The Path to Follow When You Can't Go It Alone

00;00;00;22 - 00;00;21;20
Tom Haederle
For a rural hospital with a strong community identity, one that may have been serving its community for a hundred years or more. The thought of merging or affiliating with another care provider can be pretty daunting. So many important questions. How will it work? How do we guarantee a high level of care? And what does it mean to partner with another without losing our sense of identity?

00;00;21;22 - 00;00;29;23
Tom Haederle
Today, let's hear three outstanding leaders of rural hospitals talk it through.

00;00;29;25 - 00;01;03;19
Tom Haederle
Welcome to Community Cornerstones. Conversations with Rural Hospitals in America. A new series from the American Hospital Association. I'm Tom Haederle with AHA Communications. Mergers Acquisitions and Affiliations. Most health care leaders agree that the future, especially for rural providers, will involve more cooperation and partnerships. In this podcast, three leaders from rural health care systems agree that every community must find its own unique way to maximize its health care resources while maintaining the best possible care for patients.

00;01;03;21 - 00;01;19;27
Tom Haederle
Often that's going to mean new partnerships. They're not always easy, but as one of today's experts says, I think the marketplace, the regulatory arena, the macro economics of health care is absolutely calling us to walk through this conversation. So let's join them.

00;01;19;29 - 00;01;49;17
Julia Resnick
Hello. I am Julia Resnick, director of strategic initiatives at the AHA and I'm so pleased to be here at AHA’s Rural Health Care Leadership Conference with three outstanding rural CEOs and hospital leaders. So today we're going to be talking about the question of mergers and acquisitions and affiliations and what the future looks like for rural hospitals. So I'm here today with Russ Johnson, who's the president and CEO of LMH Health in Lawrence, Kansas, Erik Thorsen, who's the chief executive officer of Columbia Memorial Hospital.

00;01;49;17 - 00;02;10;06
Julia Resnick
in Astoria Oregon, and Dawn Trompeter president of OSF Saint Elizabeth Medical Center and OSF Saint Paul Medical Center in Ottawa, Illinois. Such a pleasure to be with all of you. I would like to kick things off, giving you a minute to introduce yourself and your background and a little bit about your hospital and community. So, Dawn let's start with you.

00;02;10;11 - 00;02;33;27
Dawn Trompeter
Okay. So as you mentioned, I'm president at Saint Elizabeth Medical Center in Ottawa, Illinois, and that's a town of about 20,000. We have a hospital that's licensed for 97 beds. We also have inpatient behavioral health and a safety net hospital and I'm also president at Saint Paul Medical Center in Mendota, Illinois. As part of all of this, as part of our loss of health care.

00;02;33;29 - 00;02;37;05
Dawn Trompeter
And that's a critical access hospital, smaller town.

00;02;37;07 - 00;02;39;29
Julia Resnick
Wonderful. Russ, tell us about your hospital and community.

00;02;40;01 - 00;03;02;21
Russ Johnson
Thank you. Lawerence Kansas is sandwiched between Kansas City and Topeka. We're about 30 miles. Equidistant from both elements is a small community hospital a little larger than typical when we think about small and rural, but still not a large medical center and have about 150 physicians on our active medical staff.

00;03;02;24 - 00;03;04;04
Julia Resnick
Wonderful. And Erik?

00;03;04;06 - 00;03;31;12
Erik Thorsen
Well, I'm in Astoria, Oregon, a fishing and timber community right at the mouth of the Columbia River, right at the end of the Lewis and Clark Trail. We run a small critical access hospital in Astoria, one of the larger critical Access hospitals in the state. We have a great relationship with academic Medical Center. OHSU. Have about a 750 employees, an operating revenue budget somewhere in about $180 million range.

00;03;31;18 - 00;03;47;18
Julia Resnick
Wonderful. And it's great having hospitals from all over the country so we can get those different perspectives on what you're experiencing. So in the rural health care space, there is this tension between whether you stay independent versus aligned with a health care system. So how are each of your hospitals thinking about that issue?

00;03;47;21 - 00;04;15;18
Russ Johnson
I'll jump in there. I think it's important that we sort of acknowledge that tension and some of the legacy of that tension being, you know, what we thought of as health care and what we thought of as our purpose, which was being this fiercely independent community hospital that maybe has served our community for 100 years or more. And then what does it mean to partner with somebody and to collaborate with somebody without losing our sense of identity?

00;04;15;21 - 00;04;36;17
Russ Johnson
I think the marketplace, the regulatory arena, just the macroeconomics of health care is absolutely calling us to walk through this conversation and to think about it honestly and openly. And that can be that can be uncomfortable and just acknowledging that it can be uncomfortable. But I think it's really necessary right now.

