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PNC Healthcare Matters
Spring 2021 Issue
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COVID-19 on the Front Lines
How the pandemic has impacted the healthcare industry
A Note From Brian Kelly, Head of PNC Healthcare
First and foremost, on behalf of PNC and PNC Healthcare, we would like to thank all of the healthcare organizations that we work with, especially their clinical staff and frontline workers, for putting themselves and their families in harm's way and fighting this pandemic head-on over this past year. We are truly impressed and grateful for the valiant effort of our healthcare workers throughout our country. Thank You!
As for 2020, we can all be thankful that it is in the rearview mirror and better days are ahead! But, as we move into 2021, we realize that last year left an indelible mark on our economy and the industry, and its impact will be felt for some time. The pandemic disrupted many aspects of our lives and forced many industries to innovate on the fly. Some of those innovations hold opportunities for healthcare organizations to evolve to meet a changing environment. A few examples of the disruption and innovation that we touch upon in this newsletter include:
- Employee financial uncertainty led organizations to explore ways to alleviate that stress, and in the process, improve productivity.
- The financial upheaval reawakened organizations to the importance of credit ratings and the ways to improve them.
- The reality of social distancing and infectious disease management drove the acceleration of adoption of technology, both for patients and the organizations providing them with services.
- The spotlight on social injustice picked up more attention, and this time action is the focus.
PNC Healthcare strives to provide insights, information and guidance on all of these topics in order to help healthcare organizations better navigate these still-unsettled times. I invite you to explore this month’s Healthcare Matters Newsletter to learn more about how COVID-19 has impacted the patient experience, how health savings accounts can benefit employees and employers alike, the steps organizations can take to improve their credit rating, and what is different this time around on diversity and inclusion.
At PNC Healthcare, maintaining a trusted relationship with you is always our primary goal. We hope you find these articles informative, timely and helpful as the healthcare landscape continues to evolve.
Healthcare Matters
Reimagining the Patient Experience in 2020 and Beyond
COVID-19 created a demand for a safe, secure patient experience. As a result, patient-facing advancements, once viewed as futuristic, are becoming the new normal.
Help Unlock the Full Financial Potential of Health Savings Accounts
As High Deductible Health Plans become more popular, knowing the opportunities provided by an HSA can help benefit employees and employers alike.
Do Credit Ratings Matter? Simply Put, Yes.
Although influenced by biases, credit ratings can and do affect healthcare organizations. See what these organizations can do to receive better ratings.
Diversity & Inclusion in Focus…Doing the Right Thing
In 2020, acts of racial injustice intensified the need for social change. Discover how and why leaders in the healthcare industry are making diversity & inclusion a top priory.
COVID-19 on the Front Lines Series
Permission to Accelerate
Third Article in Series: How Healthcare is Implementing Lessons Learned During the Pandemic
Read Article »
COVID’s Lasting Impact on Our Healthcare Systems
Fourth Article in Series: In the face of challenges, organizations can transform to survive or face being overtaken by stronger competitors.
Impact Of COVID-19 Pandemic On
Healthcare Providers and Payers
First Article in Series: What’s Happening Now and What Does the Future Hold?
How Successful Healthcare Providers
Approached the COVID-19 Crisis
Second Article in Series: What a Cross-Section of Providers Learned from the Current Crisis
Past Issues - eNews Archive
Winter 2020
Telehealth: Proving its Value in the COVID-19 World
Senior professionals from Harris Williams explore developments that make the growing telehealth industry a compelling investment.
The Benefits of Employee Financial Wellness in Healthcare
Explore how improving financial security can help you reduce workforce volatility and replacement costs, improve patient satisfaction and build a healthier bottom line.
The Case for Structured Securities
Structured securities—namely asset-backed securities (ABS) and agency mortgage-backed securities (MBS)—can help mitigate risk, stabilize income, and a lower correlation with risk assets, such as equities by optimizing a portfolio’s risk-reward profile.
Protecting Your Organization from Fraud during Business Disruption
During this stressful period, more fraud schemes are taking advantage of the news headlines to prey on natural human anxieties. Learn to recognize some of the more common and dangerous attempts and know what to do and what not to do.
