APD CEO Addresses Hospital’s Future, Issues Arising From Outsourcing of Services

  • Sue Mooney, president and CEO of Alice Peck Day Memorial Hospital, answers a question during an interview at the hospital in Lebanon, N.H., on Aug. 27, 2015. (Valley News - Sarah Priestap) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Interviewed in West Lebanon, N.H., on March 22, 2018, Doug Cedeno speaks about staffing levels in the emergency department at Alice Peck Day Memorial Hospital in Lebanon, where he has worked as a doctor for decades. (Valley News - Geoff Hansen) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Alice Peck Day Memorial Hospital has announced that it will close its birthing center in mid-July. While continuing to serve obstetric patients before and after giving birth deliveries will take place at the DHMC birthing pavilion. Susan Mooney, APD CEO, and Joanne Conroy, D-H CEO, held a press conference at APD in Lebanon, N.H., Tuesday, Feb. 13, 2018. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Valley News Staff Writer
Sunday, April 29, 2018

Lebanon — Doug Cedeno was among the 15 part- and full-time physicians who were terminated in 2016 when Alice Peck Day Memorial Hospital began contracting with a Texas-based company to staff its emergency and hospitalist departments.

Although the hospital let them go, EmCare offered to rehire all the doctors, some without benefits.

Cedeno says he took a financial hit when EmCare replaced APD as his employer, but that his real concern about the impact of that change and other recent ones at the hospital goes well beyond his personal circumstances. He’s worried about what is becoming of the small hospital where he’s worked for more than three decades.

“The real question is what is APD’s role in the future?” said the veteran APD emergency room physician. “...We are losing a sense of family, a sense of community.”

It’s a concern shared by other APD employees who cite other recent changes besides the arrival of EmCare. In the past couple of years, the 25-bed critical access hospital has become an affiliate of Dartmouth-Hitchcock. Besides contracting emergency department and hospitalist physicians services out to EmCare, the hospital also has outsourced billing services. And in February, APD announced it will close its birthing unit and merge obstetrical services with Dartmouth-Hitchcock in July.

Cedeno, who plans to retire later this year, said that he felt “there was a dedication” when he was a hospital employee that he no longer feels to the same degree as an employee of a private company. EmCare, which is headquartered in Dallas, is part of Envision Healthcare, which states on its website, “No company has the scale and scope of Envision Healthcare.”

Cedeno questions whether the goals of the nonprofit hospital and the for-profit company are in alignment.

No doubt, some of the challenges facing APD and some of the changes it’s made in response mirror other small hospitals.

And not surprisingly, APD leaders have a very different perception from Cedeno.

CEO Sue Mooney said the hospital’s leadership is working to answer questions about its future, as leaders of D-H and its other affiliates also are planning ahead. Mooney said she doesn’t see this moment in APD’s history as “any sort of big inflection point. I just see it as the next step in our journey.”

Lost Benefits; Lost Loyalty

Since EmCare’s arrival in September 2016, something like 12 of the 15 former physicians in the hospitalist and emergency departments have stayed on, Mooney said. EmCare worked with those who lost their benefits to ensure that they “were not financially disadvantaged” by the change, she said.

APD spokesman Peter Glenshaw said in an email that employees affected by the EmCare transition received all of their “earned time.”

Cedeno declined to share his salary information, but said that the 25 percent salary bump he received when he was hired by EmCare didn’t fully compensate him for the loss of benefits, including 437 hours of lost sick time.

He and his wife, Adrienne, a retired nurse, felt this loss when Cedeno missed three months of work last year after surgery.

The couple, who are in their late 60s, said they were forced to dig into their savings to cover living expenses. Fortunately, their medical expenses were covered by Medicare and a “Cadillac” supplemental plan. Cedeno said he recognizes that many people are struggling with health care costs and doctors have higher incomes than most, but he didn’t expect that from APD.

“When you’re working for an institution, you would think they would have a loyalty to you,” he said.

Cedeno is not alone in questioning the shift to EmCare.

“That one makes me sick to my stomach,” said Dr. David Kroner, who was a general surgeon at APD from 1985 to 2015. “We had a dedicated group of emergency room physicians who were excellent — working for fewer dollars than they could make elsewhere.”

To Kroner, the message the EmCare change sent was “that the hospital cares more about the bottom line than it does about its people.”

The EmCare example is one of several instances of outsourcing at APD. Last September, 17 employees lost their jobs after the hospital closed its patient accounts department and contracted with Chappelle Group Corp. — a Greenbelt, Md.-based company.

In 2016, APD outsourced eight jobs in the medical coding department, which helps ensure that people and insurers are billed for the right diagnoses and procedures, to Conifer Health Solutions, a subsidiary of the Dallas-based Tenet Healthcare Corp.

