CEO Steve Clapp says the four-hospital rural health system 'hit our targets' with expense reductions, but couldn't overcome a 'problematic' decline in net revenues.
Nearly two years after acquiring three rural hospitals in Mississippi and doubling its size, Clinton, Tennessee-based Curae Health has filed for bankruptcy.
Curae Health CEO and President Steve Clapp spoke with HealthLeaders Media about the filing, the factors that led to it, and the challenges facing rural healthcare in the United States. The following is a lightly edited transcript.
HLM: What factors led to the bankruptcy?
Clapp: Our organization is small and doesn't have the deep pockets like other organizations. So, it was very important that we hit the numbers that we needed to make this thing work.
The biggest thing that really hit us was a significant decline in net revenues after we acquired the hospitals. We hit our targets in terms of expense reductions and savings that we had anticipated when we took over. But that net revenue declined was just too problematic.
Physician turnover contributed a little bit. There were delays in the Medicare extender programs in Congress. Those had ceased in October 2017 and didn't get reinstated until the spring, and it was just within the last 60 days that we've been paid on our low-volume adjustment.
We had some challenges obtaining financing on our information systems, so we had to compress a little bit of the financing there. It was just a series of things.
HLM: When you acquired these hospitals it doubled the size of Curae. Do you think that the expansion may have been too rapid?
Clapp: Part of the desire to acquire these hospitals was the proximity to the hospitals that we owned. We felt like we can we can add these hospitals and manage them effectively. We'd had the Alabama hospitals at that point for a little over two years. We thought there were synergies that we could achieve. We had waited a couple years before we made another acquisition, so I felt like the integration was fine. It was a net revenue decline in the big picture.
HLM: What will happen to Curae Health when the bankruptcy proceedings are completed?
Clapp: We'll have one hospital left that's not in bankruptcy in Russellville. We divested the other two hospitals to the local communities in Alabama. We are in the process of seeking buyers for the Russellville hospital as well. We have a letter of intent on that one as well. Curae will eventually divest all of its hospitals. Once all the legal proceedings and processes are worked out we will cease to exist.
The vision was correct in terms of what we're trying to accomplish. But the circumstances didn't plan out to pan out like we had hoped.
HLM: As you look for buyers for these three hospitals, what are the selling points?
Clapp: What attracted us to these hospitals was the fact that they had sufficient revenue. These were larger facilities than we had traditionally focused on, generating anywhere from $35 million to $60 million in revenue. So, they are bigger, and the communities are bigger. These are hospitals that should stay in place and they will in the long term. The community has built a medical community around it to make it work. There's a good physician base in place. There's good community support to keep these hospitals open and operational.
The bankruptcy court process, for lack of a better term, becomes an auction process and our intent is to find stalking horse bidders for each of the hospitals and then there will be an auction process once that initial stalking horse bid is put in place.
HLM: Is Curae Health a microcosm of the problems that rural hospitals face everywhere in this country?
Clapp: Yes. Interestingly enough, we were not the only Mississippi hospital to the file for bankruptcy (on Aug. 24). There was a hospital in Magee. We've seen over 800 rural hospitals close in the last 30 years. That's almost 25%. The number of urban hospitals has stayed flat at about 3,100.
The crisis in healthcare is in rural America, not in urban America. Urban communities are still producing a lot of development projects, a lot of expansion projects at a much higher cost to Medicare and Medicaid than what it would be to keep these smaller hospitals open and provide the services out there.
HLM: Was the Medicaid non-expansion in Mississippi a factor?
Clapp: I'm cautious as to how to address that. There are two sides to that coin. Obviously, from a hospital perspective, you love to have more insured folks. On the flip side, somebody's got to pay for it. That's the balancing act.
HLM: What are the unique challenges for rural hospitals?
Clapp: It depends on who you talk to. Tertiary hospitals will tell you they've got the same problems, but we're not doing $100 million expansions. We've got declining populations in these communities. The younger generation does not necessarily want to live in these communities. We have aging facilities that we're not able to adequately maintain or recapitalize. Some of these states that we operate in, Alabama, Mississippi and Tennessee, have a significant disadvantage relative to wage rate indices. They're particularly low.
