If Memorial Health System becomes an independent nonprofit, itsadministrators say it will become stronger because it will not beworking alone.
That's because the hospital will have the opportunity toaffiliate with smaller, rural hospitals in southern Colorado and onthe western slope, thereby creating networks that will serve morepatients and boost bottom lines.
Those types of affiliations are growing more common as hospitalsseek greater strength through numbers. However, Colorado lawprohibits such partnerships for government-owned groups, saidMemorial COO Carm Moceri, who also noted that city rules prohibithospital expansion outside city limits.
That's disturbing to Memorial's administrators, who are watchingpatient volumes decline at an alarming rate.
Moceri is convinced there's only one way to bolster market shareand bottom line -- through affiliations, partnerships andintegration.
Financial reports show Memorial is still profitable, but analystssay those numbers won't remain healthy unless Memorial makes a moveto expand -- and soon.
'We want the freedom to create joint ventures with otherhospitals and clinics, without the red tape that come from beingowned by the city,' said Moceri. 'We've done some joint ventures,but with the law written the way it is, it takes so long, and is socumbersome. We want to be able to move quickly.'
Another reason they want to move quickly is Memorial's maincompetition, Penrose-St. Francis Health Services, is alreadycreating affiliations. The hospital recently announced a partnershipwith a hospital in Alamosa, as well as an affiliation with twocardiology groups closer to home.
'Centura is reaching out as part of our strategic plan,' said BobWallace, service line director for outreach at Centura Health 'Weknow that much of health reform is still to be figured out, but wewant to be prepared by making the system strong financially.'
He said the intent of the plan is to market Centura as a singleentity, including its partnerships with independent, rural hospitalsystems. Centura also seeks to create systems of care, such astrauma, orthopedics and oncology, he said.
'But the biggest thing that involves moving outside our servicearea is moving care 'upstream,'' he said. 'We are creatingpartnerships in these towns, making sure that they can be treated intheir town, without traveling here. Then when local doctors can'ttake care of them, they'll come to one of the Centura hospitals.'
It's a plan that makes sense to Moceri, who worked at hospitalsystems in Chicago and St. Louis that were doing the same thing.Health care is changing so quickly, that affiliations andpartnerships are the way to remain competitive.
'In Chicago, I worked at a $1.4 billion hospital that was toosmall to compete,' he said. 'So it merged with a $4 billionhospital. In Colorado Springs, we don't need a $5 billion system,but the bigger we are means the more volume of patients come in, themore competitive we can be.'
Both hospital systems are looking outside the Springs for theirgrowth because they've grown as much as they can within theboundaries of the Springs, he said.
Both built hospitals on the north end of town, and now arelooking to the south.
With the uncertainty of health care reform, hospitals around thecountry are moving to integrate services and create partnerships.Reform means doctors and hospitals won't get paid on a per-patient,per-visit basis any longer, payments will be bundled and sharedbetween doctors, specialists and hospitals.
Memorial needs the freedom to do what other hospitals already are-- move outside the city limits for partnerships, Moceri said.
Poudre Valley Health System, a Fort Collins-based hospital systemthat has gained national attention for its quality of care and theway it does business, has clinics in Nevada and Wyoming -- andrecently announced an affiliation with University Hospital inDenver.
After becoming an independent system in 1994, the hospital grewits assets and its care. Recently, its board spent 24 monthsstudying what to do next. Should it sell to a larger system? Shouldit affiliate with another nonprofit system?
'We knew we'd done well so far,' said CEO Rulon Stacey. 'But wewanted to make sure we stayed profitable, stayed with high-qualitycare.'
The system looked at selling to HealthOne in Denver, and althoughStacey praised its staff, but decided against it.
'The partnership with University Hospital makes sense,' he said.'It gives us access to their doctors and their patients access toours. We created a network of 1,600 doctors -- and those doctors cannow talk to each other, provide continuity of care.'
One day, the network could also provide its own health insurance,allowing patients to see doctors and driving down premium costs.
'Health insurance companies are buying clinics and hospitals arestarting to provide health insurance,' he said. 'This sort ofintegration is the future.'
Stacey recently told a Memorial task force that Memorial cannotmaintain its status quo.
'That's the way to killing the hospital,' he said. 'You can sellit, or you can become a nonprofit, but you cannot stay the way youare.'
For Moceri, time is running out.
'Poudre Valley had 20-plus years to figure it out,' he said. 'Wedon't have that kind of time -- with reform, with competition -- weneed to move'
