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Memorial Hospital works against the odds to instill a new culture



As pressure builds to cut costs while improving patient outcomes, a team approach to health care is gaining traction at city-owned Memorial Health System. The concept is relatively simple — get all caregivers on the same page for the benefit of the patient.

"Integration" compels doctors, nurses and clinical experts, as well as the hospital, to design and administer care around patients' needs, rather than ordering tests to drive up fee reimbursements, prescribing care to cover a caregiver's potential liability, or dealing with an isolated symptom and then sending the patient to the next stop in the care chain.

It's not only imperative to improving care, but also to assuring Memorial Hospital remains financially stable, system CEO Larry McEvoy says. Integration's early results show promise, even as the community revisits whether to retain the hospital, sell it or make it an independent entity. (A City Council-appointed commission, which includes Independent business development vice president Jay Patel, recently launched a 10-month study related to the issue.)

Patient-centered care sounds like a no-brainer, but getting a bunch of independent doctors to buy in can be like herding cats. And roughly 800 such doctors have privileges at Memorial.

True believer

One of Memorial's 28 staff docs is Stephanie Martin, an osteopath who specializes in maternal-fetal medicine. And she's a believer.

"No one's allowed to opt out of the conversation," she says. "Is there undue pressure? Yes. But it's a positive peer pressure situation. In our main ORs, we've initiated a checklist program. It must be completed in the operating room. If there are physicians or nurses who are not willing to participate in this pre-operative checklist, that's not allowed. It would be the equivalent of a pilot not doing the pre-flight checklist."

For some, integration is only the latest upheaval in Memorial's operation.

"I think it's still a bit early to say how [doctors] are reacting, because there are still so many unknowns going on," says Carol Walker, executive vice president of the 1,000-member El Paso County Medical Society. "There are so many initiatives affecting physicians right now. The confused mind says, 'No.'"

McEvoy came to Memorial in late 2007 from Billings Clinic, an integrated system in Montana, and vaulted to CEO in less than a year. He instigated integrated care here about a year ago and says its alternative isn't acceptable.

One example is Memorial's 80-bed north facility at Union Boulevard and Briargate Parkway, planned and designed by bean-counters who decided Memorial's north customers didn't need an intensive care unit. After the $138 million facility opened in 2007, the need for an ICU became obvious, and the hospital pumped another $1.2 million into remodeling an area to serve as an ICU. It opened in January 2009.

"The complaint we most heard from physicians is, 'You built your north platform and you didn't ask us as physicians,'" McEvoy says. "It sounds like maybe 'Kumbaya' to think physicians and hospitals should work together better. The reality is, when you don't, you can spend $130 million and not get what you want."

Change of mindset

That McEvoy is the first physician to lead Memorial in decades, and perhaps ever, might help explain why he's optimistic about convincing hundreds of doctors to open themselves to ideas from other providers, including nurses, radiologists, even admissions clerks. While long-standing models like the Mayo Clinic have made it work, some experts say integration can be tricky when a hospital didn't start out that way.

"You cannot generally convert a free-standing community hospital into a Mayo Clinic, because the transition is very different," says David Atchison, CEO of Ponder & Co. of Chicago. His consulting firm serves as financial adviser to Colorado Health Facilities Authority, which issues bonds for nonprofit hospitals in the state.

"Those [Mayo and others] are organizations that grew out of a multi-specialty clinic. They then built their own hospital and integrated services in that manner," Atchison adds. "For a community hospital, the majority of physicians are independent. If you try to make that conversion to a Mayo Clinic model, you need a very large medical staff. Then you run into disenfranchisement of independent physicians."

Kurt Mosley, vice president of strategic alliances for doctor-recruitment firm Merritt Hawkins in Irving, Texas, says Memorial will face challenges bringing all doctors into a system to which they're unaccustomed, including traditionalists and baby-boomer docs.

"It's hard to change a mindset," Mosley says.

However, Atchison notes that such a conversion worked in Roanoke, Va., due in part to the hospital's hefty market share and large employed physician group.

Here, Memorial has 60 percent of the local inpatient market, but doesn't want to bring on a large stable of doctors.

Its main competitor, Centura Health, which operates the Penrose-St. Francis system, has formed a physician subsidiary, Centura Health Physician Enterprise, that's grown from 70 staff doctors in February 2009 to 250 today. The physician enterprise provides professional management of those who work directly for Centura, says Chris Valentine, Penrose-St. Francis Health Services spokesman, in an e-mail.

McEvoy says Memorial isn't interested in employing that many doctors. And given the reimbursement landscape, more independent doctors might be willing to drink the Kool-Aid nowadays, anyway.

Medicare is piloting projects that won't pay hospitals for re-admissions under certain circumstances, and government and some insurance payers have started "bundling" reimbursements, consolidating all provider payments associated with a single incident of care and letting providers sort out who gets how much.

"You can imagine how disagreeable that conversation would be," McEvoy says, "unless you have everyone on the same page to begin with."

Pressure to save money could intensify when the just-passed national health care reform bill delivers 30 million new patients to the insurance market in the next few years, Mosley says: "When demand for something goes up, the price goes up."

That's why even seemingly inconsequential changes are essential, he says. For instance, when a Salt Lake City hospital encouraged doctors to settle on one type of surgical glove instead of six, the hospital saved $40,000 over a two-year period.

Some good signs

So far, Memorial has seen signs that integration pays off. Operating costs per admission declined last year by 4 percent to the lowest cost since 2006, and purchasing costs sank by $3.1 million because physicians participated in deciding what to purchase and how, McEvoy says.

At the same time, care improved. Within a year, the average length of stay for hip and knee replacement patients dropped by about a half-day, and the percentage of those patients released to nursing homes declined from 30 percent to 7 percent.

"When we get physicians involved, they help us make the right decisions," McEvoy says, admitting it's still a tough sell, with doctors' attitudes ranging from "enthusiastic to highly suspicious."

Or, as Walker, with the medical society, says, "There are more questions than answers."

But Martin, the doctor of osteopathy, predicts suspicions will fade in the face of positive results and better-served patients, who she says will notice shorter wait times for treatment and a universe of caregivers, not just the doctor, who know what's being done and why.

"The vast majority [of doctors] will participate and benefit," Martin predicts. "With the change in health care, you can't survive alone anymore as an island."

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