New Plan to Place CHCs in Detroit Hospital ERs

Top executives of Detroit’s five major hospital systems are developing a plan to put satellites of Federally Qualified Health Centers into their emergency departments and pay the health centers a monthly fee for each patient the centers treat.

While the plan is in the early stages, the executives have met several times this year and expect to come up with a strategy before the year’s end, said Nancy Schlichting, CEO of Henry Ford Health System in Detroit.

“We are looking at opportunities to better integrate the health systems with the federally qualified health centers,” said Schlichting, who chairs the uncompensated-care committee developing the plan.

“The goal is to reduce the burden of uncompensated care on the health systems — but more importantly, to provide better access for patients.”

Over the past two years, uncompensated care has increased by more than 20 percent for the major health systems in Detroit, including Henry Ford, William Beaumont Hospitals, Detroit Medical Center, St. John Health System and Oakwood Healthcare.

According to audited financial statements and estimates, uncompensated care for the five systems grew some 22%, to about $810 million in 2008 from $660 million in 2007.

In 2008, the combination of rising uncompensated care and investment losses wiped out much of the profit margins of the health systems. Several, including Oakwood and Beaumont, posted sizable losses.

“Hospitals refer patients from their emergency departments to health centers now, but there is a barrier. People will not go if the health center is in the neighborhood and not even if it is across the street from the emergency department,” said Jesse Thomas, CEO of Molina Healthcare of Michigan in Troy, who chairs the hospital-health center subcommittee.

Locating the health center within the hospital emergency department is the only way to ensure that patients will seek care there, he said.

Thomas said the average cost for an uninsured patient in a hospital emergency department can be as much as $500. “Costs at a health center would be $40 to $50. … Hospitals know they can’t entirely eliminate uncompensated care, but they can reduce it,” he said.

Read the Full Article from Crain’s Detroit Business Here

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