Centura acquisition of High Country Healthcare expected to have positive local impacts
September 8, 2015
The health care landscape in Summit County is changing fast, and community leaders aren't sure yet what it all will mean for locals.
The physician practice division of Centura Health — a nonprofit, faith-based health system in Colorado and Kansas — recently announced its buyout of High Country Healthcare, a multi-specialty physician group in Summit, for an undisclosed amount.
Centura will pay High Country Healthcare for the business's equipment and investments made in training employees, he said. Centura will also take over the business's leases and service contracts, and High Country Healthcare's doctors, nurses and other staff members will join the Centura Health Physician Group payroll in November.
Leaders of both organizations said they expect the acquisition will improve the quality and cost of local health care.
"I would expect cost of care to stay the same or go down through increased efficiencies and network capabilities," said Rhonda Koehn, High Country Healthcare CEO.
WHAT DROVE THE BUYOUT
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High Country Healthcare president Dr. Craig Louis Perrinjaquet — known locally as Doc PJ — said he, his partner physicians and their employees are following a broader health care trend toward consolidation.
"Nationally, things are changing so quickly, and the movement is toward these accountable care organizations, ACOs, that provide primary care, the hospital and the actual insurance plan all in one to control costs, be more efficient, provide more care," he said.
He said an ACO wasn't feasible for High Country Healthcare, which has 16 physicians.
St. Anthony Summit Medical Center CEO Paul Chodkowski said High Country Healthcare has been involved with Centura's ACO since it was established about a year ago.
High Country Healthcare already had a strong relationship with the Centura hospital next door to its Frisco office, and its doctors have been active on the hospital's medical staff. The acquisition allows doctors to focus on clinical duties instead of administration.
"The doctors just want to be doctors," Chodkowski said. "Our health system will worry about the business side of things."
Doc PJ said the two parties also supported the buyout because they wanted to make the decision before being forced to by competition.
Kaiser Permanente, the largest managed care organization in the U.S., will open a Frisco office in January.
Don Parsons is a local retired general surgeon whose 30-year career with Colorado Kaiser Permanente included health management and policy roles. He said clinics and medical practices have been driven toward consolidation by fear that if they aren't part of larger organization, they won't survive.
"They're looking for some kind of guarantee that they're going to be around for a while," he said. "Health care is a very turbulent area right now: The way it's organized, the way it's paid for, the way people get services."
PROS AND CONS
Doc PJ said he hopes the acquisition will mean better communication and records, earlier diagnoses and treatment and fewer opportunities for mistakes. Plus, High Country Healthcare's doctors will now have more direct input on Centura prices, services and methodologies.
"People are beginning to realize that this is a better way to provide care," Parsons said.
Some Summit residents, however, have raised concerns about the potential downsides of the acquisition and Centura Health controlling much of the health care in the Colorado mountains. The system has affiliate medical centers in Leadville, Kremmling, Granby and Salida.
Dr. David Gray, an emergency physician who does house calls for visitors in the area, said he was generally against consolidation in medicine.
"It's being taken over by business types. I don't think that's good. The emphasis goes more to business and not to care," he said. "I don't like it. I mean, it's a monopoly."
Consolidation could mean institutional rules take precedence over patients, which would be detrimental to health care and society as a whole, he said. "Medicine is the most personal of services."
He also called the growing emphasis on electronic medical records and coordinated care overblown because most people are healthy, need care only periodically and are capable of telling providers about their medical history.
Summit County Commissioner Dan Gibbs sits on Summit Medical Center's community advisory board, which oversees hospital quality and safety and is not involved in business decisions. He said the acquisition seems mostly financially motivated for Centura, and he is anxious to learn more about local impacts.
One unknown remains the impact of Centura's ethical and religious directives as a Catholic organization.
Doc PJ said High Country Healthcare's doctors won't be able to provide a handful of procedures including sterilizations. They will likely carve out a way to make those services available locally outside the Centura umbrella, while doctors will still have conversations with patients about all their options.
"They're very clear that our patient-doctor relations are private. That's between us," he said.
County officials have said they have long been vocal with Centura, High Country Health Care, Kaiser and other health care providers to ensure they don't harm the Summit Community Care Clinic.
The clinic serves mostly uninsured, underinsured and low-income people and is supported in numerous ways by tax funding. The clinic's patient base has grown exponentially in recent years, so the county is working to expand its physical space.
"They are an integral part of our health care infrastructure, and without them there would be a lot of folks that would be struggling to find adequate care," said Scott Vargo, assistant county manager, of the clinic.
The most exciting impact of the acquisition, Chodkowski said, will be on new arrangements between Centura and the county's largest businesses.
Direct provider employer agreements are now a major Centura initiative, and they allow employees of local self-insured organizations to receive significant discounts when visiting Centura facilities.
"Our goal there is to bring more value and lower cost to our local employers," he said.
With the High Country Healthcare buyout, those agreements mean Centura can contract with insurance providers to create large group plans on the state health exchange that include access not only to Centura's local and statewide hospital network but also to its growing physician network.
"It's been a win-win. It's been a win for us because we keep all those employees using our services," he said. "It's very good for the hospital, good for the physician practices and particularly good for the enrollees in each of those plans."
The county was the first organization in Summit to try the new agreement model with its employee health benefits, and Chodkowski said county employees don't pay copays or deductibles for most Centura services.
Vargo said as of January 2014, when the agreement was inked, the county has received about double the discounts it received under its previous Centura agreement, which wasn't competitive with Front Range rates.
Now the county incentivizes employees to use Centura by paying their deductibles when they visit Summit Medical Center, he said. "We feel that the cost of covering the deductible is offset by the increased discount."
Summit School District is in the process of finalizing a similar deal for this school year, and Centura is also talking with Vail Resorts, Breckenridge Grand Vacations and the town of Breckenridge about creating agreements in the near future.
County Commmisioner Thomas Davidson said the arrangements pose a challenge for elected representatives and policy makers trying to lower health care costs in the High Country.
"It's very hard to see the real picture because there's all these separate deals out there," he said.
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