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Health Care Special Report: Hospitals Flash Forward

n the future, if you suffer a stroke while on a trip to Anchorage, Alaska, the medical response may involve a local emergency room, your doctor in Tarzana and a stroke specialist in Seattle – all viewing your vital statistics and giving feedback on how to save your life. The technology behind this scenario already exists, and right now Providence Health & Services, the Renton, Wash.-based Catholic non-profit hospital chain with three Valley hospitals, is working to implement it. “The hospital of the future is definitely going to be wired,” said Dale Surowitz, chief executive at Providence Tarzana Medical Center. “It’s out there on the next horizon – our challenge is to appropriately put it all together.” When the Business Journal asked local health care executives to describe the “Hospital of the Future,” the consensus response was they will be fewer in number and patients will stay for shorter periods of time. They also will be “wired” for communication with clinics and other hospitals, as well as between staff inside the hospitals. Financially, hospitals will be part of large integrated health care systems. And the technology and regulations of health care will only get more complex and expensive. The forces that will create this new environment are already on the scene and include health care reform, fast advances in genetics and information technology, and a graying of the U.S. population. Dr. Adam Singer is chief executive at IPC The Hospitalist Co. Inc. in North Hollywood, a company that supplies doctors to about 350 hospitals and hundreds of nursing homes across the country. He believes the hospital of the future will become a sort of giant intensive care unit. One goal of health reform is to minimize a patient’s time at the hospital, since it is the most expensive venue for care. So in the future, more procedures will take place in clinics or surgical centers, and as hospitals move patients out faster, many will end up in nursing homes or rehab centers, which will grow in number. “Hospital stays are getting shorter, not because we are better at curing people, but we are sending them elsewhere,” Singer said. “That’s the fastest area of our business growth right now.” Wired health The organization at the forefront of the future is Providence, which recently signed an agreement with Dr. Patrick Soon-Shiong to develop a genetic model for diagnosing cancer patients. Soon-Shiong is a biopharmaceutical entrepreneur and the richest man in Los Angeles, with a net worth estimated at $13.9 billion by the Los Angeles Business Journal. After making a fortune off generic drugs and developing the cancer drug Abraxane, he has purchased numerous companies working on ways to streamline health care. His Culver City holding company, NantWorks, plans to bring various technologies from genomics, IT and health care together to deliver systemic improvement. Soon-Shiong was not made available for comment. His project with Providence has two prongs: first, to develop genetic sequencing for use in diagnosing conditions, and second to connect all the people, machines and databases in the hospital to enable better decision-making. The project will begin with a machine called the Illumina HiSeq X Ten that can provide complete genome profiles of thousands of people a year. Manufactured by Illumina Inc. in San Diego, it costs $10 million. Traditionally, doctors have used a cancer tumor’s appearance and location to determine the best type of chemotherapy, radiation, surgery or a combination as treatment. In the future, genetics will determine the treatment. Dr. Ora Gordon, medical director of genetics for the Roy and Patricia Disney Family Cancer Center at Providence Saint Joseph Medical Center in Burbank, is working with Soon-Shiong on the project. “In the future, at the point of diagnosis, you will determine the least toxic, most effective drug right out of the gate using genomic information,” she said. “The scale of this project is to make that available to every cancer patient, and maybe later to everybody.” Gordon said the biggest bottleneck is training doctors to interpret the gene sequencing information to select the best drug. The other challenge is cost, but new technology is driving down those numbers. The first complete human genome was mapped in 2000 at a cost of more than $1 million, Gordon explained. Today, the cost is about $8,000, and a significant part of the genome can be analyzed for only $1,500. The other part of Soon-Shiong’s vision for the hospital of the future focuses on wiring and Internet connectivity. On that front, the future is much closer to reality. Surowitz, the chief executive at Providence Tarzana, said his 245-bed facility has electronic medical records that are accessible throughout the building and in affiliated clinics. Better yet, the system has telemedicine capability so that, for example, if that patient has a stroke in Anchorage, other doctors could help resolve the crisis. In addition to