With eye to the future, small hospitals look to network

With eye to the future, small hospitals look to network

Record-Journal


The choice facing small hospitals isn’t whether to remain independent or partner with a larger facility. It’s which network to join and what the merger will look like.

Bristol Hospital is considering joining Yale-New Haven Health System and Tenet, a for-profit nation-wide hospital group based in Texas.

Different hospital networks, such as the Yale and the Hartford HealthCare Corporation, have different approaches for how they integrate new hospitals and how much local control is retained.

While Bradley Hospital in Southington merged with New Britain General Hospital in 2006, the two hospitals had been more loosely connected as the Central Connecticut Health Alliance for the previous 10 years. Proponents of the formal merger of the two hospitals said it would help cut costs.

Both hospitals had been losing money in the four years prior to the merger which created the Hospital of Central Connecticut.

In 2006, the former president of New Britain General Hospital Laurence Tanner said the merger wouldn’t result in a loss of services or access to the 84 beds at Bradley

“We’re going on public record saying that the need to maintain medical beds is critical,” Tanner said.

Tanner advocated for the Hospital of Central Connecticut to join the Hartford HealthCare Corporation and retired after the union in 2010. Former Bradley CEO Clarence Silvia replaced him but left in 2013 during a wave of 179 layoffs and voluntary resignations throughout the Hartford HealthCare system. MidState Medical Center CEO Lucille Janatka now leads the Hospital of Central Connecticut and MidState.

Hartford HealthCare officials reduced Bradley’s inpatient beds from 26 to 15 and proposed removing the remainder as well earlier this year. They also planned to move the hospital’s emergency room to Queen Street.

Public backlash caused officials to put those plans on indefinite hold although the inpatient bed total will remain at 15. Janatka said fewer people are staying in the hospital for procedures and the inpatient beds just aren’t used.

A former hospital executive said demographic changes and government preferences are pushing hospitals into networks and changing the healthcare industry.

Jim Albert, president of the Bristol Chamber of Commerce and Central Connecticut Chambers of Commerce, worked at Bristol Hospital, Masonicare in Wallingford and Charlotte Hungerford Hospital in Torrington. Aging baby boomers are using more health care resources but the younger generation following isn’t as large.

“You have fewer people paying into a system and more people drawing from it,” Albert said.

To attract patients, each hospital tried to have the latest and best equipment even if it was rarely used. Albert said those purchases were reimbursed by the federal government, which has now changed its reimbursement structure to favor networks over hospitals.

Those two changes mean that small hospitals are no longer sustainable, pushing them into choosing one of the handful of networks in the state.

“As a small hospital you have to pick. You have to choose which network you’ll be a part of or you’ll be shut out,” Albert said. “Anyone under $4 billion in annual revenue is discussing and thinking, ‘How do we partner with someone to survive?’”

In 2005 before the merger, New Britain General had an annual budget of $260 million and Bradley more than $40 million.

Data from the Connecticut Hospital Association shows that trend has sped up in recent years.

From 2000 to 2010, there were four attempted or successful integrations among the state’s 30 hospitals. From 2010 to the present, there have been 15 attempts.

About 15 years ago, Winsted Hospital was in danger of closing when it was bought by Charlotte Hungerford. Winsted Hospital was reduced to a few inpatient beds and a 12-hour-per-day emergency department, Albert said, while serious cases were transported to Hungerford or Hartford.

Winsted residents initially resisted the change but became accustomed to the new model, one which Albert compared to the spoke-and-hub system of airlines.

A passenger needs to fly from a small airport like Hartford to a major hub before catching a destination flight. While local hospitals will provide basic care and recovery, specialties and major operations will mean a trip to a larger regional hospital.

“Every hospital in the state can’t do everything for everyone,” Albert said. “It’s just not feasible for each hospital to have a robotic surgery unit.”

Rather than a hub-and-spoke model, Janatka said Hartford HealthCare thinks of its member hospitals as gears that work together. That leaves more services closer to the community, she said.

Hartford HealthCare officials agree though that the era of full-service hospitals in every town and city was over.

“You can’t have a full-service hospital everywhere,” said Trish Walden, president of Central Connecticut Senior Health Services which is owned by Hartford HealthCare.

From a financial perspective, the network model is efficient. But patients can feel less comfortable traveling from hub to hub, according to Albert.

“They want to see the same doctor again. They want to see the same caregivers,” he said. “You can feel you’re a widget in a big factory.”

All networks are looking to consolidate services, but Albert said Hartford HealthCare might have moved too far too fast with proposed changes at Bradley that included completely eliminating the inpatient unit and moving the emergency room.

“No one has gone the complete distance yet as Hartford is trying to do with Bradley Memorial,” he said. “You can’t have a grocery store and not have a dairy section just because you don’t have the volume. At that point, it’s not a grocery store.”

Albert said Hartford HealthCare is “heavy-handed” when it brings hospitals into its system. New facilities have to adopt the Hartford HealthCare culture and computer systems, while other networks leave more local control.

Janatka said Hartford HealthCare pursues integration with new hospitals to keep costs down and to maintain quality across the system.

“How do you do that when everyone is standing alone as individual entities?” she said. “We have a very different model because we believe we’re transforming healthcare in Connecticut.”

Chris Boyle, spokesman for Bristol Hospital, said while the institution is in sound financial shape joining with a network will avoid anticipated losses in future years.

The Affordable Care Act and healthcare trends are “making it difficult for community hospitals like Bristol Hospital,” Boyle said.

Tenet has proposed buying Bristol Hospital for $50 million and has pledged $45 million in upgrades. Hospital officials and Tenet are also negotiating an agreement that would keep the hospital’s essential services such as emergency room and inpatient unit for the next 10 years.

Boyle said it’s not yet decided which services could be consolidated and removed from Bristol if the merger is approved.

“We haven’t gotten to that level,” he said.

Tenet’s entry into Connecticut would include buying three other hospitals but is under review by the state Office of Health Care Access.

Albert said, while the Tenet portion of the merger would provide financing, partnership with Yale might be more important since it gives Bristol patients access to specialized services throughout the Yale system.

Bristol Mayor Ken Cockayne said there’s been some resistance from residents but that the move looks promising for the city.

Property taxes on the hospital will bring in $2 million per year, Cockayne said, and he trusts the judgment of the hospital board that the merger won’t hurt care.

“I’ve got to believe the hospital board did their due diligence,” he said.

jbuchanan@record-journal.com (203)317-2230 Twitter: @JBuchananRJ


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