Nearly 700 rural hospitals are at risk of closure, research shows. They provide care access to about 11.7 million people, employ 100,000 healthcare workers, and account for $277 billion in economic activity.
You've probably read the alarming report from iVantage Analytics showing that 673 rural hospitals—one out of three—are under financial duress, and that 210 are at high risk of closing.
The methodology iVantage used to make this dire prediction looked at about 70 metrics such as market position, balance sheet, costs, charges, and outcomes from the more than 66 rural hospitals that have closed since 2010 and applied those same metrics to rural hospitals that remain operational.
Alan Morgan, CEO
"Statistically, they correlated. As we looked at those 70 indicators, we found 210 hospitals that were highly correlated with hospitals that had closed and another 453 that were strongly correlated with the hospitals that had closed," says Michael Topchik, senior vice president at Portland, ME-based iVantage.
Alan Morgan, CEO of the National Rural Health Association, which partnered in the iVantage study, says the findings are troubling, but not surprising to anyone paying attention.
"If it was one single issue then, from a policy perspective, it would be easy to show why they are closing, so you need to do this. But there are multiple factors," Morgan says. "Number one is sequestration and a series of congressionally mandated Medicare cuts that have happened over the past few years, and the reductions in the payments included in the Affordable Care Act."
"It is also tough about talking about the Affordable Care Act and its impact on rural hospitals," he says. "You have the cuts to disproportionate share payments, which are supposed to be offset by Medicaid expansion. That hasn't happened. In addition, the health exchanges were supposed to help with the numbers of people presenting at rural hospitals with insurance. People have been using the exchanges, but they haven't been signing up in rural areas at the same levels as they have in urban areas. So multiple factors within the Affordable Care Act are just not playing out in a positive manner for rural hospitals."
High Stakes
Let's review what's at stake here. According to iVantage, these 673 rural hospitals that are at risk of closure provide care access to about 11.7 million people, many of whom are older, sicker, and poorer than people living in urban America. As we know, rural hospitals are often among the largest employers in the communities they serve.
iVantage says if these 673 hospitals closed it would mean the loss of nearly 100,000 healthcare jobs, another 137,000 ancillary jobs in the communities they serve, and $277 billion in lost economic activity for these regions over the next decade.
The status quo is unsustainable, which means that every stakeholder needs to act, including elected officials and policy makers at all levels of government. This isn't simply about throwing more money at the issue. When so many rural hospitals are threatened, it means we must evaluate the way care is delivered in rural America, and what role hospitals should play in that care delivery.
Morgan says NRHA supports stop-gap legislation now in Congress called theSave Rural Hospitals Act. "It stabilizes the current environment for rural hospitals while establishing a path forward for those rural facilities," he says.
"It stops and reverses the Medicare cuts we have seen. It reverses the sequestration, and it provides an opportunity for hospitals to transition into a new provider type, a freestanding emergency room, outpatient services, and provides that new model. It also would provide the ability for rural hospitals to access federal grants to do the transition to population health."
While acknowledging that rural hospitals need more money to keep the doors open, the bill also calls for a re-examination of how care is delivered in rural America.
Michael Topchik,
"We need a new hospital model for rural and remote," Morgan says. "The No. 1 key is how do you ensure 24/7 emergency room services in these very small rural communities, and for the larger rural communities, how do you help them move towards keeping the population healthy and making that transition we are all talking about as a nation."
"It has to happen. We know that is the direction we're headed. We have to make sure that in the process we don't shut down a lot of rural hospitals as we make this transition," Morgan says. "That is the difficult part. How do we keep the doors open until we get to that new payment mechanism that provides a sustainable healthcare access point in rural communities?"
Topchik is skeptical of suggestions that moving rural patients to more centralized care at larger regional hospitals will save money or improve outcomes.
"Our research tells us it is not terribly expensive to maintain that rural safety net," he says. "What a lot of people want to do is centralize care. Every bit of research tells us we would not improve or lower the cost of care. We would shift the cost of care to more expensive cost centers."
"Yes, they have more robust clinical capabilities and when appropriate, rural hospitals are transferring there today. We don't help the system by doing that, but we hurt it two-fold," Topchik says. "We lose access and people in rural America need access to care close to home. If these rural hospitals were to disappear, the entire safety net crumbles because docs aren't going to practice in rural communities if they're a one-horse shop with no hospital for a backstop. It really has a ripple effect."
"The other side of it is I don't think it will be cheaper," he says. "It's market-by-market, but you shift costs and it's a wash. In most cases it's more expensive."
Topchik says policymakers and politicians must acknowledge that, whatever the model, providing care to a rural American population that is older, sicker, and poorer is not a money-making proposition.
"I would like to think that we as a society aren't going to let [happen again] what happened in the late 1980s, when the prospective payment system was put in place, where more than 300 rural hospitals closed," he says.
"I go back to the concept that the Senate Finance Committee latched onto when it created the Critical Access Hospital Program, which is to say that access is vital for CMS beneficiaries and we are going to create a critical access system for these 23 million beneficiaries. To do that we are going to support that system, which is low volume, with special payments that help keep them whole so they can maintain this access. That is what our research tells us. It's not a need for being totally revamped."
Action Needed
Topchik says he is not suggesting that rural hospitals should sit back and do nothing beyond waiting for a federal bailout.
"Rural hospitals are going to have to play in the value equation too. They have to position themselves for a value-based future," he says. "The top hospitals are low-cost providers, so the idea of taking 25% to 30% out of your costs over the next five years is essential, targeting 5% to 6% a year."
"They have to compete on costs. Cost-based reimbursement runs completely at odds with that so it's a challenge, but they have to do it," he says. "They have to make sure they have the best clinical outcomes, quality and patient satisfaction. More and more rural hospitals have gotten religion on that and top rural hospitals are doing that."
