Health care industry continues expansion amid major changes

Health care is one U.S. industry that is both growing rapidly and changing massively as all involved
Ellis Medicine President and CEO, James Connolly speaks about health care policy in his office at Ellis Medicine.
Ellis Medicine President and CEO, James Connolly speaks about health care policy in his office at Ellis Medicine.

Editor’s note: Ellis CEO James Connolly was interviewed for this story before he announced his retirement Feb. 5.

SCHENECTADY — Health care is one U.S. industry that is both growing rapidly and changing massively as all involved try to improve the population’s health and provide better care while also cutting costs to the system.

The Capital Region has long been recognized for leading the way on important health care trends. In the last year alone, hospitals, insurance companies and health information organizations have come together to announce new alliances and collaborations — all designed to pool resources and achieve more efficiencies in a complicated and costly system, whether it be through sharing electronic medical records, recruiting physicians in hard-to-place specialties, or investing in the region’s first Accountable Care Organization.

The Gazette recently sat down with the leader behind several of these initiatives — Ellis Medicine President and CEO James Connolly — to find out where regional health care is headed in coming years and the five trends he’s noticed firsthand as leader of the Schenectady-based hospital system.

Fewer uninsured patients

The number of uninsured Americans dropped last year to its lowest point in at least six years but the effects on hospital systems are actually quite subtle, Connolly said. Fewer people are using the emergency room and choosing primary care, leading to more investments by hospital systems in physicians’ offices. Revenue is up slightly and bad debt is down as fewer people are forced to pay out of pocket for health care.

Value-based payments

When ordering an array of pointless tests is better for the hospital’s bottom line than a patient’s health, then the system needs to change. But the industry is still grappling with how to pay providers based on the value of the care they provide, as opposed to the longstanding practice of paying them for the number of services they provide. Ellis has joined several state and federal initiatives that promise value-based reimbursement, but Connolly says a few things still have to happen before that can really take off.

To start, the industry should come up with a common definition for value-based purchasing, he said. And once they do, providers can’t go it alone. Physicians’ groups, hospitals and insurers have to team up to provide valuable, coordinated care, he said.

“You have to get them all talking about how do we organize care so it’s delivered in a cost-effective way? How do we integrate clinical activities so we avoid redundancies and don’t duplicate tests? How do we come up with a best practice? And if we do all those things, there will be economic savings that we can all share so we’re not doing all this work alone.”

And when this approach works, brag about it. “Frankly, the biggest obstacle right now is getting people to understand it and take the leap of faith to join in on it because there aren’t a lot of success stories out there yet,” Connolly said. “They’ll be coming, but they’re a minority right now.”

Lastly, a way to link up disparate information technology systems would go a long way toward bolstering value-based care, he said. Ellis runs an IT system that can spot gaps in care, like when a diabetic misses an annual checkup, but that technology doesn’t communicate with other providers (say, the patient’s endocrinologist) that might be using a different IT system.

“If you went out to 10 different physician offices you’d probably find 10 different IT systems,” he said.

Accountable Care Organizations

Ellis Medicine, St. Peter’s Health Partners and St. Mary’s Healthcare got federal approval late last year to run the region’s first Accountable Care Organization, which will allow the three hospital systems to participate in a federal program designed to improve care for Medicare beneficiaries in the region and capture savings along the way.

The organization, known as the Innovative Health Alliance of New York, was on the verge of naming a CEO in mid-February and is hiring a central staff who will work out of an office in Albany and care managers who will coordinate patient care across multiple physicians, hospitals and organizations.

“It’s a lot of work to get this thing started,” Connolly said. “We have teams looking at best practices and pathways, but they’re just starting to put all the pieces together and make sure we have the infrastructure in place.”


The creation of a regional ACO was just one of multiple collaborations announced in the Capital Region last year. Glens Falls and Saratoga hospitals announced they would look for opportunities to collaborate. Albany insurer CDPHP and Buffalo insurer Independent Health announced a strategic alliance to share best practices and expertise, among other resources. Albany Medical Center announced a partnership with CapitalCare Holdings to bolster treatment for diabetes and endocrine disorders in the area.

Connolly predicts more collaborations are on their way. Ideally, he said, they will come in the form of regional outpatient or public health programs that offer revenue streams where there previously weren’t any. One example is the current lack of any reimbursement for palliative care — treatment that enhances the quality of life for people with serious, often terminal illnesses.

Ellis launched such a program with the Visiting Nurse Service of Northeastern New York in 2013 called Care Choices, but it currently relies on grant funding to remain operational.

“What we need is a continuum of care,” Connolly said. “Take care of patients and start talking to them about what they want and what their wishes and needs are two or three years before they pass away, not one week. We and St. Peter’s have been talking about working together on this for a while, but this middle ground doesn’t exist yet.”

Convenient care

In today’s age of immediacy, people want their health care fast and convenient. The rise in urgent care centers to treat minor but urgent medical problems is one response to this growing market. Another is physician practices and medical groups offering extended hours and allowing walk-in visits to accommodate hectic schedules.

Ellis Medicine is reaping big business from the first option. It opened a 38,000-square-foot urgent care center with emergency department capabilities just off the Northway in Clifton Park in the fall of 2012. Last year, the center boasted 34,000 visits. Ellis is now tinkering with plans for a full-blown medical campus in the growing suburb, complete with physicians’ offices and possibly an ambulatory surgery center.

Connolly said he’s noticed a slight drop in the number of ER visits in Schenectady, likely a response to the growing number of walk-in clinics and extended hours at doctors’ offices.

“A lot of people if they get ill after 5 o’clock and the doctors’ office is closed they go right to the ER,” he said. “But if the doc’s office is open, they’ll go there. That is a really good thing.”

Another opportunity for convenient care that Ellis wants to explore is telemedicine, which could help low-income patients lacking transportation or patients with hectic schedules.

“Many doctors will say if I can see the patient and I can talk to the patient, I don’t necessarily have to be physically present with them to do an initial diagnosis,” he said. “Telemedicine affords people the opportunity to do that. You can actually put them right on Skype. It’s still relatively new, but I think in a few years people are going to have a lot more confidence in it.”

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