By now, you might weary of hearing how hospitals must look beyond their own four walls to establish their roles in our new and evolving health care system. The emphasis is shifting to outpatient care and population health, but exactly how a particular hospital will fit into that scenario will vary from one institution to the next and from one community to the next.
For Hospitals & Health Networks' April cover story, writer Lola Butcher interviewed CEOs from four very different hospitals and health systems who are rethinking their respective organization's place in this new health care world, including one that's diving headlong into a value-based system even before payment reform fully kicks in.
Lola also checked in with St. Charles Health System, based in Bend, Ore., to see how a largely rural provider network is meeting today's big challenges. Here's her report:
St. Charles includes a Level 2 trauma center, a 48-bed hospital and two critical access hospitals in four communities serving residents in a 30,000-square-mile swath of central Oregon.
Earlier this year, one hospital CEO position was eliminated along with one senior executive position at the system level and several administrative directors. The remaining hospital CEOs are working to create a common management team for the two hospitals they each now oversee, and they are looking at ways to consolidate certain services across all four hospitals.
"Clearly what you're seeing is a lot of attention on driving cost out of hospitals," says Jim Diegel, St. Charles' president and CEO. "This is generic across the industry around the United States, but here in Oregon, we're taking it very, very seriously."
In part, that's because Oregon is one of the first states to move to a global payment system for Medicaid patients and those eligible for both Medicaid and Medicare — known as the Oregon Health Plan. Through a federal waiver, the state established 15 coordinated care organizations, each responsible for providing physical, mental, behavioral and dental health services for all Medicaid patients living in a specific geographic area.
The three counties in the central Oregon CCO are home to 31,000 Medicaid recipients, which account for 15 percent of the population. As the only provider of inpatient care in the CCO's catchment area, St. Charles' strategy is clear: Cut costs and collaborate with other providers.
"The concept is to get multistakeholder involvement around taking care of the entirety of a Medicaid population in an area," says Diegel, who is stepping down when a successor is brought on board. "It creates a new opportunity for dialogue among the stakeholders in terms of how we deliver care better in a particular region. How do we drive out administrative and duplicative costs in the system such that we get better clinical outcomes for our patients while living within the global budget?"
Along with physicians, dentists, public health officials, county commissioners and community representatives, Diegel served on the inaugural board of the Central Oregon Health Council, which governs the CCO. He likens the approach to an accountable care organization with a key difference. "An ACO traditionally is driven by either the provider community or an insurance company; for us, it is not the insurance industry driving the organization or the hospitals or the physician provider community or public health. All of us are driving it together," he says.
The CCO's mandate is to reduce Medicaid expenditures while improving the quality of care delivered.
"So we are asking ourselves, ‘Can we afford to provide surgery 24/7/365 at all four hospitals? Can we afford to have obstetrics in all of our communities? And should we have full-service labs in all of our communities?" Diegel says.