HLM: How will rural hospitals evolve to adapt to these challenges?
Clapp: Eventually, rural hospitals are going to end up in one of four buckets. They're either going to end up with a larger health system, or they're going to go back to the community, or at least require some type of community subsidy, like we did 40, 50, 60 years ago.
The third thing is from an operating model perspective. Do we need to create the freestanding outpatient center model that has an emergency room with it? That allows hospitals to transition to another type of entity to ensure that we have some availability of local healthcare.
That can be a freestanding ER, which as originally designed was a good idea. The concept got used in large communities as a competitive tool, rather than as a means to provide emergency services. You don't need one more ER in an urban setting, but you do need one ER and an outlining county that has no other services.
On the outpatient side, it's a piecemeal deal. The primary care is in a physician billing level and your diagnostics and even your surgery can be paid at less-than hospital rates, and the ER becomes more like an urgent care. You can't operate a 50,000-to-100,000 square-foot building on those kinds of reimbursements. We have to create another model.
The fourth option is some of these hospitals will close. If you only have 1,000 admissions, it's hard to justify keeping a hospital open because it's a 24/7 operation. You can create an 18-hour operation that provides for the needs of the community and helps out with the EMS runs that have to go out of town all.
Under a definitive agreement reached this week, Mission Health will continue to manage its seven hospitals in western North Carolina, while HCA runs operations, capital access, predictive modeling and analytics.
HCA Healthcare announced Friday that it will pay $1.5 billion to acquire Mission Health, a seven-hospital, nonprofit health system based in Asheville, North Carolina.
"Mission Health is the premier healthcare system in western North Carolina, with a 130-year tradition of high quality patient care," Milton Johnson, HCA chairman and CEO, said in a media release.
"We look forward to continuing Mission Health’s focus on excellence, and investing in western North Carolina to improve the health of the region," he said.
Under the deal, "nearly all" Mission facilities will become part of HCA while continuing to operate under the Mission brand. Mission will continue to be managed locally while HCA runs operations, capital access, clinical trials, research, predictive modeling, and analytics, the media release said.
Mission Health's tax status would change to for-profit with the acquisition.
The HCA-acquired hospitals are: 763-bed Mission Hospital in Asheville; 80-bed CarePartners Rehabilitation Hospital in Asheville; 49-bed Mission Hospital McDowell in Marion; 25-bed Angel Medical Center in Franklin; 25-bed Transylvania Regional Hospital in Brevard; 25-bed Blue Ridge Regional Hospital in Spruce Pine; and 24-bed Highlands-Cashiers Hospital in Highlands.
Nashville-based HCA said it will spend $430 million over five years for the completion of the Mission Hospital for Advanced Medicine, building a replacement hospital for Angel Medical Center and building a new Behavioral Health hospital.
The proceeds from the sale will be combined with Mission Health's remaining cash and investments and will be used to fund the newly formed Dogwood Health Trust, a population health initiative serving western North Carolina.
"From the very beginning, Mission Health's Board worked diligently and continually to ensure that the very best path was selected for the people of western North Carolina and to make certain that our community has access to high quality, effective and compassionate care for generations to come," Mission Health Board Chair John R. Ball, MD, JD, said in prepared remarks.
"After completing due diligence and finalizing definitive agreements that have significant protections for our rural communities, we are convinced that HCA Healthcare is the right and best choice for western North Carolina and Mission's team members, providers and patients. It is heartening to share that every single Mission Health member entity Board voted unanimously to approve this transaction," Ball said.
HCA said it will maintain clinical services for at least five years and keep open all rehabilitation and acute-care hospitals for at least 10 years, other than St. Joseph’s Hospital which was already planned for transition.
HCA has agreed not to sell any rehabilitation or acute-care hospital for a minimum of 10 years. None of these protections exist for Mission Health programs or facilities today.
In addition, HCA and Mission will each contribute $25 million to create a $50 million innovation fund to encourage healthcare investment in the region.
The deal is subject to the approval of North Carolina state regulators, including an evaluation by the state's attorney general, to ensure that it will benefit people in the service area, and that HCA is paying a fair price, Mission said.
Four Mississippi hospitals have declared Chapter 11 in the past week, and five rural hospitals in the Magnolia State have closed since 2013.