Conifer offered jobs to each of the eight employees that APD released, according to Glenshaw, the hospital’s spokesman.

APD orthopedic surgeon Leonard Rudolf said his wife, Sylvie, who is a long-time APD emergency department physician still works there per diem, but has scaled back her hours. Before EmCare took over, Sylvie worked part-time but enough to qualify for benefits. Now, she works only a few shifts a month, her husband said.

Her attitude was “I was glad to make a commitment to you,” Leonard said. “Apparently it’s not mutual, therefore I’ll do my own thing.”

Losing her benefits is “a real sore point for her,” Leonard Rudolf said. “She’d been there a long time.”

Sylvie Rudolf was unavailable to be interviewed because she was traveling in France, her husband said.

For his part, Rudolf said he has been happy with the hospitalist service since EmCare’s arrival. Those doctors are responsible for taking care of his patients following surgery, he said. He described them as “seemingly very good; reliable.”

But, Rudolf said he worries about D-H’s influence on APD now that APD has become a D-H affiliate with D-H representatives on its board, weighing in on issues such as hiring and salaries.

The 2016 affiliation gave D-H the authority to approve APD’s budget and strategy, and also to appoint one-third of its governing board and remove the others, according to a Valley News story at the time. Beginning this year, D-H also has the power to appoint and remove APD’s chief executive.

“APD is losing autonomy,” Rudolf said.

Heather Shelton, a former APD nurse who worked in the emergency department and the birthing center from 2009 to 2015, described the EmCare change and related loss of benefits as a “slap in the face to your long-time employees who are coming there to help people.”

Shelton, who now lives in Oregon, said in a February phone interview that she was saddened by APD’s announcement that it would close the birthing center, a move officials said was necessary due to challenges in recruiting providers and maintaining consistent staffing in the face of low birth numbers.

“I love APD,” Shelton said. “One of the things I loved the best about it … It really is the small community hospital. Generations of families (have come) seeking their medical care there. A lot of it starts at the birthing center.”

But she said she understands the hospital, like most community hospitals, faces financial pressures.

“We didn’t have a lot of money,” she said. “It’s definitely a multilayer(ed) issue.”

But, she said, the ultimate question is: “What’s our priority? Is it the patients or not?”

Not Alone

APD is not alone in discontinuing its maternal labor and delivery services. Valley Regional Hospital in Claremont, New London Hospital and Cottage Hospital in Haverhill also have done so in recent years. Once APD’s merger of birthing services with DHMC is complete, Springfield (Vt.) Hospital and Gifford Medical Center in Randolph, both federally qualified medical centers, will be the only Upper Valley hospitals other than DHMC that still have birthing units.

Small hospitals are challenged by the costs associated with providing care to a low volume of patients, Cottage Hospital CEO Maria Ryan said in an email on Wednesday.

“There are fixed costs to running a hospital that reimbursement from payers does not cover,” she wrote. In addition, patients often are covered by high-deductible insurance plans and have trouble paying their deductibles, she said.

For example, she said, because Cottage Hospital is a designated trauma center, it must staff its emergency department with board-certified emergency physicians and nurses.

“Whether 60 people need that service during a 24-hour period or 20 people, we have the same costs to supply the best for the community,” Ryan wrote. “When 20 people use the services, it will not cover our costs but it is a necessary service.”

Cottage has also faced staffing challenges in light of the low unemployment rate and the low number of certain specialists, she said.

“… But overall, we attract talent from all over the country because we have a healthy culture that puts patients first and people are attracted to that,” she wrote. “We cannot always compete wage-wise but our environment is that of excellence and most people want to work somewhere where they feel fulfilled.”

Cottage has outsourced billing functions and worked with other hospitals to “share” physician services with other hospitals.

Cottage has not considered working with a private staffing group such as EmCare, nor does it want to affiliate with a larger hospital system.

“Cottage Hospital is strategic and nimble and we feel we are in a good position,” Ryan wrote. “We like having multiple business partners to meet the community needs.”

Staffing, Leadership and Financial Stability

Mooney said the hospital’s decision to contract with EmCare was a practical one intended to ensure adequate staffing for the hospitalist and emergency departments. The emergency department is open, with a doctor present 24 hours a day, seven days a week. The hospitalist service, which provides inpatient care for those admitted to the hospital, has a physician present 12 hours per day and another on call for the other 12.

“What we were finding was we didn’t have a deep-enough bench,” she said. “Someone would get sick … It was really challenging to try to scramble around to cover a shift.”

In addition to struggling with staffing, Mooney said, APD also lacked consistent leadership in its hospitalist service. There was no medical director overseeing the service at the time. Patients would go from being cared for by one doctor to another, who may have had a different idea of how to best address the patients’ needs, Mooney said.

