Big change coming to health care here
With the recent and sweeping acquisitions of hospitals and offices in Central Pennsylvania by two major health-care networks, rural health advocates across the country are referring to this area as the canary in the coal mine, a local advocate says.
In other words, a lot of eyes are on this region as UPMC Susquehanna and Geisinger Health battle for more patients.
Change and “consolidation” is coming as health systems work to insure more people to better manage and grow their businesses, says Larry Baronner, rural health systems manager and deputy director of the Pennsylvania Office of Rural Health based in State College.
The recent transactions involving nonprofit Jersey Shore Hospital, for-profit Lock Haven Hospital, the former Bald Eagle Factory Outlets property, and non-profit Charles Cole Memorial Hospital at Coudersport were so swift that it’s all been rather breathtaking.
In just a matter of weeks:
r Geisinger Health announced an affiliation with Highmark Blue Cross/Blue Shield.
r Geisinger then announced it would acquire Jersey Shore Hospital.
r UPMC Susquehanna then announced it would purchase Lock Haven Hospital.
r UPMC followed that by buying the 100-plus acre Bald Eagle Factory Outlets directly off Route 220 at McElhattan, with its various storefronts and tons of office space and parking.
r UPMC didn’t stop there, buying Charles Cole Memorial Hospital at Coudersport and its extensive rural health clinic network that supports the hospital.
This all begs the question: Why so much, so fast?
“One reason is … it used to be that hospitals sought mostly to increase their inpatient and outpatient businesses … their fee for service, so to speak. The more they did, the more they made. Now we’re moving to ‘covered lives’ … how many people are in their insurance products. How many lives are they covering? That’s the driving force here. Whether for UPMC Susquehanna or Geisinger … they want to enroll as many people as possible into their products,” Baronner says.
UPMC has a massive health insurance network covering over 3 million people, a primary reason Susquehanna Health agreed to affiliate.
Geisinger is collaborating with Highmark Blue Cross-Blue Shield and that gives Geisinger even more covered lives through affiliation. Of course, Geisinger has its own health insurance plan. Highmark has a vast network of insured members throughout Pennsylvania, Delaware and West Virginia.
All of these changes, Baronner said, means “you may lose some local autonomy, but you gain in health care services quality.”
“This is a really interesting market and you’re (Clinton County) basically at ground zero for all of this involving UPMC, UPMC Susquehanna, Geisinger Health and Highmark Blue Cross/Blue Shield,” he added.
Insurance plans have a tremendous amount of weight in determining where health-care consumers go for treatment and care. These systems want to manage the health of those patients and keep track of their health-care expenditures as best as they can.
“It’s the beginning of the switch from sick care to true health-care as value-based health-care progresses,” Baronner said.
“Certainly, the move to value-based health-care is good for the patient because it gets into the triple aim of providing better care, lower costs, and greater patient satisfaction. That’s the preeminent one.”
For small, rural hospitals, one other driver is the move in health information technology and being able to keep up with the technology.
“You need to have staff and personnel who can help … who can keep that technology up to date and to take care of any issues. For smaller, independent hospitals, that’s a huge challenge and cost,” Baronner explained.
What will be among the important benefits of UPMC Susquehanna and Geisinger ramping up competition in Clinton County?
“You will see a difference in … the cost of care. You see it already in the Pittsburgh market, where UPMC and Highmark are really competing for covered lives and that has driven the cost of health care below what you see in Philadelphia. The Philadelphia market is starting to see that change … the University of Pennsylvania and Thomas Jefferson University Hospitals are starting to change.”
Amid all of this, what’s UPMC Susquehanna’s aim in buying the Bald Eagle Factory Outlets?
A huge, outpatient center, Baronner believes.
“We’ve seen this in other parts of the state. You know the days of being wholly an inpatient center are coming to an end. If you’re sick enough to be inpatient, you’re probably in a large hospital. There are fewer cases of people being in smaller hospitals for more than a day. The biggest effort should be in primary care because of how many covered lives you can affect,” he explained.
There is talk in the community that, ultimately, Lock Haven Hospital will become exclusively an extended care unit or, perhaps, an extension to Susque View Nursing Home.
But that’s pure speculation, at this point.
Left out of all of this is Bucktail Medical Center in South Renovo.
Like Jersey Shore, Bucktail is considered a critical access hospital, hugely dependent on Medicaid and Medicare reimbursements.
It is remote, thus it is the first stop for illnesses and emergencies for those in Western Clinton County and southern Potter County.
But BMC filed for bankruptcy last fall following a string of bad years and unstable management.
Lead BMC administrator Tim Reeves and his team are doing a remarkable job of bringing this critical access hospital back to solvency, Baronner says, but much work remains.
Bucktail is still working its way out of bankruptcy amid its $6 million operating budget – nearly 80 percent of which is funded by Medicaid and Medicare reimbursements.
“With 100 employees, Bucktail is the largest employer in the western end of the county and functions equally as a community center. It’s where snakebites are treated, overdoses reversed, heart attacks, and strokes stabilized,” the Philadelphia Inquirer’s Aubrey Whalen wrote in a July 16 article that can be found online at http://www.philly.com/philly/health/rural-hospitals-medicaid-cuts-senate-bill-20170716.html.
Bucktail cycled through four CEOs in one year and defaulted on a bank loan by the time Reeves took the job there in 2014, and declared bankruptcy shortly after. State officials say he’s worked diligently to bring the hospital back from the brink, which is now close to breaking even, Whalen wrote.
“His leadership has been pretty remarkable,” said Baronner told Whalen.
But finances are still precarious. Last year, with Medicaid reimbursement funds frozen by the state budget impasse, the hospital nearly closed.
Bucktail needs to get to the point financially where it can bring something to the table to convince these larger hospital systems to grab hold.