Jim Connolly is actively trying to reduce business for Ellis Medicine. He doesn’t want people coming into his hospital. He doesn’t want people taking up beds in his emergency rooms.
If he had it his way, Ellis would be leaner and more specialized. It would send hernia patients to Canada’s Hernia Hospital and kids with broken bones to the Bone and Joint Center in Albany and old men who need colonoscopies to the Endoscopy Center in Burnt Hills.
“I’m cannibalizing myself,” said Connolly, on a Friday afternoon in his office, just a few weeks into 2013.
As president and CEO of Ellis Medicine, Connolly is in charge of steering a hospital system through the complex, financially precarious world of modern-day health care. But really, he’s no longer just in charge of a hospital. He’s in charge of an entire community’s health.
He’ll tell you, and state Health Commissioner Nirav Shah has publicly agreed: Ellis Medicine is ahead of the pack in implementing health care reform. But for a hospital to be successful at health care reform, it has to encourage activities that keep people out of the hospital.
“The problem here is if I’m successful, I’m engaging in an activity that people generally don’t pay for,” said Connolly. “And when I’m successful, I’m reducing the cost of things they do pay me for.”
And what first helped the Schenectady-based hospital system get ahead was a much-begrudged 2007 mandate — the Berger Commission recommendations.
“When people say, ‘Berger? Oh, that was terrible,’ I say, ‘Berger was the best thing that happened to this community,’ ” said Connolly. “We were blessed to have Berger, because it was a hammer. It didn’t give you any choice and it backed you up with cash. And it provided us cover to do what we had to do.”
The Berger Commission’s job was to independently review the state’s health care resources and offer recommendations on how best to use them to offer high-quality, affordable and accessible care. The commission’s recommendations were to consolidate, close, convert and restructure health care institutions across the state. And they became law Jan. 1, 2007.
Orders were handed down across the state to close a longtime hospital or to merge two or more redundant facilities. Some regions took it well. Others didn’t.
In Schenectady, the reaction was visceral. Bellevue Woman’s Center was ordered to close. Connolly recalls “sheer panic” setting in amidst women in the community. And when Ellis Hospital and St. Clare’s Hospital were ordered to merge, he recalls hesitancy to change on both sides. But years later, the region has emerged as the poster child of the Berger recommendations.
Connolly showed up two months after the recommendations became law and just over a year later, while some regions of the state were still quibbling over the changes, Ellis used state Department of Health funds to implement Berger in the community. As other regions began to catch up, the pool of available state money had nearly run dry.
Because of its head start, Ellis Medicine is on the fast track to achieving the so-called Triple Aim — better care, better health and lower costs.
Inside Connolly’s office on a January day, the gray-haired, distinctly mustached man mulled over the next big shifts in health care.
“One is under way,” he said, slowly, as if the ideas were just taking shape in his head. “And one is partially under way.”
Sitting up straight, the thought fully formed, he added with a sad smirk: “And one is still a pipe dream.”
Health care is shifting toward population management. Ellis has had a foot in this door for about the last three years, first unveiling its medical home in 2009 and then expanding the concept even further with the creation of Care Central.
Both developments are designed to accomplish the same thing: the successful management of a population’s health. It replaces the traditional one doctor, one patient model by putting all of the health care players (primary care physicians, specialists, nurses, insurance companies, nursing homes, etc.) in charge of a community’s health. So when an elderly man is discharged from the hospital, everyone works together to ensure he doesn’t end up back in the emergency room.
“It’s figuring out a way to keep people in the community healthy enough so they don’t have to use the ER, they don’t have to come to the hospital for their care, and when they do come, to make sure that care is well-managed,” said Connolly.
The kind of coordination and payment reform this model requires isn’t free, though. So the federal government and individual states are calling on the health care community to go after the low-hanging fruit first.
The chronically ill — those with chronic heart failure, chronic obstructive pulmonary disease, diabetes, obesity, mental illness, alcoholism and drug abuse — account for only about five to 10 percent of the nation’s population, but drive 50 to 60 percent of the nation’s health care costs.
