Health care deal touted
BHS, Ellwood CEOs discuss agreement
Butler Eagle
Written by:
Kelly B. Garrett
November 5, 2012
Click for larger picture
Raymond Beck, front, president/CEO of Ellwood City Hospital, speaks Wednesday at a forum at Butler Memorial Hospital about the management agreement with Butler Health System. In the background is Ken DeFurio, president/CEO of Butler Health System.

BUTLER TWP — No one knows what is going to happen to the health care industry.

“Anyone who tells you they do is lying,” Ken DeFurio, president and CEO of the Butler Health System, said Wednesday.

DeFurio and Raymond Beck, president and CEO of Ellwood City Hospital in Lawrence County, talked to about 50 health care and business leaders at Butler Memorial Hospital to discuss what the two hospitals are doing in a management agreement with each other and the challenges of the health care industry.

Brought together through a mutual desire to remain independent community hospitals, the Butler Health System and Ellwood City Hospital in July entered into a five-year management agreement.

DeFurio explained that both organizations are working to find ways to share staff and services, while taking advantage of group purchases for supplies.

And by sharing staff and services, neither is looking to cut jobs. Instead, the goal is to share specialists the other facility doesn't have or to share physician recruiting by offering potential candidates the opportunity to have patients in both counties.

The Butler Health System is the parent of Butler Memorial Hospital and a number of community-based outpatient clinics.

DeFurio and Beck talked about the challenge of staying out of a UPMC Healthcare situation, where the regional giant in Pittsburgh has absorbed 15 hospitals from Erie and Bradford to McKeesport, as well as health clinics, outpatient services and doctors offices.

As for Highmark, the fifth largest insurance group in the nation, DeFurio said BHS is “willing to work with Highmark and other insurance companies, but we are not saying to Highmark, which is looking to add patient care, 'Please come take us over.'

“We are independent, and together, we are working to remain that way,” he said, adding that this management agreement is the only one of its kind in Western Pennsylvania.

DeFurio pointed out that because of the large number of people receiving either Medicaid or Medicare benefits, hospitals lose money on about 70 percent of the patients they treat.

“And we have no negotiating power on that 70 percent. It's just gone,” Beck said, adding that there is no profit for hospitals or doctors when it comes to these government funded medical access programs.

DeFurio also pointed out that 10 years ago, the hospital's uncompensated care was $3 million per year.

“Now it's about $20 million and growing,” he said.

There are many aspects of the health care reform law that DeFurio said he has issues with, especially regulations concerning patient readmissions.

“As of Sept. 1, if a patient is readmitted within 30 days of hospital discharge, we get fined,” DeFurio said.

He said that last year one patient with chronic heart failure was readmitted eight times to the hospital, pushing it over the readmittance limits by one visit.

“That is why we were fined $500,000,” he said.

“We get penalized if a patient in chronic heart failure is readmitted to the hospital for their heart condition or if they get hit by a bus,” he said.

Another problem is the need for new primary care physicians.

DeFurio said, “Many doctors are getting toward the end of their careers, and they realize they don't want to work in this field anymore. They want less hours on call and more hours with their families, a better quality of life.”

Beck added that female doctors are practicing less than in the past, again choosing quality of life issues over work.

Primary care is important to the nation's health care system because without regular checkups or doctors and other health care providers working with patients who suffer from chronic conditions, patients are sicker when they eventually come to the hospital for care, DeFurio explained. Sick patients mean more expensive care.

Location also is a health care issue, such as the cost of procedures in Butler as compared to Pittsburgh.

“Open heart surgery at Shadyside is $90,000 while at Butler Memorial it is $30,000,” DeFurio said. “Part of this solution to health care costs comes when people pick where they want to receive health care.”

He added that Ellwood City Hospital and Butler Memorial are working together to make sure the doctors are here for patients who don't want to travel to Pittsburgh, but who want to remain closer to home for their care.

“We must have physician leadership when it comes to health care reform,” DeFurio said.

“The next two, five, even 10 years in the health care industry are going to be a bumpy ride,” he said.