Curae Health and three affiliated hospitals in Mississippi have filed for bankruptcy protection after claiming more than $96 million in liabilities, the Clinton, Tennessee-based hospital chain announced this week.
The affiliated Mississippi hospitals are: Gilmore Memorial Hospital, in Amory; Panola Medical Center, in Batesville; and Northwest Mississippi Medical Center in Clarksdale, which Curae leases.
Four Mississippi hospitals filed for Chapter 11 in the past week, including unaffiliated Magee General Hospital, which filed last Friday.
Curae said in a media release that the goal of the bankruptcy filing was "to ensure that the communities where these hospitals are located will continue to have access to local healthcare services."
The not-for-profit health system blamed insolvency on "several factors."
"Many rural hospitals across the country have faced year-over-year financial challenges due to government funding cuts, unfunded care mandates and other pressures," Curae said.
"Our hospitals were not immune to these issues and after exhausting other possibilities, the decision was clear that the hospitals could not continue to operate under mounting debt and tightening financial resources," the statement read.
Those pressures included unexpected expenses related to electronic medical records and a cash crunch that came as vendors demanded payment for outstanding debts.
Curae said the bankruptcy became the only viable course because cost-savings measures were outstripped by "a dramatic decline" in net revenues that came immediately after the hospitals were acquired from Community Health Systems in 2016.
Local media reported that bankruptcy filings made in Nashville showed that Curae Health and the three hospitals have $3.4 million in cash and cash equivalents and $96 million in liabilities. It owes lender ServisFirst $18.8 million. It owes Community Health Systems, which previously owned the three hospitals, $28.6 million.
"The conversion to a not-for-profit system combined with a lower cost structure was unable to keep pace with the dramatic decline in revenue," Curae said.
Ownership of Curae's Lakeland Community Hospital in Haleyville, Alabama, was transferred to a local authority this spring and it's now managed by Java Medical Group. Curae's fourth hospital, Russellville Hospital in northwest Alabama, has not filed for bankruptcy.
Going Forward
Curae says its 1,245 employees will be paid through the bankruptcy proceedings.
The health system's Mississippi hospitals "will be sold as going concerns to arms-length third parties who are able to keep them in operation so that they can continue to serve the community."
"All potential acquirers of the hospitals will have the opportunity to express their interest in acquiring one or all of the hospitals and to bid for them in a fair and open process," Curae said.
"We have been working with various interested parties to assist them in their review of the hospital(s) and anticipate filing a motion with the bankruptcy court to authorize the sale of the hospitals in the near term. Once the legal process is completed we hope the hospitals will emerge in a stronger financial and market position," Curae said.
As the Trump administration backs a repeal of the individual mandate, a new study offers a 'conservative estimate' on threats to coverage in the individual market.
More than 52 million Americans under age 65 have a pre-existing medical condition that would likely leave them uninsured in the individual market under state regulations that existed before the Affordable Care Act was enacted.
That's according to a new Kaiser Family Foundation issues brief, which notes that many in this potentially vulnerable group of adults, representing 27% of the total population, now get their coverage through their employers or government programs, and do not have to face medical underwriting on the individual market.
However, KFF says the findings provide a perspective on how many people would be at risk under pre-ACA standards if they were to lose their coverage.
"This is a conservative estimate as these surveys do not include sufficient detail on several conditions that would have been declinable before the ACA (such as HIV/AIDS, or hepatitis C)," the brief said.
"Additionally, millions more have other conditions that could be either declinable by some insurers based on their pre-ACA underwriting guidelines or grounds for higher premiums, exclusions, or limitations under pre-ACA underwriting practices," the brief said.
The study comes amid ongoing efforts by the Trump administration and Congressional Republicans to repeal or hobble the ACA, and give states the opportunity to re-impose coverage denials for pre-existing conditions.
Most recently, the Trump administration's efforts to kneecap the ACA includes efforts to have the individual mandate declared unconstitutional by the U.S. Supreme Court. Critics contend that removing the mandate would destabilize the individual insurance markets and lead to their collapse.
Among the findings:
Nearly 30 million non-elderly women and 22.8 million non-elderly men have declinable preexisting conditions. Pregnancy accounts for some of the difference.
