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Regional hospitals – build a virtual service delivery network

The American Hospital Association published a research paper in 2011 describing the many challenges faced by rural hospitals striving to keep appropriate healthcare local and sustainable.  These challenges speak to demographics and trends in small towns across the country: changing healthcare practices moving treatment from inpatient to outpatient or physician offices, public program reimbursement levels which fail to cover the full cost of treatment, continuous erosion of local employer-sponsored health insurance, and many other factors.  In a more recent article from Modern Healthcare, academic medical centers were reported as engaged in community hospital acquisitions to capture patient referrals for complex conditions and treatments to be delivered at the major medical center. In the past, such “spoke and hub” regional hospital networks have resulted in much “basic” hospital care moving downtown as well, leaving small facilities with even less volume.  Studies have been performed in the past documenting the tendency of better educated, employed and compensated small-town residents to take their healthcare needs to the city, contributing to volumes moving to cities at the expense of local hospitals.

Many urban hospitals are landlocked.  Capacity expansion is expensive, consuming capital and creating operating challenges to support building projects.  Routine, less complicated care tends to be reimbursed at lower levels that can challenge margins.  High-quality medical staff want and need challenging cases to maintain skills and build reputations.  Urban medical centers want to build deserved reputations as the go-to facility for cardiology, oncology, neurology or other medical conditions for the city and surrounding region.  Too often, a rural community patient needing complex care is referred or transported to the urban center, never to be seen again at the local facility for any healthcare service.  Urban centers can struggle to provide primary hospital services for patients from outlying areas that really could be well served closer to home.

Medical services are becoming concentrated in large, urban facilities.  Small town hospitals are being forced to scale services down incrementally, become a Critical Access hospital, restructure as emergency and urgent care clinics or to close the doors.  Patient access to care, compliance with treatment plans, management of chronic conditions all suffer for small-town residents as barriers of time, distance, cost and ability make sound treatment difficult or impossible.

What might be done to ease congestion, capacity challenges, capture and concentrate high complexity (and better compensated) clinical services, build a reputation as a regional center of excellence, and focus capital on the needs of the urban center?  How can an urban, regional hospital work with outlying community hospitals and medical staffs to serve residents’ primary clinical needs, while assuring that healthcare delivery can remain local as is appropriate and practical?

Acquisitions are one answer.  Partnerships may be a better one.

Partnerships preserve facility focused governance and management.  Each partner focuses on clinical service quality and sustainability.  Each must manage operations and costs to produce a margin on revenues, control its’ own capital decisions and is focused on serving its’ natural market.

To be effective, the partnership model must define clinical services each partner is capable of locally.  Treatment plans of complex conditions should be analyzed to determine which partner should provide which elements of a plan, seeking to maximize those elements assigned to the local venue according to their capabilities.  Medical staff bylaws, clinical standards, medical terminology, treatment plans, order sets, drug formularies, and many other elements of clinical practice need to be integrated into a single, unified whole across all partners.  Patient medical records, telemedicine tools, physician collaboration support, must integrate to make delivery of care seamless to the patient between partners and convenient to the physicians who must bring a patient service partnership to life.  Local communities must be educated to understand that the quality of care received locally is entirely consistent with that of the regional urban center, that local medical staff and hospital practice collaborates with their urban colleagues.  When a patient does receive necessary services from the regional urban center, they must hear from every member of the urban care teams that there is confidence and respect for local colleagues, that elements of treatment to be delivered locally are under the supervision of and up to standards at the large facility.

Preservation of local healthcare avoids dangerous consolidation of resources, reduces many physical and financial barriers to patient access – helping to improve patient treatment compliance – which can reduce readmissions, improve outcomes, patient experience, and safety.  The reputations for quality for both partners are enhanced.  The urban center is recognized for quality delivery of sophisticated services.  The local hospital is seen as (and IS) a quality facility providing a level of service on par with the downtown partner.  Local clinical volumes and revenues can improve as patients are referred back to local medical staff and facilities for more routine types of treatment or elements of a complex treatment plan that can be handled soundly and safely, locally.

Urban center performance and medical staff recruitment improve as it becomes recognized as the hub of a regional collaborative healthcare system, designed with patient care, convenience and quality in mind.  Each facility board and executive leadership team is focused on optimizing the performance of their role in the partner relationship, preserving control of its direction and finances.

Everybody wins: urban centers, community hospitals, patients, medical staff, small towns, employers, and payers.

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