What can small hospitals do to survive in the new ACO model?

insurance, medical insurance, healthcare reformHealthcare reform, especially the advent of accountable care organizations has been a challenge for small hospitals amid predictions that some hospitals will close and others will no longer remain independent.

One healthcare consultant believes that the ACO model doesn’t necessarily mean doom for smaller hospital operators, provided they can adapt and learn.

Who can they learn from?

Small state-funded, nonprofit regional health plans, said Paul Griffiths, founder and CEO of MedTouch, who works with hospitals and physicians groups to manage online strategies.


Griffiths believes that these nonprofit health plans have been doing what ACOs will demand from hospitals now: managing and caring for a pre-defined patient population.

“If you look at the motivations of these health plans, they are really all about managing a population, managing long term care of a population and trying to find ways to lower costs,” Griffiths said.

These health plans are trying to manage low-income populations who are not covered by private insurance and if they didn’t manage them well, the health plans run the risk of becoming insolvent.

They work with physician groups and provide incentives for them to see more new patients, as well as provide incentives for people to get vaccinated so that they stay well.

That is precisely what a client of Griffiths – Exeter Hospital in New Hampshire did. Several years ago, before most standalone hospitals were even thinking of ACOs, the 100-bed hospital acquired a physician group. They also own a fitness center, a VNA and hospice, and a Postacute Rehabilitation Center. Together these five entities form Exeter Health Resources.

“Instead of adding beds, they realized that the primary care physician is a critical entiry for them to engage to sustain the hospital business,” Griffiths said. “They are trying to get into regional, continuous care.”

Griffiths did acknowledge that all small hospitals may not be able to survive as an independent entity.

“If you are a small hospital, stuck between two major markets, it’s going to be harder for you,’ he said.

 [Photo Credit: digitalart]

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