The Year in Health 2014: Reform leads to change
Health care reform brought with it a number of changes that affected hospitals nationwide throughout 2014, with quantifiable effects starting to become clear by the end of the first quarter.
We sat down with Andrew Mitchell, president and CEO of PBMC Health, to discuss the highs and the lows of the past year and the changes the community can expect come 2015. As expected, there was plenty to talk about.
Q: The Affordable Care Act instituted a number of changes affecting hospitals. Can you describe some of them and how they were felt here?
A: Whether it’s providers coming together or insurance companies merging, the ACA is the impetus for a lot of merger activity across the country.
We’re seeing an aggregation of providers who are largely coming together, because — if you’re going to essentially provide care on a risk basis instead of a fee-for-service basis — you have to have larger [patient] populations and you need to have a fair amount of sophistication in technology and cross-network capabilities.
Here on Long Island, what we’re seeing is a continued movement of what were typically inpatient services to more ambulatory services.
That was initially true here, but now we are kind of bucking the trend of the other hospitals on Long Island.
During the first quarter we absolutely saw significant reductions in [inpatient] volume and, as of [Dec. 2] in every product line our volume exceeds last year’s numbers. Inpatient numbers have actually increased over last year. It’s been amazingly busy.
Q: Why do you think PBMC Health is an anomaly?
A: I think there are two reasons for it. One, population growth in this area continues to be a factor as more retirees move in, and the retirees are in an age category that are typically higher users of services. Two, I think the East End has traditionally had a limited supply of specialty services … so I think that as a result of the expansion of services here — happening mostly through our surgical services — it is logical we are seeing increases in volumes, unlike the other hospitals on Long Island.
If you provide a quality health care service where people live, people would prefer care locally than having to travel. I think that’s why we’re bucking the trend here.
Q: Do you think the ACA is helping to provide people with access to the care they need?
A: High-cost deductibles, including for in-network services, are causing people to think twice about using health care services because a piece of it is coming out of the patient’s pocket. We have had cases where people have come in, were seen by their doctor and need gallbladder removal surgery, for example, and when they realize that they are responsible for the first $3,000 or $5,000, decide that they will defer the surgery until it gets worse. That is not an intended outcome of the ACA. It was supposed to increase and improve access to care.
The implementation of high-cost deductibles has created a new barrier and it will only be over time that we know whether or not a larger percent of the population is insured. The theory is it should improve access, but it’s hard to say whether that is true yet. It’s just too soon to tell.
Q: While a number of new services have come to the community, what kind of care is still lacking?
A: Some good examples are the lack of cardiac services, such as a catheterization lab, which is desperately needed in the region. We could also use better cancer services and a lot more surgical specialties here. Given the demographic of the community, a cardio cath lab is absolutely the most significant program that will come out of being part of something bigger.
Q: At what point was it clear that merging with a larger institution was necessary? Why?
A: I think it became clear when Southampton Hospital announced it was looking for an alternative to the East End Health Alliance. Whether it’s the old system or a new system, you have to have a certain amount of mass in order to provide care and meet your mission. As we move further along into a risk-based environment, it’s clear that in order to avoid adverse risk you have to be part of a larger system.
Southampton’s decision was the wake-up call. The PBMC Health board continues to evaluate various options, ranging from a relationship with Stony Brook to a relationship with North Shore LIJ.
Q: How exactly will a merger help the organization?
A: Because of the economies of scale, a whole variety of things can be done either more efficiently or more mission focused … Services can often be provided with greater quality and efficiency if you have them on a large-scale basis.
The world is moving toward large physician networks and by combining our physician network with another system’s physician network, we should be able to prove better care with greater access to care in a more efficient way.
If the mission of PBMC Health is to improve the health of our community, the question is: Can we do that alone or do we need to be part of something larger? I think the conclusion here and across the country is in order to preserve the mission it has to be done in partnership with a larger scale organization.
Q: What is the future of PBMC Health?
A: Given the demographics of the East End, there is a growing need for skilled nursing and rehabilitation, as well as assisted living.
The future is certainly continued expansion of ambulatory care and the introduction of a new residential campus. It would create a fully integrated campus of skilled nursing rehabilitation, assisted living and an administration center for home care agency as well. It will either be in Riverhead itself or on the 44 acres of property the hospital owns in Eastport. We would target the start of construction by 2017.