Community Hospital War Pits University Against the Rest of Region's Healthcare System

Cheryl Clark, for HealthLeaders Media , April 7, 2010

Additionally, UCSD will not be required to pay "Facility Benefit Assessments" to fund road and bridge improvements, while Scripps has to go through each bureaucratic step, "costing years and millions in addition to paying facility assessments, when most of the traffic growth and problems are caused by the university's growth."

I spoke with Joanne Conroy, MD, chief healthcare officer with the Association of American of Medical Colleges, and asked her if other teaching hospitals were making similar moves. She replied that they are, but for a variety of reasons.

In her view, there's another matter potentially at stake in UCSD's decision and that has to do with the way the healthcare system will respond when a lot more patients have health insurance coverage, even if it's with expanded Medicaid.

"We're aware that when patients have insurance, they make different decisions, they want to be treated like a customer. And instead of going to a safety net hospital, where demand is high and resources are often scarce, they choose to go to hospitals where care is more patient centric."

"It may be a challenge for some safety net hospitals to change how they deliver services if their patients are all now insured," she says.

And, she points out, there may be an upside to UCSD and Scripps being such major powerhouses so close together. In an era of health reform, new ways of reducing readmissions, errors, regional electronic health record management, and other innovations may find good pairings between town and gown collaborations, she says.

"We [in academic medicine] are really good at inventing things, but I have to say that the private hospital community excels at executing them. They show us how theory translates to widespread implementation."

Conroy adds that in her view, "town-gown rifts of the past are actually closing. We're seeing a much greater degree of alignment between the two, with mergers and creative delivery models popping up all over the country."

Who's right in this argument? San Diego healthcare analyst Nathan Kaufman says the big question for him is "where are the patients going to come from to require funding another $600 million worth of infrastructure? Plus paying pensions of new employees, and new doctors, who are more expensive in a university setting than in non-academic medicine. Is the San Diego market growing fast enough to support that?"

With new ideas and rules in the new health reform legislation, physicians and hospitals will be entering new partnerships that in effect keep patients out of the hospital, not finding new ways to admit them.

"This creates an arms war," Kaufman says. "UCSD and Scripps will be in a contest to determine who can attract the best doctors and equipment. To the extent that there's a community need for those services, that's a good thing, but to the extent we're duplicating, there's no reason for it."

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