by Hamilton E. Davis
Over the last few years, a storm has been gathering over Vermont’s community hospitals, especially those with the “Critical Access” designation that gets them extra federal financial support. Despite that support, the storm is right overhead: Springfield Hospital went bankrupt a couple of months ago; hospitals in Morrisville, Randolph, Newport, Windsor and St. Albans are on track to lose money this year, with dropping patient flows and rising expenses. Two others, Porter in Middlebury and Central Vermont in Berlin, were on a similar path when they sought shelter in the University of Vermont’s health network.
There is no mystery about the financial storm and the damage it is causing, but there has been a total dearth of critical thinking about how to repair the damage. The Scott administration, the Green Mountain Care Board, OneCare Vermont—all have viewed with alarm, but with no serious discussion about a sustainable vision for the state’s small hospitals. Which is interesting, given that precisely the same storm passed over the northeastern corner of New York State a few years ago and the damage there has been fixed.
The North Country Model
New Yorkers call the far northeastern part of their state the “North Country.” The northern and eastern most part is a three-county swatch that includes the northern Champlain Valley and the eastern foothills of the Adirondacks. Ranged along the Canadian border are Franklin and Clinton counties, with Clinton to the east, on the west shore of Lake Champlain. South of Clinton lies Essex County, also bordering the lake. Those three counties are our focus here. There are four medical facilities in this rough quadrangle. The anchor is Champlain Valley Champlain Valley Physicians’ Hospital in Plattsburgh, a smallish near-tertiary center with about 340 staffed beds. I say near-tertiary because until recently, CVPH would perform open heart surgeries. To the northwest is Alice Hyde in Malone, about half the size of CVPH. Due South of Plattsburgh is a 25-bed critical access hospital in Elizabethtown in Essex County; and east of E-town, overlooking the lake, is Moses Ludington in Ticonderoga…Ludington was a full-service hospital, and now isn’t.
So, call it four hospitals in a depressed, mostly rural area in the shadow of the Adirondacks. Beginning some 30 years ago, the four hospitals began to fall victim to the plague that is afflicting the small, rural hospital environment across the country. Little towns began to hollow out, American medicine grew vastly more complicated, as well as expensive; the little hospitals strained to keep up, medically and financially.
My tiny corps of brilliant readers has read about all this before, but I think they should hear from someone else on the subject. In December of 1997, the Wall Street Journal sent its top medical journalist, a woman named Lucette Lagnado, to Ticonderoga to write about Moses Ludington Hospital. I’ll pick out a few highlights, but my readers should click here to see a superb description of a slow-moving, financial, social and medical train wreck. And keep in mind that her report was printed in 1997, 22 years ago.
At that time, Lagnado wrote, Moses Ludington in Ticonderoga was a 40-bed hospital that “may have outlived its usefulness. Its beds are empty: On one recent night only four patients were on hand. Yet it still employs more than 100 people, almost half of them nurses. Operating at a deficit for years, it has been in default since 1990 on federally guaranteed debt that now totals $9.5 million.
“Only New York State’s peculiar system of hospital bailouts and price controls has kept Moses Ludington alive. Propped up by artificially inflated rates, it has been one of the most expensive hospitals in the country, though it lacks such basics as imaging equipment for MRIs and CAT scans. In 1994, a routine baby delivery cost about $3,800 at the illustrious Columbia-Presbyterian Medical Center in New York; at tiny Moses Ludington, it cost twice that...by the end of 1994, Moses Ludington was commanding an average of $12,650 to treat conditions like peptic ulcers and bronchitis with complications, compared with about $3,000 for rivals in the region.
As far back as the 1980s, the local hospital issue was tearing the little town of Ticonderoga (pop. 5,000) apart. Some residents wanted to save Ludington, whatever the cost. Others thought the whole thing was crazy. Both sides also hated one another. Lagnado herself couldn’t see any sensible way forward, and she closed her piece with a quote from the town’s top official:
‘“There is incredible passion about the hospital,”’ says Michael Connery, the town supervisor, current funeral director and owner of the local radio station. But he says the sentiment largely misses the point: The time for Moses Ludington is long past. We should have lost that hospital 10 years ago,” he says flatly, adding that downsizing sharply is the only hope. “There’s a lot of growing up to do around here.”
Growing Up, c. 2015
About four years ago, the medical players in the North Country began to do just that. The key to the solution was linking the four hospitals with one another and then affiliating them with the University of Vermont’s health care network. The designer of the recast North Country system was Dr. John Brumsted and his senior management team. Brumsted is the CEO of the network, which is based on the University of Vermont’s academic medical center in Burlington, and includes two other Vermont facilities, Porter Medical Center in Middlebury and Central Vermont Medical Center in Berlin.
There have been informal ties between the North Country and the Burlington medical community for years. In 1975, Dr. Art Levy, a cardiologist at the Medical Center in Burlington, began traveling regularly to Malone to advise patients and doctors at Alice Hyde. The UVM College of Medicine sent students and residents for rotations in Plattsburgh; one of those was Brumsted himself, then an obstetrics and gynecological surgeon in training; residents living in the Ticonderoga area often traveled across the Champlain Bridge to have their babies at Porter Hospital in Middlebury, Vt.
The North Country, however, is a relatively depressed area, and while the health care system in Ticonderoga had been severely troubled for decades, similar problems began to show up in places like Plattsburgh and Malone. And when it did, the New Yorkers began reaching out to UVM for help. The detailed story of how all the pieces went together is too complex a saga for today, but the results have been both clear and striking.
