Safety-net systems need internal reforms and outside lifelines, hospital leaders argue

Safety-net hospitals, or anchor institutions, must reform themselves in addition to any outside aid received from business leaders and government, the presidents and CEOs of Henry Ford Health and America's Essential Hospitals argue in a piece published by Harvard Business Review

Detroit-based Henry Ford's Bob Riney and America's Essential Hospitals' Bruce Siegel, MD, joined with Texas A&M University's business school professor Leonard Berry, PhD, for their Jan. 31 HBR commentary. 

In it, the authors push for anchor institutions, business leaders and the government to take specific actions in an "all-hands-on-deck approach" to strengthen health systems throughout the U.S. that serve higher proportions of uninsured or underinsured patients and lower proportions of commercially insured patients than their metropolitan-area counterparts that serve more affluent areas. 

The authors use the term anchor institutions instead of safety-net hospitals. The latter term has been subject to some scrutiny lately, with some arguing that the lack of a universal definition for these hospitals complicates funding efforts. 

"No innovative approach to helping anchor health systems will succeed if the health systems themselves don't reform their own approaches to delivering their essential care and services," the authors posit. Mr. Riney, Dr. Siegel and Dr. Berry suggest anchor systems take the following steps: 

  1. Become even more efficient. Anchor systems need to take efficiency to a high level and cannot afford the waste that "plagues U.S. healthcare generally," the authors note. Investments must be justified and activities that provide insufficient benefit to the expense must be eliminated.
  1. Enlist capable partners. As providers of essential community services, anchor institutions are better off if they pool key resources through creative collaborations with the right partners. Mr. Riney points to Henry Ford's $2.5 billion collaboration with the NBA's Detroit Pistons and with Michigan State University to build, over a 10-year period, a new hospital, a medical research building, and residential and recreational facilities in downtown Detroit. "The net result will be better healthcare access; modern, state-of-the-art facilities; and an economic multiplier as housing, hotels, retail stores, and other amenities attract leisure and commerce visitors, not just hospital visits," the authors note. 
  1. Scale strategically. Some safety-net hospitals have improved their position through mergers with aligned systems. The 2017 combination of Greenville Health and Palmetto Health that resulted in Greenville, S.C.-based Prisma Health is one example cited by authors. "Done carefully, consolidation can strengthen these institutions by giving them greater influence in negotiating with payers and suppliers and enabling them to share best operational practices," they write.
  1. Create centers of excellence. In Miami, Jackson Health has built a large heart institute that now serves patients who otherwise may not have used the local public hospital system. The Massey Cancer Center at Virginia Commonwealth University, a public institution in Richmond, Va., attracts patients from across the region while providing the services of a major cancer center to that city's vulnerable populations. Attracting patients from across the income spectrum can buoy anchor institutions' commercial payer mix and generate new lines of revenue by becoming the option of choice in their market for specific medical conditions. 

"Anchor health systems occupy a unique, indispensable place in U.S. health care," the authors write. "Their challenges are many, far-reaching, and woefully underappreciated. Without these institutions working at their full potential, individuals, communities, and U.S. health care as a whole are jeopardized. These bedrock organizations cannot be allowed to wither."

Mr. Riney's, Dr. Siegel's and Dr. Berry's complete suggestions and those business leaders and government can be found in the full article on HBR, available here.

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