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Outpatient Networks a New Reality for Hospitals

When Chief Executive Dr. Bernie Klein envisions the ideal future of the patient experience at Providence Holy Cross in Mission Hills, he likens it to the workings of a piece of technology with a user-friendly reputation. “Our goal is to make health care just as intuitive as the Apple iPhone,” Klein said. “We want our patients to be more digitally connected to ease their way through the system.” Technology and efficiency were common themes among the hospital executives interviewed on the Business Journal’s annual list of hospitals, which rank the region’s largest facilities both by staffed beds and net patient revenue. In addition to leveraging new technology, area hospitals are increasingly integrating services with health care providers in outpatient settings, such as urgent care clinics, nursing homes and surgery centers. The goal is to cut costs while delivering higher quality services, explained Dr. Kingman Ho at Henry Mayo Newhall Hospital in Valencia, ranked No. 12 by staffed beds. The 238-bed independent hospital launched its own clinically-integrated network – called the Henry Mayo Care Network – on April 25, through which it plans to contract with private practitioners and clinics to streamline the flow of patient care. As higher bills weigh down on hospital operations nationwide, becoming more collaborative and cost-effective is imperative for survival, Ho said. “Historically, the health care industry has been very fragmented,” he noted. “In order to get great outcomes for patients on an individual- and population-level basis, we really have to integrate the different pieces of the health care continuum.” Networking skills Henry Mayo is the latest hospital in the region to embrace the network model, the foremost example of which is the Oakland-based Kaiser Permanente health care system. Kaiser hospitals in the Valley region include Kaiser Permanente Woodland Hills, No. 21, and Kaiser Permanente Panorama City, No. 22. Providence St. Joseph Health, which operates Providence Holy Cross in Mission Hills, Providence Saint Joseph in Burbank and Providence Tarzana – Nos. 2, 4 and 8 respectively – started contracting with outside medical groups and practitioners to create a similar network about six years ago, Klein said. The system, called Providence Partners for Health, has more than a thousand participating doctors. “The idea is that you work with your doctors (in the system) to improve quality and lower cost,” Klein explained. Providence’s clinically integrated network can take care of patients “from healthy to sick, from pre-hospital to hospital to post-hospital,” he said. All affiliated clinics and private physicians share patient information over a single electronic medical records system. “Clinically integrated networks are really very flexible vehicles in which health care systems or hospitals can contract with physicians,” said Ho at Henry Mayo. “This is really kind of a drive across the nation as to why they’ve come into being.” Unlike Kaiser’s model, both the Providence and Henry Mayo networks are “open,” Ho explained. While Kaiser patients must be members of the hospital system’s insurance plan to be treated at a facility, Providence and Henry Mayo accept patients with coverage from most major providers. Additionally, many of the physicians who work with Kaiser are employed by the Kaiser Family Foundation. In contrast, most of the physicians who contract with Henry Mayo’s system will be independent entities. Henry Mayo is somewhat unusual for this format on account of its size, Ho noted; as an independent hospital that primarily serves the Santa Clarita valley, its network will be much smaller than that of either Providence or Kaiser. At the same time, the diversity of specialties within the local provider pool lends itself to integration, he added. “That’s a rather unique aspect here – we have a lot of different competencies,” Ho said. “We needed a platform that let us unite in a collaborative fashion.” While moving out of the hospital and into the community is resource-intensive, it is also cost-effective, added Klein at Providence Holy Cross. For one, it’s cheaper to build or partner with ambulatory, or outpatient, clinics because they are not subject to the same regulations as hospitals, he noted. “Anything you do in a hospital takes longer and costs more money,” Klein said. More importantly, the outpatient model meets consumer demand. As more and more patients have high-deductible insurance plans, they are turning up in the waiting rooms of urgent care centers or the equivalent of CVS Health Corp.’s so-called MinuteClinics rather than emergency departments. Hospitals are trying to grab those discretionary health care dollars, Klein explained. “We want to be the preferred provider because in the case that a patient needs more acute care, it’s a seamless transition between the different settings,” he said. “We can take better care of you at a lower cost.” Building out Even as the trend moves toward networks of outpatient care facilities, construction efforts are still underway at some local hospitals. The largest project right now is the $540 million redevelopment effort at Providence Tarzana, which at the end of March was officially approved by the L.A. City Council. Dubbed the “Reimagined Project,” it will see the hospital pare down its number of beds from 249 to 202 and scale up its offices for specialty services. “We’ll have less beds than we have today, which is consistent with where health care is going,” Dr. Dale Surowitz, chief executive of Providence Tarzana, said. “We’re looking at this with the knowledge that health care is changing.” All of the rooms in the redesigned patient wing will be private, he noted. The hospital also is constructing five new operating rooms, including a hybrid room for specialized surgical services. When complete, Surowitz expects the hospital’s surgical complement to go from 23 to 35 percent of its revenue. “The goal is to stem the outmigration of services and have patients stay in the San Fernando Valley for treatment,” Surowitz said. Patients should not have to drive over the hill for surgery, he reasoned. A similar sentiment was echoed by Ho at Henry Mayo, which broke ground on a $151 million patient tower in October 2016. When construction is complete next March, it will add up to 119 patient beds. “There’s definitely a trend toward care being provided in an outpatient setting,” Ho said. “But given that we are the only hospital in the Santa Clarita valley, there is still a large demand for access to inpatient and acute care.” Future of medicine Ultimately, hospitals expect to see fewer patients within their walls, but those that come in will need complex, high-risk procedures, such as brain or open heart surgery, predicted Klein at Providence Holy Cross. “What we believe we’re going to see over the next 10 years and beyond are hospitals like Holy Cross treating more of the higher-acuity, tertiary care services,” he said. He estimated that up to 50 percent of today’s hospital admissions will be treated at outpatient facilities within the next decade. The hospitals within the Providence system are looking to technology to help ease that transition, Klein added. Termed “health care 2.0,” the effort pairs clinic-based initiatives with digital ones. “We create multiple avenues for patients to access care, whether it’s over the web or on their phone through an app, and we provide a variety of ways they can seek it,” Klein said. For instance, patients with minor ailments can be treated by a nurse practitioner using online video conferencing, or they can go to an urgent care center to have those concerns addressed in person. As players in the health care system are increasingly focused on population health, or the health outcomes of groups of individuals, the need for an integrated system that shares data between providers is poised to grow, Surowitz said. “We have to think about having all of the components that allow us to manage a population,” he explained. “Hospitals are components of that, and so are ambulatory care centers, home health (and) outpatient clinics.” The main difficulty is putting all the pieces together to create a seamless experience, Klein said. After all, the iPhone’s intuitive interface is powered by a highly-complex interior. “How do we make accessing health care as easy as using an iPhone, knowing how complex it is behind the scenes?” Klein said. For Providence Holy Cross and the other hospitals on this year’s list, coupling collaboration with new technology is the start.

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