Compelled by fiscal challenges in today’s health care system, some hospitals choose to partner with each other to share medical responsibilities and financial strategies, with the goal of improving the overall value of the services they provide. On Feb. 10, Dartmouth-Hitchcock Medical Center and Cheshire Medical Center announced that they would pursue a partnership, DHMC’s latest in a series of regional affiliations that aim to reduce costs and improve quality of care.
The partnership aims to combat challenges such as reduced government reimbursement, increased taxes on hospital earnings, declining inpatient volumes and the emergence of new payment models.
The affiliation between DHMC and Cheshire must be approved by the New Hampshire Attorney General and the director of the New Hampshire Charitable Trusts for regulatory review before it goes into effect this fall.
DHMC and Cheshire have maintained a joint operating agreement since 1998, in which Cheshire employs most of its staff through the Dartmouth-Hitchcock Keene group of multi-specialty practitioners.
Cheshire CEO Arthur Nichols said he considers the agreement a natural next step in improving the hospitals’ relationship.
In 2011 and 2012, Cheshire experienced its first operation deficits in over 30 years, prompting a desire for a closer affiliation with DHMC, which can allocate resources more effectively, said DHMC director of external relations Rick Adams. DHMC and Cheshire began discussing the agreement last September.
The proposed affiliation will allow Cheshire to remain a separate legal organization while building tighter bonds with DHMC leadership and management, coordinating their clinical and fiscal activities.
DHMC will have oversight over some of Cheshire’s financial decisions, including proposed budget strategies.
Nichols said that although it was hard for Cheshire to cede any autonomy, the decision was worth the legal and financial ability to make mutual investments, which can improve clinical strengths and intensive care services.
The hospitals will consider consolidating services and sharing some costs to reduce expenses, Nichols said.
“We have top-notch intensive care services and the Dartmouth system will have the incentive and wherewithal to do bolster them,” he said.
The agreement will enable both medical centers to pursue their shared vision of creating a sustainable system for health care, focusing on population health, delivering value-based care and adjusting to new models of payment, Adams said.
Nichols emphasized the short-term clinical advantages of the agreement for patients, adding that Cheshire would be able to alleviate DHMC’s responsibilities in caring for certain types of patients. Equipped with a Level 3 trauma center, Cheshire will handle patients with medical issues such as pneumonia or appendicitis, allowing Lebanon’s DHMC — New Hampshire’s only Level 1 trauma center — to take more high-risk patients.
According to Stanford University Medical Center, a critical patient’s chances of survival increase by 20 to 25 percent when treated at a Level 1 trauma center.
As a Level 1 trauma center, DHMC has surgeons, emergency physicians, anesthesiologists and nurses on staff 24 hours a day, along with an education program and preventive and outreach programs. As a Level 3 center, Cheshire can provide emergency resuscitation, surgery and intensive care for most patients, but lacks the full availability of specialists that DHMC has.
“[DHMC has] critical care beds but we only have so many of them,” Adams said. “And a lot of them filled with patients who really do need to come here because they’re critically injured or seriously ill.”
This new partnership is the latest in a string of affiliation that DHMC has made in the last several years. The relationships are part of a concerted effort to create a interconnected medical care system, Adams said.
In 2011, Children’s Hospital at DHMC and Children’s Hospital Boston began collaborating on pediatric care. Last fall, DHMC finalized a partnership with New London Hospital. Other recent affiliations include links with Mt. Ascutney Hospital in Windsor, Vt. and Alice Peck Day Memorial Hospital in Lebanon.
“Health care in this country is moving toward integrated networks that are able to treat large populations of people,” Alice Peck Day Health Systems president and CEO Susan Mooney said in a press release. “For APD to remain a vital health care provider in that type of system, we realized that we cannot do it alone, and we owe it to our patients to find a way to participate.”
APD realized it could not maintain long-term financial viability without assistance, prompting affiliation discussions with DHMC to start last month, APD’s director of communications Dean Mudgett said. An affiliation between the two hospitals would formalize a relationship already in place.
“Northern New England is well ahead of the rest of the country in reforms,” Nichols said. “There are a lot of people still clinging to the old health care system, we create a charge, we get paid and that’s our job.”
The article has been revised to reflect the following correction:
Correction appended: Feb. 20, 2014
Due to an editing error, the original version of this story mischaracterized DHMCdirector of external relationsRick Adams's statement on DHMC's critical care beds as referring toCheshire Medical Center's capacity for critical care. The story has been revised to correct the error.
