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Hospitals Hungry Under Health Reform

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Hospitals Hungry Under Health Reform 20120924-NEWS--0001-NAT-CCI-CD_-- 9/21/2012 6:41 PM Page 1 ® www.crainsdetroit.com Vol. 28, No. 40 SEPTEMBER 24 – 30, 2012 $2 a copy; $59 a year ©Entire contents copyright 2012 by Crain Communications Inc. All rights reserved Page 3 Bills aim to African violence Hospitals hungry under touches auto supply chain flow funds health to sewer Electronics retailer unplugs Michigan search reform projects Inside New loan, grant Tom Henderson on how Systems prowl not to save Belle Isle, for acquisitions programs sought Page 4 BY CHAD HALCOM BY AMY LANE Crain’s Lists CRAIN’S DETROIT BUSINESS SPECIAL TO CRAIN’S DETROIT BUSINESS The need for efficiency under Communities may get some help Largest IT companies, health care reform may be lead- JEFF JOHNSTON/CDB from Lansing in managing and im- ing to a wave of consolidation and proving one of the most critical largest architectural firms, the possible entry of more for- people covered by Medicaid and and costly pieces of their infra- Pages 18, 19 profit health care companies into those newly insured in 2014. structure — their aging sewer sys- Michigan. Other changes under reform in- tems. Crain’s reported Sept. 16 that clude hospitals working with On the move in the Legislature This Just In Beaumont Health System has been physicians and other providers to are bills that would take about $654 approached by for-profits Van- contract as accountable care or- million remaining from a $1 billion ganizations. ACOs have the po- environmental bond passed by vot- 2 area defense contractors guard Health Systems Inc. and Hos- BEAUMONT HEALTH SYSTEM win $665M in Army work pital Corp. of America about a possi- For-profit companies are eyeing tential to reduce costs and im- ers in 2002 and put it toward a new ble sale. Vanguard, which owns Beaumont Health System as prove quality but place hospitals state loan pro- Two defense contractors the Detroit Medical Center, has also institutions consider scaling up to and physicians at financial risk if gram and new with operations in Southeast approached Garden City Hospital tackle changes in health care. costs exceed payments. grant program Michigan will receive a com- and Crittenton Hospital Medical Cen- “This market is under-repre- for sewers and bined $665 million to im- ter in Rochester Hills on possible ed in selling to anybody.” sented by for-profits compared stormwater sys- prove power output, technol- acquisitions in the past year. Regardless of whether Beau- with other states, but Michigan is tems. ogy systems and other “In this day of health care re- mont is sold, hospitals are look- really waking up to it now. Two A central goal: components of mainstay form, everybody is talking with ing for growth to contend with years ago, when there was a lot of Get more money Army ground vehicles. everybody as part of strategic cuts in Medicare payments over this (for-profit acquisition) in oth- flowing to com- The Army Contracting planning,” said Mike Killian, vice the next few years and uncertain- er states, Michigan didn’t seem to munities so they Command at the U.S. Army president of marketing at Beau- ty over whether state legislators want to touch it,” said Gregory can be strategic Hersey Tacom Life Cycle Management mont, who called the HCA sale a will vote to expand Medicaid by a Drutchas, principal at Detroit- about planning Command in Warren last week rumor. projected 500,000 people under the based Kitch Drutchas Wagner Vali- needed sewer infrastructure spend- announced plans to award a “I can’t say it never will happen federal Patient Protection and Af- tutti & Sherbrook PC and head of its ing, rather than strictly reactive. $383 million contract to Ster- in the weeks, months and years to fordable Care Act. Hospitals are health care practice. “Most of the money that gets in- ling Heights-based General Dy- come. But our board has not made counting on offsetting Medicare “But the new trend in the com- vested … tends to get invested in namics Land Systems. any decisions to talk with any- cuts by replacing formerly unin- The contract will provide body. Management is not interest- sured patients with additional See Hospitals, Page 23 See Sewers, Page 22 for improvements to embed- ded computing, power gener- ation, radio and other sys- tems in the M1A2 Abrams tank. The new systems will be installed for qualification Incentive pay makes comeback among nonprofit execs and approval, before future contracts buy the various up- BY SHERRI WELCH five fundraising foundations, 10 arts and Bridgewater, president and CEO of the grades for production tanks. CRAIN’S DETROIT BUSINESS culture organizations Detroit Area Agency on Aging 1-A with REBOUNDING Navistar Defense LLC also an- and 10 human service $44,760 