Depending on who you ask, the decision by its parent company to scale back the services at Windham Hospital was a prudent one that will help preserve the financially struggling facility, or it was a troubling sign of the need for better state oversight to ensure that communities don’t lose access to care.
And to one key lawmaker, that’s a sign of the debates that are likely to become more common as more Connecticut hospitals join larger systems, raising the possibility that parent companies will seek to consolidate services rather than offering every type of care at each hospital in their network.
“The issue in Windham is a great example of the issues we’re going to see a lot more in health care,” said Rep. Matt Ritter, co-chair of the Public Health Committee. He said he’s heard from several fellow legislators who want the committee to look into the issue.
State law requires hospitals to receive permission from the state Office of Health Care Access, or OHCA, before terminating most services. But some critics of consolidation say Connecticut needs a broader way to ensure that communities don’t lose access to key hospital care. Others say the existing regulatory system is already too burdensome. And hospital officials bristle at the idea of additional regulation at a time when their organizations are facing higher state taxes and Medicaid funding cuts that they warn could lead to job and service cuts.
Ritter, D-Hartford, sees the underlying issue as one the state will likely be grappling with for years: How do you strike the right balance between keeping small, local hospitals operating and serving their communities – where they’re often among the largest employers – without sacrificing care quality or requiring layoffs? And how do you balance that against hospitals’ need to be profitable?
“What are we going to do when these large hospitals come in and make these decisions? How are we going to best judge and gauge what needs to be protected and is critical, versus what may be consolidated elsewhere to save money?” he said.
It’s a question that Ritter expects will be dealt with, in some fashion, when the next legislative session begins in February.
“When you get calls from five or 10 [legislators] in the off-year on something, you can predict with certainty it’s not going to go away come February,” he said.
What the future holds
Nearly all of Connecticut’s 29 hospitals are already part of larger systems, or are in the process of joining one.
It’s likely that, in the future, not all hospitals will provide every service they do now, particularly those that require significant capital, said Dr. Rocco Orlando, senior vice president and chief medical officer at Hartford HealthCare, the parent of five Connecticut hospitals, including Windham.
He cited one example: Hartford HealthCare now runs both The Hospital of Central Connecticut, which has campuses in New Britain and Southington, and MidState Medical Center in Meriden. And officials decided that rather than have both hospitals offer obesity surgery, they would maintain the procedure at just MidState. Orlando said the procedure is one for which having a high number of patients is strongly tied to quality, and the combined program could treat enough people to reach levels typically associated with strong clinical outcomes. It also allowed the health system to consolidate some costs, including staff.
“That just made sense,” Orlando said.
Hartford HealthCare is now seeking state approval to close the pediatrics department at The Hospital of Central Connecticut, which Orlando said hasn’t had an admission in months.
Decisions about closing services, Orlando said, generally center on whether the hospital provides the service to enough patients to maintain appropriate quality.
In describing the potential changes at Windham, which has struggled financially, Hartford HealthCare officials have said the hospital would offer “cornerstone services” while functioning as a “gateway” to the health care system. In some cases, patients would get more complex services at other facilities.
To Ritter, consolidation begs the question: How should policymakers gauge what services must be provided at each hospital and what could be offered in fewer places?
“You have to pick and choose your battles and you have to differentiate between inconvenience and medical necessities,” Ritter said. “And I think that might be how I view some of these changes we have to make.”
Does the state need more oversight?
When a hospital seeks to eliminate an inpatient or outpatient service, it must get what’s known as a “certificate of need,” or CON, from the Office of Health Care Access.
(Whether Hartford HealthCare needs state permission to make the changes it’s seeking at Windham Hospital – in particular, converting its 12-bed critical care unit to a 4-bed progressive care unit – has been in dispute. The hospital told OHCA that services provided to patients wouldn’t change, and OHCA determined that a CON wasn’t required because the hospital wasn’t terminating a service. But critics have questioned whether the hospital’s representation was accurate, and last week, OHCA Director of Operations Kimberly Martone asked Windham to provide a response to those concerns.)
To some critics, that situation, and the likelihood of others like it, are an indication that the state doesn’t have enough tools to address changes in what services hospitals offer.
Arvind Shaw, CEO of Generations Family Health Center in Willimantic and a critic of the Windham Hospital cuts, is among those who see a need for a broader plan for health care delivery in the state. He favors having a policy that articulates how many health care providers are needed for a given number of patients in an area and requiring hospitals to maintain certain services after they join a larger company. He thinks the state needs to define what services are critical to maintain in a hospital.
“My feeling is that the state doesn’t have the ability to regulate these waters at all,” he said.
In Shaw’s view, the current system favors larger hospitals and disadvantages small ones. Larger hospitals have leverage to negotiate higher payment rates with insurers. Cuts to Medicaid reimbursement – including recent cuts to payments for laboratory and radiology services – hit all hospitals, making them “sitting ducks for acquisition.” And if a hospital system can get paid more for treating a patient at its flagship facility rather than a smaller community hospital it owns, Shaw said, the system has an incentive to push patients toward the larger hospitals.
