Is the Community Hospital a Dying Model, or is it the Future of Healthcare?

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As the healthcare industry adopts the philosophy of accountable care, large hospitals and academic medical centers may seem to have the upper hand compared with community hospitals, because larger hospitals typically have greater access to revenue and offer more services along the continuum of care. "Academic medical centers offer complex services that for a variety of reasons produce better availability of capital," says Tim Bateman, executive director of the community hospital network Community Hospital 100 and executive vice president of Lincoln Healthcare Events. However, community hospitals may be able to develop new care models more effectively because they are smaller and closely aligned with the community. Here, several community hospital leaders discuss the biggest challenges they face and what they have to do to thrive in the new era of healthcare.

Advantages and disadvantages of community hospitals

While often seen as a disadvantage, community hospitals' small size may be an advantage in the drive to reduce costs and improve quality. "The smaller your system is, the easier it is to redesign it," says John Chessare, MD, president and CEO of Greater Baltimore Medical Center HealthCare, which includes a 281-bed community hospital. "The larger your system is, the harder it is to get standardized work in place. And then you have to [ask], is it really a system or just a confederation of units? There are a lot of hospital companies that call themselves a system, but in reality each hospital is operating independently from each other. A community hospital and its medical staff should be able to get to care that is coordinated through the eyes of the patient at a much faster pace than a large hospital company with loosely affiliated physicians." Small, close-knit community health systems may thus be able to change from a fee-for-service care delivery model to a pay-for-performance system more quickly and easier.

On the other hand, one of the disadvantages of community hospitals is their relatively lower access to medical professionals, partly due to their size and location. "[Academic medical centers] have access to larger pools of qualified medical staff and professionals," Mr. Bateman says.

Hospital-physician alignment challenges
Recruiting and partnering with physicians is one of the greatest challenges facing community hospitals today. This challenge may drive some community hospitals to work with academic medical centers and other hospitals to increase the number of physicians available to them. Recruitment of primary care physicians is particularly challenging, according to John Federspiel, president and CEO of 128-bed Hudson Valley Hospital Center in Cortlandt Manor, N.Y. "Regarding physician recruitment, we are aggressively facilitating discussions with the major medical schools in the New York region," he says.

Partnering with physicians is key to improving care while reducing costs, as the hospital and physicians can then align incentives for standardizing processes and reducing waste. "You can't redesign the system without the physicians being in the lead," Dr. Chessare says. Community hospitals generally have fewer existing relationships with physicians outside their hospital than larger hospitals and may thus have to work harder to transition to a new coordinated model of care. "We must continue to bring physicians to the table to make certain our partnership efforts are collaborative," says Barbara Tachovsky, RN, MS, president of 226-bed Paoli (Pa.) Hospital. "Our success depends on taking action together."

Meeting the community's needs
In addition to partnering with physicians, community hospitals need to strengthen their engagement with the community to ensure they are meeting patients' needs and to expand services into less costly and more efficient care settings. "We need to enhance community-provider relationships so care continues seamlessly beyond the hospital and is as focused on preventing illness as it is on treating disease," Ms. Tachovsky says. "We need to partner with other community providers to address the continuum-of-care and cost-of-care issues for our patients."

For example, Hudson Valley Hospital Center is working with area nursing homes to reduce hospital readmissions. Mr. Federspiel says the hospital meets with all area nursing homes quarterly to review their readmission activity, giving the nursing homes an opportunity to benchmark best practices.

GBMC is engaging more with the community by moving towards a patient-centered medical home model. Under this model, the health system offers care coordinators, electronic medical records, a disease registry for patients with chronic diseases, after-hour visits, group visits and educational opportunities. The health system is also planning to work with local schools to combat childhood obesity by increasing the amount children exercise.

Bending the cost curve
Community hospitals may have to make significant changes in some processes to create efficiencies and reduce cost. Reducing waste may be particularly important for community hospitals compared with larger hospitals because they typically have less capital resources, meaning less room for error in meeting new quality and cost demands. "They will have to be extremely conscious of their operating and balance sheet positions month by month and year by year moving ahead, build in significant cushions to account for uncertainty and be able to manage revenues and costs service-by-service on a much more granular basis than in the past," Mr. Bateman says.

At GBMC, each manager does a "waste walk" in his or her assigned area to identify processes that could be streamlined. Dr. Chessare says Maryland's hospital rate-setting commission decided to increase hospitals' rates by 0.3 percent, while the increase in inflation is about 2.5 percent. "There is immediate pressure to drive waste down," he says.  

Creating a high reliability organization
Hospitals need to become high reliability organizations, meaning they can consistently deliver high quality outcomes at lower cost by standardizing work and empowering employees to find and remove defects in care, according to Dr. Chessare. As do other hospitals, community hospitals need to implement evidence-based practices to prevent harm and improve quality. For example, GBMC standardized a method for inserting and extracting central lines and has not had a central line-associated bloodstream infection for approximately six months.

Comparing quality outcomes with local and national benchmarks is also important for identifying areas for improvement. "We need to continue to focus on creating a reliable culture of safety. Part of this process is sharing our results with internal audiences so we can plan for continued improvement," Ms. Tachovsky says.

Looking in the crystal ball
While community hospitals face many of the same challenges faced by large hospitals, such as aligning with physicians, reducing cost and improving quality, they have unique features that bring both advantages and disadvantages. Though community hospitals usually have less access to capital and physicians, they are closely engaged with the community and can use their size to their advantage when redesigning care delivery systems. Overall, which win out — the advantages or the disadvantages?

"I don't see any future for community hospitals," Dr. Chessare says. "I think there's a fantastic future for community health systems. If small standalone hospitals are only doing what hospitals have done historically, I don't see much of a future for that. But I see a phenomenal future for health systems with a strong community hospital that breaks the mold [of patient care]." Dr. Chessare says the future for community hospitals is to be one part of a system that is focused on improving health. The patient-centered medical home model will be the anchor of this new system.

Similarly, the definition of a community hospital as a facility may change in the future, according to Mr. Bateman. "The physical hospital will matter less in the future than the cumulative assets that the hospital entity brings to the table in the form of engaged, informed and committed medical staff and professionals," he says.

Whether a hospital, health system or a patient-centered medical home, community healthcare organizations that can align with other providers to reach financial, operational and clinical goals will likely succeed. "The future of community hospitals that stay focused on quality and cost is challenging but very promising," Ms. Tachovsky says.

More Articles on Community Hospitals:

Community Hospital CEO Panel: 3 Leaders Share Insights on the State of Community Hospitals
Why We Need to Keep Our Community Hospitals Strong

Strategic Planning for Community Hospitals: How to Effectively Move to a New Delivery Model

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