From: Becker Scott <>
Subject: [Becker's ASC E-Newsletter] Subprime Mortgage Crisis Fallout May Impact Hospitals; N.J. Senate to Consider ASC Physician-Self-Referral Amendment; Heparin Sodium Injection, Heparin and Saline Flushes Under Recall


January 28, 2008
In This Issue
Suprime Mortgage Crisis Fallout May Impact Hospitals
N.J. Senate to Consider ASC Physician-Self-Referral Amendment
News and Notes
Companies to Watch
March/April 2008 issue
Subprime Mortgage Crisis Fallout May Impact Hospitals

James Unland, President of the Chicago-based Health Capital Group, urged hospitals' top managements and boards last week to take a hard look at their existing debt instruments, their obligations and their capital and debt planning in light of recent capital market developments. Mr. Unland further urged hospitals to immediately reassess existing debt structures and capital financing plans.

Problems with some major banks and bond insurers have already affected the hospital bond markets and are expected to do so for some time to come, resulting in both debt pricing and access to capital challenges for many hospitals. Numerous hospitals have used one form or another of variable rate and/or interim bond financing, including tax-exempt short and medium maturity paper of one kind or another, often backed up by bank letters of credit, bond insurance or both. Bond insurance has also backed some longer term hospital debt.

"The Feds' lowering of a key interest rate this week and moves by Congress and the president are not going to remove some fundamental and very serious problems in the financial sector, problems resulting from billions of dollars of essentially unsound home mortgage loans that were then repackaged and sold as securities with inadequate due diligence by some key market gatekeepers," says Mr. Unland. "Some people, including myself, believe that much of the federal government's action is more along the lines of 'feel good' political moves than truly corrective of the underlying dysfunctions and could, in fact, backfire in the form of markedly higher inflation down the road."

He further advises that hospitals take the long view.

"My message to hospitals: Be objective, seek a wide range of advice, and think longer term. Don't be afraid to consider more conservative financing mechanisms such as fixed rate term debt even though exotic variable rate instruments have been the rage," adds Mr. Unland. "The ability of hospitals to budget dependably amidst what I believe to be strong medium and longer term inflationary pressures is a benefit that needs to be taken into account both with respect to a hospital's existing capital structure and with respect to its future capital planning."

For more information, e-mail James Unland or call him at 800-423-5157.

Spring Group 2nd/4th through July
N.J. Senate to Consider ASC Physician-Self-Referral Amendment

A bill that would permit physicians to refer patients to certain ambulatory facilities in which they have financial interest has been introduced to the New Jersey Senate.

Currently, practitioners are not allowed to refer patients to entities in which they or their immediate family members have a financial interest, unless they disclose that interest in writing to the patient and post a copy of this disclosure form in a "conspicuous place" in their offices. Until a recent court case, this was not interpreted as applying to ASCs. The new bill would establish that restrictions on referral of patients do not apply to

a health care service provided at an ambulatory surgical facility licensed by the Department of Health and Senior Services on the effective date of P.L. , c. (C. )(pending before the Legislature as this bill) to provide ambulatory surgery, if the physician who provided the referral also performs the surgery and the physician's remuneration as an owner of or investor in the facility is not related to the volume of patients the physician refers to the facility.

The state Board of Medical Examiners had previously proposed an emergency amendment on physician ownership, after an interesting case related to the Codey Act. This bill provides great problems for the future of new ASCs in New Jersey, and ought to be a wake-up call for ASCs nationally. To join the ASC Association, please call (703) 836-8808.

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News and Notes

Heparin sodium injection, heparin and saline flushes under recall. The FDA is working with Baxter Healthcare and AM2 PAT to recall the manufacturers' heparin sodium injection and heparin and saline flushes, respectively.

Baxter Healthcare and FDA notified healthcare professionals of a voluntary recall of certain lots of Heparin as a precaution due to an increase in reports of adverse patient reactions associated with these lots. Baxter is in the process of an in-depth investigation to determine the root cause of the reported reactions, which include abdominal pain, decreased blood pressure, burning sensation, chest pain, diarrhea, dizziness, drug ineffectiveness, dyspepsia, dyspnea, erythema, flushing, headache, hyperhidrosis, hypoesthesia, hypotension, increased lacrimation, loss of consciousness, malaise, nausea, pallor, palpitations, paresthesia, pharyngeal edema, restlessness, vomiting/retching, stomach discomfort, tachycardia, thirst, trismus, and unresponsiveness to stimuli. There have been no reports involving fatality. See the recall notice for a list of affected lots.

AM2 PAT notified healthcare professionals and patients of a nationwide recall of all lots of both heparin and saline pre-filled flushes, which are distributed under two brand names. The products are sold in 3ml and 5ml sizes for heparin, and 3ml, 5ml and 10ml sizes for normal saline. One lot of Heparin IV flush syringes (1003-02, Lot 070926H) was contaminated with Sierratia marcescens, which has resulted in patient infections. This type of bacterial infection could present a serious adverse health consequence that could lead to life-threatening injuries and death. User facilities and consumers should stop using the product immediately, quarantine remaining inventory, and return the product to their respective distributor. Go here to read the complete 2008 MedWatch Safety Summary, including a link to the manufacturer's recall notice regarding this issue.

