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Dignity Health forecasts big returns on microhospital investment as facilities meet demands of underserved communities

In Las Vegas, four are open and operational and Dignity is developing a 5th site slated to open in 2019.

Beth Jones Sanborn, Managing Editor

Microhospitals are rising in popularity for providers as a solution to expand a system's footprint without having to fund the kind of major capital project that would come with building a traditional large hospital. It's a model that San Francisco-based Dignity Health has enthusiastically invested in, and Peggy Sanborn, Dignity Health's vice President of Partnership Integration, said the results speak for themselves.

The system's first micro was built in Phoenix, Arizona. Another facility has been built in Mesa and is in the process of going through an opening worklist and state and CMS licensing and certifications.

In Las Vegas, four are open and operational and Dignity is developing a fifth site slated to open in 2019.

"The geographies that really work best for this are ones where you have a fairly robust network of assets in place with physicians, ambulatory assets and and acute settings. That you've started to make progress on a value-based contracting strategy because this fits within that model and where there's a community unmet needs."

The data coming out of Las Vegas has more than confirmed the success of their investment. The new neighborhood hospitals now handle 25 percent of Dignity Health's total ER volume in Nevada, and less than 6 percent of the microhospital ER volume requires transfer to a higher level of care. Similar success is being seen in their Phoenix facility.

The response is more than what they planned, in a good way, and highlights the reality that there was clearly an unmet community need. One facility outstripped expectations by 40 percent in patient volume, Sanborn said. Some of the others were a little slower to ramp up, some are at or slightly below budget and others are at or above budget.

"They are fully capable facilities that can handle a large majority of the what they see--treat and release, treat and admit or in some cases transfer for complex care."

The micros are generally staffed with one to two providers per 12-hour shift, along with support staff including a nurse, radiation tech, phlebotomist and registration staff. Staffing levels flex to volume so at peak times they staff up, but 24/7 they have board certified ED physician on staff in the facility, hospitalists that cover for inpatient census, and then physician extenders or a second ED physician when volume demands it. What's more, staff aren't only certified in their designated role, Sanborn said. The x-ray tech is qualified to do phlebotomy, and any of the staff can work on splinting or IVs. 

"It's a very integrated care model," she said.

Amd it's a model that isn't just seeing healthy demand. Patient experience and satisfaction scores are too. They've seen scores in the high 90s for willingness to recommend and patient satisfaction, and that's because the overall experience patients are having in that environment is very personalized and patient-centric. Most patients are seen within 10 minutes by the ED physician and it's usually 90 minutes from door to door for patients presenting depending on complexity, Sanborn explained.

"Patient experience has been probably one of the biggest benefits. Patients are getting a great introduction to our health system and they are also making strong connections to follow up referrals, either for specialty or primary care when patients present without having a primary care physician or they need specialty follow up we are able to synchronize that pretty well."

It's also yielding new market opportunities for Dignity as they are establishing the facilities where they didn't have a presence before. While it's too early to forecast the bottom-line effect, as the facilities haven't been open a year yet, seeing the new marketshare shift and high patient volume bodes well for the venture.

As predicted, there has been some competitor response in the form of freestanding ED's going up in geographies where Dignity has a presence, but they have also seen payer concerns as well. Dignity is contracted with all but one payer in the area and are still negotiating with Sierra.

"They want to understand the model. Their concern is that it's generating unnecessary Ed demand. I don't think the data will show that. It's just a redistribution. It's a process of education and getting over the anxiety that we're going to drive higher medical loss ratios in their plans."

Sanborn said it's important to talk with state regulators and understand licensing requirements, state payor requirements and service level requirements. CMS has been looking at this model thanks to its surge in popularity and heightened visibility, and are trying to decide what deserves to be licensed as an acute operation. Sanborn also cautioned systems looking to expand using the microhospital model to think about their physician staffing model, and be sure to have a strong stable ER group that can come in and take on this responsibility.

"I think as part of a bigger network of care services that you offer, it can be very valuable to the community, to the network, to the patients and ultimately bring value into the healthcare equation." 

Twitter: @BethJSanborn
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