Kevin Robinson, a spokesman for Southwestern Vermont Health Care, said the agreement will allow the Bennington hospital to recruit high-quality physicians and better prepare for requirements under federal health care reform initiatives.
“This is definitely a move that will begin to prepare our health care system for changes that will come as a result of reform,” Robinson said.
The memorandum of understanding will lay the framework for a contract in 2012. The general structure of the “multi-specialty” group, Robinson said, would combine a variety of specialties like primary care physicians, hospitalists and surgeons, for example, although specifics about the program are under wraps. The private, nonprofit hospitals did not release the memorandum to the public.
The decision to create a new joint physician group began in May when Southwestern Vermont Health Care chose to affiliate with Dartmouth-Hitchcock Health, a holding company that was formed in 2009. According to the company’s website, the objective of the entity is to allow “health service providers in the region to strategically partner with one another in order to improve population health.”
Rick Adams, a spokesman for Dartmouth-Hitchcock, said details about which facility the doctors will work for and how billing will function are up in the air.
“We’re still putting together the specifics of what this looks like,” Adams said.
The announcement came less than two weeks after Fletcher Allen Health Care in Burlington and Central Vermont Medical Center in Berlin announced a new parent organization that would promote enhanced integration between the two facilities. Fletcher Allen Partners, a new corporate entity, will serve as the parent company of the two systems and approve budgets, strategic plans and major financial decisions for each organization.
Mike Noble, a spokesman for Fletcher Allen Health Care, said the timing of the announcements was coincidental and they are significantly different actions. They are both, however, part of a movement of hospitals anticipating federal health care reforms.
The main driver for new hospital collaborations is the Affordable Care Act, which gives qualifying health care programs financial incentives to form accountable care organizations or “ACOs” that provide good quality care to Medicare beneficiaries and keep down costs.”
“This certainly reflects what is going on nationally,” Noble said.
A recent study by the consulting firm PricewaterhouseCoopers, found that impending federal health care reforms are accelerating collaboration between hospitals and physicians.
Even Fletcher Allen Health Care and Dartmouth-Hitchcock have discussed the possibility of collaborating to provide care to large groups of patients in Vermont and New Hampshire. Earlier this year, officials from both hospitals discussed Vermont’s plans for single-payer style reforms and the federal Patient and Protection and Affordable Care Act as prompts for possible joint efforts. That potential partnership marks a stark deviation from the traditionally competitive relationship the organizations have had under the fee-for-service model of health care reimbursement.
The main driver for new hospital collaborations is the Affordable Care Act, which gives qualifying health care programs financial incentives to form accountable care organizations or “ACOs” that provide good quality care to Medicare beneficiaries and keep down costs. An ACO is a network of doctors and hospitals that share responsibility for providing care to patients. In order to qualify for incentives, each network would agree to manage all of the health care needs of at least 5,000 Medicare beneficiaries for three years or more.
This incentive program is one of many changes at the federal and state level that will require health care providers to abandon the “fee-for-service” billing model that charges patients on an a la carte basis for each aspect of treatment. Under the reforms, the health care system will move toward a paradigm that puts a premium on patient outcomes and incentivizes cost savings. The National Committee for Quality Assurance released new draft criteria for ACOs on Oct. 19, and the federal shared savings program is slated to go into effect at the beginning of 2012.
The next step at the federal level is the requirement for “exchanges” in 2014 that are designed to expand health insurance coverage, improve quality of coverage and reduce costs. In 2017, Vermont will be able to request a waiver from the exchange requirement that will allow it to implement its universal health care system as planned under the state health care reform law.
Bea Grause, president of the Vermont Association of Hospitals and Health Systems, said hospitals are forming partnerships in Vermont to streamline care.
“The hospitals are reading the tea leaves,” Grause said.
Tom Huebner, president of Rutland Regional Medical Center, said hospitals around the country are restructuring programs in anticipation of reform deadlines. Rutland, for example, has been working more closely with other providers in the area as well as employing some specialists directly, he said.
“There is a lot going on as we watch the development in reform,” Huebner said.
Grause said hospitals are also trying to prepare for an impending physician shortage. According to a study by the Association of American Medical Colleges, the nation could face a shortage of as many as 150,000 doctors over the next 15 years.
Southwestern Vermont Health Care’s partnership with a teaching hospital was partly a reaction to this trend. The collaboration could help the facility recruit doctors when they finish their residencies, Robinson said.