"Finally, they can't do it alone," he says. "They don't need to merge balance sheets with larger systems, but they need to have clinical affiliation strategies. Top-performing rural hospitals are affiliated at more than 75%, whereas with the critical access hospitals it is more like 60%."
The irony is that while healthcare delivery in rural America often feels like an afterthought for urban policy makers, rural America could become the proving grounds for a sustainable care model.
"Where you see rural today is where we are going to see the country in 10, 15, 20 years from now," Morgan says. "You have an older sicker population and the current payment mechanism is heavily reliant on Medicare and Medicaid. That is rural America. Everyone who looks at where we are headed as a country realizes that is where we are looking long term for all healthcare facilities."
To rural care advocates, that means re-examining care delivery as a collaborative effort using telehealth and requiring 24/7 access. "But then, communities need to ask themselves what they need as a community," Morgan says. "For some communities that is going to be access to long-term care or who is providing the EMS in the town. How do we make sure that we keep people healthy in the first place as opposed to treating them once they're admitted? No matter how you slice this, it goes to the broader issue of where the country is going."
The urgent care centers will be a 50/50 partnership, with Dignity Health Medical Foundation providing the clinicians, GoHealth providing the organizational infrastructure and expertise, and both entities equally sharing the capital investment.
Non-profit Dignity Health and investor-owned GoHealth Urgent Care will partner to operate one dozen urgent care centers in the San Francisco Bay area, the two providers have announced.
The locations for the 12 urgent care centers have yet to be determined, but that process is expected to be finalized over the next 15 months, says Todd Strumwasser, Sr., MD, Dignity Health vice president of operations for the Bay Area.
Strumwasser says the Bay Area could be a ripe market for urgent care.
Todd Strumwasser, Sr., MD
"We had a study done by an outside agency that showed that San Francisco was underpenetrated in urgent care centers," he says. "This is just a guess, but our competitors may have been worried about the cannibalism of whatever primary care services they were already providing in this niche. Our concern is more making sure that patients get the right level of care at the right location rather than any potential cannibalization."
Strumwasser says the partnership allows Dignity to tap into the retail experience of Atlanta-based GoHealth, which already operates urgent care centers in New York and Oregon with non-profit health system partners.
"One of the things we believe at Dignity Health is healthcare is a very complex team sport," Strumwasser says. "Rather than learning on our own how to do this in an expert fashion we feel it is more efficient to partner with those who actually have a track record and proven expertise in the field of running and choosing the proper urgent care center locations. This partnership feels like it accomplishes that for us. They have the appropriate level of expertise and the track record to ensure a successful deployment of these assets in the Bay Area."
In exchange for that expertise, Strumwasser says GoHealth can tap into the strong community ties and reputation that come with the Dignity Health brand.
"All of us are trying to make healthcare less fragmented. The better you can partner urgent care with a larger healthcare delivery system, with post-acute care and home care and care coordination, the better the experience is going to be for the patient," he says. "Through this partnership, these patients will have better access to Dignity Health specialists and acute care facilities so it will make a more seamless experience for the communities we serve."
Strumwasser says the urgent care centers could prove amenable for the young professionals in the region's high tech industry who want convenient access to healthcare. "They're busy urban professionals who are looking to have healthcare come to them and the best that we can do with that is position these urgent care centers in locations that make it easy to provide them with accessible points of entry into healthcare delivery," he says.
The Right Care in the Right Locations
The urgent care centers will be a 50/50 partnership, with Dignity Health Medical Foundation providing the clinicians, GoHealth providing the organizational infrastructure and expertise, and both entities equally sharing the capital investment.
The urgent care centers don't have a name yet, but Strumwasser says they'll "be reflective of the partnership between Dignity Health and GoHealth."
"We have a strong brand in the communities we serve and we want to leverage that, making sure that patients understand that when they come to a Dignity facility, be it an urgent care center or an acute care hospital, they are going to get the same type of human kindness that they are going to get at all locations," he says.
Strumwasser says an early metric to demonstrate that the urgent care centers are working could be lower volumes at Dignity Health emergency departments "because really what this is about is patients not going to one of our EDs if that is not the level of care they need."
"We hope the communities we serve don't need our acute care hospitals, but we want them to receive the right care in the right locations with the right amount of resources every time," he says. "The way that you do that is you don't have patients with sore throats and sprained ankles in our EDs were they are going to have to pay more and wait longer and be inconvenienced. Urgent care is a way to deliver lower acuity care to patients at an affordable price in a more accessible location."
The urgent care centers will be open for "extended hours" seven days a week, with lab and imaging services, and integration with Dignity Health's electronic medical records systems. The will be staffed by physician-supervised nurse practitioners and physician assistants. "We will have people operating at the top of their license and making sure we have the right staffing ratios to take appropriate care of patients," Strumwasser says.
GoHealth's other nonprofit partners include New York's Northwell Health, and Portland's Legacy Health. Dignity Health is one of the nation's largest health systems, including more than 400 care centers in 21 states, with 9,000 allied physicians and 56,000 employees.
The newly named CEO of Carolinas HealthCare System, Eugene A. Woods, talks about his legacy at Christus Health and the challenges that await him when he takes the helm at one of the nation's largest public health systems.
Eugene A. Woods, president and COO of Irving, TX-based Christus Health, has been named as the next president and CEO of Carolinas HealthCare System. Effective April 28, Woods will succeed Michael C. Tarwater, who last June announced his retirement from the Charlotte, NC-based health system that serves two states.
Eugene A. Woods
Woods, 51, who will also serve as the next chairman of the American Hospital Association in 2017, spoke with HealthLeaders Media about his legacy at Christus, and the new challenges that will come with leading one of the nation's largest public health systems. The following is a lightly edited transcript.
HLM: Why Carolinas HealthCare?
Woods: I've been following this organization from afar for years. I've known Michael Tarwater through AHA for years. Any town, city, or state in this country would be proud and privileged to have an organization like this serving its communities for many reasons.