stroke, Providence Tarzana plans to develop psychiatric and pediatric telemedicine capability. Providence did not disclose the estimated investment or other financial details for the collaboration with Soon-Shiong. Challenges One potential obstacle to total connectivity is the need to install new systems that mesh with old technology and continue to function seamlessly. That’s why Adnan Hamid, information technology director at 238-bed non-profit Henry Mayo Newhall Memorial Hospital in Valencia, has taken a gradual approach to the future by implementing technology that isn’t new but hasn’t been used until now in health care. For example, before nurses give medication to a patient, they use barcodes to verify it’s the correct drug, the correct amount and the correct patient. “Barcoding technology has been in the supermarket for a long time, but we are using it for patent safety,” Hamid said. In the near future, Hamid hopes that when a nurse takes a patient’s blood pressure, the reading will go into the computer automatically, rather than requiring someone to manually enter the data. And smart TVs will allow patients to videoconference in their room with doctors and family. Even when it’s possible to install new technology from the ground up, it presents difficult financial and operational decisions. Henry Mayo Memorial is building a five-story tower and wants it to be state-of-the-art when it opens three years from now. “The challenge is to not put 2015 technology in a 2018 tower,” Hamid said. Gordon, the gene doctor, believes adoption of genetic medicine will be gradual, because of the long learning curve for doctors, and insurance plans and government programs need to understand the benefits and pay for it. But once all catch on, the practice will reach a tipping point and become commonplace. “Ultimately, it’s going to have a big impact on diabetes, high blood pressure, the use of blood thinners and avoiding toxicity with drugs,” she said. “In theory it would be cost-saving because you are aren’t giving medicines and therapies that are not likely to be successful. You are saving on that investment and reducing toxicity, which saves money. That’s the real promise for the future.” Consumers, not patients Technology isn’t the only driver toward the future. National health reform and economic and demographic trends also shape the market. Singer at IPC believes the trend toward hospitalists – doctors who only work in hospitals – will accelerate. Soon there will be two types of doctors, those who see patients in their office and those who only work in hospitals. As an example, he points to the maternity ward. “The doctor you see for nine months will not delivery your baby,” he said. “A specialist whom you’ve never met will deliver your baby at the hospital. And you will see that across all specialties.” While all that sounds a bit clinical, there is a flipside to the expected new regime in health care. PWC, the international accounting and consulting firm, issued a recent report that concluded that the much talked about trend of consumer-oriented health – in which individuals rather than insurance companies or government agencies determine how to spend the money –will get stronger. “In the new health economy, ‘patients’ will be ‘consumers’ first, with both the freedom and responsibility that come with making more decisions,” the report stated. Martin Gallegos, senior vice president at the Hospital Association of Southern California in Los Angeles, said some hospitals already have adopted “retail” programs, such as making sure patients are greeted at the door, and friendliness training for doctors and nurses. Some have hired high-end chefs to improve their menus. And in the future, health reform will provide people data to make consumer-like decisions, including customer satisfaction surveys, quality of care and transparent prices. “It’s going to become very competitive,” Gallegos said. “Eventually all hospital prices and safety reports and satisfaction ratings will be available to the public, so people will be able to shop around. In that way, it will become much like retail.” The bottom line for Surowitz, chief executive at Providence Tarzana? Perhaps the main obstacle between today and the future is a psychological adjustment to a new reality. “Health care is still a people business,” he said. “We have our capability and equipment, but developing the skill sets to apply it still takes time. And some of these things take more time than we would like.”

Joel Russel
Joel Russel
Joel Russell joined the Los Angeles Business Journal in 2006 as a reporter. He transferred to sister publication San Fernando Valley Business Journal in 2012 as managing editor. Since he assumed the position of editor in 2015, the Business Journal has been recognized four times as the best small-circulation tabloid business publication in the country by the Alliance of Area Business Publishers. Previously, he worked as senior editor at Hispanic Business magazine and editor of Business Mexico.
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