April 20, 1997 in Nation/World

Hospitals Join Forces For Survival Millions In Local Economy, Potential Jobs Are At Stake

By The Spokesman-Review

First he failed the treadmill test.

Then Edward Lehrman started jumping through hoops.

Lehrman and his wife drove from their Omak, Wash., home to Spokane to discover he needed heart bypass surgery, then later was sent to Portland for the operation.

His insurance company’s rules directed all nonemergency heart bypasses to Portland or Seattle.

“It’s really no good,” Lehrman said. “I would have just as soon done it in Spokane if they would have, because I have relatives in Spokane and my wife could have stayed with them. Being out of town, she didn’t know anybody.”

Spokane hospital administrators worry they’ll lose more patients like Lehrman to other hospitals in the region. With new technology, cheap flights and the constant pressure for the best health-care deal, competition for patients is growing.

Insurance companies can shop around, pitting the rates of a hospital in Portland against one in Salt Lake City.

Spokane hospital administrators are nervous. They see big city medical centers trying to siphon off lucrative patients, while smaller Eastern Washington hospitals are finding ways to keep patients who traditionally have come to Spokane.

At stake are millions of dollars and potential jobs. About 38 percent of Spokane’s patients hail from outside Spokane County. Estimates suggest that the health-care industry brings in about $2 billion annually to the Spokane economy. Hospitals are the city’s largest private employer.

About $250 million is at risk from competition for the out-of-town business.

“It’s significant,” said Garman Lutz, chief financial officer for Empire Health Services, which runs Deaconess Medical Center and Valley Hospital and Medical Center. “It may sound self-serving that we’re trying to keep that business here, but it’s good for the economy.”

This fight for patients has created odd bedfellows. Former competitors Empire Health Services and the Sisters of Providence, which runs Sacred Heart Medical Center and the Dominican Network, now work together.

The Spokane hospitals are combining some services and developing new corporations to compete in the larger market.

“Frankly, the hospitals in Spokane aren’t my competition anymore,” said Tom White, president and chief executive officer of Empire Health Services. “My competition is in Seattle, Portland, Salt Lake and Denver.”

The big-city threat

Lehrman, now 66, worked as a logger for 36 years in Omak before his heart started bothering him. He’s still a member of the loggers’ union, which represents 12,000 workers in the Pacific Northwest.

That union’s insurance plan is Blue Cross-Blue Shield/HMO Oregon out of Portland, which signed the deal sending all non-emergency bypasses, valve surgeries and organ transplants to either Portland or Seattle.

It’s called “selective contracting,” and the company will stop the practice June 1 in favor of a preferredprovider system.

“Cost is always a consideration,” said John Hutchison, a vice president at the insurance company. “But we will not sacrifice quality of care or access on the sole basis of cost. That would be very shortsighted of any insurance company.”

Many experts point to managed care as the force behind the move to a national, instead of local, market. In this health-care model, insurance companies - whether private or government-subsidized - set the payment for a specific procedure. Hospitals are forced to compete with each other by offering the best deal.

This largely has replaced the fee-for-service model of payment, in which hospitals were pretty much paid what they asked.

“Managed care is the driving factor here,” said Patrick M. Plummer, the chief executive officer of U.S. LifeLine, a Pennsylvania market research company that studies the health-care business. “These larger communities see this as some kind of a threat. They’re saying: ‘Let’s expand our market. Let’s ink this managed care contract with Microsoft. Let’s see what neighboring communities we can ink.”’

The examples are everywhere, fueled by cheap flights and buoyed by telemedicine, a catchall term describing the use of computers and telephone lines to link remote hospitals with larger ones.

The Texas Heart Institute in Houston recruits patients from all over the world. Canadian patients come to Sacred Heart Medical Center for certain procedures, lured by package pricing.

The New England Medical Center in Boston takes care of an Argentina labor union’s difficult cases because it’s less expensive to fly patients in from South America than to treat them at home. The center also is working with Saudia Arabia, Italy and Russia to develop telemedicine centers and referral relationships.

