MEREDITH — The leadership and trustees of LRGHealthcare spoke of addressing the challenges of the changed marketplace for health care through partnerships with regional institutions and local agencies within the community of providers. "Collaboration," reads the annual report, "is now a basic requirement in healthcare to make needed resources and services available to patients."
The challenges of the changing environment were reflected in the financial report by Henry Lipman, senior vice president of financial strategy and external relations. Although operating expenses rose little more than $2 million, operating revenue fell by about the same amount, shrinking income from operations to $353,000, compared to $4.5 million a year ago. Meanwhile, non-operating gains jumped from $133,000 to $2.3 million, enabling the corporation to post a positive net margin of 1.2 percent.
Lipman said that the decline of operating revenue reflected changes in the insurance market, which find more individuals and families paying a greater share of the coverage provided by employers. When they cannot defray the cost, it is absorbed by the provider. At the same time, as the population ages, more are covered by Medicare, which fails to reimburse providers for their full costs. And with pressures on nursing homes, the hospital has been pressed to place older patients, particularly those with infirmities or dementias, requiring care after treatment, which has increased lengths of stay.
Lipman stressed that LRGH is in sound condition, paying its bills on time, servicing its debt, funding its pension obligations and holding sufficient cash reserves. But, he acknowledged that the operating results are "representative of a challenging trend," which LRGH is meeting by increasing productivity by offering value added services and pursuing partnerships."
The most significant of these partnerships, the Granite Health Network (GHN) was formed in April 2011 when five of the largest hospitals in the state — LRGHealthcare, Catholic Medical Center, Concord Hospital, Southern New Hampshire Health System and Wentworth-Douglass Hospital — joined to leverage their administrative and clinical resources to enhance the quality and improve the efficiency of medical care. Together the quintet employs 15,000 people, including 900 physicians, serves 500,000 individuals and counts operating revenue of $1.5 billion.
Chuck Van Sluyter, interim president and chief operating officer, said that the GHN has achieved clinical and operating efficiencies of $4.5 million, including trimming the costs of laboratory tests and blood products while the introduction of Cigna's accountable care model has spared LRGH $250,000 in the past two-an-a-half years.
In January, GHN announced the Tufts Freedom Plan, a provider-payer insurance company administered by the Tufts Health Plan. The employees of the member hospitals will be enrolled in the plan, which will compete in the New Hampshire marketplace.
Dr. Peter Doane, chief medical officer, said that the partners of GHN are sharing their expertise and experience to develop standardized care protocols ground in sound evidence and best practices. Among the protocols followed throughout the system are those for management and treatment of chronic asthma and acute low back pain. In addition, there is a protocol for identifying and treating patients suffering from depression, whose healthcare costs are 50 percent higher than those of other patients.
Maggie Pritchard, executive director of Genesis Behavioral Health, traced the agency's partnership with LRGH to 2005 and noted that it has grown closer ever since. In particular, she stressed that patients suffering from mental illness are more likely to seek help at the emergency department, an ineffective and expensive setting, in the Lakes Region than elsewhere in New Hampshire. Greater investment in the outpatient services Genesis provides, she said, will enable those with mental illness to live healthier, more productive lives while sparing the hospital the cost of housing patients while awaiting treatment in an appropriate setting.
LRGH recently partnered with Massachusetts General Hospital to diagnose and treat patients with strokes using video conferencing and image sharing technology. Dr. Fred Jones, chief of emergency medicine, and Kendra Peaslee, director of emergency services, explained that specialists in Boston can examine patients and sitting in the emergency room of both Lakes Region General Hospital and Franklin Regional Hospital in less than 25 minutes.
Bill Grimm of Franklin, who joined the board of trustees of Franklin Regional Hospital in 2000 and has been a trustee of LRGH since the merger in 2002, was honored with the Sally Proctor Award. In presenting the award Scott Clarenbach, chairman of the board of trustees, emphasized his contribution to the safety of patients. A member of the Quality Improvement Committee, Grimm worked closely with Gloria Thorington, director of medical safety and health management, to fashion a scorecard to measure the strengths and weaknesses of the organization. He considers everyone — patients, employees and members of the community — stakeholders and when the board tackles an issue is the first to ask "what about the stakeholder?"
Pritchard received the Rhoda C. Ladd Award. Clarenbach described her as "passionate and instrumental" and called her "an incredible advocate" who has been "a great support to LRGHeathcare." Despite the challenges of constant change and decreasing financial resources, Pritchard, he said, has recruited a strong team to meet the mental health needs of the community. She championed the opening of the psychiatric unit at Franklin Regional Hospital and helped to bring telepsychology to the emergency department of LRGH.