The rates of declinable pre-existing conditions vary from state to state, from 41% in Kingsport, Tennessee to 20% in Logan, Utah and Rochester, Minnesota.
Rates are higher in other states, particularly in the South, where in Tennessee (32%), Arkansas (32%), Alabama (33%), Kentucky (33%), Mississippi (34%), and West Virginia (36%), at least one-third of the non-elderly population would have declinable conditions.
The prevalence of pre-existing conditions can vary by 10% or more between cities in the same state. For example, in Kansas 32% of Topeka’s population has a pre-existing condition, as compared to 21% of Manhattan’s population.
Prosecutors allege that an East Texas health system and its affiliated ambulance company tapped a slush fund to pay kickbacks that secured ambulance contracts.
Seven ambulance industry defendants will pay the government more than $21 million to settle whistleblower allegations of kickbacks and bribes paid to local government authorities in three states to secure ambulance contracts, the Department of Justice said.
Federal prosecutors said that Tyler-based East Texas Medical Center Regional Healthcare System, Inc., East Texas Medical Center Regional Health Services, Inc., and affiliated ambulance company, Paramedics Plus, LLC allegedly created a "slush fund" controlled by ETMC and Paramedics Plus that funneled the kickbacks to municipal emergency services providers in California, Florida and Oklahoma.
The government authorities identified by prosecutors include: Emergency Medical Services Authority, Alameda County, California; Pinellas County Emergency Medical Services Authority in Florida; and Oklahoma's Emergency Medical Services Authority.
Federal prosecutors said the kickbacks and bribes included cash payments, political contributions, marketing expenses, direct payments to the Oklahoma EMSA's contractors, and a direct payment of $50,000 to former EMSA President Herbert Stephen Williamson, which prosecutors said was for his "personal benefit."
The bulk of the settlement, $20.6 million, will be paid by ETMC and Paramedics Plus. Alameda County's Emergency Medical Services Authority will pay $300,000.
Williamson will pay the federal government and Oklahoma $80,000, which prosecutors said was based on what he could afford.
"Paramedics Plus paid millions of dollars in illegal inducements over the course of a number of years," said U.S. Attorney Joseph D. Brown for the Eastern District of Texas.
"Williamson allegedly received gifts and also directed Paramedics Plus to make political contributions to Oklahoma politicians, which EMSA could not do on its own," Brown said.
"Sophisticated healthcare companies do not simply give away millions of dollars to referral sources without expecting something in exchange. Quid pro quo arrangements for the referral of health care business are illegal," he said.
The whistleblower suit was originally filed in 2014 by Stephen Dean, who was the chief operating officer at Paramedics Plus and oversaw the EMSA contract. Dean will collect $4.9 million as his share of the settlement.
East Texas Medical Center Regional Healthcare System was purchasedin May by Ardent Health Services and The University of Texas Health Science Center at Tyler and is now part of the 10-hospital UT Health East Texas system.
Depending upon the region, Blue Cross NC said, ACA premiums will fall by as much as 22%, or rise by as much as 9.5%, with a statewide average drop of 4.1%.
For the first time since entering the Affordable Care Act marketplace in 2014, Blue Cross and Blue Shield of North Carolina will reduce premiums statewide in 2019 for most of its 475,000 Obamacare customers.
Depending upon the region, Blue Cross NC said ACA premiums will fall by as much as 22%, or rise by as much as 9.5%, with a statewide average drop of 4.1%.
The North Carolina Department of Insurance approved the plans this month.
The health insurer's ACA plans in the Triangle around Raleigh, Durham and Chapel Hill will see an average premium decrease of 21% in 2019, which translates into a pre-subsidy average of $140 a month under a new provider agreement with UNC Health Alliance.
"Our agreement with UNC Health Alliance allows us to offer similar plans, but at a significantly lower cost," Blue Cross and Blue Shield of North Carolina CEO Patrick Conway said in amedia release. "What makes this possible is that UNC agreed to partner with us on an arrangement where we're both responsible for the quality and total cost of care."
The health insurer is ending its ACA Blue Local partnership with Duke Health and WakeMed, which now has about 50,000 customers in 12 counties. Blue Cross NC said the new plan will offer "similar benefits."