It starts with public roots. Coming from faith-based care, I was attracted to the strong commitment to mission and community. Some organizations have that written on the wall. With others you can see they live it. This organization lives it.
The commitment to mission was a very strong appeal, as are the 60,000 associates who are doing phenomenal work in North and South Carolina, in terms of clinical excellence. Talk about the cancer center and the children's hospital—it's an opportunity to set national standards as we go through some unprecedented changes in the industry.
HLM: What will you do during your first months on the job?
Woods: I am absolutely coming in doing the proverbial listening tour. This organization has a phenomenal platform. It's been very successful financially, clinically, and from an associates' satisfaction perspective. It's a large and complex organization and my first goal is to spend time listening to the teammates, the physicians, the community leaders, and asking about their aspirations for the future, and using that to bring them together and shape a shared dream for the future.
HLM: What is your legacy at Christus?
Woods: It was not just my leadership. It's the leadership of the whole team there, including the CEO, Ernie Sadau, and the 30,000 associates we have there.
Among other things, we launched an international strategy there. We were in Mexico. We partnered in Chile with the number one university in Latin American, Universidad Católica, with 800 faculty members, and leveraged that to go to Colombia and partner with what I would call a mini-Kaiser there. As a faith-based organization with roots internationally we were able to expand into new countries that had a faith-based orientation as well.
We also had major acquisitions. The most recent is Trinity Mother Francesin Tyler, TX, close to a $1 billion organization. We are in the final process of joining together. That solidifies a lot of the work we have done in Texas. Strategically the organization is well-positioned going forward. There is no great time to leave but, I am happy to be transitioning at a time when the future at Christus couldn't be any brighter.
HLM: Why are you leaving Christus?
Woods: There is a point where leadership should transition. It was a good time for us both because of the Carolinas opportunity. Sometimes the timing is right. But also I felt that I was leaving at a time where Christus was in a very good place.
HLM: What will you bring from Christus in terms of vision, strategies, or goals?
Woods: You always come with the benefit of your experience, not just at Christus, but working at for-profit and not-for-profit regional systems and national systems. But, there is always the danger of coming in with a pre-plan without understanding what has been done and what people think in terms of where the future can be.
So, I come with that experience, but I also come in listening.
HLM: Is there a difference between public and faith-based healthcare delivery?
Woods: The commonality is the unwavering commitment to community. Christus was founded by the Sisters of Charity of the Incarnate Word. They came from France solely to serve the community. Carolinas HealthCare has also roots that go back to 1876 when women from the St. Peter's Episcopal Church responded to a community need and built the first civilian hospital.
That is a powerful commonality. Both organizations share a continued mission to community. It is palpable. It is in the DNA. That is what attracted me here. You want to do good work and you want to be with an organization with a fundamental mission that is responsible to the communities it serves.
HLM: Do you expect to be an advocate for Medicaid expansion in North and South Carolina?
Woods: I will be speaking with the governors in both states to get their views and insights. In 2017 the states have the ability to shape their own versions of the (Patient Protection and Affordable Care Act). Maybe there are some opportunities to shape what is right for these two states in a different way because there will be a little more flexibility.
Obviously, it will depend upon who gets in the White House. But the opportunity to help shape policy on the national level and do it from the vantage point of what also can be best for these two states is going to be one that I am pretty excited about.
HLM: What do you hope to achieve for Carolinas HealthCare? What would constitute success for you?
Woods: I am not sure the rest of the nation understands what a jewel it is. If you fast forward five or 10 years, if you had cancer I'd want this to be one of the tops on your list for care, or if you have a child who needs sophisticated tertiary or quaternary care, I'd want us to be on the top of that list. I want to see Carolinas HealthCare recognized nationally for the clinical expertise that I am already learning exists here.
HLM: How do you make your mark in a health system that is already high achieving?
Woods: You build on a strong platform and you keep going forward. The board has been clear. Healthcare is changing in unprecedented and unpredictable ways. The example I use is like playing chess on a Rubik's Cube. Just when you think you have everything figured out someone twists it and resets the game. We are going to have a number of moments like that.
Also, we have 150 million people in the country with multiple chronic conditions consuming 84% of the healthcare dollars and we certainly have to care for them better in ways that care closer to home and ways that keep them feeling better and more productive. There is plenty to do over this next decade or so, and the great thing is to be starting from a very strong platform.
HLM: You will serve as AHA chair in 2017. How do you see these roles complementing one another?
Woods: AHA sets national policy for the hospitals in the country. With a lot of input from all parts of the country. Carolinas HealthCare looks to help shape that policy in two very important states. We are looking at Medicaid expansion and a host of issues. They will be very complementary.
HLM: How will you spend your final days at Christus?
Woods: I will spend them making sure that all the transitions occur so that they are seamless. It will be up to CEO Ernie Sadau as to how my successor is chosen. We've done a lot of succession planning in the organization, so there is a lot of talent to draw from.
CEO Larry Merlo is upbeat about the growth potential for walk-in clinics and as a consequence of its acquisition of OmniCare last summer, sees "opportunities across the spectrum in skilled nursing, assisted living, and the independent living spaces."
A relatively mild cold and flu season dampened fourth quarter profits for CVS Health's Minute Clinics walk-in clinics business, which otherwise showed solid growth throughout 2015, CVS Health CEO Larry Merlo told analysts Tuesday.
"We continued to grow the number of clinics," Merlo said in a conference call to discuss fourth quarter results. "Minute Clinic is the largest walk-in clinic operator in the country. In the fourth quarter we opened 36 new clinics in addition to the 79 acquired clinics in Target, ending the year with 1,135 clinics in 33 states plus the District of Columbia."
Larry Merlo
Excluding the Target clinics acquired in last summer's $1.9 billion deal, Merlo says Minute Clinic revenues increased 4.4% in the quarter, "below the usual trend due to the mild cold and flu season versus a year ago. However, we achieved our full year 2015 revenue target of about $345 million."
