POSTED ON JUNE 19, 2013:
OSU Medical Center embracing organizational change
To describe the importance of OSU Medical Center to the Tulsa health care network, one number illustrates its vital role.
Emergency room visits totaled around 45,000 last year, according to Howard Barnett, president of Oklahoma State University-Tulsa and OSU-Center for Health Sciences.
Other hospitals in Tulsa, of course, see as many or more in their emergency rooms. But they also rely on OSU Medical Center to see its share of emergency room patients.
"I was at one meeting with a St. John's official, who I will not name, who basically said if half of those people showed up at their place, they'd be paralyzed. It's just a fact," Barnett said from his office at the main OSU-Tulsa campus.
There's no reason to sweat that possibility at the moment, though the hospital, currently owned by a city trust, has seen some dark days. Earlier this year, OSU officials pleaded their case to state legislators, outlining a financial need.
Their request was answered with a one-year, roughly $13 million boost. The state money has staved off any talk about worst case scenarios for a health care provider that's been a fixture in Tulsa for nearly 70 years, though Barnett spoke of change -- realignment made possibly by the legislature's "vote of confidence with that subsidy," he said.
"I think we have the ability to really attract a quality partner that can help that hospital be competitive and go to the next level, while at the same time continue to provide the services to the uninsured and meet its teaching -- and growing --teaching mission to provide doctors to Oklahoma in a state that so desperately needs them," Barnett said.
The era of the facility being a city-owned hospital is also drawing to a close, Barnett said. With the state funding, Barnett explained that legislators are keenly aware of the numbers of other city-owned facilities.
"There are a lot of city-owned hospitals out there. And while we're unique because of the teaching mission, they just felt better if we got it into an entity where the state is the beneficiary," Barnett said, adding that there have already been talks with Mayor Dewey Bartlett and city councilors about the idea.
"They all understand, that's where they money is. If the legislature says, we'll give you money if you're a state-owned hospital," Barnett said, pausing to snap his fingers. "We're going to be a state-owned hospital."
An entity called OSU Medical Authority will eventually take over the ownership of the hospital, he said.
The city only took over ownership in a deal worked out in 2008 as a last-ditch effort to save the hospital. Barnett called it "ironic" that the state now is basically taking on an ownership role when they declined to do so five years ago.
One lesson has been learned from the period of distress that led to such a dire situation, he said.
Before the city took over ownership, a for-profit company handled the hospital while also overseeing other medical facilities in Tulsa -- "an inherent conflict of interest, period," Barnett said. By 2009, he described the state of the hospital as being, "for all practical purposes, a big clinic," with very few specialists.
Since then, there's been a strategy to add specialists and boost the hospital's ability to attract patients who have some means to pay. Barnett noted that of the approximately 45,000 emergency room visits, 19,000 had no insurance of any kind.
COURTESY OF OSU CENTER FOR HEALTH SCIENCE
"Just because of our location," Barnett said. "We obviously are just always going to have a larger share of uninsured showing up at the door ... We're the nearest hospital to some of the poorer parts of Tulsa." Last year, uncompensated care at the hospital totaled about $25 million.
As head of OSU-Tulsa, Barnett spoke about the importance of maintaining the hospital as a teaching facility for the more than 150 residents and fellows learning on the job.
He also said university leaders understand and embrace the hospital's role in providing care for the poor, however.
"I think that if you ask the board of trustees, you'd probably get a fairly even split down the middle whether the teaching mission or the indigent care mission was their primary focus," Barnett said.
But indigent care comes at a price, and finances for hospitals are changing. Nationally, a deal was essentially struck between major hospitals and federal leaders to reduce Medicare reimbursements while providing hospitals more revenue through Medicaid expansion, the government-funded health insurance program for vulnerable segments of the population.
In Oklahoma, of course, the state has opted out of Medicaid expansion -- leaving hospitals with the sting of lower Medicare reimbursements, Barnett said.
He noted the surprise logic employed by the U.S. Supreme Court in allowing the Affordable Care Act -- aka ObamaCare -- while also giving states the ability to opt out of the expansion.
"I don't think anybody thought that was going to be the lead dog in this deal," Barnett said.
With some sort of Medicaid expansion, OSU Medical Center could need less state funding, he said. "If we had Medicaid expansion, that number could -- we hadn't done all the math -- could be less," he said.
But he spoke about the political reality of the issue.
"Politically, I understand completely where they're coming from. Selfishly, from the hospital's standpoint, it would be nice to get that expansion, but, politically, it's the ultimate hot potato," he said.
From the hospital's point of view, the goal is to find a good partner willing to invest in the facility and experienced with overseeing a teaching hospital. By definition, such a teaching hospital will have some inefficiencies, Barnett said.
He said he's "very confident" a partner will be identified by the time the state legislature convenes next year, describing the search as a key to getting state support.
"The model for this is what they did in Oklahoma City," Barnett said, referring to a deal that has the for-profit Hospital Corporation of America manage the OU Medical Center.
"They have a specific contract with HCA that spells out how much indigent care they have to do every year," Barnett said.
For any deal involving OSU Medical Center, "any agreement we got with a partner would very clearly spell out their obligation to do indigent care," he said.
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