Alice Peck Day Joins D-H Orbit
Third Hospital To Announce Affiliation
Val Clarkson, who works in the Rehabilitation Department at Alice Peck Day Memorial Hospital, asks CEO Sue Mooney about the proposed medical office building as part of the hospital's future plans on Jan. 24, 2014, in Lebanon, N.H. At left is Todd Miller, the hospital's Chief Operating Officer. Mooney held several meetings throughout the day to speak with the hospital's 365 employees. (Valley News - Geoff Hansen)
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Sue Mooney, CEO of Alice Peck Day Memorial Hospital, speaks with employees about the hospital's strategic plan and its affiliation with Dartmouth-Hitchcock on Jan. 24, 2014. (Valley News - Geoff Hansen) Purchase photo reprints »
At right, Fiorella Buck, who works in Dining Services, speaks with CEO Sue Mooney on Jan. 24, 2014, after Mooney's presentation to employees about the hospital's strategic plan and its affiliation with Dartmouth-Hitchcock. Buck earlier said she supported the plan to give patients same-day primary care access. (Valley News - Geoff Hansen) Purchase photo reprints »
Alice Peck Day Memorial Hospital in Lebanon, N.H., is the third Upper Valley hospital to become affiliated with Dartmouth-Hitchcock. The others are New London Hospital and Mt. Ascutney Hospital in Windsor, Vt. (Valley News - Geoff Hansen) Purchase photo reprints »
Lebanon — Alice Peck Day Memorial Hospital’s plan for the future involves closer ties with Dartmouth-Hitchcock as it prepares for potentially radical changes in the health care industry over the next few years.
APD announced Friday that it is pursuing an affiliation with Dartmouth-Hitchcock, becoming the third Upper Valley hospital — and the second this week — to establish formal ties with the region’s dominant health care provider.
The details of the affiliation probably won’t be finalized until the end of the year, said Sue Mooney, APD’s chief executive officer. In the meantime, no changes are expected to existing services provided at the hospital.
When it becomes official, the partnership with Dartmouth-Hitchcock would allow the cross-town institutions to share resources and coordinate patient care.
“We both really share a commitment to figuring out what’s the best thing to do for patients and for the community in which we live,” Mooney said in an interview Friday morning. “And the reality is that we need to wrestle with the fact that we have this fragmented, disconnected, inefficient health care system and I think both organizations believe that we’ve got to organize our care around doing what’s best for patients. And what’s best for patients is to do it together.”
The affiliation will not help APD or Dartmouth-Hitchcock negotiate better rates with insurers, said Dartmouth-Hitchcock spokesman Rick Adams. Still, it could improve APD’s long-term outlook during a time of rapid change in health care, particularly for community hospitals.
Alice Peck Day finished fiscal year 2013 in the black, but its finances have been strained for years amid declining reimbursements and the looming threat that it could lose its federal designation as a “critical access hospital,” which officials estimated would result in a $7 million hit to APD’s $50 million budget. Facing that possibility, the hospital began work last year on a strategic plan for the future. The affiliation with Dartmouth-Hitchcock emerged as a key part of that plan.
Partnering with Dartmouth-Hitchcock would help the two hospitals streamline care for patients and eliminate redundant costs in the local health care network, officials said. For example, back-office functions, such as billing, could be shared.
It would also prepare APD for the day when health care providers are paid according to how efficiently they care for entire populations of people, rather than the current “fee-for-service” model where doctors are paid according to the volume of services they perform.
For years, Dartmouth-Hitchcock CEO Jim Weinstein has argued that the U.S. health care system needs to move away from fee-for-service. Such a system rewards doctors for doing more tests and treatments, often unnecessarily, and drives up the cost of care. Instead, providers should move to a “population health” model, in which doctors focus on improving the health of a group of patients, and consider the social, political and environmental factors that influence their well-being.
That is where partnerships between providers come into play.
Hospitals need a large population of patients to make such a model work, hospital officials said. In the future, contracts with insurers are likely going to reward health care providers based on how well they improve the health of entire populations of patients. But hospitals could stand to lose money if the patients have a lot of health problems. Having a larger group with a mix of sick and healthy people allows hospitals to spread the risk.