"We will work with our current Blue Local customers to find in-network providers, and make sure they are getting the care they need throughout this transition," Conway said.
Blue Cross NC said it has lost more than $450 million during the first three years of the ACA, but remains committed to offering coverage in all 100 of North Carolina's counties.
On average, premiums will fall by $1,680 a year for ACA customers in the Triangle. Premiums are expected to drop by about 16% for ACA members in the Charlotte and Gastonia areas, which with the Triangle comprise 40% of ACA members in North Carolina.
Statewide, Blue Cross NC said the rate decrease translates into a $120 million cut in healthcare costs in 2019.
'Wait and See'
Blue Cross NC representatives did not specify how they plan to cover the $120 million savings. Under state regulations they don't have to disclose cost sharing or benefits packages before the enrollment period opens this fall, says Brendan Riley, a health policy analyst with the North Carolina Justice Center.
"It's wait and see at this point, but overall it's promising to see that premiums can actually come down in some areas," Riley says. "We know they are ACA compliant plans so they are full comprehensive coverage. They meet the essentially health benefits requirements, so it's not like the Trump-endorsed alternatives such asshort-term plans."
Riley says the savings likely will come from a narrower provider network, particularly in the Triangle and Charlotte areas. "There is a risk that by narrowing the network some consumers may have a harder time finding the doctors they need, especially specialists, but we don’t know that for certain yet," he said.
Blue Cross NC said the decision to partner its ACA plans with UNC Health Alliance in the Triangle "was the result of a competitive process between the area's hospital systems. The decision was based on which system could provide customers with the lowest rates, while continuing to offer them access to the highest quality care."
Matt Ewend, MD, a neurosurgeon and president of the UNC Physicians, says the new arrangement with BlueCross NC "will be a stretch, but we're pushing ourselves to do this."
"There is a realization from our organization and Blue Cross that we can't just keep spending more and more," Ewend says. "We decided as an organization that, instead of sitting back and letting this happen around us, we wanted to get out in front of this. We think in five years from now everyone will be doing this."
"A tight partnership with Blue Cross is step one. The second thing is we have to reduce the overall cost of care by getting patients to the right site and reducing unnecessary variations in care. It's preventative care over fixing the problem."
"The third thing is we have to partner with the patients," Ewend says. "We need folks to understand that they're signing up for health insurance that is less-expensive than it was before, which is remarkable, but they have to be part of the solution to make that possible. So we have to engaged them in their own health."
Health system says the 'majority' of the layoffs affect corporate positions, and another 60 vacant positions will not be filled.
Toledo-based ProMedica says that it laid off 100 workers in leadership and corporate areas this month as part of an ongoing effort to cut costs and improve efficiency.
"The healthcare industry continues to face a series of challenges, including decreasing reimbursement rates for services and rising operational costs. To adapt, health systems around the country have had to make tough financial decisions," Karen Strauss, ProMedica's chief human resources officer, said in prepared remarks.
The "majority" of the approximately 100 affected employees serve in leadership and corporate roles, she said. In addition, 60 vacant "non-direct patient care positions" will not be filled.
The layoffs are unrelated to the $3.3 billion joint acquisition with private equity firm Welltower of bankrupt long-term care provider HCR ManorCare, Strauss said. The deal was finalizedlate last month.
Strauss said that while the joint venture is expected "to bring opportunities for growth and synergy, we still must address pre-merger ProMedica financial issues now."
It's been an eventful year for ProMedica.
The acquisition of ManorCare, the nation's second-largest long-term and post-acute care provider, essentially doubled the size of 13-hospital ProMedica overnight and gave it a footprint in 30 states. ProMedica CEO Randy Oostra said the acquisition was needed because ProMedica was situated "in a non-growth market" and had few other options to expand or diversify.
"I hate to say we are in uncharted waters here, but it seems to be a unique, first-of-its-kind partnership. A nonprofit health system, a large post-acute provider and a real estate investment trust as partners is unique," ProMedica CEO and President Randy Oostra said in an interview with HealthLeaders Media this spring.
Earlier this month, ProMedica formed a joint partnership with Sonic Healthcare USA called ProMedica Pathology Laboratories, which will provide lab tests for inpatients at health system and affiliated providers in Ohio, Michigan and parts of Indiana.
