Suburban hospitals learn to compete with big city counterparts
Saturday, April 16th, 2011
Ten years ago, four hospitals in Bucks and Eastern Montgomery counties had cardiac catheterization or electrophysiology labs. Fewer had advanced cancer diagnosis and care. And robotic surgery was science fiction.
Today most local hospitals have at least two cardiac cath labs. Most have opened comprehensive cancer, cardiac care, orthopedic and diagnostic imaging centers. And at least two have robotic surgery programs.
In less than a decade, at least six radiation oncology centers have opened within a 20-mile radius of Bucks and Eastern Montgomery suburbs; a seventh is expected to open next year in Doylestown.
Same-day surgeries are routine. Next month a second Bucks County hospital will open a hyperbaric oxygen chamber used in wound treatment.
Some hospitals participate in clinical trials testing new drugs or medical devices for major pharmaceutical companies.
The advanced specialty medical care that Philadelphia suburbanites once found only in large urban and academic hospitals is as close as their well-manicured backyards.
“A ton of primary care is being done by specialists – that is why health care is so expensive, said Tom Getzen, a professor in the risk, insurance and health care management at Temple University’s Fox School of Business. “If you don’t have specialty stuff, you can’t get by anymore.”
As a result, suburban hospitals face pressure to expand and add profitable services and the latest advanced technology as a way to attract the best medical professionals, meet higher patient quality standards, and underwrite the less profitable, but necessary, community services and unpaid care.
They also have encountered unforeseen competition for shrinking health insurance dollars: private doctors with the expertise and financial ability to provide identical services.
To meet the growing specialty care demands, some suburban and urban hospitals are forging alliances.
The new radiation oncology center planned at Doylestown Hospital is a joint venture with Hospital of the University of Pennsylvania; last year Philadelphia’s Moss Rehab opened a 12-bed inpatient rehab unit inside Aria Health’s Bucks County campus in Falls.
Other Philadelphia-based health care providers are migrating north in pursuit of privately insured patients seeking lucrative elective procedures.
Fox Chase Cancer Center last year opened a million radiation treatment center – its first suburban satellite – in Chalfont about 20 miles outside its main Philadelphia campus.
The Rothman Institute, the region’s largest private orthopedic practice, recently opened its first specialty hospital in Bensalem.
The medical building it occupies is the former Comprehensive Breast Care Institute of DSI Bucks County, another specialty hospital that closed less than two years after its 2007 opening because of insufficient patient volumes and financial issues.
Deregulation to proliferation
Industry analysts trace Pennsylvania’s suburban specialty explosion with the end of the Certificate of Need (CON) program in December 1996, which removed the requirement that hospitals gain state approval before adding or expanding most medical services and technologies. Some business experts say CON programs contain health care costs.
Before deregulation Philadelphia and its four suburbs had 15 open heart surgery programs – all but three located in Philadelphia. By 2004, 24 hospitals had open-heart surgery- only half located in Philadelphia hospitals.
Between 1997 and 2004, Bucks County hospitals more than quadrupled the number of open- and closed-heart operations from 190 to 853. During the same time period, Philadelphia hospitals experienced a 41 percent drop in cardiac surgeries, from 8,758 to 5,143.
Today, many suburban hospitals offer every type of cardiac and cancer diagnosis and treatment procedure, except the most high-end specialty care such as organ transplants.
“It was almost as if there was a dam holding back a lot of these developments and the dam broke in 1996,” said Craig Holm, senior vice president of Health Strategies and Solutions, a Philadelphia health care strategy company.
Two significant events fueled the suburban market for advanced specialty care, health analysts say. The population explosion created a large enough patient base and greater demand for nearby medical care, and nationally health care dollars began shifting away from expensive inpatient to cheaper outpatient care, a trend that hospitals were eager to pursue.
A decade ago, Pennsylvania had 61 freestanding outpatient diagnostic or surgical centers, most wholly or partially hospital-owned. They included one center in Bucks and nine in Montgomery County.
But as technology improved and prices dropped, private doctors found they also could perform the same profitable medical procedures outside hospitals. As of last year, the number of Pennsylvania outpatient centers was 261 including 15 in Bucks County and 29 in Montgomery County. Most are privately owned.
Outpatient diagnostic and specialty centers are far less expensive to operate since they are less regulated than full-service hospitals, don’t provide a broad range of services, take patients at low-risk for medical complications, and they don’t have to treat the uninsured.
The proliferation of suburban specialty care, while more convenient for patients, doesn’t guarantee better quality, health business experts point out. Many studies show that hospitals that perform the most medical procedures have the best patient outcomes.
A good example is cardiology, said Holm, of Health Strategies and Solutions. Heart centers that don’t perform enough procedures tend to have lower quality levels – it’s the old practice-makes-perfect adage, he said.
As hospitals upgrade medical technology, the older equipment is typically sold to primary doctors and private outpatient centers. But those providers likely have less highly skilled and experienced staff interpreting data and images, said Guy David, an assistant professor of health care management at the Wharton School of Business.
“For me that is the big worry,” he added.
Higher standards
Health experts also worry the specialization trend could force full-service hospitals to reduce or eliminate less profitable services that communities depend on, forcing patients to travel farther and placing greater burdens on hospitals that continue the services.
Last year Grand View Hospital closed its 18-bed behavior health unit, citing underuse and a shift towards outpatient treatment. Grand View and Penn Foundation, which jointly ran the unit, combined lost about 0,000 annually operating the behavior health unit, hospital officials said.
Since 2007 alone, short-term psych beds in Bucks County hospitals have dropped from 113 to 59.
Also last year Abington Memorial Hospital eliminated the maternity unit at Lansdale Hospital, which it purchased in 2008 with officials also cited under use as the reason.
Since 2000, the Philadelphia region has seen 12 maternity units close.
Local hospital administrators, though, insist community need, not profit margins, drive financial and service decisions.
“OB is the perfect example and the perfect example why we are continuing it,” said Dr. Scott Levy, Doylestown Hospital’s chief medical officer. We just don’t feel we could possibly give up OB because of the community need.”
Hospitals also face greater standards of patient care, specifically the speed and level at which they are expected to administer care, which requires better equipment and more highly trained staff, said Eleanor Wilson, vice president of patient services at Doylestown Hospital.
“The bar has been raised everywhere,” she added.
Ten years ago, hospitals were not expected to have a heart attack patient in the catheterization lab for angioplasty in under 90 minutes. Now the standard is moving toward 60 minutes or less. Ten years ago, suspected stroke patients were observed for hours before diagnosis; now clot-busting drug treatment should be administered within four hours of symptom onset.
“You can’t get them downtown fast enough,” Wilson said. “It’s not going to work.”