During Michael Tarwater's 35-year tenure with Charlotte, N.C.-based Carolinas HealthCare, the system has grown from a single, financially strapped city hospital into a dominant, eight-facility strong delivery system.
As Mr. Tarwater prepares to hand over the reigns as Carolinas CEO to Gene Woods this May, he spoke with the Charlotte Observer about how hospital consolidation has improved Carolinas' ability to manage healthcare costs and increase patient access.
Below are four thoughts from Mr. Tarwater on consolidation and care prices.
1. Growth through attracting physician talent. Mr. Tarwater attributed much of Carolinas' early growth to the strong quality of its physicians. By building Levine Children's Hospital in 2007 and Levine Cancer Institute in 2012, "we gave [our physicians] a place to attract people from some of the name institutions across the country," Mr. Tarwater told Charlotte Observer. Mr. Tarwater believes consolidation helped Carolinas bring world-class healthcare services to Charlotte.
2. Consolidation as a means to manage healthcare costs. Consumer demand for the best quality care and leading-edge equipment in healthcare treatment has largely driven hospital expenses, Mr. Tarwater believes. Hospital consolidation became a suitable response to manage increased hospital expenses. "I know that I can buy supplies (and) equipment a lot cheaper in huge volume," said Mr. Tarwater. "Consolidation is just one way to bring your expenses down."
3. Cutting physician reimbursement won't reduce care costs. "A consumer's understanding of the word 'price' bears no resemblance to how hospitals get paid," Mr. Tarwater told Charlotte Observer. While healthcare costs must be controlled and reduced, cutting reimbursement rates to hospitals and physicians is not the answer. "What you need to do is change the incentives to encourage [hospitals] to accelerate faster to a different way to deliver care," said Mr. Tarwater.
4. Consolidation as a way to improve quality and access. Through consolidation and expansion efforts, Carolinas has been able to build new facilities and increase the access points for patients to receive care. "Through the strength of [Carolinas HealthCare] and the volumes that come through — 15,000 new cancer diagnoses a year — we can make clinical trials available to people [across] this region," Mr. Tarwater told Charlotte Observer.
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