Hospital Faces a Tough Cure

I have been very interested in your articles about the current financial problems with the Loudoun Healthcare Inc. situation and the proposed solutions to keep Loudoun Healthcare nonprofit and free-standing.

As a health care administrator myself, I admire the community's desire to ensure that Loudoun Healthcare remains free, independent and nonprofit. These goals, while admirable, are going to be difficult to achieve.

If you look at other markets (I recently relocated from Philadelphia, where there is not one remaining community hospital not affiliated with or owned by a larger system), your readers will see that the days of the free-standing, community, not-for-profit hospital are numbered. There are reasons for this sad situation.

One significant reason is that managed care is not going to go away. Employers have saved millions in their health care overhead costs by shifting more and more risk to their employees. There is less selection. There is less choice. This has not been an accident. The managed care companies have convinced employers that this is a good business practice. Employers want to keep it this way, too. Employer lobby groups are at the forefront in resisting HMO reform.

Another reason is that individual hospitals do not always have the best negotiating power with many managed care companies. Managed care companies divide and conquer by playing hospitals and physicians against each other. Providers have more negotiating power when a health system can represent many hospitals. However, excess hospital capacity (too many beds) and too many doctors do not help.

However, the profit gravy train for many managed care companies is ending. The more aggressive for-profit managed care companies have squeezed most of the fat (profit) from the old fee-for-service model and have pushed the risk of taking care of their customers down to the physicians and hospitals in their respective networks. Negotiating power constantly flows between hospitals and the managed care plans with respect to this issue.

Managed care companies doing business in Loudoun County know that their members cringe when they learn they might have to travel to Fairfax or Winchester for routine, secondary-level inpatient care if Loudoun Healthcare is not available. Most people want to be hospitalized in their own community. Members of these managed plans should tell their employers that they want to use Loudoun Healthcare. Patient volume drives hospital rates. Loudoun Healthcare needs a win-win situation with the managed care companies. But the managed care companies should not be paying more for Loudoun Healthcare's fiscal and management mistakes.

Loudoun Healthcare should not expect to be saved by new and higher reimbursements from the managed care companies. Rather, Loudoun Healthcare will have to squeeze more productivity from its employees, reduce waste and carry less overhead. Since people costs are Loudoun Healthcare's biggest budget line items, some tough calls need to be made about staffing patterns.

Another reason has been board leadership. Poor board leadership resulted in the bankruptcy of the Alleghany Health System, which included Hahnemann Medical School and several community hospitals in Philadelphia. Some former board members are under investigation for racketeering by federal and state authorities. These board members had numerous conflicts of interest that were condoned by the former hospital leadership.

Board members of not-for-profit hospitals should not benefit financially from board membership. They have fiduciary responsibility to the community to grow and nurture their community hospital.

One key to community hospital survival is physician support. Local physicians are key to Loudoun Healthcare's future. My daughter was recently admitted to Loudoun Hospital Center for surgery. We were most impressed with the quality of nurses on her floor. Doctors Joseph Pelkofski and John Pholeric were superb. They had excellent technical skills as well as a keen appreciation for customer service. The hospital experience was most gratifying. This is what high quality health care is all about. Your readers cannot imagine how rare this level of service is these days within the health care industry. This was a classic case of neighbors taking care of neighbors. This must not be lost as Loudoun Healthcare recenters itself.

The Loudoun County community should come together and help Loudoun Healthcare make its comeback. New leadership and a more focused mission are coming. Keep the physicians involved, informed and part of the solution. The board should survey its nursing staff. These two groups, along with other employee groups, can tell the consultants where to start to make the necessary changes. These changes will help keep Loudoun Healthcare the community treasure it should be. Just maybe our local hospital can buck the tide and stay free-standing and not-for-profit. I hope for my family's sake they pull it off.




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