Hospitals Divert Primary Care Patients to Health Center ‘Look-Alikes’ to Boost Finances

A rising variety of hospitals are outsourcing often-unprofitable outpatient companies for his or her poorest sufferers by organising impartial, nonprofit organizations to supply major care.

Medicare and Medicaid pay these clinics, often called federally qualified health center look-alikes, considerably greater than they’d if the websites had been owned by hospitals.

Just like the almost 1,400 federally certified well being facilities — which get these extra {dollars} as properly — a clinic designated by the federal government as a “look-alike” can be eligible for federal applications that would assist cut back prices and recruit suppliers. They permit the clinics to acquire pharmaceuticals at deep reductions and appeal to medical doctors by making them eligible for a authorities program that helps them repay their scholar debt in the event that they work in an space with a scarcity of medical suppliers.

However in contrast to the group well being facilities, the look-alikes don’t get an annual federal grant to cowl operational prices. Nor do the look-alikes get the monetary profit through which the federal authorities covers their malpractice dangers.

Although they don’t seem to be a part of a hospital system, most of the hospital-formed look-alikes have clinics on hospital campuses or inside a brief distance. Because of this, the clinics may also help divert sufferers with out pressing wants from costly emergency rooms.

That helps cut back losses, particularly from uninsured sufferers who might need been utilizing the ER for major care. Changing clinics to look-alikes can be usually a method for hospitals which have a excessive proportion of sufferers enrolled in Medicaid, which usually reimburses hospitals at decrease charges than industrial well being plans do, stated Jeffrey Allen, a companion with the consulting agency Forvis. “It’s a development that’s gaining momentum,” he stated.

Hospitals are betting that they are going to come out forward by spinning off a money-losing service and offering grant funding to the look-alike to maintain it solvent, he stated. On the similar time, hospitals anticipate many sufferers from the look-alike clinics who have to be admitted for companies or require specialised care to be routed to their hospitals, he stated.

A minimum of eight hospital programs have transformed current clinics or constructed new ones that acquired look-alike designation from 2019 by way of 2022, in response to a KHN evaluation of federal information. They embrace:

  • Parkview Well being, a big hospital system in Indiana and Ohio, which opened a look-alike known as Alliance Well being Facilities in Fort Wayne, Indiana, that was designated in 2021. Tami Brigle, a hospital spokesperson, stated look-alike standing provided the system a greater manner to supply care to underserved folks.
  • Parrish Medical Middle in Titusville, Florida, which helped open House Coast Well being Facilities, designated as a look-alike in 2022. Parrish spent $1.2 million to arrange the clinic, which offers major care and psychological well being care, just a few blocks from the hospital. “A lot of our sufferers haven’t had major look after years and have a number of medical and behavioral wants,” House Coast CEO Arvin Lewis stated in an announcement to KHN. “We’re working to enhance entry to care.”
  • Wabash Normal Hospital, which partnered with a neighborhood well being division to kind Wabash Neighborhood Well being Middle, a look-alike clinic close to the hospital in Mount Carmel, Illinois. Danielle Stevens, the hospital’s government vp of enterprise improvement, stated that the hospital was treating some clinic sufferers in its emergency room and that the brand new facility supplied psychological well being companies and bodily well being in a single location. “The intent is to broaden companies which are presently not provided to the group with the improved reimbursement,” she stated.
  • Beverly Hospital in Montebello, a metropolis in Los Angeles County, which supplied a $3 million mortgage and donated its girls’s clinic to get the look-alike BeverlyCare began, in response to BeverlyCare Government Director Corali Nakamatsu. The look-alike leases workplace area from the hospital for its grownup and pediatrics clinic. That clinic helps sufferers who want follow-up care after visiting the hospital emergency room. The clinic additionally provides sufferers a lower-cost possibility than utilizing the ER.

Indiana Hospital Affiliation President Brian Tabor stated hospitals are generally cautious of forming a look-alike as a result of it means giving management to a brand new group. However, he stated, the conversion can profit each hospitals and sufferers: “Hospitals are exploring totally different cost fashions to help entry in rural and underserved areas, and look-alike standing has emerged for some as an actual essential device.”

Nationally, 108 look-alike well being facilities function at the moment, a rise from 87 in 2020, in response to the federal Well being Sources and Companies Administration. The bulk weren’t began by hospitals.

Look-alike well being facilities are overseen by a board of administrators, and no less than 51% of the administrators are required to be sufferers — similar to full-fledged group well being facilities. Look-alike well being facilities deal with sufferers on a sliding payment scale based mostly on their earnings.

Organizations usually search look-alike standing from the federal authorities as a precursor to turning into a completely funded federally certified well being heart.

Within the Allentown, Pennsylvania, space, each main well being programs — St. Luke’s College Well being Community and Lehigh Valley Well being Community — lately transitioned a lot of their major care clinics to look-alikes. Neither hospital would supply a spokesperson to speak in regards to the modifications, however each answered questions in writing.

St. Luke’s began Star Neighborhood Well being in 2018; it acquired its look-alike designation in 2020. “Star has been capable of deal with a broader group of people that might in any other case not have entry to care,” Star CEO Mark Roberts stated, though he supplied no particulars in regards to the enlargement.

Lehigh Valley transformed a number of of its major care practices to look-alike standing below the identify Valley Well being Companions Neighborhood Well being Middle. The additional funding from Medicare and Medicaid has allowed the clinics to broaden companies for psychological well being and substance use, in addition to to supply help from monetary counselors, social staff, and medical pharmacists, stated spokesperson Jamie Stover.

Lee Well being, a hospital system based mostly in Fort Myers, Florida, transformed greater than two dozen of its outpatient clinics to look-alike standing beginning in 2014. Bob Johns, senior vp for Lee Neighborhood Healthcare, is the lone full-time government of the look-alike. The opposite personnel are nonetheless employed by the hospital system.

The upper Medicaid funding has helped pay for 4 new grownup household follow clinics and a pediatric psychological well being clinic, Johns stated. And a cell well being clinic that goes to underserved areas can be partly funded by way of the improved Medicaid reimbursements.

Johns stated the look-alike clinic will get about $120 for a Medicaid major care workplace go to, almost double the cost that the clinics acquired after they had been owned by Lee Well being.

Johns credit the look-alike clinics for lowering pointless ER visits at Lee Well being hospitals by no less than 20%. A lot of these visits had been from uninsured sufferers, he stated.

Look-alikes additionally profit from the federal 340B program, which permits them to purchase medicines at deeply discounted charges to promote to sufferers. The sufferers’ insurers usually pay the facilities the next fee, and the clinics hold the distinction. Clinics can cut back the out-of-pocket prices for sufferers however usually are not required to, though Johns stated Lee Well being does cut back the drug prices for sufferers who’re uninsured or have low incomes.

Hospital programs like Lee Well being that qualify for the 340B program usually can use it for less than their admitted sufferers, Johns stated.

The look-alike standing additionally permits the clinics to take part within the Nationwide Well being Service Corps, a federal program that pays the coed loans of clinicians who comply with work in an space with a scarcity of well being care suppliers, he stated. “It’s an effective way for us to hold on to suppliers,” Johns stated.

Shifting care to look-alikes has helped Lee Well being discover new funding to broaden care to the medically underserved, he stated.

“It’s a cool mannequin and a really environment friendly manner to make use of restricted assets,” Johns stated.

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