Cover Story
Small Hospitals at a Crossroads
By Charlotte Huff
With stimulus funds on the horizon, smaller organizations must leap toward technology adoption or risk being left behind.
In the late 1990s, leaders at Tomah Memorial Hospital decided they would take steps to elevate the central Wisconsin facility’s high-tech profile, despite a relatively small footprint of 25 beds.
“We want to maintain a high level of sophistication,” says Bob Fasbender, board chairman of the critical access hospital. “We don’t want to be viewed as a Band-Aid station. The conversation we’ve had at strategic planning is, ‘If we don’t maintain cutting-edge technology, people will go elsewhere.’”
So board members authorized a strategic plan that launched a series of health technology improvements, beginning in 2000. The price tag: roughly $2.6 million and counting, with computerized provider order entry (CPOE) and other applications in the works. Today, nearly all of the clinical notes, lab work and medication details related to a patient’s care—with the exception of emergency department and operating room treatment—are entered, updated and tracked through a centralized system using computers at the bedside.
Tomah Memorial, the only general community hospital within 20 miles, finds itself rather far along the health information technology curve as hospital boards around the country begin to weigh the strategic and financial decisions related to the estimated $36 billion in financial incentives tied to the recently passed federal stimulus bill. Nationally, just 7.6 percent of hospitals have installed a basic electronic health record (EHR) in at least one clinical unit, according to a recent survey published in the New England Journal of Medicine. Among hospitals with fewer than 100 beds, only 4.9 percent have implemented an EHR, compared with nearly 16 percent of hospitals with at least 400 beds.
Those board discussions may become fierce in the months ahead, given the relatively short time frame and complexities involved, according to information technology and health policy specialists. For those hospitals that don’t install an EHR, penalties—in the form of reduced Medicare payments—will begin in 2015.
On one side beckons the lure of financial incentives to help foot the health technology bill, an investment that could boost a hospital’s competitiveness—and, ideally, its efficiency and patient safety in the decades ahead. But potential hurdles also loom, particularly for free-standing hospitals with fewer than 100 beds: limited staff and training resources compared with larger hospitals; fewer financial resources to attract vendor interest; and possibly a staff weighted with older clinicians who’d prefer sticking with paper medical charts. And that’s before adding the current economic uncertainties to the mix.
“Small hospitals are underfunded, understaffed and critical to care,” says Mike Cummins, chief information officer for VHA Inc., an Irving, Texas-based alliance of nonprofit health care organizations. “They tend to be the only [hospitals] around. But they don’t have the capital and cash. And they lack the trained resources for implementation.”
To pool financial resources, staffing and expertise, leaders of smaller hospitals should at least consider some form of collaboration if they aren’t already connected to a large health system, says Cummins and others interviewed. Numerous examples already exist, including the Indiana Health Information Exchange, which links more than three dozen hospitals. Tomah Memorial took the collaboration route, working both with the Rural Wisconsin Health Cooperative (RWHC), an alliance of about three dozen hospitals, and teaming up with three other critical access hospitals to found an IT network several years ago.
In addition to the best planning efforts, though, implementation requires fortitude and commitment from the board, Fasbender says. “It usually takes longer than you anticipate,” he says. “And it costs you more.” One common byproduct is something referred to as the “Valium effect,” says Terry Hill, executive director of the Rural Health Resource Center (RHRC), a national nonprofit organization based in Duluth, Minn. A hospital’s productivity, he says, “absolutely, necessarily has to fall off as you make this transition from paper records.”
Reaching a Decision
As board members start to discuss their health IT goals, some crucial details related to the relevant portion of the stimulus bill—called the Health Information Technology for Economic and Clinical Health (HITECH) Act—still need to be fleshed out by federal officials.
Among the most pertinent is the precise definition of “meaningful use” of EHRs, because both the financial incentives and the penalties included in the act are tied to a hospital achieving this designation. “We suspect that [meaningful use] will be relatively advanced,” Hill says, “and it will be a huge stretch not only for the rural hospitals, but for all hospitals.”
One possibility is that federal officials will adopt the scale used by the Healthcare Information and Management Systems Society (HIMSS), which assesses implementation on a seven-point scale, Hill says. According to one RHRC analysis, critical access hospitals currently average 1.3 points on that scale compared with 2.4 points for rural and urban hospitals that follow the more traditional prospective payment system, with set payments based on DRG (diagnosis related group).
The formula for incurring hospital incentives and penalties, linked to Medicare and Medicaid, is complex. But in general terms, the financial incentives for prospective payment hospitals will be paid out from 2011 through 2014 and will increase based on a couple of factors, such as relevant patient discharges.
Timing also can matter. For Medicare payments, for example, incentive payments start being reduced after 2013 for prospective payment hospitals. To qualify, a hospital has to achieve meaningful use of its EHR. For those hospitals that don’t reach that benchmark, penalties begin in 2015.
Meanwhile, the up-front investment—before any reimbursement becomes feasible—can be significant, says Louis Wenzlow, RWHC’s director of health information technology. Wenzlow and Hill estimate that the cost to implement an electronic health record will likely range from $1.5 million to $3 million for a critical access hospital, depending upon its size, the vendor selected and other variables. A larger hospital, one approaching 100 beds, may spend $3 million to $5 million, they say.
“The result of this legislation will be that a lot of critical access hospitals will not have an EHR,” Wenzlow says. “They will fall behind. They will likely rely on tertiary hospitals to provide them with an EHR through their own system, which has the potential to erode their independence.”
Some hospital boards may prefer to delay any decisions until pivotal terms like “meaningful use” are fully defined, says Edward Koschka, network vice president of information technology and chief information officer at Community Health Network, a nonprofit system in Indianapolis with five hospitals. But they shouldn’t hold off on requesting some financial modeling from senior staff, he says. “Such as, ‘What would the stimulus package look like if we were on an electronic medical record as early as 2011? And what does it mean if we aren’t on an EMR in 2015?’ That’s really step zero,” he notes.