in incentive pay. Detroit Zoo CEO nounced last week a $282 mil- Use of incentive pay as a portion of organizations. Ron Kagan began earning incentive pay IN RECOVERY lion delivery order from compensation is returning to pre-reces- Twelve of the execu- in 2009. Tacom to make various im- Nonprofit sion levels among the heads of fundrais- tives in that group re- The responsibility is on nonprofit executives’ pay provements to its MaxxPro ing foundations, human services and ceived bonuses in 2010, boards to establish clear and measurable Dash Mine Resistant Ambush increases arts and culture organizations. up slightly from 11 goals for success for executives using in- reflect Protected vehicles. The That’s among the trends that emerged who received bonuses dependent third-party analysis and improving MaxxPro is a vehicle contract in Crain’s analysis of the compensation of in 2008, which were knowledge of the local environment and economy. More program managed at Navis- 35 of the region’s top-paid nonprofit exec- earned before the re- type of talent they are looking to attract, in Finance tar’s engineering center in utives in 2010, the latest year for which cession took hold, and said Mark Davidoff, Michigan managing Extra, Madison Heights. Bridgewater data is available. The group comprises eight in 2009. Pages 11-14 — Chad Halcom the CEOs of 10 grant-making foundations, New to the bonus club in 2010 was Paul See Nonprofits, Page 24 Learn tips to KEYNOTE SPEAKER SEPT. 27 Dr. Robert D. Childs, Chancellor 2 – 7 p.m. prepare for a National Defense University cio Information Resources The Fillmore,Det. cyber-attack Management College AWARDS Register TODAY by noon: www.crainsdetroit.com/events NEWSPAPER 20120924-NEWS--0002-NAT-CCI-CD_-- 9/21/2012 4:42 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS September 24, 2012 MICHIGAN BRIEFS Emergency manager: Loan would Chicago, until the Amway Grand Plaza was finished in 1983. Last put Benton Harbor back in black 3 and out? State’s newest SmartZones may be the last week, MLive.com reported that the As part of his plan to fix Benton McKay Tower — today Grand Harbor’s seemingly relentless bud- In the Flint area, there’s hope that the state will products. The zones can use tax increment financ- Rapids’ fifth-tallest building, had get problems, emergency manager designate the region a hub of technology business ing and offer benefits to businesses such as training, been sold in May. The Borisch Joseph Harris plans to ask the state creation. In Midland, there’s a desire to be a recog- business planning, product development, grant family paid $10.5 million, MLive for a $7 million loan. The Herald-Pal- nized beachhead for companies in the materials and writing and access to state resources for early-stage reported, citing city records. ladium in Benton Harbor reported chemical industries. technology companies. Ⅲ In the Oct. 10, 2011, issue, last week that the “mostly power- Members of both communities advocated for and The legislation also contains elements that con- Crain’s Michigan Business report- less” City Commission passed a res- want to be included in Michigan’s next — and possi- form the 12-year-old SmartZone program to the ap- ed at length on plans to turn a long- olution to support Harris’ decision bly last — batch of SmartZones. proach of Gov. Rick Snyder’s administration to eco- in-the-tooth section of downtown to seek the loan but failed to pass a A bill signed into law in August would allow for up nomic development — built around regional Grand Rapids into a $30 million, resolution of support for his deficit to three more SmartZones, expanding the roster of 15 collaboration and sharing best practices. 130,000-square-foot market. Last elimination plan. such areas around the state that cluster technology- “What we were trying to do is look at how can we week, the board of the downtown Harris said he will tell how the based businesses, entrepreneurs and researchers. get our organizations around the state to do a better market came up with an official $7 million loan would be used in SmartZones are designed to promote collabora- job of collaborating,” said Martin Dober, senior vice name for the downtown market: “Downtown Market.” Genius. the deficit plan. “To put the $7 mil- tions that include universities, industry, research president of entrepreneurship and innovation at the and community organizations, boosting entrepre- Michigan Economic Development Corp. Ⅲ The owner of movie theaters in lion request in context,” The Her- neurial activity and the commercialization of new — Amy Lane Bellaire, Petoskey, Gaylord, Macki- ald-Palladium reported, “the city’s naw City and Cheboygan admitted 2010-2011 fiscal year general fund in U.S. District Court in Grand Rapids revenue was $6.7 million, accord- ernment gave Indiana $71.3 mil- time significantly.
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