Changing revenue models lead to new access points for health care
If you look around, you can see the face of health-care delivery in the Kansas City region changing right before your eyes. It might be with a Mosaic Life Care’s gleaming medical offices and lifestyle-wellness centers in the Northland, or the new satellite hospital the University of Kansas is building in Overland Park. It might be with Liberty Hospital’s collaboration on the healthy-living community called Norterre, or it might be in your neighborhood grocery store or pharmacy, with clinics operated by advanced-practice nurses.
Once upon a time, if you were sick, you went to see a doctor. If you were really sick, the doctor sent you to the hospital, or an ambulance took you. While the concept of a monolithic acute-care hospital isn’t going away any time soon, both the access to care and the means of delivery are adding momentum as part of a trend that’s been years in the making.
As a result, hospital execs are moving swiftly on many fronts, in their words, “to meet people where they live” with services.
No matter what form that outreach takes—satellite facility, storefront clinic, workplace wellness program or mobile clinic—the increase in care access points is being spawned by the changing economics of health care today. Among them:
♦ The Affordable Care Act, on one level, includes provisions that provide financial incentives for keeping people healthy.
♦ It also pushes onto consumers—many of whom are working individuals starved for time—more of the responsibility for taking care of their own health.
♦ Federal payers like Medicare swing a bigger stick with penalties for failure to meet quality-of-care standards with outcomes.
♦ Insurance companies are pressing providers to embrace models that emphasize prevention.
♦ Hospitals themselves are changing their revenue models, yielding to unsustainable cost curves for providing acute care, long a bedrock of their revenues.
The result of it all is that more health care—and, presumably, more effective health care—is coming to a neighborhood near you, if it isn’t already there. Interestingly, no two health systems or hospitals seem to be following identical paths to that new reality.
University of Kansas Hospital
Just last month, the century-old hospital broke ground on a $100 million facility on its Indian Creek campus in Overland Park. Aside from the sprawling campus near Kansas City’s Midtown, it will be the only other location where the hospital will staff beds, rather than treating people in ambulatory-care settings.
But distributed care is nothing new for the medical center. Even before those shovels turned in July, it had a mission that’s distinguishes the hospital from others in the market: its primary mission is to serve a statewide population. How it does that, though, continues to change because of forces driving growth in access everywhere.
“Bringing care closer to our patients is not anything new to us,” said Brenda Dykstra, vice president for business and strategic development. “We have over 70 different locations now,” providing things like cardiovascular and oncology care or primary-care services. But “the pace of that is picking up,” she said, with new venues for urgent care, grocery-store clinics and the like, and “we’re always evaluating new care models and what others are doing in the market.”
The looming challenge, she said, would be consolidating those operations into hubs of service and continuing to collaborate with smaller regional medical centers and hospitals to improve the efficiency of care delivery.
What won’t change, however, is the hospital’s mission in acute care. While the Kansas City market itself has what some executives say is nearly 30 percent more licensed hospital beds than the region needs, KU is in full expansion mode. In addition to the Indian Creek site, work is progressing on the $280 million Cambridge Tower addition, just across 39th Street from the main hospital, and already there are plans to increase that capacity.
“We have exceeded capacity recently, building on the main campus,” Dykstra said. “And we will continue to serve a more complex, high-acuity patients.”
Children’s Mercy Hospital
Expanding the footprint of the region’s premier pediatric hospital is a three-fold effort, said Marshaun Butler, vice president for the hospital’s regional medical practices. One part comes by sending teams of providers into smaller markets in the two-state region, collaborating with other facilities there. Another involves increasing use of telemedicine, which is being embraced by more patients and families. And the hospital is establishing regional practices in cities like Joplin, St. Joseph and Wichita, manned by subspecialist providers in those communities. “And they’re all connected from an academic standpoint,” she said. “So we can reach out in three different ways, depending on what a community wants.”
Children’s Mercy has outreach clinics in Springfield, and across Kansas in Garden City, Great Bend, Junction City, Parsons, Pittsburg and Salina. And more of those are not out of the question.
