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Health and Medicine




In the shadow of the big two, how do smaller health systems operate?
Smaller systems try to compete even as the Cleveland Clinic and University Hospitals continually expand
by WKSU's KABIR BHATIA
This story is part of a special series.


Reporter
Kabir Bhatia
 
Summa was formed in 1989 by the merger of Akron City Hospital (pictured) and St. Thomas Hospital. The health system is the largest employer in Summit County.
Courtesy of SUMMA
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In The Region:
Correction: Cleveland Clinic had net patient revenue in 2014 of nearly $4.3 billion. That's calculated by subtracting expenses from inpatient and outpatient services. This story originally listed the $4.3 billion as the total patient revenue. 

The Cleveland Clinic and University Hospitals are based within a few blocks of each other on Euclid Avenue on Cleveland’s east side. But they’ve been increasingly opening offices to the south, including in Akron, a city where Summa Health System has traditionally been dominant. WKSU’s Kabir Bhatia reports on how Summa and others can stay competitive in the face of increased consolidation.
LISTEN: In the shadow of the big two, how do smaller health systems operate?

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In 2014, the Cleveland Clinic had the highest net patient revenue of any health system in Northeast Ohio, at just under $4.3 billion. No. 2 was University Hospitals. A couple of spots down the list -- compiled by Crain’s Cleveland Business – is Summa, which had revenue of $717 million. Summa was formed in 1989 with the merger of Akron City and St. Thomas Hospitals. This year, the Cleveland Clinic announced it would take over Summa’s biggest competitor, Akron General.

Generalists or specialists
J.B. Silvers is a professor of health finance at Case Western Reserve University, and says Akron General’s financial position made it more susceptible to takeover than Summa. He says Summa should be able to stay competitive with the Cleveland Clinic.

“They’re both general hospitals; they do everything. The Clinic may see some areas they want to go into in more depth down there. They have made some of their hospitals more specialized and others more general.

"The other broader question is: What are they going to do across the spectrum? What are they going to do about the population that's there?”

Managing cost
Summa is the largest employer in Summit County. Silvers says it will likely remain dominant in the county due to its ability to manage its total cost of care.

"The proof of that is the Accountable Care Organizations that they have [which] I think it is the most successful in Ohio and one of the best in the country in terms of getting bonuses back from the feds for their care of the population."

Spreading the care in nontraditional ways
Silvers says the difference in service and care between healthcare providers won't be that noticeable to most people, but systems like Summa will be concentrating on better outcomes and lower costs.

"So, electronic prescribing pharmacy arrangements, remote radiology departments, outpatient centers in drug stores. You're going to find more and more of those kind of things. And more distance care."

That’s something Summa is already doing, according to Benjamin Sutton, senior vice president for strategy. He says that’s one reason revenue has climbed 4.2 percent.

“We got very focused about three years ago on our operations and [in] improving things like productivity in the health system. Our workaround revenue cycles. Our spending on medical supplies. Improving some of our quality indicators that help with efficiency, like length-of-stay in the hospital.”

A national trend
That’s part of a national trend, as is the shift away from inpatient services at many facilities. Much of Summa’s St. Thomas is closed or sparsely. Summa has controlled Wadsworth-Rittman Hospital since 2008, and they closed inpatient services there two years ago. Sutton says it’s a matter of evaluating the best way to serve their populations.

“It isn’t always going to be growth in inpatient capacity that we see being built in places. But it is going to be, 'What’s the best use of the facilities that we have to really provide the care for people that they need in those communities. And a lot of times, that is growth in outpatient services. Wadsworth’s a good example.”

But the Wadsworth-Rittman Joint Township Hospital District -- represented by attorney Jeff Witschey -- disagrees. 

“They can argue what they want about whether they feel something is in the best interest of the community. We have, on the joint district, the elected representatives of these communities. And they are very much in touch with what the community needs.”

Witschey says that means returning local control to the citizens group, and allowing them to negotiate a pact with another healthcare organization – possibly the Cleveland Clinic.

Internal v. external
This is not the only partnership whose future with Summa is up-in-the-air: the health system is embroiled in a lawsuit with the doctors who run and have a majority ownership stake in Western Reserve Hospital in Cuyahoga Falls.

Those are internal issues. Externally, Summa’s Benjamin Sutton says Summit County’s hospital systems can co-exist.

“The Cleveland Clinic -- and organizations like the Cleveland Clinic – are always going to have a role in the healthcare system. There are procedures that are performed there that are not performed anywhere else in the world in some cases. And they aren’t of high enough volume to really be done anywhere else. So we’re not going to be focusing on those things.”

With all of the consolidation that’s occurred among Northeast Ohio’s healthcare providers, Case professor J.B. Silvers says he’s not sure how much more is even possible.

“Probably 15, 20 years ago, I was quoted as saying, ‘It’s time to choose up sides.’ I think everybody’s ‘choosed up’ sides, with very few exceptions. But healthcare’s still a local business. Patients don’t go long distances for healthcare. So you have to be able to do it where they live. And we need to figure out how to make that work.”
Listener Comments:

IRS form 990 shows that CCF 2013 revenue was $7.6 billion. Your article say $4.4 billion in 2014. Are you sure about your numbers?


Posted by: richard (akron) on December 15, 2015 10:12AM
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