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Metrohealth: Competing with the Big Boys

 |  By Philip Betbeze  
   December 13, 2010

When former President Jimmy Carter's sudden illness struck on his way to Cleveland in late September, he was taken directly to the hospital, of course. It's the hospital to which he was taken to that seemed to raise questions: Carter went not to the Cleveland Clinic or to University Hospitals, two world-renowned medical centers within roughly equal distance from the airport. Instead, the Secret Service escorted him straight to MetroHealth, the Cleveland area's public hospital.

Some were surprised, but MetroHealth is a quality institution. It's among the top 1% of hospitals in the country for quality and safety, according to the Premier healthcare alliance, and all its physicians are faculty at Case Western Reserve University School of Medicine. However, outside its home base, and even within, the fact that MetroHealth serves the majority of the uninsured and indigent population had some asking questions about why such an important person would go there in an emergency.

Innovation critical
MetroHealth is far from a decayed urban shell of its former self. Led by a former economics professor and high-powered consultant for Booz Allen Hamilton who has worked in a variety of industries outside healthcare, MetroHealth is in the midst of transforming itself into a provider of choice—rather than last resort—for Clevelanders and those in its suburbs. It's doing so by remaking its image as a comprehensive healthcare provider, not just a hospital for the indigent, says President and CEO Mark J. Moran. "We're serving the toughest cases—people who can't get access to the other systems in town, and we're also in the most competitive markets in the country," he says, discussing the biggest roadblocks for MetroHealth.

"We've been working recently to tackle a challenging business problem, which is how to compete and be attractive and relevant in this town," he says. "But that problem has morphed, because now it's about how to compete and be relevant in a post-health-reform world."

It's true that public hospitals might benefit from the nation's healthcare reform law, which will provide coverage for many more patients. But Moran isn't counting on that alone.

"More of the uncompensated care is now going to have some form of compensation, but at the same time, we see disproportionate-share payments phasing out, and our outlook will depend on how rates are set and access to insurance is provided. We have only a vague understanding of how that's going to work at this point."

A medical home
MetroHealth is staking its future on the patient-centered medical home concept. Its leadership believes that by getting patients into high-quality primary care relationships and facilitating their access to the rest of the system, they'll have patients for life, which also assumes they'll have better influence over outcomes, which will be the key to success under healthcare reform, says Moran. 

"If you try to create a delivery model with yourself as an integrated insurance provider, you'll end up with the right answer," Moran says. "My view is we're essentially taking care of 30,000 people who have no insurance, so essentially we are the insurance company. We're not allowed to be an insurance provider—we're a county hospital—but it's more of a philosophical realization."

With that in mind, MetroHealth has worked to enroll its patients in the Partners in Care program, its term for the patient-centered medical home. More than 10,000 of the estimated 30,000 annual uninsured patients who receive care at its facilities are enrolled. That means MetroHealth helps with scheduling appointments, disease management, pharmacy, and other pieces of the care continuum, and is able to see those patients in almost any applicable setting.

One of the keys to future viability for hospitals seems to be making sure patients' first encounter with your health system isn't with the acute care hospital, says Larry S. Gage, president of the National Association of Public Hospitals in Washington, DC. He believes many public hospitals are uniquely in the right business position on healthcare reform, as many already have the pieces that will make up an accountable care organization. But the second challenge for public hospitals may be a little more daunting.

"Our members do have commercially insured patients, but they are about half the percentage of the patient population compared to the community nonprofit or for-profit," he says. "[Public hospitals] have a high level of quality with them and are almost all teaching hospitals, but there is an image challenge that has to be overcome. We have to educate the public who have seen these hospitals as inferior when in fact they are equal or perhaps even superior."

Outpatient efficiency
Internally, much work has already been done to make MetroHealth more efficient. Chief Medical Officer Alfred F. Connors, Jr., MD, says MetroHealth "has to become more efficient because the expectation is that there will be more people coming in, but not proportionally more dollars."

The challenge is making sure the system is an attractive option. Part of overcoming that challenge is making outpatient visits more efficient. He expects that means the doctors in a clinic setting will get to see more patients per day. That's where reworking responsibilities will help. He anticipates that physicians will be relieved of some of the work they currently do that isn't direct patient contact. 
"They spend too much time doing what the nurse or nurse practitioner needs to be doing right now, but we're changing that," says Connors. "Patients will be spending more time with the team, but less time with the doc."

The changing complexion of insurance coverage is one thing for which Moran is preparing. He predicts that many employers will "look at the government health option and will take advantage of it," meaning a noticeable decline in commercial insurance prevalence in the market. At the same time, he argues that government reimbursement will make up more of the insured population. As commercial enrollments shrink, the practice of commercial insurers making up the difference between what government pays and the actual cost of care will quickly end.

"This process will lead to pretty dramatic rate restructuring for providers like us," he says. "That puts
added emphasis on how you might break even on Medicaid rates. It's a daunting challenge."

Building up the outpatient system will be expensive. MetroHealth took advantage of the financing of Build America bonds, selling $75 million in early 2010, which will be used largely for enhancing its primary and multispecialty clinic presence.

"If you follow the literature on ACOs, it revolves around that outpatient presence and the deliberate attempt to keep people out of the acute care setting through better intervention," says Moran. "We have a pretty dense network of clinics in the urban area, but will have to reach out more to be present for people in other areas."

Philip Betbeze is the senior leadership editor at HealthLeaders.

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