The two hospital systems signed a letter of intent to explore a merger in December 2018.

Miami-based Baptist Health South Florida has finalized its previously announced acquisition of Boca Raton Regional Hospital, the two hospitals announced Monday.

"We foresee an exciting future at Boca Raton Regional Hospital that will cement its title as the preeminent healthcare provider in the community," Baptist Health South Florida CEO Brian E. Keeley said in prepared remarks.

Financial terms of the deal were not disclosed.

The two nonprofit hospital systems signed a letter of intent to explore a merger in December 2018.

At that time, Keeley said acquiring the 400-bed BHHR made sense because Baptist Health was looking to expand its regional footprint.

"As Baptist Health has grown in recent years to meet the needs of our communities, we have clearly defined our service area as being from Palm Beach County down to the Florida Keys," Keeley said in December. "Boca Raton Regional Hospital will be a strong complement to the services we offer at Bethesda Hospital East and Bethesda Hospital West, along with our outpatient centers in the area."

In May, BRRH named Lincoln S. Mendez as its new CEO to succeed Jerry Fedele when he retires next month. Mendez was CEO at Baptist Health's South Miami Hospital.

“Today’s announcement concludes a process that will elevate our position as an advanced, tertiary academic center," BRRH Board Chair Christine E. Lynn said.

In 2017, Baptist Health merged with Bethesda Hospital East and Bethesda Hospital West in Boynton Beach. The BRRH acquisition brings the number of Baptist Health hospitals to 11.

Baptist Health is the largest healthcare provider in South Florida, with nearly 23,000 employees, more than 4,000 physicians, and more than 100 outpatient centers across four counties.

Cleveland Clinic Florida CEO Wael Barsoum, MD, says removing the artificial barrier to competition will improve access to care and lower costs.

Florida Gov. Ron DeSantis this week signed a repeal of the state's certificate of need law, and one hospital CEO couldn't be happier.

"I'm glad it's gone," says Wael Barsoum, MD, CEO of Weston-based Cleveland Clinic Florida. "It's better for our communities and better for our patients. Competition is a good thing. It drives lower costs and it drives better quality."

Removing artificial barriers to competition "forces providers to compete on a more level playing field," Barsoum says. "Areas that have been underserved will have the opportunity now to have more healthcare services."

"Organizations that have historically provided average or below average care will have to step up their game," he says. "Otherwise, other providers will come in and compete aggressively with them to force an improvement in quality."

Florida's CON laws, enacted in 1973, were scaled back somewhat about a decade ago and mainly regulate new and replacement hospital projects further than one mile from a main hospital, and some high-cost subspecialties such as organ transplants and neo-natal intensive care units.

The repeal takes effect on July 1.

Florida Hospital Association President Bruce Rueben took a neutral stance on the CON repeal, noting that the regulation "is intended to ensure that the full continuum of healthcare services are available throughout Florida regardless of community income levels or the number of people with health insurance."

"That safeguard to access for hospital services has been removed in an effort to promote competition for hospital services," Rueben said in prepared remarks. "Over time, our state will learn whether this goal is accomplished and whether it was worthwhile."

Barsoum says many health system executives unjustly fear that removing CON laws "is going to lead to kind of Wild West and hospitals are going to be popping up everywhere and everyone's going to start transplant programs and trauma programs."

"I don't think that's the case," he says. "Most healthcare leaders today are very, very savvy about the economics of healthcare, and recognize where there's an opportunity to better serve a community or where there's an opportunity to better serve a need."

"Most of our most of our communities are relatively well represented today, so I don't think that folks are going to be really excited about spending tens or hundreds of millions of dollars in areas just to compete. The market is going to drive where we see growth and where we see more competition."

The Federal Trade Commission for more than one decade has sharply criticized CON laws as anticompetitive, and the Trump Administration urged states to repeal their CON laws last December.

Proponents of the repeal have been fighting for more than a decade.

Although there appears to be a growing movement to repeal CON laws in several states, only 12 states now have none. Defenders of CON laws say they're needed to protect against niche healthcare providers "swooping in" and "cherry picking" profitable services and leaving safety net hospitals in the lurch.   

Barsoum dismisses that argument.

