On first blush, you might think Vincennes, Ind.-based Good Samaritan Hospital is just another small community healthcare provider in the heartland of America. At 232 beds, how much could be possibly be happening on the IT front? But upon closer look, it’s clear this organization is different. Good Samaritan offers a range of medical services, as well as some of the most progressive technology available today. Of course, it doesn’t hurt when your CIO has been chairman of the HIMSS board. To learn more about what’s going on at GSH, and pick the brain of a top CIO about HITECH, HCI Editor-in-Chief Anthony Guerra recently talked with Chuck Christian.
GUERRA: I was looking at some information about your hospital online. I would call it a community healthcare facility on steroids – you’re doing some pretty interesting things on the IT side for a small organization.
CHRISTIAN: Yes, you’re absolutely right. I think you would not expect to have the facility that we have, and the services we have, in the size of community that we have. Our market area is about 250,000 people, which is about six times the population of our county, but we’re the only facility in the county, so it’s an interesting place. It was not what I expected to find here 20 years ago, and I guess that’s why I’m still here.
GUERRA: So would you say it’s not a super competitive environment where you have to bend over backwards to attract physicians?
CHRISTIAN: Well, that is true. However, to say we have no competition would be inaccurate. Because of technology today, and the fact that people are used to going for specialty services and stuff, they don’t get in the car and drive an hour. An hour north and south of us are Terre Haute and Evansville, and Indianapolis is only two hours away, so they have a variety of very large hospitals and stuff up there, but technology is also allowing our medical staff to compete as far as moving services and things that would be profitable for them to be done in their offices.
There’s also a free-standing surgical clinic that we now own that was put up by several of our physicians and an investment group. And then we have a radiology group from Evansville which is about 45, 50 miles south of here that put in a free-standing imaging center. So technology and entrepreneurism, if you will, creates a level of competition that we have to be aware of.
I was over in Peoria at Methodist Hospital. Right across the street is another facility called The Order of Saint Francis, a very large hospital, both of them are, and the thing I found very interesting is that in the boardroom at Methodist Hospital one wall is all windows. There are no curtains, and the view outside that window is The Order of Saint Francis Hospital.
So, on our end, we have more of a virtual view of who our competitors are. Sometimes I think we compete against ourselves as well because we don’t have another hospital that is sitting across the street or down the block, so it’s important we don’t get complacent with our strategic thinking. That’s just Chuck’s opinion and that, and $1.65, will get you a cup of coffee in most Starbucks in this country.
GUERRA: Hey, come on, you’re a big player in this space, don’t kid yourself.
CHRISTIAN: Well, I don’t know.
GUERRA: So sometimes the independent physicians that really drive your revenue, and bring the patients in your door, become competitors. Do you wish you’d seen that coming? Was it a service or something you could have done for them?
CHRISTIAN: Well, to tell you the truth, you have to remember that these guys are independent businessmen. These are small businesses and their reimbursement is still a volume-based business – the more stuff you do, the more money you generate. They go to their conferences, just like we go to ours, and they get presentations from consultants about how to make their practices more efficient, more profitable, “Here are some services you could bring in … oh, by the way, did you know that if you’re a urologist and you want to do PSAs in your office, you can earn another X number of tens of thousands of dollars.”
So those are the kinds of things we have to be conscious of. The other thing is I think we have to keep the relationships close enough so we can have conversations about those kinds of things. “There’s something that needs to be done, so let’s do it together rather being competitors.” How do we cooperate and create win-wins?
Have you read the book by Clayton Christensen called, The Innovator’s Prescription? It’s about disruptive solutions for healthcare. I highly recommend you take a look at that because I think some of the things he’s talking about, we’re starting to see come to fruition, specifically in organizations like Mayo and Cleveland Clinic, Kaiser and a few other places that have taken that clinic model and really done a really good job with it.
I think that 10 years from now we’re going to see more and more of that, that’s just Chuck’s prediction anyway. We’re going to see more organizations start forming these kinds of cooperative efforts between the medical staffs and the physicians. Rather than being separate entities, we’ll be doing more and more together. If you look around the country, more and more physicians are asking to be acquired by the hospitals because they want to practice medicine and they also want to have a life.
I have a friend of mine who’s a surgeon and retired a few years ago. I was having a conversation with him about it. He said, “Think about it for a moment, I’m a surgeon. I’m up in the morning making rounds between 5-5:30 and then I’m in the OR. If I’m not in the OR, I’m in the office. If I’m the managing partner of that practice and the practice is busy, when I’m finishing patients, I still have my charts to finish up, because everything’s on paper. Then I have a business to run. I have to worry about bank insurance, get the bills paid, make sure we’re collecting the revenue and paying the malpractice insurance, and all the things related to the building maintenance.”
And so they really don’t have a life because they may be back in the hospital late in the evening rounding on the patients that get surveyed on that day. They may be getting home 8, 9, or 10:00 o’clock at night and turn right around four or five hours later, they’re right back at the hospital again.
