FUTURE OF MEDICINE?
Allegheny Health Network opens a sleek, 10-bed hospital in Westmoreland County.
Allegheny Health Network opened a sleek, 10-bed hospital in Westmoreland County on Friday — a first of its kind in Pennsylvania — and a model of care that officials say is the future of medicine.
The microhospital concept is so new that federal regulations are rapidly evolving to catch up with what advocates describe as an advance in the way health care is provided.
The 80,000-square-foot Hempfield Township hospital — the first of four that AHN corporate parent Highmark Health plans in Western Pennsylvania — will also contain a cancer treatment center scheduled to open early next year. Highmark and AHN officials joined elected representatives in cutting the ribbon to
AHN Hempfield Hospital, which will begin accepting patients in a few weeks.
“This is the model for the future,” Highmark President and CEO David Holmberg said. “It’s really changing health care.”
Highmark also has plans to open tiny hospitals in McCandless, Harmar Township and Brentwood.
Although AHN Hempfield is licensed as a general acute care hospital — with an emergency room and inpatient beds — the facility has no operating rooms or maternity or intensive care units. Patients who need definitive medical care for such things as strokes, heart attacks and broken hips will be taken by ambulance to other hospitals, a practice that hospital administrators sometimes call “capture and transfer.”
“We’re going to have stabbings walking in the front door,” said David Stillwell, region president of Highmark hospital development partner, Emerus Holdings Inc. “We can stabilize anything that comes in the door.”
Houston-based Emerus, which was founded in 2006 by a group of emergency medicine doctors, has 28 facilities nationwide and another 25 microhospitals in development, according to the company’s website.
For consumers, microhospitals offer speed and convenience — and, in the case of AHN Hempfield, a much-needed boost to local taxing authorities because the hospital is for-profit. Moreover, the hospital will employ 80 to 90 people, most from the surrounding communities.
Systemwide, the average time to see a doctor after coming into
an Emerus hospital is just six minutes, Mr. Stillwell said.
The new tiny hospitals are profitable when compared to most nonprofit community hospitals.
Nationwide, for-profit hospitals had an average operating margin of 10%, compared to 0% for nonprofit hospitals, according to 2016 survey by the Washington, D.C.-based Center for American Progress, a public policy research and advocacy group.
Microhospitals also offer a reimbursement bump, courtesy of the federal government, which is typically twice the Medicare payment for the same care provided in an ambulatory surgery center, according to Harold Miller, president and CEO of the Center for Healthcare Quality and Payment Reform, a Downtown-based consultant.
But Medicare regulations for microhospitals are evolving quickly, which could affect future reimbursement rates. In 2017, for example, the Center for Medicare and Medicaid Services targeted microhospitals in refining the definition of “hospital” to mean an institution that is “primarily engaged in providing inpatient care.”
Preceding the new CMS definition for a hospital was a yearslong dispute between the federal agency and Wills Eye in Philadelphia, historically an outpatient surgery center, which created a fourbed inpatient unit in 2011.
CMS said Wills did not meet the definition of a hospital, which Wills disputed. The matter was resolved in 2018 when CMS reversed itself and granted it status as an acute care hospital.
CMS said it would consider a hospital’s average daily census and length of stay — minimums of two patients and two days each — in determining whether a microhospital was eligible for
Medicare reimbursement.
Mr. Stillwell said AHN would not have a problem meeting those requirements: The average length of stay at Emerus hospitals is 2.6 days, and the average daily census is five patients.
Further refinement of the rules covering microhospitals appears likely as federal regulators try to prevent operators from claiming the designation — and the higher reimbursement — of a general acute care hospital when inpatient care is not the facility’s primary purpose.
At an April 2018 meeting of the Medicare Payment Advisory Commission in Washington, D.C., which advises Congress on hospital reimbursement and other matters, commission chair Francis J. Crosson said microhospitals needed more scrutiny.