As small hospitals ally with big ones, do patients benefit?

https://www.washingtonpost.com/national/health-science/as-small-hospitals-ally-with-big-ones-do-patients-benefit/2019/01/25/ccd50f2c-0a14-11e9-88e3-989a3e456820_story.html?utm_term=.44da63db320e

After seven years of a vigorous fight, Jim Hart worried he was running out of options.

Diagnosed with prostate cancer at age 60, Hart had undergone virtually every treatment — surgery, radiation and hormones — to eradicate it. But a blood test showed that his level of prostate-specific antigen, which should have been undetectable, kept rising ominously. And doctors couldn’t determine where the residual cancer was lurking.

“I didn’t like the sound of that,” said Hart, a retired international oil specialist for the federal government. “I wanted it gone,” he added, especially after learning that he had inherited the BRCA2 gene, making him vulnerable to other cancers.

So when Andrew Joel, Hart’s longtime urologist at Virginia Hospital Center in Arlington, mentioned the hospital’s membership in the Mayo Clinic Care Network and suggested consulting specialists at the Rochester, Minn., hospital for a second opinion, Hart enthusiastically agreed.

A Mayo immunologist told Joel about a new PET scan, not then available in the Washington area, that can detect tiny cancer hot spots. Hart flew to Mayo for the scan, which found cancer cells in one lymph node in his pelvis. He underwent chemotherapy at Virginia Hospital Center and five weeks of radiation at the Mayo Clinic. Since September 2016, there has been no detectable cancer.

“This collaboration was sort of a magic process,” Hart said. “I feel very fortunate.”

‘Benefit by association’

Hart’s experience showcases the promise of a much-touted but little understood collaboration in health care: alliances between community hospitals and some of the nation’s biggest and most respected institutions.

For prospective patients, it can be hard to assess what these relationships actually mean — and whether they matter.

Leah Binder, president and chief executive of the Leapfrog Group, a Washington-based patient safety organization that grades hospitals based on data involving medical errors and best practices, cautions that affiliation with a famous name is not a guarantee of quality.

“Brand names don’t always signify the highest quality of care,” she said. “And hospitals are really complicated places.”

Affiliation agreements are “essentially benefit by association, ” said Gerard Anderson, a professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health. “In some cases it’s purely branding and in other cases it’s a deep association.”

A key question is “how often does the community hospital interact with the flagship hospital? If it’s once a week, that’s one thing. If it’s almost never, that’s another,” Anderson said.

Feeling ‘plugged in’

To expand their reach, flagship hospitals including Mayo, the Cleveland Clinic and Houston’s MD Anderson Cancer Center have signed affiliation agreements with smaller hospitals around the country. These agreements, which can involve different levels of clinical integration, typically grant community hospitals access to experts and specialized services at the larger hospitals while allowing them to remain independently owned and operated. For community hospitals, a primary goal of the brand name affiliation is stemming the loss of patients to local competitors.

In return, large hospitals receive new sources of patients for clinical trials and for the highly specialized services that distinguish these “destination medicine” sites. Affiliations also boost their name recognition — all without having to establish a physical presence.

In some cases, large hospital systems have opted for a different approach, largely involving acquisition. Johns Hopkins acquired Sibley Memorial and Suburban hospitals in the Washington area, along with All Children’s Hospital in St. Petersburg, Fla. The latter was re-christened Johns Hopkins All Children’s Hospital in 2016.

New York’s Memorial Sloan Kettering Cancer Center has embraced a hybrid strategy. It operates a ring of facilities surrounding Manhattan and has forged alliances with three partners in Connecticut, Pennsylvania and Florida.

“Every one of these models is different,” said Ben Umansky, managing director for research at the Advisory Board, a Washington-based consulting firm.

Local hospitals, he said, particularly those operating “in the shadows of giants,” may be better able to retain patients “by getting a name brand on their door. . . . There is a sense that they are plugged in.” (Virginia Hospital Center, for example, competes with Hopkins, MedStar Washington Hospital Center, which has an alliance with the Cleveland Clinic, and the Northern Virginia-based Inova system.)

Doctors can obtain speedy second opinions for their patients and streamline visits for those with complex or unusual medical needs, processes that can be daunting and difficult without connections.

Michael Kupferman, senior vice president of the MD Anderson Cancer Network, said it seeks to “elevate the quality of cancer care” by forming partnerships with “high-quality [hospitals] to keep patients at home and provide the imprimatur of MD Anderson.”

Virginia Hospital Center’s association with Mayo is “not just a branding affiliation, it’s a deep clinical affiliation,” said Jeffrey DiLisi, senior vice president and chief medical officer at the Arlington facility.

Despite extensive marketing, many patients seem unaware of the linkage. “We still think a lot about ‘How do we communicate this?’ ” DiLisi said.

Although affiliation agreements differ, many involve payment of an annual fee by smaller hospitals. Officials at Mayo and MD Anderson declined to reveal the amount, as did executives at several affiliates. Contracts with Mayo must be renewed annually, while some with MD Anderson exceed five years.

Acceptance is preceded by site visits and vetting of the community hospitals’ staff and operations. Strict guidelines control use of the flagship name.

