A couple of weeks ago I was chatting with a customer I’ve had for many years. He’s a custodian at a church in Erie and he mentioned that his daughter had to go to an emergency room in Erie with a badly infected gums. She’s one of the working poor who hasn’t had the best dental care because she couldn’t afford it. Coincidentally, I was at the Incorporator’s meeting of Meadville Medical Center and Health Systems (MMC) that very night.
Many things were discussed at that meeting, but one of the things I was reminded about was the dental clinics that MMC has started in Conneautville and Meadville. I note reminded, because I’m proud to say I was on the executive committee of the hospital board when we approved these practices. At the time, the proformas indicated that the clinics would not ever be especially profitable and at best, might break even, but there was an overwhelming need in the community for non-served dental patients to have a resource for care.
Nearly all the local dentists realized a need for the service and their concerns were reinforced by a Community Needs Assessment Survey completed by citizens of our community. In less than a year, MMC established the first dental clinic at Conneautville and within two years, one in Meadville. The administration and the board of the hospital have taken MMC to areas not normally engaged in or funded by a hospital system. The Mind and Body Center and the Wellness Extension were facilities that stretched our capacities in ways most hospital systems never even considered.
My tenure on the board was capped by the construction and utilization of the Yolanda G. Barco Oncology Center. It would have been much easier to have stayed with the Erie provider, but we were determined to offer local treatment to local residents. All of these initiatives were based not on a financial return on investments but serving the need of our community with one of our community’s most valuable resources. We knew we had a fiscal responsibility to the mission of MMC, but when those endeavors would at least break even, we had a moral compulsion to do them.
At the same Incorporator’s Meeting, Philip Pandolph, chief executive officer of MMC, gave us an update on the large number of consolidations occurring in western Pennsylvania and eastern Ohio. Large hospital systems are absorbing community hospitals at an ever increasing rate. The St. Vincent hospital absorption by Allegheny Health Systems and before that, the merger of Hamot Hospital with University of Pittsburgh Medical Center and the absorption of Sharon Regional by a for-profit group are recent examples of that activity. Other community hospitals may be consolidated into larger systems, we were told, depending upon the financial climate going forward.
Now, it might be that the health care delivery model has shifted and the only way to feasibly render service is with these very large models. The financial road ahead is unclear, at best. The Affordable Care Act, for example, may only further complicate the lives of community hospitals. It seems that the Bronze and Silver options come with high deductibles and co-pays (what the patient pays before the plan kicks in and what the patient pays as their share of the treatment). If that is true, local hospitals will be stuck with collecting these and often times individuals are not good about paying them. As it is, MMC could not collect about $9 million in 2012 and this number may only increase. Make no mistake about it, these are difficult times to be a health care provider, large or small.
We have to be aware that a merger into a large hospital system will require a change of expectations and priorities. I doubt the initiatives in dental care, wellness-fitness, or maybe even oncology treatment would have happened if we were in a bigger hospital system. We must be aware that the interests of the system will trump the interests of the community and that is an understandable consequence. We must also be aware MMC is among the larger employers in Crawford County.
As you can imagine, a merger would result in the elimination of any redundant or unnecessary jobs that can be performed at the larger system’s headquarters. Back office functions like accounts receivable, accounts payable, purchasing, warehousing and patient records, to name a few, can be replaced and integrated by a central office. It’s not that the large systems are out to steal people’s jobs, but to make the whole program work it’s necessary to consolidate and eliminate positions as the first step. I’m not sure, but it seems that a number of positions were eliminated at Hamot. UPMC indicated other jobs would be added but I don’t know if that happened. The merger of St. Vincent’s into the Allegheny system hasn’t resulted in any major layoffs yet, but it seems to me that any duplication of job functions will have to be eliminated.
Another aspect that some overlook is the elimination of any local vendors who happen to compete with the system’s current consolidated vendor. There again it’s nothing malicious but the transactional costs are prohibitive when it comes to using different vendors for each hospital segment. My company, DeSantis Solutions, was eliminated 11 months after the merger at Hamot. We had done an incredible job there and the local environmental service staff were sorry to see us eliminated, but the interests of the system were paramount to the interests and desires of the local community.
What is even more frustrating for us was the inability of our company to make a presentation to the purchasing people at UPMC for some part or all of the system’s business. There again, UPMC is doing fine with the vendor base they currently have so why disrupt the program with another untried (forget our work at Hamot) vendor. You have to understand the cruel facts of today’s hospital environment.
What does all of this matter to the individual citizen in Meadville? Well, Allegheny College, our schools, local manufacturers and hospital are our most important local resources. Pandolph said it best when he said, “Not only what we offer to the local community but how we offer our health care product depends upon who owns the hospital.”
Right now, you and I own Meadville Medical Center and we can try to keep it that way. To some degree, we have a say in that by how much we use its services and by asking for its continued prudent management. To be sure, it is going to be a difficult path to take, but MMC has done difficult things before and overcome some very high hurdles.
Gary DeSantis, a Meadville resident, is a part-time consultant to DeSantis Solutions. He is the author of a recently published book titled “The 6th Floor.”