Marshall Erdman to be acquired for $247 million. Cogdell Spencer, a Charlotte, N.C.-based real estate investment trust, announced last week it would acquire Marshall Erdman and Associates, a national design-build firm that specializes in the advance planning, designing, and building of healthcare facilities, for $247 million. The transaction, which will create a national integrated healthcare real estate company with nearly 700 employees and combined 2007 revenue of approximately $360 million, is expected to close by the end of February, according to a statement issued by Erdman.

"Erdman was seeking a strategic partner in healthcare real estate and selected Cogdell Spencer, a pioneer in healthcare development, physician ownership, and asset and property management," says Scott Ransom, the president and CEO of Erdman. "In partnering with Cogdell Spencer, we have positioned the company for continued growth through expansion of services and strengthening of client relationships."

By integrating Erdman's platform with Cogdell Spencer's extensive portfolio management, the company will offer the full range of healthcare real estate services to an expanded client base that includes healthcare systems, physician tenants and practice groups. Mr. Ransom will continue to lead Erdman. Management will remain unchanged in both companies.

Jan./Feb. issue now online! The Jan./Feb. issue of the Becker's ASC Review is now online at

The March/April ad deadline closes in 10 days. The issue has a terrific internal pull-out section focused on establishing an ASC and terrific articles on GI endoscopy, and on orthopedics and spine. We are investing more and more in outstanding outside writers to ensure we provide the best information in the ASC business. In addition, we are delighted to add Facility Development and Management as an advertiser, as well as Marshall Erdman and Associates. Thank you. For information on advertising in the March/April issue, e-mail Jessica Cole, e-mail Dan Bragaw or Ryan Kiernan.

Welcome, new Web advertisers. We are very thankful to our first five advertisers on our new Web site -- visit to see the improvements. The advertisers include Meridian Surgical Partners and Orion Medical Services, two outstanding management and development companies, each with different focuses; Provation Medical, a great software and services company; National Medical Billing Services, a well-established billing company; and The Spring Group, a search firm and a recent addition to the e-newsletter advertisers. As the advertisers don't pay on a per-click basis, please click as much as you want and don't be concerned regarding the potential for doing so costing them more money.

Sales position. ASC Communications is seeking a super-smart, achievement-oriented sales person with two to four years' experience in advertising sales to help directly drive and handle efforts to sell electronic advertising and to assist with print and exhibit sales. The candidate must be very smart, desire to grow and excel, and have outstanding integrity and discipline. This is a full-time position. The ideal person will have worked directly selling advertisements for at least two to four years, and is looking to take the next step in professional growth and accomplishment. Preferably the candidate will be in the Chicago area. Please e-mail Scott Becker to apply of if you know of a strong candidate.

ASC Society
Companies to Watch

We are delighted to highlight the following companies in this week's E-Weekly.

B. Braun. For 150 years, B. Braun has developed a rich heritage of knowledge and expertise for delivering innovative healthcare products, medical devices and programs designed to improve both patient and health-professional safety.

From a small-town apothecary founded in Germany in 1839, B. Braun has grown into a global organization with over 30,000 professionals worldwide -- and remains committed to translating customer needs into products with unmatched quality, cost-effectiveness, environmental responsibility and superior technology and safety. Using its Sharing Expertise initiative as a driving philosophy, B. Braun collaborates with customers, partners and employees to develop innovative products, services and education programs.

CareCredit: Patient Payment Plans. CareCredit lets your patients pay their current bills in full immediately with the use of convenient monthly payments. Your center gets paid in two business days with no responsibility if the patient delays or defaults. This reduces risk and costs of carrying accounts receivable, increases cash flow, and eliminates outsourcing and resultant fees to outside billing and collection agencies. That's why more and more ASCs are offering CareCredit interest-free and low-interest extended patient payment plans. A division of GE, CareCredit is the nation's leading patient payment program. CareCredit is currently offered by over 80,000 practices and has been used by over 6 million patients. Don't wait for your facility fee -- get paid now and increase your cash flow with CareCredit. Call 800-300-3046, ext. 4519, or visit for more information or to get started today.

Nueterra Healthcare. Nueterra Healthcare partners with physicians and hospitals to develop and manage community hospitals, surgical hospitals, ASCs and physical therapy centers including new development, joint-ventures, acquisitions and turnarounds. Nueterra's comprehensive partnership model goes beyond turn-key services. It provides its partners with access to business management and wealth building opportunities to ensure sustained growth throughout the lifecycle of your facility and beyond. Nueterra has expanded service lines to the healthcare industry to include Nueterra Real Estate, a developer of medical and commercial real estate, and Nueterra Capital Management, a venture capital firm that expands our partner's investment opportunities. For more information e-mail Denise Mayhew, call her at 888-887-2619 or Nueterra's Web site.

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If you have any questions on any of the items listed in this letter, please contact me at (312) 750-6016 or by email at

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