Roughly 10 years ago, Robert Kent, DO, FACOI, a primary care physician, realized things had to change.
The costs to practice medicine independently were skyrocketing. Physician reimbursement was heading the opposite direction. He was fed up with the billing inefficiencies and overall fragmented care among all providers in his community of Cuyahoga Falls, Ohio. Something had to give.
Dr. Kent eventually formed Western Reserve Hospital Partners, a group of more than 200 primary care and specialty physicians in northeast Ohio, with the goal of making healthcare more efficient and streamlined while putting patients first. But his work didn't stop there.
Beginning operations at Summa Cuyahoga Falls General Hospital provided "the ability to work out potential 'start-up' challenges," and "partnering with Summa also made sense as the healthcare system is the dominant presence in the market area," Dr. Kent says.
Summa Cuyahoga Falls General Hospital had several financial problems, to say the least. In 2006 through 2008, before Dr. Kent and WRHP took over, the hospital was running on negative operating margins — 4.3 percent, 4.6 percent and 1.7 percent, respectively. It was hemorrhaging millions of dollars and did not fit Dr. Kent's vision of what a community hospital should be.
After months of working with state and local policymakers, Dr. Kent and WRHP purchased Summa Cuyahoga Falls General Hospital's Medicare license, and in June 2009, they officially converted it into a for-profit, physician-owned hospital with the help of Summa Health System. The new hospital, Summa Western Reserve Hospital, has been running under the joint venture structure for more than three years, and Dr. Kent — Summa Western Reserve's president and CEO — says it is the physician leadership that has helped to turn the organization around.
"From day one, we've lead this operation. Our physicians make the decisions every day, and we don't waste a lot of resources," Dr. Kent says. "The operational setup is extremely efficient since we don't have multiple layers of administration. That's probably one of our biggest successes."
Summa Western Reserve Hospital is still a full-service community hospital, as it has an intensive care unit, an emergency department and several other components of a typical community hospital — it has also grown its community outreach with five hospital outpatient departments. While many physician-owned hospitals are specialty institutions, Dr. Kent considers their hospital to be a "full-blooded community hospital that happens to be physician-owned."
So how was the financial turnaround completed? Dr. Kent, who was recently named an Ernst & Young Entrepreneur of the Year for 2012, emphasizes the physician focus in all of their services and eschews the conventional wisdom associated with healthcare reform.
"In the last 12 to 18 months, hospitals are trying to acquire physician practices. Our mantra is we're a physician group that happens to own a hospital," Dr. Kent says. "We're not a hospital trying to own physicians. It's really helped us push all aspects of the organization forward."
Putting physicians in the leadership positions also spurred Summa Western Reserve to start new, innovative programs for its community. Primary care physicians comprise roughly 70 percent of the physician group, and they worked together to start a new center for pain medicine, a concierge pharmacy, a lung health program that is the only of its kind in northeast Ohio and preventive care outreach to community members.
"When hospitals start having financial difficulties, they cut people. We did the opposite," Dr. Kent says. "We started seven-day-a-week MRIs and CTs. A lot of patients are working Monday through Friday, so we wanted to give them access to these services on weekends. We expanded services. We don't make people come to us — we come to them. Going out to the patient and making sure its convenient for them has helped us tremendously."
Because Summa Western Reserve is successfully expanding preventive care services, catering to patients' and the community's needs and putting physicians at the helm of it all, Dr. Kent says the organization could become a model for other community hospitals and local physician organizations.
"We make sure the key people are at the table and are making the decisions," Dr. Kent says. "We are not trying to get doctor buy-in later on. [Physicians] are making the decisions from the beginning."
"We also wanted the patient first and the patient to drive those business decisions," Dr. Kent adds. "That's been the heart and soul, and every physician is driven around that mission."
The costs to practice medicine independently were skyrocketing. Physician reimbursement was heading the opposite direction. He was fed up with the billing inefficiencies and overall fragmented care among all providers in his community of Cuyahoga Falls, Ohio. Something had to give.
Dr. Kent eventually formed Western Reserve Hospital Partners, a group of more than 200 primary care and specialty physicians in northeast Ohio, with the goal of making healthcare more efficient and streamlined while putting patients first. But his work didn't stop there.
