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Life or Death for Small Systems?

Philip Betbeze, for HealthLeaders Media, February 13, 2014
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Ridgeview budgeted for approximately 12,500 combined ED and UC visits in the first 11 months of operation but instead attracted more than 27,000 patient visits over that time. In 2012, its second year, it recorded more than 32,000 visits and will surpass that number in 2013.

"We evaluated the market share and we figured that even with the most conservative return-on-investment projections surrounding this proposal, it was still positive, so our risk was that it would be minimally successful," he says. "That would've been good enough for us, but it's gone gangbusters."

As a silo it is profitable, Phelps notes, but the intangible benefit to downstream service line growth has been its biggest benefit to the system.

"Many of these patients need additional care and follow-up, and some don't even have a primary care provider, which is another issue," Phelps says. "Referrals can be made directly to the services available on the campus, which has improved our service line market share in nearby geographies and, hopefully, we've found a better attachment for those patients who've gone without a PCP relationship."

Another area of projected growth is through Ridgeview's ACO strategy, something many, if not most, smaller organizations are still evaluating. Many small systems are trying to understand whether they are better off with their own such entity or as a partner with a bigger organization. Ridgeview plans to take its own ACO path.

"We've started an ACO through a wholly owned subsidiary of our health system," Phelps explains. "Worst case, we get into limited agreements [with payers]. The upside would be total cost of care contracts and conversations around changing the way we deliver care."

The ACO features relationships that Phelps characterizes as independent, but just short of ownership and joint ventures.

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