Washington, D.C.-based Providence Health System announced it’s dropping acute care by the end of the year and will focus on population health.
Providence aims to revamp its delivery to a “community-focused” approach. The system will rely heavily on care coordination, telehealth, primary and urgent care, home care, community-based behavioral healthcare and senior care. The health system said the move will better align its offerings with D.C.'s "evolving needs."
The 283-bed hospital with more than 500 providers said its Community Health Needs Assessment helped prompt the shift, and the area's needs will still be served by “many high-quality providers of acute healthcare services.”
Ascension, which reported drops in operating income, revenue and total admissions for the first nine months of fiscal 2018, is in the midst of a major restructuring and shift in focus away from hospitals and toward outpatient care and telehealth services.
The health system said the plan for Providence includes looking at non-healthcare-related services that affect patient health. Providers everywhere have increasingly paid more attention to such population health factors and are tackling social determinants of health.
“We know that 15 percent of a person’s life is spent in actual healthcare, which means the remaining 85 percent is spent in other areas that either positively or negatively impact their overall well-being,” Providence Health System CEO Keith Vander Kolk said in a statement. “That is where the greatest opportunity to make meaningful change lies, and we must put our focus and energy on advancing a model of transformation that will serve the district in new and lasting ways.”
Hospitals around the country are going through a similar soul-searching exercise as the changing healthcare landscape works against acute care facilities. Payers are giving hospitals lower reimbursements and pushing patients to outpatient care. Inpatient hospital beds sit empty. All of that is forcing hospitals to figure out whether population health and outpatient facilities are a better bet.
An example of how payments are working against hospitals came this week with CMS’ proposed rule for the Outpatient Prospective Payment System and Ambulatory Surgical Centers for 2019. The proposal would institute site neutral payments and extend 340B payment cuts to previously exempt off-campus providers. The American Hospital Association said the plan would "result in close to $1 billion in unwarranted cuts to hospitals."
The proposal is another blow for hospitals struggling to survive. Some hospitals are finding that acute care might not be the long-term solution.
In response, one growing trend is micro-hospitals. The smaller facilities seek to capture patient flow without more significant investments in hospital infrastructure.
Zach Hafner, partner at Optum Advisory Services, recently told Healthcare Dive that micro-hospitals address emergency and limited inpatient need for short-term stays. “Micro-hospitals fall into the realm of big investments, but not game-changer investments, so [health systems] are willing to make those bets,” Hafner said.