"'Cherry picking' is a great term that people like to lean on when they're worried about competition," he says. "But the truth is, there's no data that really supports that. The market pressures in healthcare are pretty significant, and starting subspecialized services or building hospitals is extremely capital intensive."

"Unless you really think you can do it better, and unless you really think there's a need, I don't think that you'll find healthcare organizations going into those areas because the burden of entry is relatively high."

Barsoum says CON laws have thwarted Cleveland Clinic Florida's expansion plans on several occasions through the years.

"For years and years, we were not able to open a hospital in Weston. It took many attempts before we finally got one open," he says.

"For years, we weren't able to start an open-heart surgery program when we were in Naples. We ended up selling our hospital there," he says. "There isn't a day that goes by that I don't hear from somebody on the west coast of Florida who asks when we're coming back."

"And over the last several cycles, we've applied to do bone marrow transplants here in our Weston hospital, and we've been thwarted by a very low-volume program that does not want to see us get into that market," he says.

"We have international patients and patients from all over the country who want to come to us for these types of procedures that we have not been able to do, which we will now start," he says.

Barsoum says he doesn't see any downsides to repealing the CON laws "when I look at it from a patient's perspective."

"I see potential downsides to healthcare providers who are looking to profit in healthcare without providing very high quality," he says. "You may find some groups that feel that the elimination of CON is bad because they don't do as well financially as they used to. That's a danger to them. In the end, it's a benefit to the community and a benefit to the patients."

Sun allegedly received $140,000 in bribes and kickbacks from Insys Therapeutics in exchange for prescribing more than 28 million micrograms of Subsys.

A pain management physician has been indicted for allegedly taking more than $140,000 in bribes and kickbacks from the drug maker Insys Therapeutics in exchange for prescribing the company's fentanyl product.

Kenneth Sun, MD, 58, of Easton, Pennsylvania, was arrested Tuesday and charged with one count of conspiracy to defraud the federal government and four counts of receiving health care kickbacks, the Department of Justice said.

A trial date has not been set.

Sun was the owner of Progressive Pain Solutions, LLC, a pain management medical practice with clinics in Phillipsburg, New Jersey, and Wind Gap, Pennsylvania.

According to the indictment, Sun allegedly asked for and got more than $140,000 in bribes and kickbacks from Arizona-based Insys Therapeutics in exchange for prescribing more than 28 million micrograms of Subsys, a fast-acting and expensive opioid that is sprayed under a patient's tongue.

Subsys, which costs thousands of dollars for a month's supply, contains fentanyl, a synthetic opioid pain reliever which is much more potent than morphine, DOJ said.

The Food and Drug Administration approved Subsys only for the "management of breakthrough pain in cancer patients who are already receiving and who are tolerant to around the clock therapy for their underlying persistent cancer pain," DOJ said.

The indictment alleges that Sun prescribed Subsys to patients for whom the drug was medically unnecessary, and for whom the drug was not covered by insurance. In some cases, the drug was prescribed to patients who didn't want it, DOJ said. 

The bribes and kickbacks that Sun allegedly received from Insys Therapeutics were disguised as "honoraria" for "sham" Subsys educational presentations, DOJ said.

The indictment said that the presentations were often held in upscale restaurants, attended by the same people, most of whom were not licensed clinicians, and that in some cases Sun did not even attend the presentations.

The end result of the scheme was that Sun's allegedly bogus prescribing of Subsys caused Medicare to pay more than $847,000 for a drug that was medically unnecessary, procured illegally, and not eligible for Medicare reimbursement, the indictment said. 

Several people affiliated with Insys and medical practitioners involved in the kickback scheme already have been charged and convicted in Connecticut and other states. 

On Tuesday, a federal judge in Connecticut on sentenced the wife of Insys CEO Michael Babich to five years of probation for her role in the company's widespread kickback scheme.

Natalie Devine, 35, of Scottsdale, Arizona, worked for Insys in 2013 and 2014, as a sales rep in New England. She pleaded guilty last year to one count of conspiracy to violate the Anti-Kickback Law.

Babich pleaded guilty in January to federal conspiracy and fraud charges stemming from the scheme. He awaits sentencing.

On May 2, Insys founder John N. Kapoor and four other former Insys executives were found guilty of racketeering conspiracy.