The solution looks like this:
The problem in the southern tier was Moses Ludington Hospital; there was no way to render that facility sustainable as a full-fledged hospital; so Brumsted shuttered the hospital, and converted it to what they called a Medical Village, with strong primary care and a fully equipped Emergency facility, supported by both lab and imaging services.
By far the most solidly run player in the area was the critical access hospital in Elizabethtown. When I talked to John Remillard, the CEO there, he told me that the hospital had 10 straight years in the black; and that the hospital did no inpatient surgery at all. I was amazed at that—most critical access hospitals in Vermont fight like tigers to rack up every surgery they can get. In any event, Brumsted turned the management of Ticonderoga over to E-town. Effectively, the move collapsed two management teams into one; and they have been affiliated into the network as one unit.
Meanwhile, the big hospital in Plattsburgh sought out a relationship with UVM because the New York managers thought they needed more access to the professional resources in Burlington. So, Plattsburgh affiliated with the UVM network.
At around the same time, Alice Hyde in Malone was increasing its ties to Plattsburgh, by sharing doctors and other functions. Eventually, Alice Hyde affiliated with the UVM network by virtue of its ties with Plattsburgh. The effect was to collapse those two managements into one, which now reports to Brumsted.
The vision for the North Country solution can be summed up in Brumsted’s mantra that medical care has to be delivered to the right patient at the right place and at the right time. That is so obvious that it has become a cliché, but it happens only rarely in American medicine. An example of where it mostly doesn’t happen is Vermont, which is the whole point of reform in our state, about which more later.
For now, some critical details about the way the North Country actually works:
Most surgery short of the most complex takes place at CVPH in Plattsburgh. There is no standard in-patient surgery in Ticonderoga or E-Town; it all goes to Plattsburgh, or Burlington. Example: about a year ago a young man of my acquaintance suffered a severe attack of appendicitis. His mother drove him to E-town where the ER docs immediately sent him by ambulance to Plattsburgh, where the docs yanked the appendix. That kind of thing means that instead of maintaining routine surgery in the southern tier with low volumes and high fixed costs the volume goes up at Plattsburgh, which means that the fixed costs are spread and the surgical teams stay sharp.
Another critical example: When the UVM system took over Plattsburgh, Brumsted and his team looked at the high-end surgery there. A major question was the efficacy of the cardio-thoracic team, which did open heart procedures like coronary artery bypass graft, CABG, known in the biz as “cabbage” or just, “bypass.” Plattsburgh was doing about 110 bypasses per year; barely two a week, which routinely led to millions of dollars of losses per year—one of the reasons the key players at CVPH wanted help from UVM in the first place. Moreover, Brumsted knew that 150 or so residents of the North Country were going around Plattsburgh each year to get their bypasses in Burlington.
Still, the changes UVM was imposing on the four-hospital system were wrenching and politically fraught, so Brumsted worked hard not to be overbearing. Gathering the cardiac team and the hospital senior managers, he told them he wouldn’t make any changes for three years—on one condition: that they tell him face-to-face that they were confident enough about their quality that they would bring their own family members there for a bypass.
Shortly thereafter, the hospital management told Brumsted they couldn’t meet the condition. So the cardio thoracic surgery team went away and the New York bypasses came to Burlington. What the Plattsburgh docs could do was the catheterization procedure that precedes bypass surgery, so Brumsted kept them doing that work, and increased the volume there by shifting the catheterization of New York patients back to Plattsburgh.
Cases like that are dramatic, of course, but according to John Remillard at E-Town the integration of the North Country medical resources leads regularly to cost savings. A couple more examples: about a year ago, E-town lost its top computer manager to a nearby university and Remillard faced the need to replace him. Instead, he simply called Michelle LeBeau, the CEO in Plattsburgh, and she assured him that if he ran into a bad computer system problem she’d send her IT person to help him fix it. Savings: low six figures.
Another example: two critical players in the southern tier are the docs running the E-town-Ticonderoga primary care and Emergency systems. In most places, those jobs are full time, and very well paid. The chief of primary care at E-town and Ti is Dr. Rob Demuro. In the UVM system, Demuro manages the primary care side—in 10 percent of his time. The remaining 90 percent of his time he works as a primary care doc. His Emergency system counterpart is Dr. David Claus. He both manages the E-town, Ti and emergency systems, and takes a regular turn as an ER doc.
“If I had to pay for two full-time management jobs there,” Remillard says, “I couldn’t make my budget.”
Is the job complete in the North Country? Net yet. Alice Hyde in Malone is integrated with Plattsburgh only partially, mostly at the management level. Michelle LeBeau is the president of both Alice Hyde and CVPH, and there are also single top management jobs that now cover both hospitals. But the service lines at Malone might need more work.
I have not yet been able to quantify the specific dollar savings flowing from the integration of the North Country medical system, but it has clearly been more than welcome to the New York State Department of Health. The department invested some $15 million in the conversion of Moses Ludington from a hospital to a “medical village” and, according to John Remillard there was no way the state would have done that without assurances that the UVM health network would oversee the North Country system.
The reason for laying out the North Country experience for Vermont readers is that there may be very valuable object lessons there. It will be interesting to see whether the Vermont reformers take a close look at the North Country—UVM network nexus. For example, might the problem at Springfield be solved along the lines of the Ticonderoga experience? And what does the Plattsburgh experience suggest for the small Vermont hospitals scrabbling for the most complex—and lucrative—cases they can possibly manage, even if they don’t make medical or financial sense?
So far, there is no evidence the Vermont reformers have even glanced.