“It is not the Mayo Clinic,” said David Hayes, medical director of the Mayo Clinic Care Network, which was launched in 2011. “It is a Mayo clinic affiliate.”

Of the 250 U.S. hospitals or health systems that have expressed serious interest in joining Mayo’s network, 34 have become members.

For patients considering a hospital that has such an affiliation, Binder advises checking ratings from a variety of sources, among them Leapfrog, Medicare, and Consumer Reports, and not just relying on reputation.

“In theory, it can be very helpful,” Binder said of such alliances. “The problem is that theory and reality don’t always come together in health care.”

Case in point: Hopkins’s All Children’s has been besieged by recent reports of catastrophic surgical injuries and errors and a spike in deaths among pediatric heart patients since Hopkins took over. Hopkins’s chief executive has apologized, more than a half-dozen top executives have resigned and Hopkins recently hired a former federal prosecutor to conduct a review of what went wrong.

“For me and my family, I always look at the data,” Binder said. “Nothing else matters if you’re not taken care of in a hospital, or you have the best surgeon in the world and die from an infection.”

 

 

 

Financial updates from Banner, Kaiser, Mayo + 3 other health systems

https://www.beckershospitalreview.com/finance/financial-updates-from-banner-kaiser-mayo-3-other-health-systems.html?origin=cfoe&utm_source=cfoe

The following six health systems recently released their financial statements for the nine-month period ended Sept. 30:

1. Phoenix-based Banner Health’s revenue climbed 7.2 percent year over year to $6.3 billion in the first nine months of 2018. The system ended the first nine months of this year with operating income of $122.1 million, down 37 percent from $192.9 million in the same period a year earlier.

2. Oakland, Calif.-based Kaiser Permanente’s revenue climbed to $59.7 billion in the first nine months of 2018, up 9.6 percent from revenue of $54.5 billion in the same period of 2017. Kaiser ended the first nine months of this year with operating income of $2.03 billion, compared to $2.33 billion in the same period of 2017.

3. Rochester, Minn.-based Mayo Clinic ended the first nine months of 2018 with revenue of $9.5 billion, compared to $8.8 billion in the same period of 2017. The system reported operating income of $601 million in the nine months ended Sept. 30, up 32 percent from the same period of 2017.

4. Bronx, N.Y.-based Montefiore Health System recorded revenue of $4.4 billion in the nine months ended Sept. 30, up from $4.1 billion in the same period a year earlier. The system ended the first nine months of this year with operating income of $59.6 million, up from $37.7 million in the same period of the year prior.

5. Arlington-based Texas Health Resources recorded revenue of $3.5 billion in the first nine months of 2018, up from $3.4 billion in the same period a year earlier. The system ended the first nine months of this year with operating income of $168.7 million, down from $174.5 million in the same period of 2017.

6. Pittsburgh-based UPMC reported revenue of $13.9 billion in the first nine months of this year, up from $11.4 billion in the same period of 2017. The system ended the first nine months of 2018 with operating income of $190 million, down from $196 million in the same period of 2017.

 

Adventist Health’s net income nears $230M in FY17

https://www.healthcaredive.com/news/adventist-healths-net-income-nears-230m-in-fy17/522093/

Dive Brief:

  • Adventist Health’s net income grew 366% to $229.8 million in fiscal year 2017, up from $169.1 million in 2016.
  • Operating income was $203.9 million for the year ended Dec. 31, an 11.6% increase from $812.8 million the previous year, according to recent released financial documents.
  • The 90-hospital, Roseville, CA-based nonprofit health system reported $4.1 billion in revenue, a 5.8% gain over 2016’s $3.9 billion.

Dive Insight:

Adventist’s rosy performance gain reflects at least a short-term upward trend in financials as nonprofits show some signs of bouncing back from several years of rough currents fueled by shrinking volumes and reimbursement cuts. Geisinger Health System saw net income jump nearly $200 million to $324.9 million in the first half of fiscal year 2018, compared with the prior year, providing an excess margin of 9%.

Mayo Clinic reported $707 million in operating income and $12 billion in revenue for 2017, an increase of more than $225 million and $1 billion, respectively, from the previous year. Meanwhile, UPMC’s net income rose to $1.3 billion last year, spurred by strong operating and investing results and integration of UPMC Pinnacle into UPMC operations. Operating revenue and operating income also increased.

Adventist is looking to expand its brand footprint. Earlier this month, the system inked a deal to acquire Florida-based 421-bed Munroe Regional Medical Center from Community Health Systems. It has also broadened its reach in northern California through an affiliation agreement with Fremont-Rideout Health Group, which become effective at the first of this month.

Net patient service revenue at Adventist was $3.8 billion, up from $3.6 billion a year earlier. Total expenses rose to $3.9 billion, versus $3.7 billion in 2016. Of that, $1.9 billion was for employee compensation. The system recorded total cash and investments of $1.9 billion for last year.

Occupancy of licensed beds stayed mostly flat at 55.6% across the system. Average length of stay was down slightly and outpatient revenues as a percentage of gross patient revenue was down to 44.7% from 45.1% in 2016.