The formation of Summa Western Reserve Hospital
Dr. Kent and WRHP wanted to create a physician-owned hospital in the area to create their own, full-scale continuum of care, but due to limitations on building new physician-owned hospitals and the flailing economy, they decided to take a different route. Instead, they created a joint venture with Akron, Ohio-based Summa Health System and purchased a controlling interest in Summa's financially ailing Cuyahoga Falls General Hospital.Beginning operations at Summa Cuyahoga Falls General Hospital provided "the ability to work out potential 'start-up' challenges," and "partnering with Summa also made sense as the healthcare system is the dominant presence in the market area," Dr. Kent says.Summa Cuyahoga Falls General Hospital had several financial problems, to say the least. In 2006 through 2008, before Dr. Kent and WRHP took over, the hospital was running on negative operating margins — 4.3 percent, 4.6 percent and 1.7 percent, respectively. It was hemorrhaging millions of dollars and did not fit Dr. Kent's vision of what a community hospital should be.
After months of working with state and local policymakers, Dr. Kent and WRHP purchased Summa Cuyahoga Falls General Hospital's Medicare license, and in June 2009, they officially converted it into a for-profit, physician-owned hospital with the help of Summa Health System. The new hospital, Summa Western Reserve Hospital, has been running under the joint venture structure for more than three years, and Dr. Kent — Summa Western Reserve's president and CEO — says it is the physician leadership that has helped to turn the organization around.
"From day one, we've lead this operation. Our physicians make the decisions every day, and we don't waste a lot of resources," Dr. Kent says. "The operational setup is extremely efficient since we don't have multiple layers of administration. That's probably one of our biggest successes."
Summa Western Reserve Hospital is still a full-service community hospital, as it has an intensive care unit, an emergency department and several other components of a typical community hospital — it has also grown its community outreach with five hospital outpatient departments. While many physician-owned hospitals are specialty institutions, Dr. Kent considers their hospital to be a "full-blooded community hospital that happens to be physician-owned."
The turnaround
In its three years of operation as a physician-owned institution, Summa Western Reserve Hospital has increased its profitability by a cumulative $8.3 million, a significant amount of money for a 105-bed hospital, and it most recently posted a positive operating margin of 4.5 percent. Dr. Kent says there has been a total shift in profitability of 13 percent because the for-profit hospital now pays property taxes and rent — something it didn't have to do when it was a non-profit.So how was the financial turnaround completed? Dr. Kent, who was recently named an Ernst & Young Entrepreneur of the Year for 2012, emphasizes the physician focus in all of their services and eschews the conventional wisdom associated with healthcare reform."In the last 12 to 18 months, hospitals are trying to acquire physician practices. Our mantra is we're a physician group that happens to own a hospital," Dr. Kent says. "We're not a hospital trying to own physicians. It's really helped us push all aspects of the organization forward."
Putting physicians in the leadership positions also spurred Summa Western Reserve to start new, innovative programs for its community. Primary care physicians comprise roughly 70 percent of the physician group, and they worked together to start a new center for pain medicine, a concierge pharmacy, a lung health program that is the only of its kind in northeast Ohio and preventive care outreach to community members.
"When hospitals start having financial difficulties, they cut people. We did the opposite," Dr. Kent says. "We started seven-day-a-week MRIs and CTs. A lot of patients are working Monday through Friday, so we wanted to give them access to these services on weekends. We expanded services. We don't make people come to us — we come to them. Going out to the patient and making sure its convenient for them has helped us tremendously."
Because Summa Western Reserve is successfully expanding preventive care services, catering to patients' and the community's needs and putting physicians at the helm of it all, Dr. Kent says the organization could become a model for other community hospitals and local physician organizations.
"We make sure the key people are at the table and are making the decisions," Dr. Kent says. "We are not trying to get doctor buy-in later on. [Physicians] are making the decisions from the beginning."
"We also wanted the patient first and the patient to drive those business decisions," Dr. Kent adds. "That's been the heart and soul, and every physician is driven around that mission."
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