00;04;36;24 - 00;05;08;05
Erik Thorsen
I think for Columbia Memorial, you know, we're an independent or private, not for profit independent organization with a community led board. And we really wanted to grow services inside of our service areas and needed a partner to do that. So for us, we started looking for partners who would allow us to retain our independence, allow local control, but yet bring services into the community that would help us achieve, you know, a joint vision around growth in our community.

00;05;08;08 - 00;05;51;09
Dawn Trompeter
And I'll say we were a community independent community hospital. And I'm speaking of Saint Elizabeth now in Ottawa first. And we probably 13, 14 years ago really started looking at where health care was going in the future and really needed to partner. We were coming from a point of strength, a lot of dollars in our funding, appreciation, etc., but really wanted to maintain health care within our communities long term and really identified that we had a lot of hospitals in our rural area, probably too many hospitals that weren't all going to make it, and we wanted to really make sure we were at the forefront of that and really partnering with a good partner to

00;05;51;09 - 00;05;53;14
Dawn Trompeter
sustain health care for years to come.

00;05;53;18 - 00;06;23;18
Russ Johnson
You know, I've really enjoyed this conversation with Eric and Don because they're they're ahead of this curve from where my organization is. And I think they're sort of showing what we all need to think about, which is it doesn't have to be an existential threat to who we are as an organization and to our legacy and our place in the community and our heritage to think about how we can partner with someone that extends and maintains and even grows and expands our mission.

00;06;23;18 - 00;06;32;08
Russ Johnson
And I just think framing it up like that as how can this be a component of our success rather than a mark of failure somehow?

00;06;32;15 - 00;06;57;05
Dawn Trompeter
I would agree too, because as we've talked before, it really, whatever the relationship looks like, it's really about having a partner that is really aligned with strategy and the mission and really what you're trying to accomplish for your community and I think that's really what it's about is really finding the right partner regardless if it's an acquisition, a partnership, affiliation, whatever that looks like.

00;06;57;07 - 00;07;11;22
Erik Thorsen
And really, I think understanding what you want out of that partnership as you go in so you can make sure that vision and values relationships are all aligned with the larger partner that you seek.

00;07;11;24 - 00;07;21;16
Julia Resnick
Mm hmm. And what I'm hearing from all of you is that there are different ways of going forward, but really maintaining your sense of individualism and like the culture of your community is such an important piece.

00;07;21;21 - 00;07;57;08
Russ Johnson
That's super important and I think, you know, one of the things that I've learned from Dawn and Erik and their conversation and and what rings true for us is that time upfront to really understand who you are and what you are and what what those things are. Julia, to your point that make you who you are, whether that's an organizational culture or it's even your service lines or it's your governance and being super clear about that so you don't compromise those things in maybe a journey of a partnership that does adjust some other aspects of your organization that are less central to who you are.

00;07;57;11 - 00;08;11;17
Julia Resnick
The health care field is certainly changing and we have to change along with it, even when that's a little uncomfortable. So I do a lot of work in the value based care space, and a lot of it is talking about how we shift from, you know, the traditional models of care to new models of care in the rural context.

00;08;11;17 - 00;08;31;06
Julia Resnick
How that enables you to continue to have access to care in rural communities without may be different from the traditional inpatient model. So how are you thinking about those alternatives to traditional hospital models that would allow you to maintain that access, access to care services? And what is that looking like in your communities? Erik, I'm going to throw out to you.

00;08;31;08 - 00;09;00;09
Erik Thorsen
Well, I think our relationship that we developed with OHSU lends itself nicely to answer that question that we have seen the shift in care. Certainly the inpatient outside the patient setting, we've tried to tackle it from bringing specialists into our community. We really wanted to limit the amount of basically services our community had to leave the community for and bring them local as best we could.

00;09;00;09 - 00;09;28;16
Erik Thorsen
And we found a great partner who didn't require a merger, who didn't require us to change EMR, who didn't require us to give up local control, but yet supplied and helped us recruit a number of specialists into our community that we would not have otherwise been able to do. So, You know, 80% of our work now is done on the outpatient side in clinical or ambulatory settings.

00;09;28;18 - 00;09;53;02
Erik Thorsen
That's worked well for us. Our hospital has thrived. We've added jobs, we've gained confidence in our community with the services that we provide, which is just a big snowball that helps our organization continue to thrive and grow. And that's our vision. A little different maybe than a true merger, but a little different model that is working well for us and our community.