Although he is upbeat about the growth potential for walk-in clinics, Merlo walked back earlier projections that CVS Health would operate 1,500 clinics by 2017. "Obviously we are going to be focusing on the Target integration, which includes about 80 clinics this year," he said.
"We may be a year or two behind that original target of 2017. We continue to be comfortable with the rollout. As we sit here today, about 50% of the U.S. population actually lives within 10 miles of a Minute Clinic."
Pharmacy Conversions
On other fronts, CVS Pharmacies last week opened its first retail stores inside Target stores in North Carolina. CVS Health will convert 1,672 Target pharmacies over the next eight months.
Merlo says the Woonsocket, RI-based company is "in the process" of ramping up its Target pharmacies and that the financial and operational returns on investment will not be fully felt until later this year.
"We have a lot of heavy lifting to do, when you think about the store and systems conversions, we've got about 1,700 or those," he says. "We are not in roll-out mode. It will take the better part of the next six seven months to complete those activities. That is when you will see the marketing efforts ramp up. The benefits that we will see from beginning to create customer conversion within the Target stores and the Target guests will be more of a second-half impact."
"We have a number of pilots that have just begun to kick off that focus on the revenue synergies side of the equation, acknowledging that we see opportunities across the spectrum in skilled nursing, assisted living and the independent living spaces," Merlo says. "Those opportunities will manifest themselves across our retail business. It's early in the process. The benefits that we will see from that we don't expect to begin to come on line until the second half of the year."
Merlo says CVS Health is poised to take advantage of its recently completed roll out of the Epic electronic health records system in its retail settings.
"That does a couple things for us. It provides an infrastructure that broadens our scope of practices," he says. "You are beginning to see that now as we are getting into the treatment of some conditions. That does create a tighter interface with the health system affiliations, where we can transmit the information around a particular patient in a seamless fashion. We are beginning to get some traction in terms of triaging patients across the delivery of care."
CVS Health reported a net revenues increase of 11% to $41.1 billion in the fourth quarter of 2015, ending a record year for net revenues that increased by 10%, or $153.3 billion in 2015. Operating profits were up 17.6% in the fourth quarter of 2015 to $2.7 billion, and rose 7.4% to $9.5 billion throughout 2015.
CVS Health ended 2015 with 9,600 retail pharmacies, a net expansion of 130 new stores.
An analysis of data from the National Practitioner Data Bank shows that 70% of physicians sanctioned for sexual misconduct by a hospital or other healthcare organization were not disciplined by state medical boards for their behavior.
State medical boards are not protecting the public from doctors who've committed sexual misconduct, one watchdog group says.
According to a Public Citizen study published this month in PLOS ONE, 70% of physicians (177 out of 253) who had engaged in sexual misconduct that led to sanctions by hospitals or other healthcare organizations or a malpractice payment, were not disciplined by state medical boards for their behavior.
Azza AbuDagga, MD
The study is the first to tap data on physician sexual misconduct from the National Practitioner Data Bank.
"It's clear that medical boards are allowing some doctors with evidence of sexual misconduct to continue endangering patients and staff," Azza AbuDagga, MD, lead author, said in remarks accompanying the study. "These boards must pay more attention to sexual misconduct that leads to healthcare organizations cracking down or to lawsuits."
The consumer advocacy group Public Citizen examined physician reports in the NPDB from Jan. 1, 2003, through Sept. 30, 2013. The focus was on sexual misconduct-related licensure, clinical privileges, and malpractice payment reports for all physicians, including medical doctors, osteopathic doctors, and intern/resident physicians.
The analysis found that 1,039 physicians had one or more sexual misconduct-related reports, and of these, 786 (76%) had been disciplined only by a medical board. The study also revealed that the remaining 253 physicians had one or more clinical privilege reports or malpractice payment reports related to sexual misconduct, but 177 did not have a report of state medical board licensure action for such misconduct.
Lisa Robin
Lisa Robin, chief advocacy officer at the Federation of State Medical Boards, declined to comment on the study's data collection, methodology or analysis. However, she said state medical boards can only take action when they get a complaint.
"It is an issue for boards to be sure that they get information from the hospitals. Reporting is an issue," Robin says. "That is something that hospitals and other entities need to look at complying with. It is something we would like to bring attention to on behalf of our boards. It is their responsibility not only ethically, but in many states there are reporting requirements for any entities to report to the state boards."
Robin says the NPDB has adopted the continuous query option for the past several years to improve access to reports, but the process is expensive. "We have tried throughout the years to get some relief for the states to be able to get the service to be able to get the reports without charging them. We've been unsuccessful. They will not waive the charge for the states," she said.
And just because a report goes to the NPDB, Robin says state medical boards may not necessarily know it unless the hospital reports it.
'Boards Take it Very Seriously'
"If the privileging action is reported to the NPDB, the medical board might not necessarily know it unless the hospital reports it to them," Robin says. "It's a query when someone applies for a license but at times, even if they now subscribe to the continuous query, that wasn't always available. That is why hospitals are required to report directly to the board. The NPDB recognizes that that is an issue."
In another effort to improve notifications, Robin says hospitals are now told that they must file a report to their state medical board along with any report to the NPDB.
"They recognize that hospitals don't always report to the board for whatever reasons," Robin says. "In the instances of sexual misconduct, boards take it very seriously, when they know about it, and usually the sanctions are very severe."
The study backs her claim. For the 974 NPDB reports of medical boards disciplining physicians in response to physician sexual misconduct, the boards revoked, suspended, or restricted the medical license in 89% of cases. In contrast, state medical boards took such severe actions in only approximately two-thirds of cases involving other types of misconduct.
Sidney Wolfe, MD
"These numbers show that when state medical boards take action, the action rightly tends to be much more severe for physicians who engaged in sexual misconduct than other offenses," study coauthor Sidney Wolfe, MD, founder of Public Citizen's Health Research Group, said in prepared remarks.