Frances Padilla, president of the Universal Health Care Foundation of Connecticut, also thinks the state needs a broader way to look at whether each area of the state has adequate health care resources.
More generally, Padilla thinks the state needs a health care agency or authority that could better coordinate the various health care efforts and functions underway in state government. Those include efforts to roll out the federal health law, a state-level initiative intended to change how care is paid for and delivered, and the development of a database of medical claims information to provide data on health care costs and usage – none of which, Padilla noted, are connected to decisions about hospital mergers or affiliations.
“The consolidation and acquisitions and mergers are really driven by wanting to secure the economic sustainability of the hospital,” Padilla said. “Somewhere in there, though, is lost what is best for the local communities and the local markets.”
Another critic of the Windham cuts, AFT Connecticut Executive Vice President John Brady, also sees the need for a broader approach.
“The changing health care landscape in Connecticut requires a more holistic prescription,” he said.
Existing regulation as the problem
But where some see the need for more regulation, others see the existing system itself as problematic.
The certificate of need process governs not just when hospitals seek to close services, but changes ownership of hospitals and large medical group practices. An organization seeking to purchase imaging equipment or open a health care facility must get a CON first.
To Zachary Janowski, director of external affairs for the Yankee Institute for Public Policy, the first step should be eliminating the certificate of need process altogether.
It makes hospital consolidation problematic, he says, because if a hospital system eliminates or scales back certain services, the certificate of need process poses a barrier for another organization – an out-of-state company, say, or a group of local leaders concerned about the availability of services in the area – to enter the market to deliver those services. That allows hospitals to close services in one area with confidence that someone else won’t try to replace them and compete for their other business, he said.
“Right now, people don’t have an alternative,” Janowski said.
Getting rid of the certificate of need process might not fix everything, but it’s a start, he said. If someone were planning to rebuild the state’s regulatory system from scratch, he said, “I don’t think CON is on anybody’s wish list.”
Alternatives could include policy proposals to ensure that hospitals behave like nonprofits and provide good care, he said.
“I think they’re critically important questions, but I don’t think that creating hoops for health care innovation is the right approach,” Janowski said.
Orlando, from Hartford HealthCare, also has concerns about the certificate of need process, but for different reasons.
“Our view is that the current regulatory process is broken, dysfunctional and not particularly helping our communities…or the people we serve,” Orlando said.
Orlando said he thinks there’s a happy medium between a lack of regulation and what Connecticut has now.
“In terms of closing certain hospital services, some of what’s there is just crazy,” he said.
For example, he noted, transferring a geriatrics office from Hartford HealthCare to Hartford HealthCare Medical Group, an administrative change, would require a CON. “That’s just dumb,” he said.
And Orlando said the regulatory environment needs to be viewed in the context of state budget cuts to hospitals.
“We are now being clobbered with reductions,” Orlando said. “The simultaneous interaction of regulatory and fiscal harm that’s being done to health care, it has the potential to destroy the health care delivery system in Connecticut.”
“I understand some of our legislators, I understand some folks in our community, they become concerned about the mix of services that are being delivered,” Orlando said. “We’re doing our utmost to really preserve the core services, and if this pendulum doesn’t stop swinging in the wrong direction, we’re not even going to be able to provide the cornerstone services that we’re seeking to preserve.”
Ritter acknowledged that the relationship between hospitals and state government is “strained,” and said he’d like to see it become healthier and more predictable. “We have to find a way to make that happen,” he said.
Legislators weigh in
Not everybody thinks the certificate of need process is broken. Senate President Pro Tem Martin M. Looney, D-New Haven, who was involved in developing a major bill this year aimed at addressing the changing health care landscape, said he thinks it’s reasonable.
Does the state need a broader plan to address changes in service delivery?
“I think it is inherent in the CON process, but obviously there is always a willingness to look at these issues,” Looney said.
Similarly, Senate Minority Leader Len Fasano, R-North Haven, said he thinks OHCA has the power it needs, although he questioned how the office works.
“I just don’t think it’s using [its power],” he said, adding that if OHCA doesn’t think it has the ability to take a holistic approach, lawmakers need to re-examine the CON rules.
A spokesman for the Department of Public Health, which oversees OHCA, declined to comment for this story.
Expert: Keep politics out of it
Angela Mattie, chair of Quinnipiac University’s health care management and organizational leadership department, said it’s understandable that people feel strongly about their local hospitals and want services to be delivered locally. But she said that’s not the reality of the marketplace.
“We need economies of scale. We need efficiencies. We need expertise,” she said.
And given how complex health care is, Mattie said, it’s important to keep politics out of decisions about the delivery system and determining what makes the most sense for patients.
“To make these decisions in terms of what’s politically correct is not the best value and the best quality for the citizens of Connecticut,” she said.