Summer 2020
Do Relationships Really Matter?
A conversation with Brian Kelly reveals that PNC views a banking relationship as no different from a strong, healthy personal relationship that requires work on the part of both parties to build and grow. It’s a two-way street.
Tactics to Strengthen Your Organization in Trying Times
Reducing check use and adopting electronic payment solutions such as RTP®, ACH and mobile apps can improve your business resiliency.
Strategies for Addressing Pension Market Headwinds
A sharp decline in equity markets coupled with falling discount rates led to potential double digit declines in funded ratios for plans with sizeable equity allocations. A borrow-to-fund strategy should be analyzed as one approach to reducing overall cash expense and balance sheet volatility.
Consumers Increasingly Worried about Healthcare Costs
A recent survey by AccessOne suggests that offering flexible payment plans may benefit providers while easing patient concerns.
Spring 2020
Where is Drug Pricing Headed?
Manufacturers are thinking twice before egregiously pricing new products and/or greenlighting price increases. They know the public is watching and sentiment is important to their long-term prospects.
The Value of a Holistic Approach to Investment Management for Healthcare Providers
Demand for health services continues to rise steadily, with spending becoming an increasingly larger portion of national expenditures.
Accounts Receivable Securitization for Healthcare Organizations
Securitization is most frequently used by healthcare organizations to repay more expensive debt and more efficiently fund permanent working capital.
Video: Healthcare Solutions for Providers and Payers
Each member of our team has a singular focus on healthcare and many have walked in your shoes. Employing individuals who have experience in the industry is one way PNC demonstrates how dedicated we are to helping you meet today’s intense challenges.
Winter 2019
How Might Economic Uncertainty Affect Your Balance Sheet?
An economic downturn can have significant effects on your balance sheet. Find out how best to manage key resources in light of declining margins to maintain liquidity while investing in fundamental strategic and capital needs.
9 Top Priorities for Healthcare Systems
PNC’s Healthcare Advisory Board members listed system conversions as their top priority, representing the broad industry trend of health system consolidation. Also not surprising was continued focus on the patient experience, which healthcare providers realize is an essential component of their missions.
A Proactive Approach to Denials Management and Collections
Few, if any, healthcare organizations are free from the growing challenge of denials. However, this should not be used as an excuse to allow denials to occur. The approach should be to understand why they occur, identify root causes, and then act to do something about them.
Medicaid in a Recession
When the entire system is under pressure, hospitals and skilled nursing appear to be at most risk. Part of it is due to the perception that a diverse payer mix means that shortfalls in Medicaid can be offset elsewhere.
Summer 2019
Strategies for Innovation: PNC’s 2019 Healthcare Symposium
Executives representing the nation’s leading healthcare providers, insurers, and technology firms, key industry consultants and advisors address the future of healthcare.
Confronting Investment Management Challenges for Healthcare Organizations
Today’s challenging healthcare environment places greater demands on the investments you make to support your mission. Here are some practical tips to help you harness your resources and overcome common problems.
How to Maximize Returns on Your Physician Integration Strategy
As the industry moves towards a value-driven care delivery model, health systems and physicians are integrating to deliver an improved patient experience and ultimately improve quality and value. These strategies come with a cost but can be managed to meet the needs of all stakeholders.
Medicare for All: Could It Actually Happen This Time?
There are more than half a dozen approaches to universal healthcare being floated in Washington and the concept is becoming more attractive to voters. Ipsita Smolinski, a national healthcare policy expert with Capitol Street in Washington, D.C. weighs in.
Spring 2019
Healthcare Transparecy: A Trickle Could Become a River
Many agree that price transparency is imperative. Over the next few years, we could see a restructuring of incentives, updating of pricing structures and even changes in recommended therapies to support the drive for value and higher quality results.
Addressing Pension Risk Mitigation: Strategies For 2019
Given recent changes to the interest rate outlook, is your organization reconsidering its approach to funding pension obligations? It may be better to review liabilities and have a long-term plan in place for whatever course of action you choose to take. Here are three strategies that can help improve outcomes.
