Community hospital strategy:

Join a tertiary hospital network

By Christopher Guadagnino, Ph.D.

Published September 1997

• Community hospital strategy: Independent from tertiary networks

• React to this article in the Discussion Forum.

Lawrence F. Blackburn, M.D., a retired internist in Greensburg, was on the medical staff of Westmoreland Hospital for 40 years, during which time he was president of the medical staff for two terms and chairman of the Department of Medicine for three terms.

PND: What was the basis of the recent dispute between the Westmoreland Hospital medical staff and the administrative over whether or not to join a large hospital network?

LB: Ten years ago we developed a working affiliation with the University of Pittsburgh Medical Center to help start up a cardiac catheter lab and a cardiac surgical program. This arrangement fostered our program and was doing very well; however, it was severed about 4 or 5 years ago. So, we’ve been going alone. My feeling has been that a cardiac surgical program must have referrals of nearby hospitals as well as our own admissions, as more and more are becoming outpatients. The surrounding hospitals have affiliated with UPMC: Latrobe Hospital, Mount Pleasant Hospital, Highlands Hospital, and Jeanette Hospital. If we continue an adversarial stance with Pitt, any physicians who are affiliated with Pitt could easily have their patients come into Pitt for cardiac catheterization, therefore seriously jeopardizing our program. The administration has instead been advocating a network of community hospitals so they can negotiate for insurance products.

PND: How has the Westmoreland medical staff reacted?

LB: At a recent meeting of the medical staff, the administrator was asked why we are not negotiating with Pitt or Allegheny General to form an affiliation. The physicians felt they were brushed off, and asked to have a vote to see whether a [community hospital] network was the way to go. The president of the medical staff would not permit a vote during the medical staff meeting. A group of about 15 doctors met in early June and decided to poll the medical staff members. I was invited to assist them. A questionnaire was sent out to 155 active medical staff members of the hospital; 122—78 percent—were returned. Of those responses, 62 percent disagreed with the hospital administration’s attempt to establish an independent community hospital network, and 85 percent felt that the hospital should pursue networking opportunities with one of the major networks in Pittsburgh. We felt that that was an over whelming response.

PND: Why do you favor an affiliation with one of the Pittsburgh tertiary hospital networks?

LB: The medical staff members are greatly concerned that HMOs may negotiate more favorable contracts with a network because the network will have more leverage—many more patients they offer the insurance companies. Westmoreland would be covered if they belonged to the network. HMOs are certainly not above limiting the number of physicians to whom patients could be referred. The doctors are very fearful that they could be left out, particularly the specialists.

PND: Highmark has indicated its intention to continue negotiating with individual physicians groups and hospitals rather than with networks. Doesn’t that validate the administration’s resolve to remain independent?

LB: Highmark also stated that they’re examining options for network provider contracting and that details of specific arrangements have not been finalized. We don’t feel this is the end of the story. We feel that Blue Cross/Blue Shield has waffled at times. A stand alone hospital would be more desperate to adopt a less favorable contract than a network that has quite a bit of leverage because of a large number of patients.

PND: How did the hospital administration respond to these views?

LB: The doctors have urged working together. The administration has continued to talk about an independent network that our medical doctors felt had no chance of surviving. The administration has the backing of the board of trustees. Our concerns are heard but not acted upon.

PND: Why don’t you think a community hospital network would be effective?

LB: A group of hospitals that is away from Pittsburgh and the large metropolitan group of patients does not have enough of a patient base to have real clout in negotiating with insurance companies. The UPMC network already controls about 200,000 to 250,00 people.

PND: What can medical staffs do when they disagree with hospital administration?

LB: We are going to send letters to our patients and ask them to bring their concerns to the hospital administration. The hospital administration has used the argument that if we affiliate with large groups, then we’ll be sending our patients into Pittsburgh. Patients out here are very fearful about traveling into Pittsburgh. They want to go to a local hospital. We feel that the hospital administration in using this fear tactic is giving false information to the public. The medical centers know its not to their advantage to bring patients to Pittsburgh because of its higher cost care. They want patients out here in the community as much as they can. We’re fearful that patients will be shuttled away from Westmoreland Hospital to the other affiliated group hospitals. The administration has stated that the doctors who are already affiliated with Pitt have a financial stake in this position. We don’t feel that’s true. The doctors don’t really have that much to lose if Westmoreland Hospital does not have as many patients. They can apply to staffs at adjoining hospitals and continue their work. It’s their concern for the hospital’s welfare and the patients here. We’ve already seen as the screws are being tightened, we’ve seen decrease in the nursing staff of the hospital and we don’t want to see it deteriorate further.