantage of interest rates and toreduce our debt service. For real estate transactions, traditionalback financings have been utilized. The system is in the processof issuing bonds through the Hospital Asset TransformationProgram (HATP), which will finance the Capital Expansion onthe Edison and Plainfield campuses as well as refinance theexisting outstanding debt of JFK and Muhlenberg.

FOCUS: What are your spare time activities?

RICH: I have coached basketball and baseball for my chil-dren for the past 11 years, but my coaching career ended thispast summer. I enjoy playing basketball, softball and golf,

which I hope to start playing on a more regular basis. In thesummer I enjoy relaxing down the shore or by the pool.FOCUS: What are your professional memberships?

RICH: I am a member of HFMA and the State Society ofCPA’s for both NJ and NY.

FOCUS: You have 30 minutes to pack-you are going to asparsely populated island. What would you bring besidesfood, clothes, hygiene products, etc?

RICH: While I do enjoy skiing, a warm beach side resort ispreferable. With my wife Josephine by my side, my three chil-dren (not sure they would be willing to go along), golf clubs,plenty of nice cigars, and Coronas are all I would need.

continued on page 26

November/December 2 0 0 8

26 Focus

proper use of ABNs and outpatient observation services. Torespond to the introduction of MS-DRGs, last year I imple-mented a system-wide physician documentation improvementprogram. I am now in the process of meeting with the variousphysician groups to report on the successes of the program andto educate the medical staff on Medicare’s Present on Admissiondocumentation requirements. I am also responsible for the over-sight of the Medical Records departments at both sites, and haverecently taken on the responsibility of managing a two year proj-ect aimed at decreasing length of stay at one of Atlantic’s acutecare facilities.

FOCUS: Please name a few of the special challenges you facein your position.

MIKE: For me, every day brings something new. One of thebiggest challenges that I actually enjoy is to be able to stay on topof the ever changing Medicare regulations and developing waysto explain those changes to different audiences. I may findmyself having to address observation issues with case managersin the morning, then presenting the implications of POA to theMedical Executive Committee that evening. The next day I maybe talking about the billing and coding of specialty braces withrehab managers then speaking about MS-DRGs at a hospitalAdvisory Board meeting. Throw in a few phone calls from thebusiness office or a clinical department asking about CCI, LCD,or NCD edits or chargemaster issues on top of that and I’d say Ihad a good day.

FOCUS: What advice can you give other professionals thatare interested in entering your line of work?

MIKE: The one suggestion that I can give to anyone interestedin entering healthcare finance and compliance is to stay abreastof current trends and regulatory changes in the industry. Therules of today will most certainly be different a year of two fromnow. It is extremely important to keep current through newslet-ters, websites, journals, and networking within the industry.

FOCUS:What are your hobbies and outside interests?

MIKE: In my spare time??!I’ve been telling myself for a long time that I want to start a

regular exercise program, but I haven’t taken the idea beyondwalking the dog in the morning.

I have been doing community service since I was 15 years oldwhen I joined a local first aid squad. While I don’t get up at 2:00am any more for first aid calls, I still believe that keeping activein the community is very important. Today I serve as a memberof the Hanover Township Public Schools Board of Education.

Most weekends you will find me shuttling my childrenbetween soccer games, or other activities if I’m not mowing thelawn or working on a home improvement project.

FOCUS: Thank you for taking the time out of your busyschedule to be interviewed for this edition of MemberSpotlight.

MIKE:Thank you for thinking of me, Jim.

About the AuthorJim Yarsinsky, CPAM, is president of Expeditive, a BESLERaffiliated company. He can be reached at jyarsinsky@expeditive.com.

continued from page 25

Don’t forget to check

our website often

for the latest news

and information:

www.hfmanj.org

Wishing you and your familiesall the best

this Holiday season and in 2009!

The NJ HFMA Publications andHermitage Press Teams

November/December 2 0 0 8

Focus 27

New MembersAlina MoranNYC Health & Hosp. Corp.Senior Director(212) 788-3688alina.moran@nychhc.org

Doris DonnerstagShore Memorial HospitalFinancial Analyst(609) 653-3810ddonnerstag@shorememorial.org

Karen Van DexterShore Memorial HospitalSystems Procedure Analyst(609) 653-3256kvandexter@shorememorial.org

Jeremy ArnoldErnst & Young LLPAudit Manager(212) 773-5486jeremy.arnold@ey.com

Johanna LeeCooper University HospitalMgr Product Support(856) 382-6565lee-johanna@cooperhealth.edu

David TeichmanEnglewood Hospital & Medical CenterInternal Auditor(201) 894-3559david.teichman@ehmc.com

Joseph R. ZazzeraA.M. Best CompanyManaging Senior Financial Analyst(908) 439-2200joezazz1@verizon.net

Kim KarasiewiczDeloitte Financial Advisory Services LLPManager(212) 436-7545kimk734@comcast.net

Christopher F. KellyBesler ConsultingDirector, Business Development(732) 839-3888cfkelly@beslerconsulting.com

Joseph DiRienzoAetna Of Northern New Jerse