"Now, the medical boards need to pay increased attention to sexual misconduct that led to health care organizations cracking down or to lawsuits. State medical boards have full access to the NPDB data. The boards must protect the public."
The NPDB is the only national repository that receives reports of disciplinary actions taken by state medical boards and clinical peer review committees at hospitals and other healthcare organizations. It also is the only database to receive reports of malpractice payments made on behalf of physicians by malpractice insurance companies or other payers, Public Citizen said.
AbuDagga noted that sexual misconduct-related reports accounted for only 1% of the total reports in the NPDB over an almost 10-year period, and that the study "represents only the tip of the iceberg of physician sexual misconduct in the U.S.
Under LifePoint's deal finalized this month with Sisters of Charity Health System, Providence Hospitals will change its tax status to for-profit and will pay taxes, but will retain its Catholic affiliation, mission, and charity care mandates.
LifePoint Health has entered the South Carolina market with the recently finalized acquisition ofProvidence Hospitals, a two-hospital Catholic system in Columbia, SC.
Jeff Seraphine, Eastern Group director for LifePoint, says the timing seems right for the Nashville-based for-profit hospital chain to expand into a new state.
Jeff Seraphine
"South Carolina has an attractive operating environment and one in which we felt very comfortable about going in and being successful and being able to operate consistent with our mission to make communities healthier," Seraphine says.
"It really is similar to what we experienced looking at other states. We were not in North Carolina five years ago and today we operate nine hospitals in that state. It has become a fantastic partnership for us there, one in which we are excited that we decided to move into that state. We think we will look back in five years from now and say the same thing about South Carolina."
Under the deal finalized this month with Sisters of Charity Health System, Providence will change its tax status to for-profit and will pay taxes, but will retain its Catholic affiliation, mission, and charity care mandates.
Seraphine says many not-for-profit health systems are increasingly more open to negotiating with potential partners from the for-profit sector.
"We still experience what we consider some decades-old biases in some communities, sometimes perpetuated by other interests that aren't relevant in today's environment," he says.
"Our commitment to move forward with our quality agenda, with partnerships such as Duke LifePoint, the commitments that we make routinely as we've done in Providence, that we are going to maintain the existing charity care policy, and some of the accomplishments we've had with our healthcare engagement network and other quality accolades, the combination of those things has changed the conversation drastically."
"When we have the opportunity to talk about that with a potential partner, and they understand who we are and what we are trying to accomplish in our medical communities, we do not find it difficult to move past that conversation of 'do you pay taxes or not pay taxes?'"
South Carolina is one of 19 states that has refused to expand Medicaid under the Patient Protection and Affordable Care Act. Seraphine says that was not a dealbreaker.
"We still believe that in some form or fashion, expansion will come to most of these states. It comes in different ways and at different times," he says. "We don't know what the near-term projections are for expansion in South Carolina. We understand the state and local politics of that decision but we favor expanded coverage and hope it will come to that state also, but we also feel comfortable that in the meantime we can be successful operating these hospitals and doing them in the right way."
While LifePoint's expansion in South Carolina is likely, Seraphine says there is no timetable.
"One thing we've learned is that the decision to seek out a partner is part of the strategic planning process that always comes when it is the right time for that medical community," he says.
"What we do know is that market conditions and the headwinds that the industry and stand-alone smaller hospitals and systems are facing are not changing. In fact, it is going to become more difficult to be in a stand-alone environment over time. We don't know the timing," he says. "We do know that market forces suggest that there is window when we can expect to see that in the foreseeable future."
"We felt we'd go into Columbia, make a difference in that community, work with the physicians and help that organization grow again, [and we'll] show that we are a great partner in the state of South Carolina, so when that when the time comes we will be ready."
Prime Healthcare Acquires 4 Hospitals
The Ontario, CA-based for-profit hospital chain Prime Healthcare this month finalized its acquisition of four acute care hospitals in four states. The hospitals are:
88-bed Lehigh Regional Medical Center, in Lehigh Acres, FL, purchased from Franklin, TN-based Community Health Systems, Inc.
With these four acquisitions, Prime Healthcare now operates 42 hospitals in 14 states, employing nearly 42,000 staff and physicians.
Prem Reddy, MD, chairman, president and CEO of Prime Healthcare, said in a media release announcing the acquisitions that Prime has committed more than $80 million to capital improvements at its four newest hospitals over the next five years.
With the divestiture of Lehigh Regional, CHS operates 25 hospitals in Florida
Brazosport (TX) Regional Joins CHI St. Luke's
Brazosport Regional Health System, an independent hospital in Lake Jackson, TX, has joined CHI St. Luke's, effective this month.
"With this new alignment, we will be able to better meet the needs and expectations of our community locally, and in addition, add an entirely new dimension of access to tertiary and quaternary services that this alignment will provide," Brazosport CEO/president Al Guevara, Jr., said in prepared remarks.
Brazosport's affiliation with CHI means that it can tap into the two-year-old academic affiliation agreement between CHI St. Luke's Health and Baylor College of Medicine, and a research relationship with the Texas Heart Institute. The collaborations include Baylor St. Luke's Medical Center's 27-acre McNair Campus, a new 650 bed, acute-care hospital; creating with the Texas Heart Institute; and BCM's cancer center.
The first steps are to define what population health means to safety net hospitals. Any national strategy toward population health would likely be more nuanced than a purely medical initiative to tackle a particular disease.
The nation's safety net hospitals are building a road map for population health.
Backed by a $350,000 grant from the Robert Wood Johnson Foundation, America's Essential Hospitals will survey its 275 member hospitals in 35 states about the programs they're using to improve population health for their service areas. The aim of the Moving to Action for Hospitals and Population Health project is to identify effective population health strategies that can be adopted nationally.
One of the first questions the survey hopes to answer about population health is what exactly everyone means when they use the term "population health."