00;09;53;05 - 00;10;17;20
Dawn Trompeter
And I think for us, you know, we have a great innovation center as well as a digital health platform. And so really looking at that care model development and we cannot continue to serve as we've served. How do we change that? Where's telehealth come in? Where some of the e-services and our digital platform that we use, how do we really think differently?

00;10;17;23 - 00;10;36;16
Dawn Trompeter
We just don't have the resources from staff to physicians to be able to continue to have everything exactly how we've had it. So how do we really level up and still provide great quality services and be more efficient and give our providers and our staff a better work life balance?

00;10;36;18 - 00;11;01;19
Russ Johnson
I would jump in on that too, Julia. I think the reforming of our financing and delivery system and the shift to risk is by definition outside of the capability of a small institution. When you think about, you know, sharing risk across a bigger organization and actuarial, even large organizations that we used to think of as large are no longer seen as scaled enough to bear risk.

00;11;01;21 - 00;11;23;19
Russ Johnson
And so we have to think about as smaller institutions, how do we come alongside a partner that can bear that risk and or who collectively we can? And I think it's I think it's to Dawn's point around expertise, and I think of data and analytics and development of new process models and the clinical integration that Erik spoke about.

00;11;23;21 - 00;11;46;09
Russ Johnson
Those are things that are all bigger than a small independent community hospital. And the literature and the forecast for the future is not a return to fee for service, it's a continuation away from that to more risk bearing. And it just not being a good steward of our institution to think we can bear that kind of risk and be successful through it.

00;11;46;12 - 00;11;57;11
Julia Resnick
And I think even if the value based payment model isn't fully ingrained in a lot of rural hospitals, you can still take on those care models that allow you to improve value and can help move your communities forward.

00;11;57;12 - 00;11;57;21
Russ Johnson
Yeah.

00;11;57;23 - 00;12;06;05
Julia Resnick
So I'll close with one final question I like. I like to think big picture at the end. So what is your vision for the future of rural hospitals and what's it going to take to get us there?

00;12;06;10 - 00;12;28;12
Dawn Trompeter
I think it's collaboration and partnerships. You know, how do we work together? We're not necessarily competing with everyone. It's really we have to join together for the better of all to be able to take care of our patients, to make it economically sustainable and really to drive quality and the care that we provide. We need to have those partners to be able to do so.

00;12;28;19 - 00;12;59;15
Erik Thorsen
Yeah, I agree and I'm anxious to see how the Rural Emergency Hospital model plays out in some of the communities that don't have the scale to, you know, offer the full array of acute care services. I think every community is unique. They have their own unique needs. They need to determine how and what they need to do to meet those needs and what they can, I think, safely do at a high level of quality in their community.

00;12;59;15 - 00;13;10;13
Erik Thorsen
And maybe that model will transform some small community hospitals into something a little different. And I'm really anxious to see if that plays out the way people think it will.

00;13;10;20 - 00;13;46;06
Russ Johnson
I think to start with something really simple, which is we have to find a way to continue providing excellent clinical care in rural communities. And maybe that's a statement of the obvious. But the other reality that we're facing is the trajectory of the current financing and delivery system really isn't compatible with that. And so I think taking those two forces really brings the work of AHA in promoting what are the alternative delivery models.

00;13;46;11 - 00;14;20;10
Russ Johnson
You know, so much of rural health care came out of forties and fifties era Hill Burton funding in a fundamentally different financing and health care environment, a different clinical environment, even a different demographic population environment. Well, we're not going back to that. So to me it's around to to steal from my colleagues here. It's around innovation and innovation at the local level, maybe letting go of some of the things that used to be scary, which are being independent and not being able to partner with somebody.

00;14;20;13 - 00;14;33;06
Russ Johnson
But I think also at the macro level, we have to support our association and each other because we've got to find a different delivery model that's sustainable. The local hospital can't do that on its own.

00;14;33;08 - 00;14;50;10
Julia Resnick
So what I'm hearing from all of you are that partnerships are key and that they are going to continue to be key in developing those new care models that will allow rural hospitals to thrive in the future. So we're lucky to have such great leaders like the three of you who are thinking about what the future looks like and really impacting the health of the communities you serve.

00;14;50;10 - 00;14;53;08
Julia Resnick
So I want to thank you for your time today. Really appreciate it.

00;14;53;12 - 00;14;54;01
Russ Johnson
Thank you, Julia.

00;14;54;05 - 00;14;54;21
Erik Thorsen and Dawn Trompeter
Thank you.