Monday, October 4, 2010

Client News: Advantages of Hospital Mergers: Q&A With Marty Bonick of Jewish Hospital in Louisville

Pictured: Marty Bonick
Source: Becker's Hospital Review 
Written by Leigh Page 

Marty Bonick has been president and CEO of Jewish Hospital in Louisville for two and one half years and maintains a blog, called Hospital Life. The 517-bed hospital is part of Jewish Hospital & St. Mary’s HealthCare, which is in merger talks with 404-bed University of Louisville Hospital.

Question: Your system has been exploring a partnership with University of Louisville Hospital. How is that coming along?
Marty Bonick: My board is still negotiating and final details have not been worked out yet. It's looking more like a merger. We already have a close working relationship with University of Louisville Hospital. For example, we have been jointly operating the Cardiovascular Innovation Institute in Louisville. We have several complementary service lines. For example, we have transplant and heart and they have cancer, obstetrics, a NICU and trauma. We have some of those services, too.

This would not be the first merger for us. We merged with St. Mary's [331-bed Sts. Mary & Elizabeth Hospital] in 2005. But the market would stay competitive. There are four large health systems in the area, and we are second in market share. In the past six to eight years, we've had a strategy of developing outpatient centers with their own surgery centers, imaging, labs and women's health centers. We now operate four outpatient centers and they have started to have market penetration. We don’t have plans for any more right now. Kentucky is a CON state, so it's quite a process to set up a new one.

Q: Hospital consolidation seems to be the wave of the future. Would you agree?

MB: All indications show consolidations are going to be important to healthcare. They offer an opportunity for hospitals to broaden access and improve quality. A relationship with University of Louisville Hospital would help us grow our service lines and we could also reduce administration costs and centralize services like medical records and billing.

Q: Another trend is for hospitals to buy up physicians' practices. Are you doing that as well?
MB: Employment of physicians is a relatively new concept here. It has been occurring just in the past five or six years. Some doctors will always want to be independent. We what to try to achieve a consensus among all the doctors on staff.

Q: Are you interested in forming an accountable care organization?

MB: Like everybody, I'm waiting for the details but we've been doing a lot of planning. Healthcare reform will dramatically alter the environment. Hospitals and physicians need to work together in a stronger way than before to improve access.

An ACO could be formed by employing physicians or through clinical integration. The FTC has already condoned clinical integration. In this model, physicians use clinical IT to share information about outcomes and cost. We are in the midst of organizing independent physicians right now, like Advocate Physician Partners has done in Illinois. It's too early to say how many physicians would join, but we want a large group of them to demonstrate value to insurers. The numbers of could be in the hundreds and maybe in the thousands, especially if you include University of Louisville Hospital. There are four to five examples of clinical integration already running around the country, and we have been studying them.

Q: Humana is based in Louisville. Are you planning any ACO-like pilots with Humana?

MB: We are in initial discussions with Humana. It's just exploratory at this point. Insurers are still trying to figure out their role.

Q: Do you have electronic medical records?

MB: We don't have EMR yet. We are working on that. We do have an IT system, but not a full-blown EMR. It will take a few years.

Find out more about Jewish Hospital & St. Mary’s HealthCare.

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