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Friday, June 20, 2014

MaryBeth Matzek: More hospitals seek out partners

By MaryBeth Matzek
Economic pressures, rising costs and lower reimbursement rates may soon make small, independent hospitals a thing of the past.

In recent years, several small health systems and hospitals across Wisconsin have teamed up with their larger neighbors as they seek to stay competitive.

It's definitely a trend Dr. Dean Gruner, president and CEO of Appleton-based ThedaCare, has noticed. ThedaCare signed affiliation agreements with Shawano Medical Center in 2011 and Wild Rose Community Medical Center and Community Health Network, the owner of Berlin Medical Center, earlier this year.

"There are four or five reasons that smaller hospitals are looking for larger partners, but overall we're all dealing with a changing marketplace," he says.

That changing marketplace is one where there are more outpatient procedures and increased use of more expensive technology, including electronic medical records. Medicare and insurers have also lowered their reimbursement rates, which has increased financial pressures on hospitals.

For example, a small health system such as CHN doesn't have access to electronic medical record systems, such as the popular one offered by Verona-based Epic. "It's a volume question. You need to be a certain size before they'll work with you and then there's the question of cost. Adding electronic records is very expensive," Gruner continues. "Smaller systems don't have access to the capital they need for some investments."

As part of their affiliation agreements, ThedaCare is adding Epic in both the Wild Rose and CNH systems.

ThedaCare isn't the only larger health care system taking on smaller partners. Ripon Medical Center joined with Fond du Lac-based Agnesian Healthcare in 2011 while SwedishAmerican Health System of Rockford, Ill., announced plans to merge with UW Health of Madison this past April. Bay Area Medical Center in Marinette and Aurora Health Care signed a letter of intent late last year giving the Milwaukee health care system a chance to explore the opportunity of becoming a minority owner of the hospital. And just this week, Aspirus announced it was taking over Northstar Health System, which is based in Michigan's Upper Peninsula and operates a hospital in Iron River, making it the fourth UP hospital to join with the Wausau based system.

In some instances such as with Shawano and Ripon, there's a new building involved as the larger healthcare system pledges to build a new hospital or other facility as part of the affiliation agreement. The new Ripon Medical Center will open later this year while a new Shawano hospital, ThedaCare Medical Center-Shawano, will open next year.

When CHN and ThedaCare announced its affiliation earlier this year, John Feeney, CHN CEO and president, said the deal made sense.

"The changing healthcare environment is requiring organizations like us and ThedaCare to look for ways to enhance healthcare quality, deliver healthcare more cost-effectively, reduce duplication, and improve the patient experience," he says, adding the two organizations worked together previously in several areas such as the ThedaStar air medical program. "The best way to achieve this is by working together rather than being competitors.

Working together is essential to making these partnerships work, Gruner says. "Collaboration is give and take. You need to work together at a higher level for the common good," he says.

In ThedaCare's case, they have a local board for each of its five rural hospitals – New London, Waupaca, Shawano, Wild Rose and Berlin. "There's community pride and heritage for each of our facilities and we want to keep that and build on that," Gruner says.

Skipping the soda

Baldwin Area Medical Center in western Wisconsin is just saying no to soda.

The 25-bed hospital is removing soda – or pop as some in this part of the state call it – from its facility, taking it off the patient menu and removing soda machines from waiting rooms and employee areas. Employees, however, are still allowed to bring in their own soda to drink while working.

Hospital officials made the move as part of an overall healthy community initiative.

-- Matzek, a freelance writer and editor, is the owner of 1Bizzy Writer. She has worked in the past as a news editor at Insight Publications and as business editor at the Appleton Post-Crescent.


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