Earlier this month, Insys Therapeutics agreed to pay a $225 million to resolve criminal and civil investigations of the company. The company filed for bankruptcy protection on June 10.

 

In the face of barriers to financial solvency, some rural hospitals are taking the initiative to improve access to care as they transition from inpatient services toward population health.

This article appears in the May/June 2019 edition of HealthLeaders magazine.

Name the most intractable problems of healthcare delivery in urban hospitals, and they are likely worse for rural hospitals.

Rural providers contend with a sparsely concentrated population that tends to be older, sicker, and poorer than urban residents. These providers often work in geographic isolation within a crumbling or nonexistent healthcare infrastructure, with fewer clinical support options and chronic staffing shortages.

Sixty million Americans—roughly 20% of the population—live in rural areas, according to U.S. census data, but only 11% of physicians and 16% of nurses practice in rural areas. Mortality rates are higher in rural America, too. Delays in emergency care due to transportation time to remote hospital emergency departments can often mean the difference between life and death for rural Americans.

In addition, few rural hospitals can rely on economies of scale, so they are left with higher costs and almost no leverage with health insurers. 

These hardships have taken their toll. The University of North Carolina's Cecil G. Sheps Center for Health Services Research reports that 106 rural hospitals have closed since 2010.

In the face of these persistent barriers to financial solvency, some rural hospitals are taking the initiative, capitalizing on factors they can control to improve access to care as they transition away from inpatient acute care services and toward chronic disease management, population health, and value-based care. 

These initiatives come as more attention is being given to social determinants of health. Rural hospitals are asked to contend with even more factors that occur outside hospital walls, such as the poor health outcomes associated with poverty, unemployment, poor nutrition, and lack of care access.

Margaret Greenwood-Ericksen, MD, an assistant professor of emergency medicine and a health services researcher at the University of New Mexico School of Medicine, says the intransigence of rural poverty is exacerbated by a lack of social services and community resources.

"And so hospitals might have to assume more responsibility and rural areas for addressing patients' social determinants of health because there really aren't community organizations like there are available in urban areas," Greenwood-Ericksen says.

"We're all moving towards fewer inpatient admissions," she notes. "The goal now in healthcare is to try to get patients home in a way that is safe and in a way where they feel supported. We need to be putting more effort and resources toward safely caring for patients and their families outside the hospital."

HealthLeaders spoke with two rural hospital executives who are working on rural healthcare delivery reform by using strategies that reduce inpatient beds and concentrate resources on preventive care and population health.

Atrium Health thinks small
 

When it was time to think big and replace the 52-bed Hill-Burton-era Anson Community Hospital in Wadesboro, North Carolina, management at Carolinas HealthCare System (now Atrium Health) went small.

"We had a very rural hospital that was at the end of its useful life, and we realized that the model of care wasn't sustainable from our financial model," recalls Mike Lutes, president of the southeast division at Charlotte, North Carolina–based Atrium Health.

"We were losing about $8–$10 million a year. But more importantly, the health outcomes for the community weren't very good. Out of 100 counties in North Carolina, we were about 94th for staying healthy," Lutes says.

The health system found itself in a predicament, chained to a money-losing, obsolete hospital using an outmoded acute care model for a dwindling daily census of between three and five inpatients.

But Atrium couldn't just walk away. The aging Anson Community Hospital was the only access to acute and emergency care for a region already struggling with the effects of chronic illnesses such as diabetes, obesity, and cardiovascular disease.

"So we're here with outcomes that weren't very good, but we didn't want to leave this rural community. We wanted to make sure this community had access to high-quality healthcare. We thought we were the right system to do it. And quite honestly, since we are a mission-driven organization, we realized that if we left this rural community, there wasn't anyone else that was going to come in behind us," Lutes says.

Building a new model

Rather than leave the region as a healthcare desert, Atrium Health rethought the care model from the ground up.

The health system built a $20 million, 43,000-square-foot hospital that is as much a hub for a medical home with primary and population health services as it is a provider for acute, inpatient care, and emergency services.

"To really embed this medical home, we needed to have a new facility. We wanted something that was financially sustainable for the community for a long period of time and that allowed us to focus on health outcomes," Lutes says.

