Safety net hos­pi­tals can thrive un­der re­form

Modern Healthcare - - COMMENT - By Kate Walsh

Never in Amer­ica’s his­tory has more at­ten­tion been paid to our health­care sys­tem. As an in­dus­try and at our hos­pi­tals, we need to fig­ure out how to get rid of ex­cess costs and ac­cept that the Pa­tient Pro­tec­tion and Af­ford­able Care Act and the re­sult­ing fo­cus on well­ness and bet­ter man­age­ment of chronic con­di­tions are here to stay.

As CEO of Bos­ton Med­i­cal Cen­ter, the only hospi­tal that is both a safety net fa­cil­ity and aca­demic med­i­cal cen­ter in a state with man­dated health­care re­form, our ex­pe­ri­ence may shed some light on what hos­pi­tals are ex­pe­ri­enc­ing at this point and what they can ex­pect. Ex­pect to fo­cus on ex­pense re­duc­tion. Given that more than 50% of our in­come comes from Med­i­caid, BMC ex­pe­ri­enced fi­nan­cial tur­bu­lence be­cause Mas­sachusetts’ re­forms led to a sig­nif­i­cant de­crease in Med­i­caid re­im­burse­ment rates and a de­crease in sup­ple­men­tal state fund­ing. This com­bined with the Great Re­ces­sion put sig­nif­i­cant pres­sure on BMC’s al­ready thin mar­gins. As a re­sult, we fo­cused in­tensely on ex­pense re­duc­tion and cost-con­trol ef­forts, in­clud­ing freez­ing man­age­ment salaries and mak­ing sup­ply-chain im­prove­ments, which led to flat ex­penses year over year start­ing in 2010. All hos­pi­tals that rely on govern­ment fund­ing should pre­pare for de­creases in re­im­burse­ment lev­els and de­velop an ex­pense-con­trol plan that main­tains their fi­nan­cial vi­a­bil­ity, even as they plan for more pa­tients.

Big­ger isn’t al­ways bet­ter. Hospi­tal con­sol­i­da­tion has made head­lines, par­tic­u­larly in Mas­sachusetts, as aca­demic med­i­cal cen­ters part­ner with com­mu­nity hos­pi­tals through ac­qui­si­tions or af­fil­i­a­tions. This trend will likely con­tinue, but there is a coun­ter­vail­ing trend at play. As providers seek to deliver care in the most ap­pro­pri­ate and cost-ef­fec­tive set­ting, more care is be­ing de­liv­ered out­side of the hospi­tal in doc­tors’ of­fices and com­mu­nity health cen­ters. Fall­ing in­pa­tient vol­ume is a sign that re­form is work­ing; ev­ery hospi­tal’s in­fra­struc­ture must re­flect this new re­al­ity. At BMC, we are redesign­ing our clin­i­cal cam­pus, with greater ef­fi­cien­cies and a smaller foot­print. Cre­ated in 1996 fol­low­ing the merger of Bos­ton City Hospi­tal and Bos­ton Univer­sity Med­i­cal Cen­ter, BMC has been op­er­at­ing a split cam­pus con­fig­u­ra­tion with costly op­er­a­tional in­ef­fi­cien­cies. Ex­pand­ing our emer­gency depart­ment and cen­tral­iz­ing op­er­at­ing rooms and in­ten­sive­care units will help us meet fu­ture pa­tient de­mand and have a more im­me­di­ate pos­i­tive ef­fect on mar­gins than adding new fa­cil­i­ties.

Ig­nore con­ven­tional wis­dom. Many as­sumed that be­cause it was the re­gion’s largest safety net or­ga­ni­za­tion, BMC would be at a dis­ad­van­tage when re­form hit and people sud­denly had more choice of where to re­ceive care. How­ever, that was not our ex­pe­ri­ence. Our pa­tients chose to con­tinue to re­ceive care at BMC. We at­tribute that to two things: Our pa­tients are sat­is­fied, and they rely heav­ily on the an­cil­lary ser­vices we have built around them, rang­ing from the tra­di­tional, such as trans­porta­tion, to the unique, such as our first-in-the-na­tion hospi­tal-based food pantry es­tab­lished in 2001. This doesn’t mean safety net hos­pi­tals won’t face com­pe­ti­tion for the newly in­sured. My bet, how­ever, is that they have an ad­van­tage be­cause they are al­ready skilled at meet­ing the di­verse clin­i­cal needs of the pop­u­la­tion they serve. Fo­cus on pro­grams in­te­grat­ing care. When the Af­ford­able Care Act im­ple­men­ta­tion is com­plete, it will be less about people get­ting in­sur­ance cov­er­age and more about how that cov­er­age will work. When suc­cess­fully im­ple­mented, the ACA will in­cen­tivize providers to treat the whole pa­tient and keep people healthy.

We have fo­cused on de­vel­op­ing pro­grams that truly in­te­grate care. We see the im­por­tance of spend­ing money on non­re­im­bursable ser­vices to achieve the best health out­comes for pa­tients. We keep pa­tients in lower-acu­ity-care set­tings by in­vest­ing in care-man­age­ment ser­vices and ser­vices such as pa­tient nav­i­ga­tion, to en­sure pa­tients sched­ule fol­low-up ap­point­ments and fill pre­scrip­tions be­fore they leave the sys­tem. These pro­grams re­quire in­vest­ment and are un­likely to gen­er­ate rev­enue, but they are es­sen­tial to help­ing pa­tients make the life­style choices that im­prove their health. With­out pro­grams like these to sup­port pa­tients, many, if not most, pa­tients will fail in their ef­forts to im­prove their health. If our pa­tients can­not suc­ceed, we will have failed.

There is more change ahead for Amer­ica’s hos­pi­tals. We are ask­ing pa­tients to make their health a pri­or­ity and elim­i­nate un­healthy choices and habits they have de­vel­oped over the years. As an in­dus­try, we need to do the same thing. Providers can­not rely on the same habits and busi­ness prac­tices that have worked in the past. We must change along with the people we care for to keep our hos­pi­tals healthy and strong.

Kate Walsh is pres­i­dent and CEO of Bos­ton Med­i­cal Cen­ter.

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