So when I got to thinking about it from that perspective, it’s not a distant leap for me to understand why these guys are getting out of private practice. It’s because they want somebody to manage the business of their practice, but they still want control of the medical decision making. I absolutely agree with it because they have the education and expertise to do that. But they want somebody to handle the business of running that practice, and they want to practice medicine, but they also want to make sure they can get to their sons’ and daughters’ ballgames, concerts and graduations.
GUERRA: Help me out here. What’s the difference between an MSO and an IPA.
CHRISTIAN: Well, I think they’re kind of different things. Both of them will provide the management services and stuff. Well, the MSO is just a service organization that comes in and many of them will operate on the premise that, “We’re going to run your business and you’re going to give me a percentage of the revenue collections.” So they’re incented to make sure that the practice is as profitable as it possibly can. I believe the IPAs work is more of a cooperative partnership between the two, the physicians and someone else owns the organization.
What I’m proposing, and what I’m suggesting that we’re going to start seeing more of, are organizations like Cleveland Clinic and Mayo Clinic, but on a smaller scale. Physicians and hospitals will not be so separate anymore, but one entity practicing medicine and taking care of the community together.
GUERRA: Do you think that would be where the physicians are in joint ownership or where they’re employees of the hospital?
CHRISTIAN: I don’t know what that business model is going to look like. To tell you the truth, I haven’t studied Mayo or Cleveland. But, based on what I do know, if you look at Cleveland, it’s a very large organization. The physicians actually work for the clinic, but it’s a privately held entity, nonprofit organization. I think that’s probably going to be the model – that they’ll be employees of a nonprofit organization, but they’ll have incentive programs in place where the more you add into it, like in a partnership, the more you get out of it.
So it just depends on how it’s crafted. I think there’ll be some federal law around that as well, because the other thing that we have to take into consideration is this thing called healthcare reform that’s kind of pending out here and looming in our future. It’s going to happen. What it’s going to look like, nobody really knows yet because they’re still making that sausage behind closed doors on Capitol Hill.
The issue is how we’re going to work together to keep the community well. I’m sure you’ve heard it more than anybody else, but we don’t have healthcare. We have sick care. You don’t interact with your healthcare providers until you have an incident or a situation arises where you need care because you’re either ill or you had an accident or that kind of stuff. But the large portion of our healthcare dollars is spent taking care of chronic diseases, diabetes and congestive heart failure, COPD, and you can reel off the list of the dozen or so. A lot of those also entail lifestyle issues.
I have high cholesterol. I’m genetically disposed to have it. There’s no amount of changing my diet that’s going to impact that. So I have to make sure that I take my medicine every day, and I do watch what I eat because you can’t just take your medicine and continue your lifestyle. Well, you can but you won’t live very long.
Right now, healthcare workers or practitioners are not reimbursed for providing that wellness care. I think that if we truly want to change our cost structures, we’re going to have to start looking at how do we do that, and there’s a couple of models that I’ve read very, very little on out there where communities have come together, where the hospitals, the physicians, the payers, and the employers all sit down and figure this out. They said if the doctors and hospitals work together to keep the community well, then the people that are going to really benefit initially are the payers, because they are going to keep the premiums and not pay out.
Well, the payers then agree to pay the hospitals and the physicians to help keep them well, and then they decrease the amount of premiums that the employers are going to have to pay, but their profit margins stay the same because they’re getting to keep a larger component of that premium that they’re not having to pay out. So it’s a redistribution of that money because it’s a finite amount of money. The money gets moved around. It’s just a matter of who keeps the majority of it when things start changing.
GUERRA: When the music stops, who’s got a chair? Who’s got the money?
CHRISTIAN: Yes, exactly. It’s paramount. You can’t expect healthcare providers to go out and spend their resources keeping the community well when it decreases their ability to earn money. The employers will continue to pay the same level even though their volumes to the insurance company have gone down. The insurance companies aren’t paying in much as they used to but they’re keeping more of that premium, and so you have one winner and two really bad losers and one that really is not impacted a whole lot, which is the employer. They have a healthier workforce and they’re not losing time off of work. So they may be partial winners. So you have two really bad losers and a really big winner, then maybe a kind of intermediate player.
GUERRA: And don’t forget that you talked about the revenue declining for the physicians but you also mentioned how they want more time, more of a life. However when you put an electronic system in your office, you’re going to have less of a life for awhile and reduced revenue and increased expenses.
CHRISTIAN: Well, absolutely.
GUERRA: What’s not to love? Sign me up.
CHRISTIAN: Actually, I was having that conversation right before we got on the phone, but the thing about it is that I’ve had that very conversation with several different physician groups in town. I’ve met with a neurology group not long ago and I said, “That the person that’s filing all your medical records and stuff, you can either re-task that person or you can get rid of that person,” and one of the guys said, “Well, she’s been with me for 22 years.” I said, “Well, it’s a decision you’re going to have to make, and if you’re going to continue to dictate when everybody else around you uses the electronic system, it’s going to cost you more money because you’re going to be using dual systems. You’ll need one process to satisfy your needs because of your paper-based world then you’ll need another process to satisfy the requirements that you’ll need to extract the data in the system for review organizations, whether that is CMS or another designated quality organization.”