Is This Time Different? 3 Takeaways From the Volatility in the Current Interest Rate Market
Following a 10- year consensus that interest rates will rise, now the broader market cannot coalesce around a prediction. Here’s help in understanding how rate fluctuations affect your balance sheet, how to manage through the rate cycle, and how to prepare to take advantage of market opportunities.
Collaboration to Establish Blockchain-based Ecosystem for the Healthcare Industry
Aetna, Anthem, Health Care Service Corporation (HCSC), PNC Bank and IBM have announced a new collaboration to design and create a network using blockchain technology to improve transparency and interoperability in the healthcare industry.
Fall 2018
ACA is Alive and Breathing
Despite worries about an impending “death spiral” the ACA’s health insurance exchanges have survived. Five years in, participating insurers are generally profitable, rates are stabilizing and “bare counties” – those with zero insurers – are practically non-existent. Learn about the potential scenarios going forward.
PNC’s Healthcare Capital Markets Update
Since the Tax Cuts and Jobs Act of 2017 took effect, banks have begun exercising the protective provisions triggered by the drop in the corporate tax rate. As a result, borrowers have seen rising interest costs associated with bank direct purchase loans and are seeking lower-cost alternatives.
Survival of the Fittest: Payers Reimagined
Detailed research finds that payers are betting on the future: taking advantage of their relationships and strength in analytics, with the hope of improving outcomes, reducing costs and ultimately, being at the center of the eventual solution. View the results of our quantitative study of payer executives, supplemented by insights and verbatim comments from the qualitative research.
Summer 2018
Healthcare Symposium Spotlights Leading-edge Change
Healthcare Symposium Spotlights Leading-edge Change PNC’s 2018 Healthcare Symposium created a unique forum for healthcare executive-level discussions on key industry trends and challenges.
Capital Markets Update
Healthcare municipal issuance through May 2018 is down approximately 23% versus the same period last year. Lighter issuance is most likely the result of the acceleration of intended 2018 bond issues into late 2017 in light of proposed tax reform and the elimination of advance refundings in 2018.
Employers Step up Their Commitment to Healthcare
Get the results of our quantitative study of employer executives which is supplemented by insights and verbatim comments from qualitative research. It covers the shape of employer-sponsored health plans, the greatest healthcare challenges facing employers, combating rising costs and coping with ACA uncertainty.
An Alternative to Taxable Advance Refunding Plans
The Tax Cuts and Jobs Act [1] prohibits advance refunding of tax-exempt bonds with tax-exempt debt, effective January 1, 2018. While the Act limits a borrower’s advance refunding capabilities to taxable financing, other opportunities to monetize savings may be realized using a forward refunding.
Spring 2018
How Investors View the Healthcare Sector
For investors, the healthcare industry’s secular growth rate is appealing, but the profitability outlook isn’t as clear. During 2017, a key question for investors was the sluggish pace of commercial patient utilization, a trend that resulted in generally softer than expected hospital admissions and a less favorable payor mix.
Why You Should Actively Manage Your Derivative and Debt Portfolios
Recent legislation may drive the tax-exempt cost of debt higher. It is important to actively monitor and manage one’s debt and derivative portfolio. Policy implications can and do impact the composition of the balance sheet with the unintended consequence of moving a borrower along the risk spectrum. Active management can ensure the desired risk and debt composition.
Winter 2017
Identifying Missed Revenue Opportunities
Since 2000, there has been $538 billion worth of care provided for which no payment has been received. An unpaid claims analysis should be performed on a regular basis to measure any revenue loss that may be occurring due to sub-optimal claims management processes. An effective analysis can help organizations determine process issues, payer problems, and site-of-service issues to help staff redesign processes, improve technology integration and increase revenue moving forward.
Hospitals in Transformation
The current healthcare environment is marked by intense pressure, rapid change and deep regulatory uncertainty. U.S. hospitals are struggling to adapt to this tumultuous and increasingly complicated environment, failing at an alarming rate. Through qualitative and quantitative research with hospital executives across the country, a new study examines how changes in healthcare today are impacting these institutions and what they are doing to survive.
Is a Securitization a Viable Financing Option For You?
Securitization may allow your company to efficiently leverage the value of your accounts receivable into a low-cost, committed financing platform. In practice, your company will receive cash due from its accounts receivable immediately, and such proceeds can be used for any corporate purpose, including reducing more expensive debt or reinvesting into the business.
