Some question regional collaboration for hospitals, as others forge alliances

Just as economic-development agencies in the Corridor work toward a regional approach, hospitals, too, are exploring the value of similar cooperation.

But some question if the business model is being appropriately applied to health care.

Tim Charles, president and CEO of Mercy Medical Center in Cedar Rapids, said the approach is similar for hospitals, which seek to improve patient care and contain costs by collaborating with other health care institutions.

A prime example of that cooperation came with the announcement earlier this month of a joint venture between Mercy and University of Iowa Hospitals and Clinics in Iowa City.

“This is a new way of thinking,” Charles said, citing conversations that began last fall among leaders of the two hospitals. “We're redefining community. We're thinking more in terms of the Corridor.”

As a start, the hospitals will form a Medicare accountable care organization, or ACO; work together to treat patients affected by end-stage kidney failure; and convert Mercy to Epic, an electronic medical record system already in use at UI Hospitals.

The cooperation isn't limited to those initial services.

In a separate agreement, UI surgeons are providing Mercy's Emergency Department with surgery coverage to help meet state guidelines for retaining its Level 3 trauma center designation.

The agreement began April 5.

Ted Townsend, president and CEO of St. Luke's Hospital in Cedar Rapids, applauded collaborative efforts as a way for stand-alone organizations to find ways to work together in an era of broader systems and accountable care.

“We've encouraged greater collaboration with Mercy to strengthen health care in our community for years,” Townsend said by email.

He noted that St. Luke's officials were told the UI Hospitals agreement is not an exclusive partnership with any one hospital and will look for ways to collaborate beyond the UI's longtime Emergency Department residency program at St. Luke's.

Townsend, however, expressed caution over having UI surgeons provide emergency department coverage at Mercy.

“(It) is our feeling this massive, but presumably temporary, introduction of University faculty into our community versus Mercy working out acceptable arrangements with Cedar Rapids-based physicians is not in the best long-term interests of the community,” he wrote.

Mercy spokeswoman Karen Vander Sanden said St. Luke's was not contacted because the hospital does not employ general surgeons.

Pat Baird, retired president and CEO of AEGON USA (now Transamerica) in Cedar Rapids, cited regional cooperation as a plus, but said hospitals must first examine the needs of the community to appropriately apply that business model.

“If you're running a business, you'd clearly look at demand and at the capacity,” Baird said. “If there is enough demand to support competition, then competition is good.”

Baird questioned whether the Cedar Rapids hospitals and Physicians' Clinic of Iowa, the specialty medical group of physicians in Cedar Rapids, sufficiently had examined that demand.

Cedar Rapids has been cited as a national model for high quality, low-cost health care, but Baird said both elements will disappear if demand and capacity are not monitored.

Overcapacity of facilities and personnel raises costs, and without enough work doctors' skills begin to suffer, Baird said, citing examples elsewhere in the United States where costs are high and quality is low.

“That seems to be where we're going with too many doctors and too many facilities,” Baird said, asking if state oversight should be used to monitor patient numbers, similar to Iowa's Certificate of Need program, which reviews purchases of high-end medical equipment to avoid duplication.

Most notable in Cedar Rapids are two new cancer centers.

Mercy's new Hall-Perrine Cancer Center opened in March. Just blocks away, the Helen G. Nassif Community Cancer Center of Iowa is scheduled to open in consolidated quarters next January in the new PCI building.

The UI is not involved in either cancer center, but has an agreement with Mercy Iowa City in its medical oncology clinic, Cancer Care of Iowa City.

Jean Robillard, UI vice president for Medical Affairs, noted the UI welcomes conversations to collaborate with other health care organizations.

The UI recently ramped up those efforts, to include a joint pediatric specialty clinic in Bettendorf with Genesis Health System and siting a regional branch campus for the UI Carver College of Medicine with the Des Moines Area Medical Education Consortium.

“It is becoming increasingly clear that the stand-alone model of hospitals operating independently is no longer sustainable and has led to a fragmented system of care,” Robillard wrote via email. “Our goal is to improve patient care by enhancing access, better coordinating care and controlling costs.

“We anticipate that patient care will change for the better.”