Board members also should assess the potential risks of not leaping the digital divide, says Larry Walker, president of The Walker Co., an Oregon-based health care management consulting firm specializing in governance development, among other services. Some issues to consider, he says, include the long-term competitive impact, efficiencies and safety concerns, and the recruitment of recent nursing and physician graduates.
“All of the advice I’m seeing is that 2011 is going to come a lot faster than you think,” he says. “And that these vendors are going to be really overtaxed. This is not a conversation that you want to put off.”
Shifting into Gear
Because of their size and sometimes-remote location, smaller hospitals face staffing challenges and expertise deficits, most notably on the IT side. Competing with larger hospitals for IT specialists and vendors’ attention is a recurring worry among the leaders of smaller hospitals, Walker says.
One North Dakota survey, conducted in spring 2008, found that 35 out of 37 rural hospitals employed three or fewer IT staffers; seven of the hospitals didn’t employ any. Hill calls the IT expertise in many rural hospitals “vastly inadequate” given the task at hand.
Nurses and physicians also tend to be older than the national average in rural areas, Hill says. “It’s a generalization, but it is more difficult for older health care professionals to adapt to a new way of doing things,” he says.
At the same time, small hospitals are feeling the economic pinch. A recent survey conducted by Healthland, an information technology company, found that three-fourths were already deferring capital expenditures and 39 percent were dealing with staff reductions. Nearly one-third reported a decline in emergency department visits, according to the findings, based on responses from nearly four dozen hospitals with 50 or fewer beds.
To access health IT funding, a good first step is to contact state and local health agencies to determine if any grants or other funding vehicles are available, as well as potential collaboration opportunities, experts say. Merging forces with a nearby hospital system or tapping into an emerging affiliation or collaboration might make the difference, Koschka says. The timing couldn’t be worse for cash-strapped hospitals, he says. “You have to make this investment at a time the whole economy is pretty much going south.”
At Tomah Memorial, hospital officials have financed and implemented IT improvements in stages. LaVonne Smith, the hospital’s information services director, has a timeline dating back to 2000 of technology rolled out nearly every year: an electronic medication administration record (EMAR), clinical views, lab interfaces and related improvements, such as updating the phone system. The transition to more sophisticated intravenous medication devices, commonly dubbed “smart pumps,” is slated for this year, Smith says. CPOE is planned for March 2010, beginning on a pilot basis.
The hospital employs about 270 people, including three physicians on staff, and more than 100 local physicians have privileges to admit patients. It doesn’t have a dedicated training department so Smith and others, including the nursing director and the quality leader, take turns training clinicians on new systems depending upon their own schedules.
To get ahead of the curve, training begins early. The nurses will start learning this summer about CPOE in preparation for next spring’s roll out.
Not everyone, though, gets on board at the same time. Sometimes it takes longer for physicians who seldom admit patients to become comfortable with the new technology, Smith says. And the emergency department still doesn’t enter clinical information into the hospital’s information system. Smith says officials are searching for a technology solution.
Along the road to implementation, Tomah Memorial’s collaboration with the three other critical access hospitals helped to maximize limited resources, including technology, people and project management, Smith says. The foursome also shares a data center in Madison, Wis., which collects and analyzes patient data. Pooling limited IT specialists also freed up Smith to work more on long-term strategic planning, rather than on basic equipment maintenance issues.
Quality Payoffs
Located on Lake Tomah, Tomah Memorial is one of the community’s largest employers, with roots that run deep. The hospital is only a few minutes away from any local resident facing a medical crisis. Smith says she will never forget the day, some 15 years ago, when her husband was rushed to Tomah Memorial after falling from the roof of their four-story home. (He suffered a concussion and was left black and blue, but didn’t break a bone.)
Fasbender, also superintendent of the Tomah area school district, brags that he’s fielded maybe a handful of hospital-related calls in his nearly six years on the board. The hospital also makes an effort to spotlight its tech savvy as new equipment is installed. Early this year, hospital spokesman Eric Prise sent out a press release promoting a new ATM-style device that dispenses commonly prescribed medications in the emergency department, a convenience for sick patients after the local pharmacies close. The news was covered in several local newspapers and on the radio and television, he says.
Board members can play a significant role in explaining the rationale behind implementing an EHR to community members, management consultant Walker says. Trustees also can make sure hospital clinicians feel supported, so they don’t become overtaxed when installation hits some speed bumps, he says. “All it takes are a few comments at the church or the grocery store,” he says. “Or a clinician saying to a patient, ‘I wish we had never put this thing in,’ and the word gets out there.”
It doesn’t take long, though, for frustrated clinicians to learn firsthand about IT’s benefits to quality, Tomah officials say. If a physician notices a worrisome outbreak of pneumonia cases, he or she no longer has to chase down a stack of medical charts but can run a quick patient analysis, scrutinizing the type and timing of antibiotic treatment, with just a few key strokes.
Following the introduction of the EMAR, the rate of administrative errors at Tomah Memorial declined by more than 23 percent from 2004 to 2008, says Shelly Egstad, director of quality. Some examples of an administrative error include giving the wrong dose or the wrong drug to a patient. Tomah clinicians also track “good catches” when an error is caught before it reaches a patient, such as when the same medication is sent to the unit twice.
Their mantra: The next patient could be their mother, their sister or their neighbor down the street. And, in a city with fewer than 9,000 residents, that likelihood may draw everyone just a little bit closer.
Charlotte Huff is a writer in Fort Worth, Texas.
This article 1st appeared in the June 2009 issue of Trustee Magazine.
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