Keeping patients at home

Linda Fritts told her daughters that she loved them. Then the barely conscious woman, suffering from a torn aorta lining, was put on an air ambulance flight from the Tri-Cities to Spokane.

The Aeromed plane slammed into an industrial building as it descended into foggy Spokane, killing Fritts, the pilot and a nurse in January 1996.

“We’d hate to see anyone else go through that,” said Matthew Price, Fritts’ son-in-law. “Even if the flight had been successful, it’s still very frustrating to know that you can’t get anything done in your own community.”

Another woman was flown into Spokane from Walla Walla for heart surgery several months ago. A week after she arrived home, her heart ruptured. Twenty minutes into the flight to Spokane, she started sliding downhill. The plane turned back home. The woman died.

These cases are rare. But they’re one reason why smaller communities like the Tri-Cities and Walla Walla are asking the state for permission to set up their own open-heart surgery centers. Complicated procedures like heart surgery and organ transplants are the chief reason patients are flown to larger hospitals.

Another reason is the expense of sending patients out of town. For example, Tri-Cities hospitals spend about $1 million a year in ambulance charges, 90 percent of which are heart patients being transferred to larger cities.

Most of those - nearly 300 a year - end up in Spokane.

Medicare regulations also require any hospital that performs angioplasties to have an open-heart surgery program in case something goes wrong. Angioplasty, a procedure in which a balloon is threaded into a blocked artery and inflated to try to open the passage, is becoming a standard treatment for heart blockages. Time is considered crucial.

“This is not a matter of competition between hospitals,” said Dr. R.A. Johnson, a cardiologist at St. Mary Medical Center in Walla Walla. “This is a matter of conscience. You know what it’s like to have to go off to another city to have these procedures performed?”

The state is now considering applications from both Walla Walla and the Tri-Cities. Both communities need to prove they’ll have at least 250 heart surgeries a year and enough qualified surgeons.

In Eastern Washington, only Yakima Memorial Hospital, Sacred Heart and Deaconess provide open-heart surgery.

The Tri-Cities program probably would be linked with Spokane physicians.

But the Walla Walla program, as proposed, would depend on the Starr-Wood Cardiac Group in Portland - a maverick organization that’s already set up seven clinics in three states.

“This threat is real,” said White of Empire Health Services. “A number of other surgical groups would like to take what traditionally has been Spokane’s heart business.”

Preparing to fight

Spokane hospitals, already crunched by the new health-care environment, aren’t planning to let any business go without a fight.

“We see it coming more in the future,” said Ron Schurra, president of Holy Family Hospital and the Dominican Network. “It’s like the tip of the iceberg.”

Administrators say they need to do a better job of selling the region’s strong points and setting up relationships with rural hospitals.

They point to a standardized computer platform for patient records in Eastern Washington hospitals as one way to keep patients in the region.

They look to Pat Thompson, who was just made responsible for regional services for Inland Northwest Health Services, the corporation handling Spokane hospitals’ joint ventures.

Thompson speaks about helping rural hospitals serve their communities and creating relationships that make any transfers to Spokane the natural choice.

“If you need a medical procedure not provided in your community, you and your physician have a choice,” Thompson said. “If you have a choice, we would like you to choose us.”

Years ago, such cooperation between hospitals was a pipe dream. It’s still unusual in many other places.

“There’s a lot of folks in the Seattle area that look over and are jealous of how well the community of Spokane is working together,” said Greg Vigdor, vice president for policy development for the Washington Hospital Association. “We’re pretty impressed.”

But patients like Edward Lehrman don’t care much about collaboration or market share, or whether Spokane hospitals hold onto their patient base.

The Omak man just wants good care in a comfortable environment.

Several months after he underwent bypass surgery in Portland, his wife started having heart problems.

The two drove to Spokane just before Thanksgiving. Barbara Lehrman, now 64, needed bypass surgery. Her husband wasn’t about to drive back to Omak and set up a flight to Portland. This was an emergency, he said.

“I looked ‘em right in the eye and I said, ‘Hey. I don’t want you to do her like you did me,”’ Lehrman said. “They didn’t consider sending her to Portland at all.”

, DataTimes

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