Highmark and Allegheny Health Network closed out 2014 by announcing a 10-year clinical and research partnership with Baltimore-based Johns Hopkins Medicine. The alliance makes clear sense for the two Pittsburgh institutions — the Johns Hopkins name and its sterling medical reputation lend instant credibility to the health system that Highmark is trying to rebrand and rebuild.
But what’s in it for Johns Hopkins?
Turns out, a great deal.
Academic medical centers are the battleships of the American health care industry — striking, lumbering, dynamic institutions yet always teetering on anachronism. Because they conduct research, train doctors, and carry out the highest risk surgeries and transplants, they are more expensive to operate than their community hospital counterparts, and thus constantly searching for new revenue streams and capital availability.
“They’re big,” said health care analyst Steven T. Valentine, president of The Camden Group of El Segundo, Calif. And “they need a big population base to support them.”
But those populations simply aren’t available in the medical centers’ own back yard — as insurers try to steer patients toward outpatient clinics and other lower-cost health care settings, overnight hospital inpatient stays are declining nationally. So teaching hospitals must “reach out so they can get that big tertiary and quaternary care population,” Mr. Valentine said.
Sometimes that means absorbing nearby practices and established specialty groups. But increasingly, it means reaching outside of the medical center’s traditional geographic footprint into other cities or states, not necessarily to fill beds back home, but to deploy physicians and other resources across a wider base.
Some do it by way of branded hospitals (think the Mayo Clinic, which has hospitals in Arizona, Florida and Minnesota). Others do it by way of partnership — Boston Medical Center is exploring a venture with nearby Tufts Medical Center. And some are simply bailed out with cash: Last year, Arizona’s only academic medical center, the University of Arizona Health Network, agreed to sell to Phoenix-based Banner Health.
Mr. Valentine, in The Camden Group’s annual roundup of health care trends, said he expects the affiliations and acquisitions will continue into 2015 and beyond, as academic medical centers seek to remain vital and transformative institutions while finding their way in an era of value-based care, stagnant medical reimbursements and cuts in government funding for medical research.
Those partnerships aren’t just about driving referrals and consultations, said Tory Wolff, managing partner at Recon Strategy of Redmond, Washington.
“Johns Hopkins is a mission-oriented institution,” and that mission is focused on improving care and outcomes. Some of that is still tied up in lab experiments and therapy trials, but more and more, it’s about data analytics, population health, and delivering care in unconventional ways and locations.
“The more providers, the more patients that you can spread that development over, the better,” Mr. Wolff said.
Indeed, built into the partnership announced by AHN and Johns Hopkins is a collaboration on new electronic medical record platforms and ongoing patient safety analyses. Those kind of partnerships are more about data, and less about proximity.
“Geography matters,” Mr. Wolff said. But as advances in telemedicine and mobile health care continue to lower communications barriers, and make long-distance clinical partnerships possible for wiling partners, “I do think it’s mattering less and less.”
Other trends for 2015 from The Camden Group
• Hospitals will continue to struggle as inpatient use stagnates.
• The public insurance exchanges may find strong headwinds due to the Republican opposition.
• Information technology will gobble up a greater portion of capital expenditures for practices as well as hospitals.
• Consolidation will continue at a strong pace and spread, particularly when it comes to diagnostic and imaging services.
• As physicians in the Baby Boomer generation start their retirements, hospitals and clinics could struggle to fill the void.
First Published: January 9, 2015, 5:00 a.m.
