Hospitals Divert Primary Care Patients to Health Center ‘Look-Alikes’ to Boost Finances


A rising variety of hospitals are outsourcing often-unprofitable outpatient companies for his or her poorest sufferers by organising unbiased, nonprofit organizations to supply main care.

Medicare and Medicaid pay these clinics, referred to as federally certified well being middle look-alikes, considerably greater than they’d if the websites have been owned by hospitals.

Just like the practically 1,400 federally certified well being facilities — which get these extra {dollars} as effectively — a clinic designated by the federal government as a “look-alike” can also be eligible for federal packages that would assist cut back prices and recruit suppliers. They permit the clinics to acquire prescribed drugs at deep reductions and entice docs by making them eligible for a authorities program that helps them repay their scholar debt in the event that they work in an space with a scarcity of medical suppliers.

However not like the neighborhood well being facilities, the look-alikes don’t get an annual federal grant to cowl operational prices. Nor do the look-alikes get the monetary profit through which the federal authorities covers their malpractice dangers.

Regardless that they aren’t a part of a hospital system, lots of the hospital-formed look-alikes have clinics on hospital campuses or inside a brief distance. Because of this, the clinics may help divert sufferers with out pressing wants from costly emergency rooms.

That helps cut back losses, particularly from uninsured sufferers who may need been utilizing the ER for main care. Changing clinics to look-alikes can also be usually a method for hospitals which have a excessive proportion of sufferers enrolled in Medicaid, which typically reimburses hospitals at decrease charges than business well being plans do, stated Jeffrey Allen, a associate with the consulting agency Forvis. “It’s a pattern that’s gaining momentum,” he stated.

Hospitals are betting that they are going to come out forward by spinning off a money-losing service and offering grant funding to the look-alike to maintain it solvent, he stated. On the identical time, hospitals count on many sufferers from the look-alike clinics who should be admitted for companies or require specialised care to be routed to their hospitals, he stated.

One California hospital not too long ago opted for this technique. Beverly Hospital in Montebello, a metropolis in Los Angeles County, began BeverlyCare by changing considered one of its clinics to look-alike standing. BeverlyCare, which the federal authorities designated a look-alike in 2020, has its primary main care and pediatrics location on the hospital campus and a ladies’s well being clinic 2 miles away.

Government Director Corali Nakamatsu stated the look-alike nonetheless works intently with the hospital and pays it to deal with many administrative features, together with data know-how.

No less than eight hospital techniques have transformed current clinics or constructed new ones that obtained look-alike designation from 2019 via 2022, in keeping with a KHN evaluation of federal knowledge. They embrace:

  • Parkview Well being, a big hospital system in Indiana and Ohio, which opened a look-alike referred to as Alliance Well being Facilities in Fort Wayne, Indiana, that was designated in 2021. Tami Brigle, a hospital spokesperson, stated look-alike standing provided the system a greater means to supply care to underserved folks.
  • Parrish Medical Middle in Titusville, Florida, which helped open Area Coast Well being Facilities, designated as a look-alike in 2022. Parrish spent $1.2 million to arrange the clinic, which supplies main care and psychological well being care, a number of blocks from the hospital. “A lot of our sufferers haven’t had main take care of years and have a number of medical and behavioral wants,” Area Coast CEO Arvin Lewis stated in an announcement to KHN. “We’re working to enhance entry to care.”
  • Wabash Basic Hospital, which partnered with a neighborhood well being division to kind Wabash Group Well being Middle, a look-alike clinic close to the hospital in Mount Carmel, Illinois. Danielle Stevens, the hospital’s govt vice chairman of enterprise improvement, stated that the hospital was treating some clinic sufferers in its emergency room and that the brand new facility supplied psychological well being companies and bodily well being in a single location. “The intent is to broaden companies which might be at the moment not provided to the neighborhood with the improved reimbursement,” she stated.

California’s Beverly Hospital supplied a $3 million mortgage and donated its ladies’s clinic to get the look-alike there began, Nakamatsu stated. The look-alike leases workplace area from the hospital for its grownup and pediatrics clinic. That clinic helps sufferers who want follow-up care after visiting the hospital emergency room. The clinic additionally offers sufferers a lower-cost choice than utilizing the ER.

“The neighborhood makes use of the ER as a main care workplace and even goes to the ER for a covid check,” she stated. “Some do it as a result of they don’t have insurance coverage, and a few are simply used to utilizing the ER for every little thing.”

About 70% of sufferers at BeverlyCare are enrolled in Medicaid.

