Health reform, governmental reimbursement cuts, and changing technologies are encouraging hospitals across the country to re-evaluate the way they do business and Lakes Regional Healthcare (LRH) is no different. In a strategic response, LRH’s Board of Trustees recently signed a Letter of Intent to consider an affiliation with Avera Health, a nonprofit health system based out of Sioux Falls, South Dakota.
LRH President and CEO Jason Harrington said the changing health care environment is prompting LRH to evaluate new ways to deliver improved care. In the future, providers will offer the best care with the best customer service, at the lowest possible price. In order to do so, alignment with physicians and other healthcare providers is key. Harrington said, “Aligning ourselves with others will improve continuity of care for all patients and result in less duplication of services, improving care and service while decreasing costs and unnecessary health care expenses.”
LRH took a step in this direction a year ago by forming a partnership with the two local family practice clinics, which strategically positioned the hospital to better improve the health of individual patients and the community. Harrington said, “We’ve already started to see benefits of the partnership, and know it will become increasingly more apparent as health reform initiatives advance. We’ve been looking at overall system affiliation for a while and are comfortable with making this possibility a serious conversation given the changes that are occurring in the health care industry now.”
Hospital affiliations with larger systems are the norm across the country. In Iowa alone, 85 percent of hospitals are affiliated with a larger health system and according to American Hospital Association, that number is expected to rise drastically due to pending health reform changes. “The financial risk of health care costs will be pushed to the providers themselves, and independent, rural hospitals in particular will be especially vulnerable. Alignment with larger tertiary health care providers will help spread that risk while also realizing other benefits such as decreased costs and improved service,” said Harrington.
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A benefit of an affiliation would be decreased costs for healthcare organizations and patients. LRH’s costs could be lowered by improved purchasing power through the Avera system. Patient continuity of care would also likely improve with an affiliation. LRH Chief Financial Officer Steve Alger said, “An affiliation would allow a conversion of our computer system to that of Avera’s. In doing so, we would be able to manage a person’s health care much more easily by having access to the patient’s medical information across multiple places of service. This would not only save each provider and the patient time, it would also save the patient money on unnecessary duplicated tests and procedures, and decrease industry health care costs overall.”
LRH Board of Trustees Chairperson Denny Perry said, “We’ve been evaluating a possible affiliation over the last 18 months and are excited at the prospect of a partnership. At the same time, we recognize the importance of maintaining local control. LRH will remain an asset of the county and governance will remain with the locally elected board.”
Dr. Thomas Kalkhoff, family practice physician with Avera Medical Group Lakes Family Practice added, “Avera has a strong track record in the successful partnership with community hospitals. Through our local clinics, we have benefitted greatly from our relationship with Avera, and we look forward to the advantages this affiliation will offer our local hospital.”
LRH will host a Town Hall Meeting on Wednesday, Aug. 28 at 5:30 pm in the hospital’s Big Spirit Conference Room for those interested to learn about the specifics of an affiliation arrangement and ask questions. In addition, Harrington will be presenting to several local community groups during the next 60 days.
Date: August 6, 2013