Waterbury Hospital’s Latest Suitor Touts Regional System To Curb Costs

BY MICHAEL C. JULIANO
REPUBLICAN-AMERICAN

Waterbury Hospital has another suitor interested in buying the company: Prospect Medical Holdings. - REPUBLICAN-AMERICAN ARCHIVES

WATERBURY — The latest company interested in buying Waterbury Hospital employs a data-driven health care system intended to coordinate patient care across different needs and medical venues.

It’s a system Prospect Medical Holdings Inc. uses in 13 hospitals and 40 clinics in three states — California, Rhode Island and Texas. The company calls it “coordinated regional care,” an approach Waterbury Hospital officials said made the company an attractive potential buyer.

Prospect Medical seeks to purchase the hospital and its parent, Waterbury Health. An initial hearing on the matter is expected early next month.

The privately held company also wants to buy Eastern Connecticut Health Network and its two hospitals.

Patients within the system see their treatment coordinated by doctors, medical groups and hospitals brought together by Prospect to collaborate and work with insurance companies.

The company’s website pitches the model as help for people trying to navigate the “confusing maze” of health care. What it means in practical terms is that patients are referred to what the system believes is the most appropriate treatment, whether a doctor’s office, an outpatient clinic, a hospital or even at home.

Prospect President Dr. Mitchell Lew said the model delivers health care in a more “holistic” way, one that focuses on treating the whole person.

The model considers cost, such as keeping patients out of expensive emergency rooms for routine care, or make sure clinics are available for preventive care that could eliminate more costly treatment later. Extensive data collection builds a library of context about demographics and specific health trends and needs in the region. The company might provide a need for more childhood immunizations in a region lacking that care, for example.

“Too often, physicians and hospitals operate in ‘silos’ and are at odds with health plans,” the company website states. “Patients are left on their own to find specialists, schedule and keep appointments, and make important decisions about their care.”

“HEALTHCARE IS LOCAL. THAT IS KEY.”

DR. MITCHELL LEW
PRESIDENT, PROSPECT MEDICAL HOLDINGS

PROSPECT FORMS CONTRACTS between health insurance companies and hospitals, local independent physicians, and other local health care providers. Through those contracts, Prospect manages local networks of hospitals and independent physician associations in a health maintenance organization, or HMO, structure to control costs. Participating health care providers receive “capitation payments” — a set fee per patient to deliver services over a set period.

“We accept responsibility to manage a population and deliver all of the appropriate care under the budget of a capitated payment that we negotiate with the health plan,” Lew said.

Prospect, which employs 7,321 people, coordinates the model as a “third-party administrator,” Lew said. It processes claims and provides other administrative services through a “management service organization” based in Orange, Calif. The unit, called Prospect Medical Systems, employs 400 people and manages 19 independent physician associations, he said. The associations are legal entities organized and directed by independent physicians — those not employed by a hospital — to negotiate with insurance companies on their behalf.

Lew said the model’s success depends upon understanding a region’s regulatory and financial risks, and implementing the model through local health care providers.

“Healthcare is local. That is key,” Lew said. “Health care is delivered by local providers within that local culture. It’s understanding that and being able to make it unique to the needs of the physicians in the community and the hospital.”

FOR THE “SICKEST 5 PERCENT OF PATIENTS,” Lew said, “we have a high-intensity care management program.”

That means a “care management team” of nurse practitioners, nutritionists, social workers, pharmacists and health educators cares for these at-risk patients to prevent them from ending up in an emergency room for a condition that could have been addressed at home.

“It gets to the appropriate care in the appropriate time in the appropriate setting,” he said. “By using a lot of data, we’re able to look at who those sickest 5 percent of patients are going to be.”

Prospect has developed interfaces that let it pull data from electronic medical records to optimize the coordination of care, said Thomas M. Reardon, president of Prospect East, which manages the Rhode Island hospitals and acquisition efforts in the eastern United States.

The interfaces also work well within the care model because it is an “open system,” he said. Prospect, which works with more than 9,000 contracted physicians, does not have to own a medical facility to include it the model, he said.

“We don’t have to own the surgery centers, we don’t have to own the nursing homes,” Reardon said. “We will partner, and we partner very well.”