March 16, 2018

Inside the 'all-out hospital war' in South Florida

Daily Briefing

    Hospitals and health systems are increasingly turning to outpatient services to maintain a competitive edge—but in South Florida, the expansion boom often means encroaching on other health systems' service areas, creating what at times can resemble "an all-out hospital war," John Dorschner reports for the Miami Herald.

    Mar. 29 webconference: Learn the major trends in outpatient shift for 2018

    A shift toward outpatient care

    According to the American Hospital Association (AHA), inpatient admissions have dropped over the last decade, and Dorschner reports there are more outpatient surgeries than inpatient ones. Sal Barbera, a professor at Florida International University and former hospital executive, said, "There is a clear trend ... toward outpatient care."

    Ashley Thompson, an AHA executive, said one of the forces spurring the shift toward outpatient care is the adoption of value-based payments. Hospitals typically can navigate certain payment reforms, such as bundled payment models, more effectively when they're connected to outpatient sites for follow-up care—and the prospect of readmissions penalties incentivizes hospitals to have outpatient services lined up for patients once they're discharged, Dorschner reports.

    Other factors fueling the expansions in South Florida, according to Dorschner, include a shortage of primary care providers, an increase in ED use, narrow insurance networks, the proliferation of high-deductible health plans, and even traffic. Patients generally prefer to be treated closer to home—and, as Laura Hunter, a Jackson Health System executive, put it, "It's very difficult to travel around Miami-Dade County."

    Meanwhile, for providers, outpatient facilities also offer a cost-effective way to expand, appeal to consumers, and compete with larger hospital chains, Dorschner reports. Ben Riestra, chief administrator of UHealth's Lennar Foundation Medical Center, said, "This is the future of the industry."

    How providers are growing

    In South Florida, local health systems are investing in multiple types of outpatient facilities, Dorschner reports—and occasionally drawing pushback from local competitors.

    Mount Sinai

    For instance, Mount Sinai Medical Center has established 11 outpatient facilities from Sunny Isles to Key West—a strategy that Sinai CEO Steven Sonenreich pursued when the hospital realized it couldn't continue to grow in Miami Beach, where the population has remained stable.

    And according to Sonenreich, Sinai's physical expansion spurred physician expansion as well—the health system has doubled its number of physicians over the past five years or so, and most of them work in the outpatient space. Currently, 70% of Sinai's overall patients come from outside the Miami Beach area, Dorschner reports. For instance, Sonenreich said Sinai has about 20,000 visits per year to its first freestanding ED in Miami-Dade, which results in about 1,500 admissions to its hospital in Miami Beach.

    Sinai intends to continue expanding by opening a medical office and a freestanding ED in Hialeah—a move that sparked pushback from officials at Tenet Healthcare's Palmetto General. Shelly Weiss Friedberg, Palmetto General spokesperson, said, "Our community is well-served from an emergency-care perspective as there are already three hospitals."

    However, Sonenreich has maintained that the move is needed, noting, "We notice that 85,000 people every year leave [the Hialeah area] to go to other hospital [EDs]."

    Baptist Health

    Separately, Baptist Health has plans to build 20 new outpatient facilities over the next five years, including a large medical facility on South Beach slated to open later this year and four freestanding ED facilities. According to Dorschner, South Beach is "Sinai's heartland."

    Ana Lopez-Blazquez, chief strategy and transformation officer for Baptist, said the system had to invest in outpatient facilities—particularly freestanding EDs—to "decompress" its packed EDs at its South Dade hospitals, where patients were increasingly seeking out basic rather than emergency care. "In reality, we don't have an option," she said.

    Baptist has also opened up 18 urgent-care facilities across Eastern Florida. In addition, the health system is investing in express clinics, with one in Country Walk, another in Key Biscayne, and two more planned for Doral and Parkland.

    As with Sinai, the number of physician employees at Baptist has more than doubled since 2012, growing from about 100 to 255, Dorschner reports. Most of the physicians, according to Dorschner, work in outpatient facilities.

    Other health systems

    Several other health systems are pursuing similar strategies, Dorschner reports.

    For instance, Jackson Health System plans to open a new medical center in the state by 2020 that will offer primary and specialty care, as well as imagining services and facilities for treating women and children. In addition, Jackson wants to build a freestanding ED in Doral, and the system has partnered with UHealth to open three urgent care facilities in the past year and a half, with plans for two more this year.

    For its own part, UHealth in 2016 opened the $155 million, five-story Lennar Foundation Medical Center on the University of Miami's Coral Gables campus that provides a wide range of services—including oncology and sports medicine—but which focuses primarily on outpatient care. And in 2017, UHealth took on operations of express clinics at 17 Walgreens locations. UHealth is also investing a $50 million donation to expand its cancer services in the Deerfield Beach area.

    Separately, HCA has established five urgent-care facilities in eastern Florida, and HCA-owned Kendall Regional plans to build two freestanding EDs in West Dade. Memorial Healthcare System, which opened an urgent-care facility in December, plans on opening another urgent care facility by the end of 2018 and establishing a new freestanding ED in West Broward. Meanwhile, Tenet has opened up freestanding EDs in North Dade, northern Broward, and Palm Beach County. 

    And those are just hospital-affiliated facilities. According to Dorschner, there are also "dozens of" urgent-care centers that aren't affiliated with a hospital that are operating throughout South Florida.

    Several hospitals are also trying to set themselves apart from the competition by establishing themselves as destination spots for certain specialties, Dorschner reports. For instance, Baptist opened the Miami Cancer Institute, which works with Memorial Sloan Kettering, while Memorial Cancer Institute has formed a partnership with Tampa-based Moffitt Cancer Center and Sinai continues to leverage its innovative therapies (Dorschner, Miami Herald, 2/25).

    Mar. 29 webconference: Learn the major trends in outpatient shift for 2018

    Learn main outpatient shift trends impacting organizations, including services shifting outpatient and market characteristics signaling risk of shift.

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