To drive down those costs, Connolly and others in the health care community are hiring people to coordinate their care. They’re paying “navigators” to check in on them after discharge, to make sure they understand how to take their medication and to make sure they have transportation for medical needs. They ask patients about the shortness of breath they’ve been feeling lately, keeping an ear tuned to any red flags that could send the patient back to the emergency department.
“The problem with chronic illnesses is they’re, for the most part, the result of behaviors,” said Connolly. “We drink too much, smoke too much and eat too much. So if I’m going to bend that cost curve, I’ve got to change behavior. So I said, I’ve got to get a chronic care team, I’ve got to have people out there that are doing nothing but managing that population.”
Ellis has also jumped on a national trend that steers people away from hospitals and into urgent care centers. Urgent care centers are part of a growth strategy for some hospital chains, according to an NPR report last year. Hospitals own more than a quarter of the nearly 9,000 urgent care clinics in the U.S., the report said, with the goal of drawing patients away from emergency rooms.
In October, Ellis Medicine debuted a brand new urgent care center to serve the population of southern Saratoga County. The Medical Center of Clifton Park, a 38,000-square-foot facility just off of Northway Exit 9, has already seen robust attendance in its first three months with an average of 70 to 80 visits a day. During the holiday season when the flu had hit the region and the rest of the nation hard, the center was over capacity at more than 100 visits a day, said Ellis Medicine Executive Vice President and COO Paul Milton.
“Volume there has been good,” he said. “We’ve been hearing anecdotally that activity and service there is very good, and soon we will have formal results of a survey.”
“Why should a hospital change when all the economics of health care pay you for doing more?”
What Connolly is referring to is the industry’s longtime reliance on a fee-for-service payment model, where physicians are paid separately for each office visit, lab test, procedure and other services.
The industry is now shifting toward a pay-for-performance model, which drives down cost by rewarding physicians for keeping patients healthy and out of the hospital.
Since 2005, the federal Centers for Medicare and Medicaid Services has poured money into pilot programs and initiatives designed to avoid unnecessary health care costs, and the Capital Region is a frequent recipient of these funds.
The reason the government stepped in with the funds now was to avoid driving up the deficit later, said Connolly.
“The deficit is going to drive the demand for reduced spending in health care,” he said. “And if most spending in health care is driven by chronic illness then I’ve got two choices. I can sit here and I can wait until the feds and the states say, ‘OK. Enough. We’re cutting everybody 20 percent across the board. Here’s the ax. Whack.’ In which case, we all go into freefall and who the hell knows what happens then. Or, I can be proactive and invest in this kind of a population management program that keeps people out of the hospitals and ERs.”
THE PIPE DREAM
The best thing that could happen to the health care industry (in Connolly’s pipe dream at least) is for hospitals to stop trying to be everything to everyone.
Institutions need to get smaller, he said, and they need to specialize.
“Why don’t we start moving resources around so that one institution concentrates on neuroscience and one institution on cardiac care?” he said. “There are some things you cannot strip way from hospitals. You still need a basic cardiologist, because so many people come into your ERs with cardiac problems. You still need neurologists because so many people come into your ERs with strokes. But not every hospital needs to have a pediatrics unit, not every hospital has to do OB. Not every hospital has to do intensive neurosurgery.”
After Berger, Ellis Medicine actually restructured its campuses following a similar, specialized format.
It moved all of its women’s and maternity care to Bellevue. It transferred all of the inpatient care services from St. Clare’s to the hospital on Nott Street. And right now, construction crews are putting in the foundation for an expanded emergency room at the main campus so that the emergency room at the old St. Clare’s can close.
“The problem with Schenectady was not operating three campuses,” said Connolly. “It was not operating Bellevue and St. Clare’s and Ellis Nott Street. It was operating three full-service hospitals. As soon as we gave that up, the economics changed dramatically. Now that’s what we need to do in a broader region.”
To read all the stories from the 2013 Outlook special report, click here.