“Five years in health care is a whole other world,” said David Scarpino, three months in the job as president and chief executive officer at HealthAlliance of the Hudson Valley, the Kingston-based healthcare provider. “It’s no longer about bricks and mortar.”
HealthAlliance announced at a press conference Wednesday, Nov. 20 that the state has awarded it $6.5 million in start-up money to improve the quality and efficiency of patient care, as developed and managed by physicians and supported by a performance management infrastructure. Affiliation with a larger healthcare partner continues to be part of HealthAlliance’s approach. “We want to be the poster child for our approach,” said Scarpino at the press conference.
HealthAlliance has proposed teaming with a network of physicians working in collaboration with it, said Chief Strategy Officer Joshua Ratner. Data in the evolving shared management information system will pull the threads together. This type of coordination is called clinical integration.
In August Scarpino and his team had made a 40-minute PowerPoint presentation to Department of Health in Albany in which they asked the state for support in exploring partnerships with physicians and other providers. The $6.5 million in state support announced this week will enable HealthAlliance to invest the time and seed money in the technology and support systems required to implement clinical integration.
Until very recently HealthAlliance was very much about bricks and mortar. For over a year and a half, the organization unsuccessfully sought state approval — and state money — for an ambitious plan to close its Kingston Hospital campus and consolidate at a renovated former Benedictine Hospital on Mary’s Avenue. Former hospital CEO David Lundquist assured the public that the state was supportive to the plan. The money sought was revised downward from $46.5 million to $20 million. Once sufficiently detailed plans were assembled, Lundquist said, state Department of Health (DOH) approval would surely be forthcoming.
Though proposals to the state about the Kingston one-campus hospital plan were presented, negotiated, revised and reinforced in the past 18 months, state approval never came. The required state contribution to the pot of gold at the end of the rainbow never materialized. The application remained incomplete. (In declining three months ago to respond to a request under the Freedom of Information Act for HealthAlliance’s application, DOH cited a regulation by which it didn’t have to provide information on an incomplete application.)
The new chief executive felt the August HealthAlliance presentation in Albany went well. “They said to us, ‘You finally figured it out, didn’t you?’” said Scarpino with more than a hint of pride in his voice. The $6.5 million Health Efficiency and Affordability Law (HEAL) grant announced Wednesday confirmed Scarpino’s assessment.
Under Scarpino’s new leadership, a plan (referred to in Wednesday’s press release as “an enhanced regional planning approach,”) is emerging, attuned differently to the unprecedented pace of change in the healthcare industry. Though based on the same expectations about a shrinking HealthAlliance role that Lundquist articulated, Scarpino’s goals are no longer being expressed in terms of bricks and mortar. The veteran hospital administrator’s focus is on HealthAlliance’s place in the healthcare world, on its connections with a variety of potential partners, and at the same time, he said in an interview last week, on continued improvements in service to the Kingston-based health system’s customers. In short, emphasis is being placed for now more on coordination of care. The spatial arrangements for the downsized facilities will come later at an unspecified time.
Scarpino disclosed at the press conference that HealthAlliance has lost $3 million this year through October.
Even if it wanted to do so, HealthAlliance couldn’t afford to work toward a model of seamless coordination of care that would seek to put additional healthcare personnel on its own payroll, as many larger hospital systems are currently doing. The required coordination would come from partnerships among providers.
On May 6, HealthAlliance launched a computerized medical information system required to meet the federal standard for electronic health records called meaningful use. By meeting federal criteria for meaningful use, a healthcare provider can become eligible for millions of dollars of governmental incentive payments. Some other hospitals in the region had met the meaningful-use criteria earlier. HealthAlliance more recently implemented a system bought from McKesson Health Systems.
Scarpino and Ratner noted with satisfaction that after the first 90 days of operation “we got our first check.” After a long period of planning and preparation, HealthAlliance had achieved meaningful use in a short time.
With the state grant, HealthAlliance is ready for the next step. It will use its new health information system for pro-active health management. Though no agreement has yet been reached, HealthAlliance is in active discussion with a subsidiary of the Montefiore Medical Center, a large, experienced and influential teaching hospital and healthcare services operator based in the Bronx.
Shared service model
Scarpino came to Kingston in August 2006 after 27 years at St. John’s Riverside Hospital System in Yonkers, a hospital system that includes two hospitals, a school of nursing, a skilled nursing facility and other corporate entities.
Under the Scarpino regime, reducing cost continues to a major goal at HealthAlliance. In an extensive interview last week, Scarpino acknowledged that HealthAlliance will continue to “get smaller.” Indeed, there has been a slow but steady attrition in employee head count. That will continue.
“We want to focus on quality and cost,” explained Scarpino. “We want to reduce cost not through the rationing of care but through a partnership in the coordination of care: physicians, insurance companies, providers like us, and employers. It’s a shared-service model: value equals quality plus cost.”
As chief financial officer at HealthAlliance, Scarpino may have become a bean-counter by profession. But he certainly doesn’t talk like one. “It’s not the core of who we are,” he said in the interview. And he added at the press conference that his goal was “not just caring for you but caring about you.”
Scarpino believes his mission starts with being willing and able to connect on a person-to-person basis. Starting with the 125 patients who come to the emergency room every day, he’s been trying to improve the patient encounter. “It’s based on respect and communication,” he said. “I want them to say, Something has changed. You know what, it’s different.”
The emergence of the state health exchange, changes in the organization of regional specialty care, and the shifting responsibilities of employers and insurers in a changed marketplace have provided a new environment for all the healthcare players, including hospital-based health systems. Finally, individual consumers too are faced with the need to adapt their behavior to the emerging new world.