Shared Success

Carrie Vaughan, for HealthLeaders Magazine , May 9, 2008
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There is no single formula that yields a true partnership between small hospitals and larger systems—a host of factors, from market dynamics to financial resources to community needs, make each situation unique. But making sure both institutions can benefit from the relationship is a good place to start. If done right, these partnerships can help both small and large facilities position themselves for future success. Here are four examples of how community hospitals and tertiary systems are working together.

Michael Iltis, vice president of professional services for Emanuel Medical Center in Turlock, CA, was looking into a possible lab outreach project at Stanford (CA) Hospital & Clinics when opportunity came knocking. During his visit, he was introduced to the administrative director and the medical director of the Stanford Cancer Center. The medical director was a radiation oncologist who had experience putting together community outreach sites. From that introduction emerged the Stanford-Emanuel Radiation Oncology Center, which opened in March 2007.

The community needed oncology services after the company that had been providing radiation therapy in Turlock retired an older piece of equipment and decided not to replace it, explains Iltis. Emanuel, a 221-staffed-bed hospital located about 90 miles from Stanford, first tried partnering with local hospitals and for-profits, but either due to a lack of interest or differing business strategies, nothing panned out. Then came the opportunity with Stanford, he says. "We thought, 'This is even better than a local partner—having an academic medical center for a service that we never had in our service line before.'"

Stanford owns 60% of the business and supplies two radiation oncologists and a physicist, while Emanuel owns 40% and supplies the technical and support staff. The relationship enables Stanford to increase its name recognition and capture referrals from a region where it competes with other tertiary giants like UC Davis Medical Center and UCSF Medical Center, says Iltis. Emanuel is starting to recapture patients who were leaving town for oncology services, as well as luring patients from nearby towns thanks to Stanford's reputation, he adds.

The center is approaching break-even about six to 12 months ahead of schedule. While radiation oncology is a marginal business, Emanuel has seen an increase in some of its ancillary services. Total imaging procedures for both inpatient and outpatient climbed from 59,000 to 70,000 from 2006 to 2007, and laboratory tests grew from 350,000 to 450,000. Some of that jump is due to growth in the hospital's service area, Iltis says, but he adds that "the expectations of the center have been widely exceeded in terms of our patient population and what it has meant for the community."

In 2005, Nashville-based Saint Thomas Health Services changed its strategic direction. Rather than focusing on ways to bring suburban and rural residents to Nashville for treatment, the four-hospital system decided to venture into outlying areas and help local community hospitals expand their services. Healthcare is moving toward more ambulatory and outpatient care, and people want to stay closer to home, says Wes Littrell, chief strategy officer and president of STHS Affiliates. "We decided that we needed to be out there, because urban hospitals are going to be smaller players in the future."

Aside from fulfilling its mission to provide care for those who need it, Saint Thomas figures it's also positioning itself as the preferred provider for services that the community hospitals can't provide, says Littrell.

To date, Saint Thomas has partnered with nine independent community hospitals across Tennessee and southern Kentucky in the Saint Thomas Chest Pain Network. Saint Thomas has no investment in the centers; instead, the system helps local hospitals obtain accreditation from the National Society of Chest Pain Centers. For example, the community hospitals adopt Saint Thomas' protocols, order sets and door-to-balloon time. In return, the centers are branded as the "Saint Thomas Chest Pain Center at XYZ hospital," Littrell explains.

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