Shareholders from both companies back the deal, which remains the subject of a DOJ antitrust review.
Shareholders at Cigna Corp. and Express Scripts overwhelmingly approved the $52 billion merger agreement on Friday morning, the two companies announced.
Early results show that 90% of Cigna shareholders favored the deal, as did 78% of Express Scripts shareholders.
"By approving our proposed combination, Cigna and Express Scripts stockholders recognize and validate the highly attractive value this transaction delivers to all stakeholders," Express Scripts CEO Tim Wentworth said in a media release.
"Together, we will transform healthcare by combining two innovative healthcare services companies that will have the capabilities, financial flexibility, reach and expansion opportunities to create significant and immediate value for clients and stockholders," Wentworth said.
Cigna CEO David M. Cordani called the strong endorsement by shareholders a "recognition of the combination's significant value creation potential."
Cordani has been an unabashed cheerleader for the deal.
"Our combined company will enhance Cigna's differentiated service-based model, fueled by actionable insights and analytics, to drive innovation and meaningful growth in a highly dynamic market environment," Cordani said. "As a result, we will build more effective partnerships, further improve health outcomes and deliver a superior customer experience."
The final voting results will be filed with the Securities and Exchange Commission.
The merger is the subject of a Department of Justice antitrust review. If the deal clears those regulatory hurdles, it is expected to close by the end of this year.
Stakeholders want underserved communities to have the same cutting-edge technology, entrepreneurialism and problem-solving focus that is used by top health systems.
The 17 health systems collaborating in the newly created Medicaid Transformation Projectsay they want to close the gap between the needs of vulnerable populations and the healthcare they receive.
The collaborative, which includes 280 hospitals in 21 states, will focus on several problem areas for underserved communities, including behavioral health, women and infant care, substance use disorder, and avoidable emergency department visits.
Rich Roth, chief strategic innovation officer at San Francisco-based Dignity Health, one of the "anchor" health systems in the collaborative, spoke with HealthLeaders about the project and what the health systems hope to accomplish. The following is a lightly edited transcript.
HLM: Why is the Medicaid Transformation Project Needed?
Roth: There needs to be an injection of the next level of innovation and entrepreneurialism for all communities, including those people who are most vulnerable. There has been a lot of innovation, but sometimes it's innovation for a certain segment of the population but not for everyone. It is incumbent upon us to drive that innovation for all communities, all individuals, regardless of their payer status.
HLM: Can you provide an example of how this transformation would work?
Roth: At Dignity Health, for example, we have strong expertise in digital transformation; using novel care models and digital methods to care for all populations. Other systems have expertise in different things. This is a chance for us to get around the table and help drive transformation based upon our shared accomplishments in unique areas and help to create things that may only work in one state or service area now, and that need fuel to help them scale nationally to accomplish the goals of benefitting all individuals.
That could be through solutions individual systems have created. It could be through an entrepreneurial company, or it could be finding needs at the table for these forward-leaning systems that say "we need a solution in this area" and co-creating something to address problems that are not effectively being addressed.
HLM: One of the project's focus areas is avoidable ER visits. How might that be addressed?
Roth: In an ideal world you want to treat patients in a manner that is close to their home, convenient to their needs and which embraces them in preventative health holistically. There are great examples of this happening throughout the healthcare delivery system, but it's not necessarily done at scale.
At Dignity Health we have been working with a connected inhaler that our teams have helped develop. That work resulted in 100% reduction in hospitalizations, and a 60% reduction in ER visits for children with challenging asthma conditions, with an average savings of $600 per patient per year.
We can scale that throughout Dignity. But if we are to truly address this problem as a nation, that means broader scale beyond what we can do. We are forward-leaning those types of methods and capabilities to scale to other areas of the country and other health systems.
We will also learn from other systems that address similar problems. It will be about understanding the challenges in the ER, and working together to cross the chasm with innovation that makes a difference, and to scale it nationally.
HLM: What metrics will you use to measure success?
Roth: We ultimately are going to measure success in the areas we focus on in their ability to reduce the cost of care, improve quality, and improve access for people who face barriers today.
