Bigger, but better?

As an increasing number of southeastern Wisconsin health care systems merge and acquire physicians’ groups, some industry observers are questioning whether or not patients will benefit from the industry transformation.

A market with fewer but larger systems will give patients fewer health care choices and could result in lower quality of care and higher costs, according to some observers.

As of July 1, West Bend-based Synergy Health Foundation, St. Joseph’s Hospital, and The West Bend Clinic officially became affiliates of Froedtert & Community Health after announcing the decision in May.

Froedtert Community Health and Columbia St. Mary’s also announced in January plans to form a joint operating agreement between the two hospitals to form Progressive Health.

According to Carolyn Bellin, chief public relations officer at Froedtert Hospital, the joint operating agreement takes a different review path then regular mergers, and the agreement documents have been with regulatory agencies for about a month. Under the agreement, the two systems will function under one leadership board as a single organization. To consumers though, each facility will still be marketed separately and still function under their own names. The organization is expected to move forward later in the year.

“We believe by combining the strengths of our clinical services and by using our geographic complementarity, we can provide health services that are efficient and meet the patients’ needs better,” said Leo Brideau, president and chief executive officer of Columbia St. Mary’s Hospital. “Our two organizations have been consistently the lowest cost hospitals in Milwaukee. We believe that by coming together we can not only continue that track record, but it really puts us in the position of very smart use of scarce capital and makes sure we don’t drive up the cost of health care by our decisions.”

Waukesha-based ProHealth Care joined with Medical Associates in November of 2007, which added an additional 100 physicians and 900 employees in 12 locations throughout southeastern Wisconsin counties. In July 2007, Aurora Healthcare and Advanced Healthcare also finished their affiliation process, and brought together two physician-led organizations.

“Through consolidation we achieve greater integration and a higher level of coordination of care through information connectivity between hospitals and clinics,” said Sandra Peterson, ProHealth Care spokesperson. “Together, we have a larger reporting capacity of quality and outcome measures and greater access to capital for process improvement and technological advancement. From a customer service and quality of care standpoint, all of this serves patients better.”

When a private practice is owned by a larger cooperating health care system, those physicians, according to Jon Rauser, president of the Rauser Agency in Milwaukee, are either rewarded or penalized for making or not making referrals to hospitals and physicians within that parent health care facility.

“When the physicians are owned by the health systems, it really limits the options of the patient,” he said. “As a patient, I may not necessarily be getting an unbiased referral or opinion.”

Dr. Bruce Wilson, cardiologist and president of Wilson Heart Care Associates in Mequon, and former chief of cardiology and head of medical education at Columbia Hospital in Milwaukee, expressed some concerns for patient care, as well.

“Bigger is not necessarily better, and smaller and more focused usually produces a better product,” he said. “It’s not that you can’t provide quality care at the large size, it just becomes increasingly difficult to do so.”

According to Wilson, large facilities are becoming more difficult to staff sufficiently, and hospitals expend so much energy on administrative power on completing mergers that patient care could suffer.

“When hospitals merge, you might have two hospitals who are perfectly good at what they do, but they have to take their eye off providing excellent patient care in order to complete the merger,” Wilson said. “Mergers can take as long as five years in some cases.”

Competition also creates an environment for improvement and constant acceleration, said Wilson, as health systems merging begin to create huge systems the opportunity for that necessary competition is decreased.

“As hospitals keep getting bigger and bigger to capture more market share, we develop a system that suffers from the natural problems of less efficiency and more administrative challenges,” he said.

The Business Healthcare Group supports physicians remaining independent in order to protect consumer choices. Dianne Kiehl, executive director of the group, said it is possible to look at the system mergers from both a positive and negative standpoint but mentioned that the group overall is not in favor of consolidation.

“The expectation is that if they consolidate and they manage resources better it should lead to better things for consumers and improve cost structures,” she said, “But there is no evidence that that will happen, and the downside of it is as they consolidate they have more control of the market and so from an organization standpoint it could then lead to higher costs for consumers.”

The decision lies in how the provider community behaves said Kiehl.

“They are telling us right now that this will be better for the community, but the truth is in the pudding, so right now we have to trust them,” she said. “The business community is concerned, but at this point it isn’t something we can control.”

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