Hospitals vary wildly in what services and levels of care that they offer. This is critical as the word “hospital” is both very specific and very vague in what it defines in health policy terms.
When I worked at UPMC Health Plan, one of my major responsibilities was network data management. Managing the network data drove what we displayed in our directories. The directories were supposed to be helpful and useful for members in their decision making process as to where they needed to make appointments and schedule surgeries. A recurring fight with other internal stakeholders was how did we define categories of providers and the services that they offered?
Not all hospitals were equal. UPMC Presbyterian has over 1,500 beds. It is the flagship hospital of the UPMC network and does pretty much anything and everything that did not involve giving birth, kids or eyes and ears. Those problems were treated a few blocks away at the other specialty hospitals in the UPMC Pittsburgh cluster. UPMC Bedford Memorial was also categorized as a hospital. It was at Exit 146 off the PA Turnpike and about two hours away from the UPMC central cluster in Pittsburgh. UPMC Bedford has less than 50 beds. It is a hospital. It is a very different hospital than UPMC Presby.
Individuals with complex acute needs in Pittsburgh were taken by ambulance to Presby and treated there. Individuals with acute care needs in Bedford County were frequently taken to UPMC Bedford for triage and stabilization before the people with complex care needs were airlifted out. Individuals with complex, chronic conditions that required specialty and sub-speciality clinics were driving to Pittsburgh no matter where they lived. Bedford and similar hospitals could perform routine care and some advanced care with distance support from Pittsburgh subspecialists but most of the very high end care could only be done in Pittsburgh.
I say all of this as I need to respond to Zach Cooper’s 3rd point:
1) Need to be cautious of claims that hospital mergers —> efficiencies. There’s not much (any?) evidence
2) we need to regulate prices in some markets
3) We need to make patients comfortable traveling longer distances for care. Not every hospital should provide every service
— Zack Cooper (@zackcooperYale) November 14, 2018
Not every hospital does provide every service. People with significant acute care needs are often stabilized and triaged at community hospitals before being flown out. People with peristent medical complexity will often drive right by half a dozen hospitals to get to their appointments already.
I think a favorable reading of point three is that people with plannable one-off care needs should expect to travel further in order to be able to access something that resembles competitive hospital markets. In this case, then we need to look at the WalMart Center of Excellence model
1.1 million US Walmart employees and their dependents will be eligible for free heart, spine, and transplant surgery at 6 highly regarded health care organizations. Walmart employees will have no out-of-pocket costs, including travel, lodging and food for the patient and a caregiver.
On Thursday the company announced that its “Centers of Excellence” program, which had previously provided free transplants to Walmart employees, would expand to include heart and spine surgeries. Here are the six health care organizations involved in the program:
Cleveland Clinic in Cleveland, Ohio
Geisinger Medical Center in Danville, Pa
Mayo Clinic sites in Rochester, Minn., Scottsdale/Phoenix, Ariz., and Jacksonville, Fla.
Mercy Hospital Springfield in Springfield, Mo
Scott & White Memorial Hospital in Temple, Texas
Virginia Mason Medical Center in Seattle, Wash
Walmart is betting that higher quality of care, fewer errors and a national competetive bidding process will lead to lower overall healthcare costs. The employees/patients are sharing in the gains by having access to no cost-sharing services that normally would have set them back thousands of dollars.
I agree with Dr. Cooper that expanding the effective market regions in order to break localized monopolies will probably be part of the package of delivery and demand changes that offer a viable cost control mechanism going forward. I disagree that this does not already happen to some populations.
It’s certainly more creative than the approach Walmart became known for previously, which was aggressive cost sharing through high deductible plans. This approach is not a guaranteed way to avoid the exercise of market power by hospital conglomerates, but by diverting high value services away from local oligarchs it certainly throws down the gauntlet. No one cares whether they have a monopoly over maternity services.
Walmart’s model seems unbelievable. What’s the catch? There has to be one.
Assumes patient mobility, for which evidence and infrastructure are lacking. This is the healthcare equivalent of asking voters to cross town to reach their polling places.
The question that needs to be asked is that if you take a high cost/high value add procedure – transcatheter aortic valve replacements for example – and determine what is the optimal national footprint for delivery. Companies like, say, Wal-Mart and Amazon are always optimizing their store/DC footprint. We don’t have anyone that says we only need (say) 3 or 4 hospitals suited to deliver TAVR or CAR-T in the state of Ohio.
david, how can I respond to the article about unsubsidized buyers? It was available to me at 6 am, now I cannot find it.
Is Wal Mart part of the Berkshire Hathaway/Amazon remaking health care alliance? Or did they just notice that employees who go to those centers had twice as good outcomes at half the costs of other centers?
If the hospital provides the transportation, then mobility issues are less severe. And when a hospital saves the consumer over a 10 grand compared to ones in the local market for better care – that buys a lot of plane tickets.
My son-in-law works “in this space” and his hospital system provides Ubers to help patients make their appointments. It takes a lot of Uber rides to cost more than a readmit.
@scottinnj: If things work the way they should, siphoning off high value services — complex cardiac procedures, transplants, bariatric surgery, etc., then those hospitals that are losing out on performing those services will lower their prices. Several national payers have long had transplant and bariatric surgery networks, but those are procedures for which people have often traveled. Look, when you have people traveling to Mexico and India to get procedures it’s just loopy to think that people can’t or won’t travel for lower cost, higher quality facilities. They haven’t traveled because they didn’t need to. I used to get exasperated with my in laws, who would drive an hour to buy a toaster, but who refused to bypass the doctor who was five minutes away but totally unable to deal with my mother in law’s complex, medically fragile health — until several decisions he made nearly killed her. So much of this is simply ingrained habit.
@debbie: There is a catch. The patient has to travel away from home, hopefully with one or more family member or friend to accompany them. They get the special procedure, but then when they are back home and some problem arises, they see their local specialist who may not have all the records from the center of excellence. Worse yet, the “away” doctor may not be easily available for calls to discuss new problems.