"If you ask 100 people you will get 100 different definitions," says Kalpana Ramiah, drPH, director of research for AEH. "We are excited because now we can think about what population health means to our membership, who care for the nation's most vulnerable populations, including those with complex healthcare diseases and racial and ethnic minorities. What does it mean to our member hospitals and how should they be engaged with population health?"
Kalpana Ramiah, drPH
Ramiah says many safety net hospitals are already working locally on specific issues related to population health, such as food insecurity and adequate housing, but those efforts are often isolated and there aren't enough opportunities to share and build on success stories.
"Where do you start is a good question," she says. "That is why we are doing the survey and interviews to figure out what that population means for our membership."
The Essential Hospitals Institute, the research arm of AEH, also plans to conduct a literature review; interview patients, caregivers, community members, and other groups to understand their perspectives on the value of population health; and convene a stakeholders' summit that will include clinicians, researchers, policymakers, community-based organizations, and others.
The Institute will use its findings and summit proceedings to develop a population health road map to share with member hospitals and partners. From there, it will transition to a multiyear project to promote broader use of population health programs nationally.
David Engler, PhD, director of the Essential Hospitals Institute, says the concept of population health has been around for a while, but it's somewhat broad.
"Our members are struggling with where to start," he says. "We have heard from them about needed assistance, and that is what this program does. It develops a road map for our members to use for hospitals nationwide to use."
Engler says the link between social determinants such as poverty and population health have been established. "There is also a clear trend toward the notion that socio-demographic factors in a population matter," he says.
David Engler, PhD
"Therefore, improving water supplies, improving education, housing, improving a variety of environmental factors will have a positive impact on health, will create a reduction overtime of morbidity and mortality, and will create a better use and efficiency of healthcare resources."
Any strategy toward population health would likely be more nuanced and holistic than a purely medical initiative to tackle a particular disease such as diabetes.
"Rather than attacking diabetes from the notion of only controlling A1C, the medical model of control," Engler says, "it's the notion of controlling diabetes through better food, nutrition at home the workplace and school, exercise programs that are known to impact diabetic care. It's also about better awareness. One third of folks in hospitals today have diabetes and don't know it. It is getting that knowledge base to folks to reduce the burden of diseases. It's more of a multifactorial approach rather than a clinical one-off approach to healthcare."
Engler hopes to have a road map in place as population health moves away from hospital-centric care and toward multiple community-based sites with outpatient services and wellness centers.
"In five years the hospital-centric approach to healthcare will change, and it will be more and more distributed among a community of healthcare providers and wellness providers," he says.
"It is the notion that there are a lot of community resources that can be brought to bear, that hospitals don't have to do it alone, that partnerships will pay off, and that there are folks in the community that have a good role in this."
"We are not trying to gain a competitive advantage over the other systems," says the group's CEO. "We are just trying to gain efficiencies for the systems that are participating."
Ten healthcare systems with a combined 55 hospitals have formed a statewide collaborative in Kentucky with the aim of raising care standards while lowering costs.
"With respect to healthcare reform and all the pressure that is going to put on organizations across the state, we think this collaborative will help us achieve success in the healthcare that is coming down the road," says Garren Colvin, CEO of Edgewood, KY-based St. Elizabeth Healthcare, one of the founding systems in the Kentucky Health Collaborative.
Garren Colvin
"The way we will achieve that is through clinical integration, so we will be able to share best practices. Having 10 systems and more than 50 hospitals, you get a little more exposure than you do as an independent hospital or system."
"Secondly, there are cost efficiencies," says Colvin. "In addition to higher quality, we should be able to provide that at lower and more efficient costs by economies of scale so we can integrate. Instead of having 10 of 'X' we can buy one or two of 'X' and share that across the system. Lastly, patient experience. We would be able to deliver a consistent patient experience across the entire state."
While the collaborative is not yet operational, Colvin says some prime targets likely will include pooling resources on health information technology. "The whole data analytics around information technology is very costly," he says.
"Every system is looking at spending anywhere from $35 million to $55 million to get the expertise they're going to need in the future. If there is a way we can consolidate that [by] maybe having 10 systems spending $5 million each, that is a great opportunity. That is an area that has a lot of potential."
In addition to St. Elizabeth, the founding health systems in the collaborative are: Appalachian Regional Healthcare, based in Lexington; Baptist Health, based in Louisville; Ephraim McDowell Health, based in Danville; LifePoint Health, based in Brentwood, TN, and operating 10 hospitals in Kentucky; Norton Healthcare, based in Louisville; Owensboro Health, based in Owensboro; St. Claire Regional Medical Center, based in Morehead; The Medical Center, based in Bowling Green; and UK HealthCare, based in Lexington.
Bill Shepley has been named executive director of the Kentucky Health Collaborative. A veteran healthcare administrator, Shepley has also worked with the Southern Atlantic Healthcare Alliance and the Coastal Carolinas Healthcare Alliance.
Shepley me that the Kentucky collaborative doesn't even become a legal entity until March, and that many of the goals, priorities, and brass tacks operational details—such as funding a budget, finding an office, and hiring staff—have yet to be finalized.
"The key thing is we want to improve the health status of the Commonwealth of Kentucky," Shepley says. "There is so much room for improvement and we think it makes sense to combine all of the efforts that are going on in the individual healthcare systems, put our heads together, and try to figure out how can we tackle these national problems on a statewide basis by comparing notes and seeing who has the best results and practices."
"We want to do that in combination with finding ways to aggregate our volumes to save money to be able to put more into the system so that we can come up with better clinical results for the people we are serving," Shepley says.
"It's a two- or three-pronged approach. How can we improve outcomes for our patients? How can we save money for the hospitals, and thereby save money for the people using our systems? And how can we manage the health of our entire population, from the healthiest people to the sickest, the entire continuum?"
"We want to look at not only how do we treat the very sickest who need care immediately. We also want to work in the prevention area and see if we can help reduce the numbers of people who smoke, or reduce obesity, or diabetes. It is an approach to managing the health of the entire population by putting our minds and our experience together through one entity."