Changes Ahead For LIBOR
The London Interbank Offered Rate (LIBOR) is a benchmark interest rate for seven maturities (overnight to 12 months) quoted in five currencies. LIBOR is widely used as a benchmark rate in lending, borrowing and derivative transactions, relating to an estimated $350 trillion of financial instruments. The Financial Conduct Authority (FCA) believes the markets supporting LIBOR are no longer “sufficiently active” to ensure the rate is representative of market conditions. Now what?
Fall 2017
Refunding Valuation Analysis: An Issuer’s Decision Tool
PNC Capital Markets LLC has built a new model to value call options of tax-exempt fixed rate bonds to assess refunding efficiency. Called “ReVal," it differs from standard industry practice that typically use a form of the Black-Schole Option Pricing Model.
ReVal’s pragmatic approach to defining “Peak” Present Value Savings looks at historical relationships between MMD and U.S. Treasury securities to estimate a point in time that will achieve Peak Present Value Savings. Is the ratio of Refunding Efficiency sufficient to execute the trigger for your organization?
Identifying and Collecting Patient-Responsible Balances
With the evolution of high-deductible health plans and health savings accounts, consumers are now responsible for a larger portion of their healthcare expenditures. Currently 29% of covered workers are enrolled in a high-deductible health plan/healthcare reimbursement account (HDHP/HRA) or healthcare savings account (HSA-Qualified HDHP). This shift can lead to a rise in bad debt.
Many leading healthcare providers identify and collect patient-responsible balances prior to service and/or at the time of service, significantly increasing the likelihood of timely payment for services performed. Find out how your organization can benefit from these best practices.
Enterprise Risk Management: Consider Both Sides of the Balance Sheet
Incorporating both sides of the balance sheet can be essential to properly managing a healthcare organization’s enterprise risk in a holistic manner. Furthermore, doing so can help to maintain a level credit rating, stabilize Days Cash on Hand, and comply with debt covenants.
By performing an Enterprise Risk Management analysis, a healthcare system can calibrate its investment portfolio to help ensure that it is optimized relative to its liabilities. Over the near term, this can help to provide continuity of operations; over the long term, we believe that this can help to fuel organizational growth.
Making Sense of Uncertainty: The First PNC Healthcare Executive Symposium
PNC Healthcare’s first annual PNC Healthcare Executive Symposium created a unique environment for executive level discussion and dialogue on key industry challenges.
Twenty-six CEOs and CFOs attended. Key organizations represented included Highmark, the Cleveland Clinic and Penn Medicine. The two-day event opened with a networking reception and a dinner presentation on cybersecurity, followed by a day of discussions about the key issues facing boards and management, including:
- Industry disruption
- The vision of an integrated delivery network
- Federal update and healthcare forecast
Spring 2017
A new way to evaluate liability portfolio risk
When it comes to managing liability portfolios in the healthcare industry, standard practice consists of evaluating finance alternatives based upon a comparison of cost of capital followed by an assessment of the risk of each product alternative. Developed by PNC’s Capital Markets group, a new process starts with assessing risk in your healthcare system’s existing liability portfolio.
7 trends that will drive the year in healthcare
Many healthcare systems have experienced weakness in financial performance that requires them to examine their current strategies, the adequacy of their information systems and the revenue and cost assumptions under which they were operating. This article shows how successful organizations are addressing these issues.
Benchmarking cash posting automation
PNC’s 2016 survey of Healthcare Client Advisory Board members tracks trends in cash posting and associated cost reduction potential. Survey results can help you benchmark your own processes and point the way toward improvement.
Spring 2016
Veterans Health Administration (VHA) Teams With PNC to Reduce Administrative Costs
In an industry where only 56% of aggregate claims are paid electronically[1], the Veterans Health Administration’s eBusiness Solutions team receives more than 85% of its claim payments via Electronic Funds Transfer (EFT). Like the veterans it serves, VHA has achieved its goals through a disciplined approach to its mission.
Beginning in 2003, with PNC’s help, the eBusiness Solutions team began a focused outreach campaign to maximize enrollment of insurance payers for electronic claim payments and remittances (835s).