For example, when you talk about ER overcrowding, interjecting more services that keep people out of the ER in a preventative way. That is a win for us, the systems, and individuals who get a more personalized experienced.
HLM: Where is CMS's role in this project?
Roth: While CMS is not an official member, per se, because that is not their role, we will absolutely work with their programs and advocate and support changes to policies and programs that allow for better support for these communities.
HLM: Andy Slavitt has been an outspoken critic of CMS and President Trump. Could his lead role in this project be seen as a shot across the bow?
Roth: Andy has sat in the CMS chair. He understands how to make change. He has created a strong bipartisan group out of the United States of Care, which includes people from both sides of the aisle. He's been a successful entrepreneur as well. He is going to be an important voice. But if you look at our assemblage of systems, they're from all over the country and they recognize this not as a political problem, but as a community health problem and a public health problem and that is the lens we all see this in.
We see this as an effort to serve patients in communities, regardless of what state you are in. The diversity of the systems in the project and where they're from speaks to that.
HLM: Your media release announcing the project struck a tone of urgency. Why?
Roth: The feeling is that healthcare is changing and we are seeing various issues that exist in our community. With the rise in certain conditions, such as opioids abuse and other public health and social issues, the only way to get in front of it is to take a leadership position and do so in partnership not only with peers but with the entrepreneurial community to create systems, models and processes that are sustainable and can impact change for populations.
Now is the time for forward leaning systems, entrepreneurs and others to partner together to create change. There is a tremendous platform out there. New technologies have been developed. We need to get them in practice, and we need to make sure they are addressing real problems in real communities in ways that helps the healthcare system become more sustainable.
Former CMS Acting Administrator Andy Slavitt will co-lead collaborative that focuses on behavioral health, women and infant care, substance abuse and avoidable ER visits.
Seventeen health systems in 21 states are collaborating to identify, develop, and scale financially sustainable digital solutions to improve healthcare for the 75 million Americans on Medicaid.
The Medicaid Transformation Project will focus on critical challenges facing vulnerable populations across the country, including behavioral health, women and infant care, substance use disorder, and avoidable emergency department visits.
"Geisinger has joined the Medicaid Transformation Project because of AVIA’s emphasis on action. ... The gap between the needs of vulnerable populations and the healthcare they receive is too great," said David Feinberg, CEO of Geisinger, in Danville, Pennsylvania, one of five "anchor" health systems in the collaborative.
"We are no longer interested in discussing the problems our patients are facing or just piloting solutions – we’re interested in solving them as quickly as possible," Feinberg said.
The collaborative will be led by AVIA, the health system digital transformation network, and Andy Slavitt, former acting administrator at the Centers for Medicare & Medicaid Services, and founder of the venture capital firm Town Hall Ventures.
"The current healthcare system fails the people who need it most," Slavitt said. "The Medicaid Transformation Project will be part of a decade-long journey leading some of the best health systems in the country. Our work will be to deepen and refine the best innovations and then implement them at an accelerated pace at providers across the country."
Slavitt is an outspoken critic of the Trump administration and its ongoing efforts to hobble the Affordable Care Act and reform Medicare and Medicaid. It is not clear if the collaborative intends to work with Medicaid, or in spite of it, to achieve its transformational goals. No mention of collaboration with the current leadership at CMS made in a media release issued by the collaborative.
AVIA will work with a team at each health system to implement solutions that share best practices across the network, and create a roadmap for partner organizations to act quickly to create change. The work will feature a Leadership Council, chaired by Slavitt and composed of health system CEOs.
The collaborative said that Medicaid in its existing form is not sustainable, and the fallout from a destabilized program could be catastrophic. Medicaid insures one-in-five Americans, pays for 50% of births in the United States, is the biggest payer for behavioral health services, and with Medicare accounts for 33 cents of every dollar for physician services.
Combined, the 17 hospitals in the collaborative span 21 states, 280 hospitals with more than 53,000 hospitals beds, and more than $100 billion in combined annual revenues.
The collaborative said the allied health systems will be able to better meet their communities' needs by adopting shared digital solutions and innovative care models.
In addition to the five anchor health systems, the 12 other health systems in the Medicaid Transformation Project are:
