Hospitals divert primary care patients into health center ‘look-alikes’ to boost finances

A growing number of hospitals are outsourcing often unprofitable outpatient services for their poorest patients by establishing independent non-profit organizations to provide primary care.

Clinics designated as “similar” by the government, as well as about 1,400 federally accredited medical centers, are also eligible for federal programs that help reduce costs and recruit health care providers. This will allow clinics to get prescription drugs at deep discounts and qualify doctors for government programs that help pay off the debt of students working in areas where there is a shortage of healthcare providers. can attract.

However, unlike community health centers, look-alikes do not receive annual federal subsidies to cover operating costs. Look-alikes also do not receive the financial benefit of federal government cover for medical malpractice risk.

Although they are not part of the hospital system, many hospital-formed look-alikes have clinics on the hospital campus or within a short distance. Helps distract patients from expensive emergency rooms.

This will help reduce losses, especially from uninsured patients who may have used ER for primary care. Converting clinics to similar facilities is often also a strategy for hospitals with a high percentage of patients enrolled in Medicaid. Medicaid generally reimburses hospitals at lower rates than private health insurance, said Jeffrey Allen, a partner at consulting firm Forbis. “It’s a trend gaining momentum,” he said.

Hospitals are betting to gain an edge by spinning off loss-making services and subsidizing similar services to keep them alive, he said. At the same time, the hospital expects many patients from similar clinics to be sent to the hospital who need to be admitted for services or need specialized treatment, he said. It received similar designations from 2019 to 2022, according to KHN analysis of federal data. They include:

  • Parkview Health, a large hospital system in Indiana and Ohio, has opened a similar facility called Alliance Health Center in Fort Wayne, Indiana, designated in 2021. A better way to provide care to underserved people.
  • Parrish Medical Center in Titusville, Florida helped open the Space Coast Health Center, designated as a parallel facility in 2022. Parrish said he spent $1.2 million to set up a clinic that provides primary and mental health care a few blocks from the hospital. “Many of our patients have not received primary care in years and have multiple medical and behavioral needs,” Space Coast CEO Arvin Lewis said in a statement to KHN. “We are working to improve access to care.”
  • Wabash General Hospital partnered with the local health department to establish the Wabash Community Health Center, a clinic similar to the hospital in Mount Carmel, Illinois. Daniel Stevens, the hospital’s executive vice president of business development, said the hospital is treating some of the clinic’s patients in emergency rooms and that the new facility will offer mental health services and physical health. It said they serve it in one place. “The intention is to expand services not currently provided to the community by increasing reimbursement,” she said.
  • Beverly Hospital in the City of Montebello, Los Angeles County has provided a $3 million loan to donate a women’s clinic to start a similar Beverly Care, said Coralli Nakamatsu, executive director of Beverly Care. Lookalikes rent office space from hospitals for their adult and pediatric clinics. Its clinic helps patients who need follow-up care after visiting a hospital emergency room.The clinic also offers patients a lower-cost option than using an ER.

Brian Tabor, president of the Indiana Hospital Association, said hospitals may be wary of forming a similar organization because it means giving control to a new organization. But he said the transformation could benefit both hospitals and patients.

There are now 108 similar medical centers operating nationwide, up from 87 in 2020, according to the Federal Office of Health Resources Services. Most were not initiated by hospitals.

Located in Montebello, Los Angeles County, BeverlyCare is similar to a federally accredited health center established by Beverly Hospital. Look-alikes rent space from hospitals for major primary care and pediatric facilities housed at Beverly Medical Plaza. The women’s clinic is 3 km away from her. Corali Nakamatsu, executive her director of BeverlyCare, said similar clinics work closely with hospitals and incur costs to handle many administrative functions.

Heidi De Marco—KHN

Similar health centers are overseen by a board of directors, and like full-fledged community health centers, at least 51% of directors must be patients. Similar health centers treat patients on a fee structure based on patient income.

Organizations typically seek similar status from the federal government as a precursor to becoming a federally accredited health center that is fully funded by the federal government.

In the Allentown, Pennsylvania area, both major health systems, St. Luke’s University Health Network and Lehigh Valley Health Network, recently moved many of their primary care clinics to similar facilities. Neither hospital provided a spokesperson to speak about the change, but both responded to questions in writing.

St. Luke’s launched Star Community Health in 2018. Received the Lookalike designation in 2020. “Star has been able to treat a broader group of individuals who otherwise would not have been able to get treatment,” said Star CEO Mark Roberts. did not reveal.

The Lehigh Valley has changed several of its primary care practices to similar status under the name Valley Health Partners Community Health Center. Additional funding from Medicare and Medicaid will allow clinics to expand mental health and substance use services and provide support from financial counselors, social workers and clinical pharmacists, spokeswoman Jamie Stover said. Stated.

Lee Health, a hospital system based in Fort Myers, Fla., has converted more than 20 outpatient clinics to similar conditions since 2014. Lee Community Healthcare’s senior vice president, Bob Johns, is the only full-time director. Look-alike. Other personnel are still employed in the hospital system.

According to Johns, more Medicaid funding has paid for four new family practice clinics for adults and one child psychiatric clinic. Mobile clinics that go to underserved areas are also partially funded through enhanced Medicaid reimbursement.

Similar clinics receive about $120 for a visit to a Medicaid primary care office, Johns said. That’s almost double what the clinic received when it was owned by LeHealth.

Johns credits similar clinics for reducing unnecessary ER visits at Lee Health Hospital by at least 20%. Many of those visits were by uninsured patients, he said.

Look-alikes also benefit from the federal government’s 340B program. This allows you to buy medicines at deep discounts and sell them to your patients. The patient’s insurance company usually pays the center a higher rate, and the clinic covers the difference. Clinics can reduce patient out-of-pocket costs, but they aren’t required to do so, but Johns said Lee Health could cover the cost of medicines for uninsured or low-income patients. It is said to be reducing.

Hospital systems like Lee Health that are covered by the 340B program are typically available only for inpatients, Johns said.

Similar status also allows the clinic to participate in the National Health Service Corps, a federal program that pays student loans for clinicians who agree to work in areas where there is a shortage of providers. “This is a great way to rely on providers,” he said.

By shifting care to look-alikes, Lee Health could find new funding to expand care to underserved people, he said.

“It’s a cool model and a very efficient way to use limited resources,” says Johns.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. KHN is one of his three major operational programs in the United States, along with policy analysis and polling KFFMore (Kaiser Family Foundation). KFF is a donated non-profit organization that provides information on health issues to the public.

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