“We’re being asked almost monthly to put telemedicine services into more of these communities,” said Milton Fowler, senior medical director and emergency-room director for Children’s Mercy. The hospital is trying to oblige that demand in part because it sees itself as being the best resource for meeting the needs of young patients, even if smaller hospitals want to expand their role in that care.
“As you look at hospital systems that want to attract children, you have to be careful,” Fowler said. “When everything is fine and looks the way it should on a given diagnosis, that’s OK, but the rare things that don’t fit into the puzzle are what concern us” because the medical staff may lack the experience to identify critical issues. “So if I were able to have a children’s hospital in every major city and do this outreach, that’s a win-win for everyone.”
Saint Luke’s Health System
With one of the region’s biggest stand-alone medical centers as a hub, and three smaller hospitals bracketing the metro area, most residents aren’t far from a hospital bed managed by Saint Luke’s. So the drive to diversify delivery mechanisms is amply illustrated with its new specialty clinics coming to Blue Springs and the Mission Farms area of Overland Park. The latter, expected to open in the spring, is less than five miles from the 125 licensed beds at Saint Luke’s South. But the mission will be substantially different.
“The goal is to improve access for patients, largely through primary care, but also some specialty care,” said Robert Bonney, senior vice president for business development and the health system’s non-acute services. Like the Blue Springs site, the 35,000-square-foot Mission Farms facility will combine primary care, urgent care, lab, imaging, and pharmacy, as well as access to various specialists. It is, Bonney said, “an entirely new health-care option for patients. This will provide easier access to treatment, save patients’ time, and streamline care.”
It’s also just one part of a three-legged strategic stool. Down a notch from that level of care are the convenient-care clinics that will be rolled out next year and in place at area Hy-Vee grocery stores. The third access point, Bonney said, would be a 24/7, virtual primary-care service that patients can access through their mobile device. “All of those are substantially less expensive than expanding,” he said. “We’re positioning ourselves to be ready for continued movement into population health—that’s where all the insurance companies are going, where Medicare is going. It’s all based on having access to primary-care services, so patients don’t only use the hospital or more intensive settings than they really need.”
Mosaic Life Care
The good news at Mosaic Life Care: The needle is moving. The St. Joseph-based health system has been aggressively expanding its footprint not just into the Kansas City market, but across northeast Kansas and as far away as Clarinda, Iowa, with more than two dozen clinics. All of that comes with one objective in mind: “It’s really pretty simple; we’re moving from volume, because we realized that cranking out volume is not good for the U.S. or our consumption of health care, and it’s not good for people,”
said Lisa Michaelis, chief life care officer. “We have this shift from volume to value.”
That value, she said, is showing up in hard data that says more people are not only becoming customers, but are engaging with primary-care providers—a necessary first step toward reducing long-term health-care costs through prevention.
“When we make things more convenient, when people can schedule their own appointments whenever they want, see the doctor they want, go to the facility they want, do virtual visits—we’re seeing record numbers of new patients coming in for new primary-care and wellness visits,” Michaelis said. “We’re seeing some really positive initial numbers.”
Look at the demographics—75 million Baby Boomers now 52-70 years old—and it’s easy to understand what’s driving Liberty Hospital’s collaboration on the $60 million Norterre development, a healthy-living community near the hospital. “Health care is moving, and the payment system, too, toward overall health and wellness and how you care for patients in variety of settings,” said CEO David Feess. “Not just the acute care, which is the most expensive health care that can be provided. We are trying to look at the demographics of our community and offer services that fit our demographic.”
Norterre will offer varying levels of medically-based care, and its residents will be dealing with chronic diseases. Its goal, Feess said, would be to “help them manage those and keep them from being admitted to the hospital.” The new model in health care, he said, means that successful providers would be the ones who “do the best job of caring for patients in the least expensive settings.”