PNC Epic Case Histories Demonstrate Measurable Improvements
More than 60 Epic clients, representing 20 health systems, presented case studies on Epic integration, shared information and networked with peers in the healthcare industry. During the forum, Penn Medicine presented a detailed case study showing how they automated cash reconciliation by implementing the Epic Cash Management module using custom lockbox files from PNC.
Fall 2015
The Miracle of a Proactive Strategy
Denials prevention/management and patient payment estimation/collection are two areas where hospitals have historically taken a reactive approach and continue to fall short from the standpoint of performance. Although providers can correct and resubmit claims, submit appeals to payers, and bill patients 30 to 60 days after their healthcare service has been rendered, these approaches are time consuming and costly. Hopefully, your organization’s approach to these critical functions doesn’t require a “miracle” to get it under control.
The Road Ahead in U.S. Healthcare - Will Patients Take the Wheel?
With the passage of the Affordable Care Act and other recent trends in the U.S. healthcare system, we are experiencing a paradigm shift toward patient-centered care. PNC Healthcare commissioned Shapiro+Raj to explore this shift and what it means for the future of healthcare. This white paper summarizes the results of their study.
The Frugal Healthcare Provider - Saves and Earns with PNC's P-Card Program
Shannon Medical Center in San Angelo, Texas, has served the Concho Valley for more than 80 years. Today it is licensed for 400 beds and is the designated lead level 3 trauma center for the region. The locally-owned health system has a nationally-recognized intensive care unit and critical care for fragile newborns is also among its many services. In order to continue to grow and deliver the state-of-the-art services its diverse community requires, the hospital has maintained the frugal nature of its founders, J.M. and Margaret Shannon. Shannon’s Board of Directors keeps a laser focus on the bottom line.
Healthcare Advisory Board Update
With the passage of the Affordable Care Act and other recent trends in the U.S. healthcare system, we are experiencing a paradigm shift toward patient-centered care.
Spring 2015
Healthcare Virtual Card Payments — Just the Facts
Healthcare regulations continue to focus on ways to reduce cost and increase efficiency for both Providers and Health Plans, including a renewed emphasis on electronic payments. Electronic Funds Transfer (EFT) payments sent via the ACH Network are now considered a HIPAA transaction; therefore, Health Plans are required to provide EFT payments if requested by a Provider.
Are You Ready for Chip Cards?
In October 2015, a new technical standard for credit cards will be introduced. The standard is also known as Europay, MasterCard® and Visa® or EMV, after the developers of the technology. It is designed to ensure that microchip-embedded payment cards (chip cards) are compatible with the terminals of merchants who accept them.
PCI DSS: The Security Your Customers Are Looking For
Cybercriminals are just like any other criminal — they prey on the weak and vulnerable. And they are discovering that many small merchants have not implemented even the most basic security measures.
Get to Know Greg Jelinek
In October, 2014, PNC Healthcare welcomed Greg Jelinek as our new executive vice president.
Contact Us
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Important Information & Disclosures
PNC Healthcare Matters Newsletter is for informational purposes only. No part of this document may be reproduced in any manner without the prior written permission of PNCCM. Under no circumstances should it be used or considered as an offer to sell, or a solicitation of an offer to buy, any of the securities or other instruments mentioned in it. The information contained herein is based on information PNCCM believes to be reliable and accurate, however, no representation is being made that this document is accurate or complete and it should not be relied upon as such. Neither PNCCM nor its affiliates make any guaranty or warranty as to the accuracy or completeness of the data set forth herein. Opinions expressed herein are subject to change without notice. The securities or other instruments mentioned in this document may not be eligible for sale in some states or countries, or suitable for all types of investors; and their value and returns may fluctuate and/or be adversely affected by changes in exchange rates, interest rates, or other factors.
PNC is a registered mark of The PNC Financial Services Group, Inc. (“PNC”). Banking and lending products and services, bank deposit products, and treasury management services, including, but not limited to, services for healthcare providers and payers, are provided by PNC Bank, National Association, a wholly-owned subsidiary of PNC and Member FDIC. Lending, leasing and equity products and services, as well as certain other banking products and services, require credit approval.
