Independent Hospitals Require Group Effort

Five hospitals in northern Maine have formed a collaborative alliance to improve healthcare access and outcomes and to generate savings. The arrangement allows each hospital to maintain some level of autonomy.

Has the term "independent hospital" become an anachronism?

I suspect not, or at least not yet.

There are still plenty of hospitals out there, particularly in rural areas, which are not formally part of a health system, and that maintain a local board of trustees and executive suite for strategic planning and budgeting. These hospitals are a growing rarity.

The Community and Rural beat at HealthLeaders Media has allowed me to interview dozens of rural hospital leaders over the years. To a person, these leaders tend to be feisty, independent, problem-solvers who greatly value local control of their healthcare.

It's a matter of pride born from necessity. They've had to learn to make do with what they have, and they often justifiably believe that no one better understands the healthcare needs of the communities they serve.

To a person, however, these executives all say it's getting harder, if not impossible, to go it alone. I cannot recall speaking to a hospital leader who was not looking for some sort of affiliation, whether an outright acquisition by a larger hospital or health system, or some sort of looser affiliation to pool resources and improve leverage with vendors and payers.

Last month, for example, five hospitals in northern Maine formed the Maine Rural Health Collaborative, LLCto improve healthcare access and outcomes and to generate savings. At the same time, the arrangement allows each hospital to maintain some level of autonomy. The five hospitals are:

• Northern Maine Medical Center in Fort Kent
• Cary Medical Center in Caribou
• Houlton Regional Hospital in Houlton
• St. Joseph Hospital in Bangor
• Mount Desert Island Hospital in Bar Harbor

Houlton and Mount Desert Island are critical access hospitals. Every hospital has an equal vote, and all decisions by the collaborative must be unanimous.

Tom Moakler, CEO at Houlton Regional Hospital, summed up the need for the collaborative when the project was announced March 12.

"The advent of the Affordable Care Act, changes in reimbursement, and a number of other complex issues are reshaping the landscape for hospitals and other healthcare providers across the nation," Moakler said.

"Our hospitals here in Maine are coping with these changes while facing unique challenges in providing healthcare to a rapidly aging and low income population, particularly in rural parts of the state. By working together in a collaborative fashion we can all benefit from each other's experience, standardize best practices and protect quality, accessible care."

An Opportunity to Reduce Expenses
What's happening now in Maine is not a new idea. Hospitals in Georgia, New Hampshire, Illinois and other rural states have formed collaboratives and the Maine providers will be taking notes from those projects.

Peggy Pinkham, RN, executive director—and the only employee—at the Maine Rural Health Collaborative, says the first item on the agenda will be the search for opportunities to reduce expenses in areas that are not directly related to patient care.

"Some of the examples could be what collection agencies are the members using and is there an opportunity to negotiate a better rate with five hospitals versus one," she says. "There are opportunities to identify revenue cycle initiatives, reduce the number of denials that hospitals experience by discussing what best practices the hospitals are using."

Employee benefits are another area identified for potential savings or efficiencies by the five hospitals.

"We aren't into health insurance now, but things like disability and long-term life. Again, using one vendor versus potentially five," Pinkham says. "So, it's looking at those types of things that could be more cost-effective as a group, versus individually."

Healthcare IT is also on the radar.

"That is something we will always be looking at," she says. "We are going to start collecting that data this year at least so we have an inventory of what everybody is using and where they are using it."

In the future, Pinkham envisions the collaborative "moving into some clinical arena, which would be a bit more challenging, as well as looking at opportunities perhaps for grant funding. Obviously the goal is how can we stay connected to our communities, provide the best service possible, and be as efficient and effective as we can be."

It's probably a safe bet that this collaborative will gain new members once it demonstrates success.

"I am sure people will be keeping tabs on how the collaborative works, some of the results they will achieve, and they might consider whether that would work for them," Pinkham says.

When you look at the challenges that rural providers face providing care for an older, sicker, poorer population, collaboratives such as Maine Rural Health could mean the difference between shuttering and continuing to provide care.

Independent hospitals are not an anachronism. They're adapting to a new reality, and the understanding that maintaining independence in this evolving healthcare landscape is going to require a group effort.