https://www.healthcaredive.com/news/allegheny-health-network-plans-four-micro-hospitals/526218/

Dive Brief:

• Allegheny Health Network (AHN) said it will open neighborhood hospitals near Pittsburgh in Brentwood Borough, Hempfield, Hamar and McCandless over the next year.
• The smaller facilities will be open 24/7 and offer an emergency department, 10 inpatient beds, diagnostic care and other medical services. The neighborhood hospitals will also have onsite primary and specialty care physicians.
• The four neighborhood hospitals are part of AHN and parent company Highmark Health’s $1 billion investment plan in western Pennsylvania.

Dive Insight:

AHN said it’s creating a for-profit joint venture with Emerus to build and manage the new facilities. The Texas-based company operates neighborhood hospitals, also known as micro-hospitals.

AHN said the four neighborhood hospitals are going into communities that have limited options for healthcare services.

Cynthia Hundorfean, AHN president and CEO, said the neighborhood hospitals will use a “patient-centered model” that will focus on emergency care, short hospital stays and outpatient services.

As hospitals move away from large, inpatient facilities, some healthcare organizations have turned to these kinds of facilities. They’re smaller, have less overhead and are not meant for long patient stays. More serious acute care cases would go to traditional local hospitals. Micro-hospitals have a small inpatient component, which makes them different from urgent care and standalone emergency departments.

Earlier this year, the Advisory Board Company released a report on micro-hospitals that predicted significant growth over the next five years. The report predicted that micro-hospital growth will depend on regulatory decisions and certificate of need approvals.

“Ultimately, the new wave of micro-hospitals will need to show they can consistently meet CMS’ minimum census requirements. However, the strategic flexibility these sites offer parent systems means their future can be bright. Expect significant growth over the next five years, with the potential for further growth contingent on positive clinical and financial results,” Advisory Board said.

AHN’s neighborhood hospital plan comes after the provider wing of Highmark Health reported its best operating performance year. Highmark announced in March that AHN enjoyed a nearly 8% increase in revenues in 2017 compared to the previous year. AHN finished 2017 with $3.1 billion in revenues.

Company officials said factors in the growth included stable hospital volumes and high patient acuity, greater operational efficiencies, better care coordination and improved business and clinical process, such as revenue cycle operations. In addition, physician office visits increased by more than 4% and ambulatory surgery center volume increased by 10%. However, AHN also laid off 75 employees in corporate jobs earlier this year, though the company said it plans to add another 1,000 jobs.