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ARCHIVED  August 27, 1999

PVMC places its future in community hands

BRIGHTON — Today’s health-care system looks a lot different than it did, say, 20 years ago. In particular, hospitals have undergone dramatic change in the wake of managed care.Today, many of the hospitals that started as community, nonprofit organizations have merged with larger entities, some have contracted with management companies to broaden their support structures, and a few have joined cooperatives to get the buying clout of larger hospitals. Brighton’s Platte Valley Medical Center, like so many others, continually strives to find the right balance between a supportive relationship with a larger entity and community-based management.
PVMC announced recently that, after 20 years of affiliation, it will not renew its governance agreement with Centura Health, the largest hospital system in Colorado. This doesn’t mean, however, that the hospital has severed all ties with the Denver based-hospital group, said John Hicks, president and CEO of PVMC. Control of PVMC now rests with the community it serves rather than with Centura, but the hospital still maintains a relationship with Centura and uses some of its services. Termination of a formal agreement between the two simply establishes the medical center’s role as an independent community-based hospital, he said.
A contract was established between the Brighton community and Mid-America Adventist Health Services when PVMC was built in 1979. (Mid-America Adventist Health Services partnered with Sisters of Charity to form Centura Health.) The community put out a request for proposal for their new hospital and selected the Adventists’ plan, Hick’s said. The governance contract that came as part of that deal provided the fledgling acute-care facility with management expertise, strategic planning and a financial component, he said.
In return, Centura filled eight out of the 12 seats on the hospital’s board. Most of those seats have now been transferred to members of the community and industry experts, although Centura is still represented, Hicks said.
In addition, Hicks still works with Centura on a contract management. “Their department does our managed-care contracting,” Hicks said, referring to the arduous process of hammering out reimbursement rates with managed-care companies.
PVMC had been preparing for the discontinuance of the agreement for many years, Hicks said, which is why the transition has been a smooth one. He explained that the decision not to renew the contract came as part of the hospital’s attempt to create a closer partnership with community members. The hospital serves an area that extends in every direction: north to Fort Lupton and Platteville, northeast to Keenesburg and on toward Fort Morgan, northwest to the tri-towns — Frederick, Firestone and Dacono, and south to Thornton and Commerce City
“In 1997, the community really began looking at what they wanted for their hospital, and determined that they wanted more responsibility for its governance,” he said. “We’re not big, we’re not rich, but we are a community hospital,” he emphasized.
In fact, the medical center recently rolled out a new program titled Community Health Investment Program, which directs 10 percent of all operating income to the community in the form of events and educational programs, to reinforce that commitment.
PVMC recently completed a $6.1 million renovation that added more than 20,000 square feet to the facility. Most of the construction focused on renovating current structures, Hicks said, but a new medical center, which will accommodate physical therapy, chemotherapy and other specialties, was also added.
The construction, which took about a year and a half to complete, doubled the emergency and radiology facilities, and enlarged the day-surgery area.
While PVMC has been able to assume responsibility for its own management, industry members doubt that many other hospitals in the state will hasten to follow suit. More stringent reimbursement policies imposed by managed-care companies continue to make it difficult for hospitals to tow an independent line, they say.
“In this day and age, the key to long-term success for hospitals is tied to resources,´ said Jim Hertel, publisher of The Colorado Managed Care Newsletter and a member of the PVMC board. “The increasing presence of managed-care companies that are unwilling to pay standard hospital prices creates uncertainty for hospital reimbursement.”
A tax district, a corporate parent, or a management company with deep financial pockets can provide these resources. In Northern Colorado; few hospitals operate independently of national management companies or hospital cooperatives, and many hospitals manage other facilities around them.
“You need to look beyond the management to assess the relationship,´ said Larry Wall, president of the Colorado Health and Hospital Association. “All hospitals are affiliated with other, larger organizations in one way or another.”
For example, instead of merging with another hospital or hospital group or hiring a management company, Poudre Valley Hospital in Fort Collins affiliates with Voluntary Hospitals of America. The Texas-based health-care cooperative maintains offices in Denver and provides the nonprofit hospital with a variety of services and programs.
“VHA is an organization that helps pair us with other hospitals to provide wonderful savings and purchasing power,´ said Ruth Lythle-Barnaby, director of community and foundation relations for PVH.
The savings programs, which include discounts on supplies and pharmaceutical drugs, translate into millions of dollars each year, Lythle-Barnaby said. “It allows us to keep costs down and gives us an incredible advantage.”
Elsewhere in the region, North Colorado Medical Center in Greeley and Loveland’s McKee Medical Center have affiliated with Lutheran Health Systems, an extensive network of health-care facilities — including several in eastern Colorado — based in Fargo, N.D.
Hicks says it would be inaccurate to draw a direct comparison between PVH and its status as an independent system and his hospital. PVH is a tertiary-care hospital, capable of handling every degree of illness and injury, while PVMC is defined as an acute-care facility — a smaller operation altogether. They refer trauma patients and more-serious cases to NCMC in Greeley or, more often, to one of the Denver hospitals.
Hicks sees his hospital’s shift to community-based operation as a means to benefit from continued relations with a long-standing partner yet avoid the infighting and fragmentation that characterize Denver’s health-care community
“There is a huge amount of capitated business (payment disbursement among a hospital, insurance company and doctors) and that form of business has radically changed health-care delivery,” Hicks said. “In Denver, health care has gone a different direction with mega-mergers of what used to be community hospitals, while our move is consistent with Northern Colorado.”

BRIGHTON — Today’s health-care system looks a lot different than it did, say, 20 years ago. In particular, hospitals have undergone dramatic change in the wake of managed care.Today, many of the hospitals that started as community, nonprofit organizations have merged with larger entities, some have contracted with management companies to broaden their support structures, and a few have joined cooperatives to get the buying clout of larger hospitals. Brighton’s Platte Valley Medical Center, like so many others, continually strives to find the right balance between a supportive relationship with a larger entity and community-based management.
PVMC announced recently…

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