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The Hospital of the Future

Gienna Shaw, for HealthLeaders Media, July 13, 2011
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Considering the rural context

Larger systems have a number of models to choose from and the wiggle room to experiment. For many small and rural hospitals, however, government regulations are like a bag of hand-me-down clothes that don’t quite fit.

Like all healthcare organizations, rural hospitals must become more efficient, improve quality of care, and focus on wellness and prevention, says Tim Size, executive director of the Rural Wisconsin Health Cooperative, a professional services and networking organization that’s owned and operated by 35 rural acute and general medical-surgical hospitals.

But government initiatives must also address the special problems facing rural areas—including an older, poorer, and less healthy population, he says. “Too many government proposals are designed for urban and suburban settings with little or no attention to the rural context.” The March release by CMS of proposed ACO regulations is just one recent case in point. “As written, ACOs are unlikely to attract much rural participation. As the model further evolves, rural hospitals need to focus on developing the core competencies related to care coordination and not get distracted by trying to become an early adopter of an urban-centric set of incentives.”

Rod Boula, CEO of Elizabethtown (NY) Community Hospital, a 25-staffed-bed hospital that also offers outpatient rehab services, agrees.

Elizabethtown’s parent company does own a variety of properties, including nursing homes, assisted-living facilities, ambulance services, and physician billing services. And the organization works with a sister hospital to provide specialty services to its patients. But while other organizations will expand services to prepare for an accountable care model, Boula says his organization will stick to its primary care core. 

“Our niche is primary care. We’re not looking to be a surgical unit or [perfrom] brain surgery or anything like that. We’re looking at excelling in primary care.”

Balancing the power of capital, the power of place

The small hospital of the future may not be quite so small, given the recent spike in mergers and acquisitions and the trend toward collaboration, such as with data exchanges. But while some small and rural hospitals welcome the chance to come under the umbrella of large organizations or to share some resources with regional competitors,
others are worried about maintaining independence.
Luckily, there’s still plenty of choice when it comes to
business models. 

“I don’t think any one corporate model is inevitable in our country given the value we place on independence, inventiveness, and the underdog,” Size says. “There are many examples of both independent and system hospitals excelling at serving their local communities.”

But there are trends that suggest local organizations will remain part of the mix, he says. “First, all providers are increasingly incented to work collaboratively so the distinction is fading between ‘independent’ and ‘system,’” Size says. “Second, advances in telehealth and electronic support services will give local hospitals more choices in where and how they gain assistance in maintaining local care. Third, the imperative and benefits of hospitals working with their communities to create health will definitely favor those with the strongest local connections. And last but not least, health reform will tend to level the playing field between primary care and specialists and their related hospitals. The over-payment of specialty services will be less available to fuel the corporate acquisition and subsidization of rural hospitals. I believe it is likely that we will see a healthier balance between the power of capital and the power of place.”

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