Shepley says there are more than 50 collaboratives across the nation involving about 750 hospitals, but that the Kentucky collaborative is the largest ever formed on its first day. The office will be in Lexington, and Shepley anticipates hiring a staff of between 15 and 40 people, which would have to be approved by the collaborative's board, which is comprised of CEOs from the 10 systems. An operating budget is expected to be approved within two weeks.
Measuring Success
As for metrics, Shepley says: "We want hardcore statistics that have a baseline and after the initiative has been put in place, we want the results in generally-agreed-to metrics, whether they are clinical or financial. That will be a critical part of what we do. You have to be able to measure to determine the impact."
"One of the easier ones to measure would be diabetes, because those people are interacting with their physicians more typically," Shepley says. "They usually have more hospitalizations, so they come on our radar screen more often. Another big one for us is going to be cancer. If you were to pick one area, we are going to want to tackle cancer and see what we can do to reduce the rates of cancer in this state. That is going to be huge."
Colvin says the metrics for success are relatively simple. "Any opportunity to reduce our costs so that we can adjust to what we all know is going to be less reimbursement moving forward is going to be a success and that will occur in this process," he says, "No matter what."
Shepley says the collaborative's board has already discussed bringing on new member systems, but that probably won't be for a while. "We've got the largest group that has ever come together," he says. "We want to make sure that we get our systems and infrastructure and our means of taking action nailed down as completely as we possibly can before we start to add additional members. But we certainly plan on adding additional members to the group."
Colvin says he doesn't believe the collaborative will blur the lines between competition and cooperation. "From my point of view, I am in Northern Kentucky, so the closest competitor in this collaborative is going to be in the Lexington or Louisville area, so it really doesn't affect me," he says.
"At the end of the day we are not trying to gain a competitive advantage over the other systems. We are just trying to gain efficiencies for the systems that are participating."
Concern that duty hour restrictions inhibit the ability of surgical residents to care for patients prompted researchers to design a trial to test the efficacy of duty hour policies.
Giving surgical residents the choice to work longer shifts or take less time off between shifts does not create greater risks of health complications or death for their patients, according to a study in Tuesday's edition of The New England Journal of Medicine.
Karl Bilimoria, MD
The first-ever national randomized trial of resident duty hours involving 117 general surgery residency programs and 151 hospitals found that less-restrictive policies are safe for patients, reduce complications arising from handoffs, and increase resident satisfaction, said study author Karl Bilimoria, MD. He is a faculty scholar at the American College of Surgeons and director of the Surgical Outcomes and Quality Improvement Center at Northwestern University Feinberg School of Medicine in Chicago.
"The study was developed due to persistent concerns in the surgical community because of the duty hour restrictions that had been implemented in 2003 and 2011," Bilimoria said in a conference call with media on Tuesday.
"There was concern that the restrictions actually inhibited continuity of care, or the ability of doctors to care for their patients [by] having to hand off care at inopportune times. The cumulative restrictions were forcing residents to leave in the middle of operations, or while stabilizing patients in the in the intensive care unit. Clearly that is bad for patients, but it is also bad for resident training."
The Accreditation Council for Graduate Medical Education in 2003 limited residents' work hours to 80 per week, capped overnight shift lengths, and mandated minimum time off between shifts. In 2011, ACGME further shortened shift lengths for first-year residents and increased residents' time off after a 24-hour shift.
The FIRST Trial
With the support of ACGME, the American Board of Surgery, and the American College of Surgeons, Bilimoria and his colleagues developed the Flexibility in Duty Hour Requirements for Surgical Trainees (FIRST) trial to test the efficacy of these duty hour policies.
The study randomly assigned general surgery residency programs to use one of two types of duty hour policies during the academic year from July 1, 2014, to June 30, 2015. Both groups adhered to three main ACGME rules: The workweek was limited to 80 hours; one day off in seven was required; and residents could not take call more often than every third night.
A total of 117 programs at 151 hospitals completed the study.
One group of 59 programs and 71 hospitals participated in "Standard Policy," with all existing ACGME duty hour policies.
The other "Flexible Policy" group of 58 programs and 80 hospitals got permission from the ACGME to waive rules on shift lengths and time off between shifts. Interns could work beyond the maximum of 16 hours; more senior residents' duty hours could exceed 24 hours; residents were not required to have at least eight hours off between shifts; and residents were not required to have at least 14 hours off after 24 hours of continuous duty.
Results
With the study groups in place, FIRST found that surgical patients' complication rates in the first postoperative month were not affected by less-restrictive duty hours. Among nearly 139,000 patients treated, the rate of this composite outcome was similar in both groups, at 9%. There were no group differences for the 10 other patient outcomes studied, including the need for an unplanned second operation.
"The study found that when we looked at patient outcomes between the two study arms, we found that there was no difference in patient safety in surgical patients," Bilimoria says. "We investigated this in a number of ways and for a number of different complications and continued to find no difference."
Reaction
In addition, 2,220 residents who were in the flexible hours program reported in a survey accompanying the study that they were not more likely to be dissatisfied with their residency experience, nor to report negative effects of fatigue on themselves or their patients when compared with the 2,110 residents in the standard group.
"We were very interested in the residents' perspective," Bilimoria says. "The residents noted striking improvements in patient safety and continuity of care, and the ability to stay in an operation that they started, or to operate on patients that they were taking care of, or to stay and stabilize patients at critical moments."
"In terms of wellbeing, they noted that the flexible duty hours had some effect on their time with their family and friends, time for hobbies and such. But when you asked if they were dissatisfied, they answered that there was no difference and they were not particularly dissatisfied, which makes sense. We see that in a lot of professions, where people understand the trade-offs with activities outside of work in exchange for working in their profession."
Reaction to the study was mixed.
The Resident and Associate Society of the American College of Surgeons, which represents more than 13,000 surgical trainees, said in a media release that the study was needed "to inform surgical resident duty hour policy. Up until now, there has not been high-level prospective evidence on this important issue."