The hospital also has a well-established network of clinics and other facilities to project itself into the Northland suburbs, all part of a strategy built on the balance of quality care and cost control. “The margins in acute care are very thin,” Feess said. “Outpatient care is where you can offset some of the losses you typically experience on hospital admissions. Any more, very, very sick people are the ones admitted to hospitals, and they have serious health conditions. It’s expensive
to provide that care.”
Hence Norterre. “On a macro level,” Feess said, “10,000 people a day are entering Medicare, and over the next 15 years, the Medicare population will double. Obviously, if we don’t manage our resources more efficiently, the cost of providing care to that many will be overwhelming.”
Shawnee Mission Health
The consumer cat is out of the health-care bag: “One of the things we’re seeing now is more of a consumer-driven approach to health care,” says Robin Harrold, who oversees ambulatory strategy for Shawnee Mission Health. “People are making different choices than they used to, so we have to make sure there’s a continuum of access points.”
For Shawnee Mission Health, the first hospital in the state with a free-standing emergency room, that means partnering with CVS Minute Clinics in a retail setting. It also has added urgent-care clinics, called Center Care, at 135th and Grandview and at 91st and Quivira Road, with a third just opening in Olathe and others on the drawing boards. Meeting people where they live, though, isn’t just a physical construct—it’s a financial one.
“We know that hospitals are the higher-cost alternative, so we want to make sure we have locations that meet people’s pocket-book needs,” Harrold said. “Especially with more out-of-pocket and high-deductible health plans.”
The U.S., she said, spends more on health care than any other nation, with outcomes that too often aren’t appreciably different. “Something has to be done differently,” Harrold said. “The U.S. is grappling with what different means, so health systems are trying to position themselves to take advantage of the current revenue model, but also be prepared for the next. That means thinking about wellness, fitness and sick care.”
North Kansas City Hospital
Medical centers in the region had combined revenues of more than $29 billion last year, but Becky Fisk is convinced: “There’s no more money in health care,” she declares. “Employers are done. People are finished paying into the system. We have to find more cost-effective ways to get people healthier.”
At the region’s fifth-largest medical center, based on annual admissions, that means focusing on accessibility for consumers. “It’s expensive to run an ER,” says Fisk, vice president for revenue and business development. “If you come in with a cold or flu, you’re paying high-dollar doctor and nurse to do what we can do in an ambulatory-care setting. Now, it’s better for you, for the system, better for all of us.”
That drive toward improved accessibility is why the hospital began discussions with Hy-Vee 18 months ago to put express clinics around Clay and Platte counties, or to create the Meritas Vivion Clinic, just for employees of the North Kansas City school district, one of the Northland’s biggest employers. Same goes for the Downtown clinic serving city employees. On top of that, she says, “we’re also trying to amend our hours to make it more convenient—that helps employers and it keeps costs down.”
Successful collaborations, as with Hy-Vee, she said, must ensure that patients are referred immediately to higher levels of care when necessary. “Traditionally, we made money when people were really sick,” Fisk said. “We have to find out how to make
people well. That’s been the hardest part. The payment model has been broken and we’re seeing the shift from hospitals being
revenue centers to becoming cost centers.”
Olathe Health System
For Olathe Health System, greater access means Care Express clinics in Price Chopper stores, 17 family medicine offices offering regular appointments, same-day appointments and even walk-in appointments on evenings and weekends, specialty clinics; nine rehabilitation services locations, home-health services and a true Urgent Care Center. “The major objective in this type of provision of care is providing convenience to the people we serve,” said Mike Jensen, vice president for marketing and external affairs.
“The key is developing a model of care that works well and patients appreciate, then, use that model throughout the system of care,” he said. The health system has moved aggressively to embrace the medical-home care model, so that teams of professionals can “personalize and coordinate appropriate care, based on each patient’s needs.”
The trends, he said, will continue toward more convenience for patients, with more timely access to care: “This will include increased emphasis on the digital experience, that makes scheduling, communication and receiving information easier.”
Correction: The print version of this story incorrectly spelled the last name of Liberty Hospital CEO David Feess.