Partnerships also help strip waste out of the system and coordinate care for patients, Weinstein said.
“We just duplicate things that don’t really bring value to the population as far as health,” Weinstein said Friday. “And if we can help each other in ways we probably haven’t even imagined, then I think it will be fantastic for this community.”
The proposed affiliation with APD is only the latest step that Dartmouth-Hitchcock has taken to strengthen ties with other health care providers. On Monday, officials at Mt. Ascutney Hospital in Windsor announced it was affiliating with Dartmouth-Hitchcock in an arrangement similar to the one New London Hospital approved last year.
Dartmouth-Hitchcock has partnerships with other hospitals in New Hampshire and Vermont through accountable care organizations, in which they work together to care for Medicare patients. And last September, Elliot Hospital in Manchester and Dartmouth-Hitchcock announced a new partnership with insurer Harvard Pilgrim Health Care called ElevateHealth, which aims to lower patients’ insurance premiums by 10 percent.
The affiliations with New London and Mt. Ascutney are not mergers. The community hospitals remain independent with their own boards. But Dartmouth-Hitchcock will have seats on those boards and be involved in major governance decisions.
Details of APD’s affiliation will be worked out over the coming months, though hospital officials said it would be similar to the ones with New London and Mt. Ascutney.
“They’re going to maintain their identity. They’re going to be APD. We don’t want to lose that,” Weinstein said in an interview Friday. “That’s what the community respects and likes. The things they’re offering, we need to take advantage of and value, not change.”
Mooney discussed the affiliation and APD’s strategy for the future with APD employees throughout the day on Friday. During a noontime discussion, APD staffers wondered what the affiliation would mean for individual departments at the hospital as well as the relationships with Mt. Ascutney and New London.
Mooney said she hoped it would help the hospitals collaborate more and would not change existing services for at least a year.
One particular are of concern was APD’s birthing center. Alice Peck Day would keep delivering babies for the foreseeable future, Mooney said. Long-term, the affiliation with Dartmouth-Hitchcock could help ensure that expecting mothers end up in the most appropriate place for their care, she said, with APD handling more of the low-risk pregnancies while Dartmouth-Hitchcock would take high-risk cases.
Regardless of what happens, something needs to change, Mooney said. Two “task forces,” including one focused on obstetrics, that worked on APD’s strategic plan determined that the hospital had to align itself with a larger organization to survive.
“The price of not acting is likely going to be financial failure for the organization in the future,” Mooney told a group of around 90 APD employees Friday.
Some employees also have wondered about the fate of APD’s emergency department, which loses money. As a critical access hospital, APD is required to have an emergency department, but that requirement would go away if APD loses the federal designation in a couple of years, allowing the hospital to close the ED to save money. Hospital officials assured employees that the emergency department would be around for at least another year.
That, and the affiliation, offered a little bit of comfort to Karen Johnston, an ED nurse.
“I think both hospitals serve vital functions in the community,” Johnston said. “And anything that would keep us going at our current status would be great.”
Peter Mason, a longtime family physician at APD, also supported the affiliation with Dartmouth-Hitchcock.
“It’s a very uncertain world in terms of medical financing,” Mason said. “And it’s very clear that we’re moving toward population-based health care. Unless you’re part of a network of providers... you’re really on shaky ground.”
Mooney acknowledged that it had been a tumultuous year for APD, one in which the “critical access” question forced everyone to consider difficult questions. Federal officials appear to have shelved the critical access issue for the time being, giving APD a bit of breathing room. Still, there are bigger questions facing health care providers, and APD could not be complacent, Mooney said.
“We’re very proud of how the organization handled the stress of the last year,” Mooney said. “I think that people have a lot of confidence in our board, I think they have confidence in our leadership and I think that they truly understand that we are committed to doing the right thing for the community. I think there’s a good mood within the organization.
“Tough year, but we came through it.”
Chris Fleisher can be reached at 603-727-3229 or firstname.lastname@example.org.