The new Atrium Health Anson hospital opened in mid-2014, and it's about half the size of the old community hospital. It has 15 inpatient beds, a 24/7 emergency department with a trauma room, and adjacent dedicated spaces for primary, specialist, behavioral health, and ancillary services.

"What really makes our model work is that we co-embedded this medical home inside the ER," Lutes says. "If you go inside our ER, it's fairly large, with 10 ED bays. There's about 13 bays that we considered to be part of our medical home, with a combination of physicians and advanced clinical practitioners."

There is also a pharmacist, a patient navigator, a behavioral health specialist, and a social worker on staff to provide "wraparound services," such as referrals to community partners.

"We realized that 40%–60% of our cases that utilize the ED could really be seen in a primary care office. We wanted to break that vicious cycle that really all hospitals have, but particularly rural hospitals," Lutes says. "They'd have an underlying chronic condition. [Patients would] come through the ED, we'd treat their condition, but then three days later, they'd show up in our ED because they've never had their chronic condition addressed."

"With our new model of co-embedding the medical home inside the ED, we have patients do the medical screening and then we transition them to the appropriate setting," he says. "We're finally addressing the underlying chronic disease rather than their just reappearing in our ED."

Providing wraparound services

Last year, Atrium Health Anson transitioned about 2,700 of its 15,000 ED patients into the medical home for more comprehensive, preventive disease management. The medical home recorded 13,000 patient visits. As a result, health outcomes have improved, including decreased incidences of cancer, obesity, COPD, and heart failure.

"It's really just having these wraparound services and getting these patients to the right care,"
Lutes says.

Atrium Health Anson also relies on telemedicine for stroke and cardiac care, and for overnight inpatient care.

"It's allowed us to bring specialists into the community that, quite honestly in a rural community of 26,000, you just wouldn't have," Lutes says. "With the virtual component, we've been able to bring specialists to the patients that they would have otherwise had to drive 45 minutes for."

Beyond the hospital walls, Atrium Health Anson has developed relationships with local charities, churches, and civic organizations in Wadesboro to sponsor screenings for diabetes, high blood pressure, and other chronic diseases, as well as promoting better nutrition and encouraging discussions about healthy living.

The hospital also uses analytics to determine which home addresses in the county are more inclined to use ED services, or which addresses don't use primary care. Often, they're the same areas. Only about 19% of county residents say they have a primary care doctor.

The hospital sends a mobile clinic to these "hot spots" to facilitate access to care, and uses the patient interactions to encourage residents to use the medical home.

"We can capture them and start addressing a chronic condition," Lutes says. "We're very strategic with how we use our services to make sure we're meeting the needs of the community."

'Enough of a profit'

In addition to improving efficiency and outcomes, Atrium Health Anson has also turned things around financially, although Lutes won't provide exact details.

"What I can tell you is we're making enough of a profit that we can continue to reinvest the capital program expansion," he says. "The hospital has been open now for five years this July, and it is a financially sustainable model. But more importantly, the health outcomes of the community are improving."

Lutes reflects on the proven sustainability of Atrium Health Anson with pride.

"It's a great story to go into a community and build a new hospital. There's just not many health systems that would do it," he says. "This is probably the most rewarding thing I've done in my career just because if we didn't do it, no one else was going to do it."

Marshfield Clinic considers its options
 

Marshfield Clinic Health System finds itself today in much the same place as Carolinas HealthCare did several years ago.

A relative newcomer to inpatient care, Marshfield Clinic will either revamp the decades-old, 25-bed Marshfield Medical Center—Ladysmith (until last year known as Rusk County Memorial Hospital) or start from scratch and build a new $35 million hospital.

"Right now, we're looking at all of our options. But one of the options we're looking at is building from the ground up to create, probably an overused term, a hospital of the future," says Susan L. Turney, MD, CEO of Marshfield Clinic, a seven-hospital, nonprofit integrated health system based in Marshfield, Wisconsin.

Whatever venue emerges, it will provide a different care model for the 14,000 citizens of Rusk County, located over 200 miles northwest of Madison.

Shifting to population health

Like Atrium Health, the emphasis at Marshfield—Ladysmith will shift from inpatient care toward a population health model that proactively manages chronic health issues in the region, such as diabetes, heart disease, and obesity, in an outpatient or virtual setting.