“Medicine, as much as we like to think that it’s a science, it’s much more of an art,” Mooney said.

The EmCare change was not motivated by financial concerns, Mooney said.

But that assertion conflicts, at least in part, with the reasons laid out in the termination letter hospitalist and emergency department physicians received in May 2016, alerting them to the fact that APD would terminate them in September of that year.

“In an effort to address areas of financial sustainability, standardization and integration of our hospitalist and emergency services, Alice Peck Day Memorial Hospital has decided to partner with EmCare, a national leader in facility-based physician services,” read the letter, which was signed by Brenda Blair, APD’s then-vice president of human resources, who was later promoted to chief administrative officer.

APD officials declined to provide the cost of the contract with EmCare or the amount APD spent to employ emergency department and hospitalist physicians before EmCare’s arrival, so it remains unclear to what degree finances may have played a role in this decision.

“As a matter of policy, we do not comment on the cost of services provided by vendors to APD,” Glenshaw wrote in an email.

APD officials chose EmCare after vetting three agencies, Mooney said.

“One of the things that was important to us was that they had a proven track record of being able to get that deep bench,” Mooney said.

EmCare also was willing to agree to terms “consistent with our values as an organization,” she said.

For example, EmCare was required to participate with all of APD’s insurance carriers and not to “balance bill,” which occurs when providers charge patients for the difference between the cost of the care and the amount their insurance company is willing to pay.

“They were like ‘OK, we can do that,’ ” Mooney said.

EmCare, on its website, says that it provides staffing services to more than 1,000 practices. In New Hampshire, as of Friday, EmCare was hiring to fill both hospitalist and emergency department positions at APD and Parkland Medical Center in Derry, where EmCare also is looking for per diem psychiatrists. It also is hiring for positions at a stand-alone emergency room in Seabrook and positions in surgery, mental health and hospitalist medicine at Portsmouth Regional Medical Center.

In addition to balance billing, EmCare has a reputation for upcoding, which involves coding physician services to use the most high intensity, high paying codes.

A July 2017 study by researchers at Yale found that after EmCare arrived at a hospital, patients were 43 percent more likely to be billed by EmCare physicians for their visit under the highest acuity — and highest paying — procedure code.

EmCare requires that physicians do a complete physical exam, regardless of the health issue for which a patient may be seeking medical care, Cedeno said.

“You get all this information ... you can go to a higher billing level,” he said.

Envision spokeswoman Kim Warth did not respond to emailed questions or return phone calls by deadline.

Public Information

EmCare remedied the leadership issue in the hospitalist service by hiring Dr. Martin Johns to be the director of both emergency and hospitalist services at APD beginning in October 2016.

But the public announcement of his hiring, dated Oct. 5, 2016, and still posted on the hospital’s website, makes no mention of EmCare or the fact that APD had outsourced the staffing of some of its physicians.

“APD is pleased to announce that Martin Johns, MD, has accepted the position of Medical Director for the Hospital’s Emergency and Hospitalist Physician Services,” the announcement said.

Mooney said she didn’t remember how the hospital approached informing the public about the contract with EmCare.

“My guess is we were so busy managing the internal world that we didn’t think about the external world,” she said. “...We weren’t trying to hide the ball, let’s put it that way.”

But Cedeno said that the administration made little effort to inform other members of the hospital’s staff about the change: “Even the medical staff didn’t understand what happened.”

Temporary Change

EmCare’s role at APD will not necessarily be permanent, Mooney said.

In March 2016, about six months before EmCare came in, APD became an affiliate of D-H. Moving forward, Mooney said she hopes to find staffing solutions within the D-H system, which also includes Mt. Ascutney Hospital and Health Center in Windsor and New London Hospital.

For now though, Mooney said, she “can’t say that there’s any specific plan, but there’s been lots of discussion about it.”

APD is certainly not alone in struggling with staffing. More than a decade before APD contracted with EmCare, New London Hospital had contracted with the company to provide emergency services, said Bruce King, the hospital’s CEO.

Though the relationship, which lasted from 2001 to 2004, was meeting the hospital’s clinical needs, the hospital discontinued the contract because King said he “felt like we were paying more in contract expenses than the value we were getting.”

Additionally, King, who has headed New London Hospital since 2003, said that he generally prefers to manage services in-house. He described outsourcing as “almost an admission of you can’t manage.”

His management style is to directly control his employees and his equipment, he said.

Every situation is a little different, said Mooney. “I think everybody’s trying to find a solution that fits their hospital at any given moment in time,” Mooney said.

Overall, Mooney said the relationship with EmCare has been positive so far. “They have done everything they said they were going to do,” she said.

Valley News Staff Writer Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.