Nakamatsu stated one other driving pressure behind organising the look-alike was to make sure underserved folks would have entry to care after the closure of many non-public practices within the space. The hospital had issue recruiting docs as a result of in California many hospitals can not immediately make use of physicians, and lots of docs would favor to work for a well being system so that they don’t have the expense of organising an workplace. The look-alike is allowed to rent docs and has used its eligibility for the Nationwide Well being Service Corps — a federal program that pays the scholar loans of clinicians who conform to work in an space with a scarcity of well being care suppliers — to recruit and retain one doctor.

Indiana Hospital Affiliation President Brian Tabor stated hospitals are typically cautious of forming a look-alike as a result of it means giving management to a brand new group. However, he stated, the conversion can profit each hospitals and sufferers: “Hospitals are exploring completely different cost fashions to assist entry in rural and underserved areas, and look-alike standing has emerged for some as an actual important instrument.”

Nationally, 108 look-alike well being facilities function immediately, a rise from 87 in 2020, in keeping with the federal Well being Assets and Companies Administration. The bulk weren’t began by hospitals.

California has greater than two dozen of the look-alikes, far outpacing another state.

Look-alike well being facilities are overseen by a board of administrators, and at the least 51% of the administrators are required to be sufferers — identical to full-fledged neighborhood well being facilities. Look-alike well being facilities deal with sufferers on a sliding payment scale primarily based on their revenue.

Organizations sometimes search look-alike standing from the federal authorities as a precursor to changing into a completely funded federally certified well being middle.

Within the Allentown, Pennsylvania, space, each main well being techniques — St. Luke’s College Well being Community and Lehigh Valley Well being Community — not too long ago transitioned lots of their main care clinics to look-alikes. Neither hospital would supply a spokesperson to speak in regards to the adjustments, however each answered questions in writing.

St. Luke’s began Star Group Well being in 2018; it obtained its look-alike designation in 2020. “Star has been in a position to deal with a broader group of people that will in any other case not have entry to care,” Star CEO Mark Roberts stated, though he supplied no particulars in regards to the growth.

Lehigh Valley transformed a number of of its main care practices to look-alike standing beneath the title Valley Well being Companions Group Well being Middle. The additional funding from Medicare and Medicaid has allowed the clinics to broaden companies for psychological well being and substance use, in addition to to supply help from monetary counselors, social staff, and medical pharmacists, stated spokesperson Jamie Stover.

Lee Well being, a hospital system primarily based in Fort Myers, Florida, transformed greater than two dozen of its outpatient clinics to look-alike standing beginning in 2014. Bob Johns, senior vice chairman for Lee Group Healthcare, is the lone full-time govt of the look-alike. The opposite personnel are nonetheless employed by the hospital system.

The upper Medicaid funding has helped pay for 4 new grownup household follow clinics and a pediatric psychological well being clinic, Johns stated. And a cell well being clinic that goes to underserved areas can also be partly funded via the improved Medicaid reimbursements.

Johns stated the look-alike clinic will get about $120 for a Medicaid main care workplace go to, practically double the cost that the clinics obtained once they have been owned by Lee Well being.

Johns credit the look-alike clinics for decreasing pointless ER visits at Lee Well being hospitals by at the least 20%. A lot of these visits have been from uninsured sufferers, he stated.

Look-alikes additionally profit from the federal 340B program, which permits them to purchase medicines at deeply discounted charges to promote to sufferers. The sufferers’ insurers sometimes pay the facilities the next charge, and the clinics hold the distinction. Clinics can cut back the out-of-pocket prices for sufferers however aren’t required to, though Johns stated Lee Well being does cut back the drug prices for sufferers who’re uninsured or have low incomes.

Hospital techniques like Lee Well being that qualify for the 340B program sometimes can use it for under their admitted sufferers, Johns stated.

The look-alike standing additionally permits the clinics to take part within the Nationwide Well being Service Corps, he stated. “It’s a good way for us to hold on to suppliers,” Johns stated.

Shifting care to look-alikes has helped Lee Well being discover new funding to broaden care to the medically underserved, he stated.

“It’s a cool mannequin and a really environment friendly means to make use of restricted sources,” Johns stated.

This story was produced by KHN (Kaiser Well being Information), a nationwide newsroom that produces in-depth journalism about well being points. Along with Coverage Evaluation and Polling, KHN is likely one of the three main working packages at KFF (Kaiser Household Basis). KFF is an endowed nonprofit group offering data on well being points to the nation.

KHN (Kaiser Well being Information) is a nationwide newsroom that produces in-depth journalism about well being points. Along with Coverage Evaluation and Polling, KHN is likely one of the three main working packages at KFF (Kaiser Household Basis). KFF is an endowed nonprofit group offering data on well being points to the nation.

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