"We realized, as the world has changed in the external environment, it has put a lot of pressure on delivering efficient affordable care, access to care, and a great patient experience," Turney says.

The emphasis on outpatient care is a natural fit for Marshfield Clinic, which formed in 1916 as a private, physician group medical practice.

"Because we haven't been in the acute care space until the last couple of years, we have had a lot of innovation around taking care of patients differently to keep them out of the hospital or to take care of patients who need to be in the hospital in alternative sites," Turney says.

"We can care for patients closer to their homes. We can make sure that we have all the critical pieces of the healthcare puzzle working in concert, if we added acute care to our integrated health system," she says.

As part of an effort to further improve access to care in rural Wisconsin, Marshfield Clinic in May announced that it was in merger talks with La Crosse, Wisconsin–based Gundersen Health System.

"This merger would give us an opportunity to combine the unique strengths of our systems to become the preeminent rural healthcare organization in the country," Turney said in a press release related to the merger news.

A focus on outpatient care

That doesn't mean inpatient care is going away. It's just not going to be the central focus of Marshfield Medical Center—Ladysmith. The challenge is in determining where to place scarce resources.

"Until we can prevent every disease, people are going to have acute care needs," Turney says. "They're going to have trauma. They're going to have premature babies who are going to need intensive care. We're going to need some services that are just risky enough that they need to be provided in that acute care setting. I don't see that going away."

One of the biggest challenges Marshfield Clinic faces is determining exactly what inpatient services should be provided at the reconfigured Ladysmith hospital.

"That's a tough question because every community that we're in will be a little bit different, just because of the patient demographics and what access our patients have to the other facilities," Turney says.

"Certainly OB care is a real struggle in rural communities, so that's something we have to have up front and center," she says. "Then, we think about the major types of medical conditions, treating the chronic diseases like heart disease, diabetes, chronic degenerative joint disease. So, orthopedics, cardiology, and endocrinology are going to be in there."

In addition to ED access, Turney says Marshfield anticipates a focus on geriatric outpatient and ambulatory services, given that the patient mix in rural areas tends to be older, less affluent, and facing multiple chronic conditions.

Accessing telehealth

Marshfield's home recovery care program uses telehealth to facilitate physician visits from the patient's home, Turney says, providing care in a lower-cost environment and "right-sizing the hospital for the future so it allows us to think differently and to do differently."

In another money-saving initiative, Turney says Marshfield has been "very aggressive moving patients out of the hospital into our ambulatory surgery center."

"Because we have built skilled nursing facilities and because we have our health plans, we have been able to extend recovery postoperatively because of our health plan for our Medicare Advantage and commercial population," she says.

As a result of that, Turney says, the only orthopedic procedures that are managed in the acute care setting are joint revisions and trauma.

"Every other orthopedic procedure is being done in the ambulatory surgery center," she says. "We've adjusted that really good care of patients in our communities. You can also see that the demand for the number of beds is going to be very different in the future than it is right now."

By partnering with Marshfield's health plan to bundle the services with a skilled nursing facility, the health system reduced the cost of care by 25%.

"Paying less for those services eventually turns into reduced premiums, and we also know that our patients are paying less out of pocket. That's a win-win-win. And they have incredible outcomes, with fewer readmissions and fewer ER visits," Turney says.

Financially sustainable

The focus on outpatient settings means that Marshfield is getting less reimbursement from Medicare, but Turney says providing value-based care has to be a priority.

"We decided that we're going to move care from the hospitals, which we now own, into the ambulatory surgery center, and we knew we were going to get paid 25% less," she says. "The objective here really is assessing what's best for your patients and your community and then figure out how to manage it."

"These are struggles because the financial vitality of organizations is dependent on getting paid for the services you provide," she says, "so when you make a conscious decision to decrease the revenue stream, you have to manage differently."

Can the model be financially sustainable? Turney believes so.

"There are many services that we provide that are not going to break even in the way reimbursement is today, yet it's extremely important to have those services," she says. "A good example would be behavioral healthcare."

"So we have the opportunity to really spread our risk throughout our enterprise," Turney says, "but it does take a lot of work to optimize services, optimize resources, and really be as efficient and effective as we can, so that the care is affordable and accessible yet we're also able to continue as a business."