"Based on the trial's results, the RAS-ACS firmly believes that flexibility in duty hours is not only safely possible, it is essential to provide surgical residents with exposure to the variety and complexity of educational experiences necessary to become fully trained and competent surgeons," RAS-ACS said.
The reception was not so cordial at the Public Citizen Health Research Group, which had filed a complaint against the study in November, and which this week issued a scalding critique of the "unethical clinical trial" and of NEJM for violating its own guidelines.
"The NEJM editors' decision to publish the results of the unethical, seriously flawed FIRST trial violates the journal's own policy requiring authors to provide assurances related to the protection of human subjects," PCHRG wrote.
"Furthermore, as Public Citizen and the American Medical Student Association predicted in their November complaint letter to the Office for Human Resource Protections, the trial yielded the self-serving results sought by the trial's researchers, whose stated goal before the trial began was to roll back the ACGME's 2011 mandatory limits on physician resident work hours that were adopted to protect both the residents and their patients from serious harm."
'Unfounded' Complaints
Bilimoria dismissed the complaints as "unfounded and not reasonable, quite frankly."
"Their main issues focus on whether there is a reason to even do such a trial," he said. "To us there is total reason to do a trial, and the question is around equipoise. Is there balance around the two study arms in terms of risks to patients, residents, and everyone involved?"
"If you look at the prior data before this trial in surgery, most of it suggested that patient outcomes worsened after the 2003 duty hour reforms," he continued. "Not only is there equipoise, there is an imperative to study the question to make sure the policy reforms of 2003 and 2011 are not endangering patients and residents."
"To us," said Bilimoria, "the concept of whether the trial is ethical just doesn't make sense."
A drop in the percentage of IT budgets that is directed toward electronic health records systems signals a shift in focus. Now it's on broader business problems and on operational efficiencies, research suggests.
Hospital health information technology budgets are still growing, but the focus has shifted from meaningful use benchmarks and big electronic medical records projects toward business analytics, mobile services, and cloud-based technologies, a new survey shows.
Judy Hanover, research director for IDC Health Insights, the Framingham, MA-based research firm that conducted the survey, says hospitals have entered a "post-EHR, post-Meaningful Use era."
Judy Hanover
"There's a lessening of focus on EHR" and a redirecting of focus "on the full scope of the IT strategy," Hanover says.
"We had this period of broad investment between when the meaningful use incentives were announced in 2009 until about 2013/2014. [That's when] we really saw a laser focus on EHR as a way to meet the need for meaningful use requirements and as a focus and primary goal of health systems when they were directing most of their new investment in IT toward EHR projects and related infrastructure."
"When we talk about post-EHR, we've seen this drop in the percentage of the IT budget that is directed toward EHR. We've seen the focus of IT being on broader business problems, on operational efficiencies, things like that," Hanover says.
"This started to happen for some organizations in 2013, but it's really in 2015 that we really saw systems turn the corner. They were looking at IT more holistically. They were looking at broader strategies for meeting the goals of healthcare reform. While EHR was still definitely one part of those strategies, it wasn't the whole focus.
The survey, which focuses on acute care hospitals with 200 or more beds, found that:
Providers are using more cloud implementations and leveraging mobile and analytics capabilities in the cloud. While 50% of software spending growth is still for on-site investments, survey respondents said 18% of new software spend is going into software-as-a-service (SaaS) and 24% is going into projects hosted by a third party.
30% of the respondents said they were comfortable with cloud in 2014 and another 41.5% respondents said they were more comfortable with cloud in 2015 than they were in 2014. Barriers to cloud adoption, primarily comfort levels with security and compliance, are clearly coming down.
Top reasons for IT budget growth included the desire to enhance or add analytics, patient engagement, customer relationship management, and security.
Security strategies are maturing. Cybersecurity is one of the new growth areas in the provider IT budget, and this growth is expected to continue in 2016. While threats remain a cause of concern, there is growing implementation of IT security strategies.
Analytics continues to be one of the fastest-growing segments of the provider IT budget in 2016 as it has been for several years. Ongoing investment in ACO, clinical, and quality will continue in 2016, but hot areas of new analytics investment reported also include provider and care team performance analytics, as well as analytics that examine referral patterns and other financial analytics areas.
"There are still a lot of issues with regard to productivity, with regard to patient safety, with regard to operational efficiency, and effectiveness. When we solved some problems with EHR we created some other ones," Hanover says.
'It Can't be Untethered'
"What we are seeing now is the acceptance of EHR as part of the hospital. It can't be untethered. But there are ways we can build infrastructures and other technologies around EHR to get us to the next level. That is what we are talking about here."
Hanover says the post-EHR era likely will be easier for hospitals than the pre-EHR era.
"The hard part is over, but there are still a lot of changes in the environment," she says. "We are still only partway through a massive change in the business model that has resulted from healthcare reform. We can expect to see changes to how the healthcare business works in the United States for many years to come. We haven't solved that yet."
"In terms of the day-to-day change associated with how providers do their job with EHR versus prior to 2009 without it, that change is pretty much complete," she says.
"The IT changes going forward are going to make that better. We are seeing a lot of tools and add-ons and new EHRs that are going to make the work flow a lot better, a lot less painful for providers. They are going to automate some things and bring more information into it so it is more of a thinking-and-learning platform for the delivery of care. They are going to fix some of the things that disrupt workflows. There is plenty of change to come."
Going forward in this post-EHR world, Hanover encouraged hospitals to embrace the platforms they're using now. "If they going to change platforms in the future, they should rate for real innovation and better technology to reach the market," she says. "There is a lot of senseless spending to try to find the perfect EHR that doesn't really exist."
"Holistically, hospitals should be looking at ways to modernize infrastructure. Providers should be getting familiar with the cloud," she says. "Those who haven't should start to get that expertise built up within their team."
