Ru­ral groups opt for change

Hospi­tal merg­ers could lead to higher prices for pa­tients.

The Denver Post - - FRONT PAGE - By John In­gold

Yampa Val­ley Med­i­cal Cen­ter in Steam­boat Springs has stood for 71 years as an in­de­pen­dent bas­tion of health care in its bu­colic moun­tain com­mu­nity.

“We’ve done very, very well here from a stand­point of qual­ity of care,” its CEO, Frank May, said.

But Yampa Val­ley won’t make it to 72 years on its own.

The 39-bed hospi­tal an­nounced last month that it is merg­ing with Colorado hospi­tal heavy­weight UCHealth, which al­ready en­com­passes seven other hos­pi­tals and more than 1,600 pa­tient beds in the state. In do­ing so, Yampa Val­ley has be­come the lat­est ru­ral hospi­tal in Colorado to be gob­bled up by grow­ing Front Range health care sys­tems — a vo­ra­cious process that an­a­lysts say is sav­ing some of Colorado’s most vul­ner­a­ble hos­pi­tals but could also lead to higher prices for pa­tients.

The force driv­ing the trend is sim­ple eco­nom­ics, said Al­lan Baum­garten, a Minneapolis-based con­sul­tant who pro­duces re­ports on the busi­ness of hos­pi­tals. As smaller, ru­ral hos­pi­tals la­bor un­der the weight of ever-more so­phis­ti­cated tech­nol­ogy de­mands, larger hos­pi­tals are look­ing to spread the in­vest­ments they’re mak­ing into those ar­eas across greater num­bers of pa­tients.

As a re­sult, what used to be thought of as lo­cal health net­works have ex­panded to cover in­creas­ingly broad swaths of the state. And it’s not just in Colorado where this is hap­pen­ing.

“It’s a trend that’s been in mo­tion for more than a decade, at least in cer­tain states,” Baum­garten said. He added: “The no­tion of what your lo-

cal mar­ket is is re­ally chang­ing sig­nif­i­cantly.”

In Colorado, the last decade has seen a flurry of con­sol­i­da­tion among hos­pi­tals.

UCHealth, known for its flag­ship Univer­sity of Colorado Hospi­tal in Aurora, added Me­mo­rial Hospi­tal in Colorado Springs and Poudre Val­ley Hospi­tal in Fort Collins to its quiver. SCL Health, which op­er­ates Den­ver’s Saint Joseph Hospi­tal, scooped up Platte Val­ley Med­i­cal Cen­ter in Brighton.

Cen­tura Health, owner of St. An­thony Hospi­tal in Lake­wood, has been par­tic­u­larly ac­tive in ru­ral Colorado. The health sys­tem added Du­rango’s Mercy Re­gional Med­i­cal Cen­ter in 2011, bought a Frisco physi­cians’ group in 2015, and has also taken over man­age­ment of Leadville’s St. Vin­cent Hospi­tal, which would have likely closed with­out Cen­tura’s in­ter­ven­tion. The lat­ter is of­ten seen as a good ex­am­ple of con­sol­i­da­tion help­ing to keep cash-strapped small-town hos­pi­tals vi­able.

“We want to keep health care lo­cal,” a Cen­tura spokesman said at the time the St. Vin­cent deal was an­nounced.

That, said Baum­garten, is the up­side of merg­ers.

Small-town hos­pi­tals can find them­selves in a Catch-22, he said. Be­cause ru­ral ar­eas of­ten have higher per­cent­ages of peo­ple on Med­i­caid and Medi­care, the hos­pi­tals there may not make as much money as their big-city brethren. Be­cause the hos­pi­tals are small, though, they strug­gle to at­tract the spe­cial­ists and buy the high­tech equip­ment that could lead to greater rev­enue.

“Ru­ral hospi­tal lead­er­ship re­ally has a lot of com­pet­ing things they have to worry about,” said Tif­fany Rad­cliff, a pro­fes­sor at the Univer­sity of Colorado’s School of Medicine who stud­ies health eco­nom­ics.

The merg­ers, though, may bring new wor­ries for pa­tients. Rad­cliff pointed to a study last year of hospi­tal merg­ers in the same state but dif­fer­ent lo­cal mar­kets. Fol­low­ing the merg­ers, health care prices in­creased 6 to 10 per­cent, ac­cord­ing to the study.

“It seemed like the cost in­creases may have been due to a lit­tle bit of mar­ket power,” she said.

May, the Yampa Val­ley CEO, said his hospi­tal’s merger with UCHealth isn’t about mak­ing more money but about pro­vid­ing bet­ter care.

Prior to the merger, the hospi­tal had to shift nurses out of clin­i­cal care and into ad­min­is­tra­tive roles to keep up with pa­per­work. It also had to send pa­tients down to Den­ver when they needed spe­cialty care — such as in neu­rol­ogy — that the hospi­tal couldn’t pro­vide. Join­ing with UCHealth means Yampa Val­ley will have ad­min­is­tra­tive help, and it also means that spe­cial­ists from UCHealth will travel to Yampa Val­ley a few days a week to see pa­tients in Steam­boat Springs.

“I do have to ac­knowl­edge that sus­tain­abil­ity for the fu­ture was part of the con­ver­sa­tion,” May said.

But the thing he’s most ex­cited about?

“We re­ally have an in­fras­truc­ture,” he said, “that is go­ing to get us into the fu­ture and pro­vide pa­tients with as high-qual­ity care as pos­si­ble.”

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