THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Sunday, July 3, 1994 TAG: 9407020606
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: By TOM HOLDEN, STAFF WRITER
LENGTH: Long : 104 lines
By 1996, the first of the baby boomers will turn 50. By 2000, managed health care will dominate the region, and outpatient surgery, already topping 50 percent in some hospitals, will become even more prevalent.
These seemingly unrelated facts about the changing face of health care in Hampton Roads are at the heart of Sentara Health System's announcement of its first corporate restructuring in nearly a decade.
The Norfolk-based health care company has reshuffled its boardrooms in a move intended to shift board members' perspectives away from the needs of individual hospitals to the needs of the region.
The change comes Aug. 1 when Sentara Health System will dissolve the governing boards of three hospitals and three subsidiaries - Sentara Lifecare Corp., Sentara Enterprises and the company's Alternative Delivery Systems.
Under the new arrangement, an eight-person executive council will oversee policy development and corporate management. A 15-member systemwide board, composed of community volunteers, will help govern Sentara Health System.
Sentara will staff two additional groups, called a Board of Trustees and a Directors Emeritus group. They will provide community input into the operation of the company.
E. George Middleton Jr., the former chairman of the board for Sentara's holding company, said the change was urgently needed.
``People who contend there is no crisis in health care don't understand,'' said Middleton, who will serve as head of the newly created systemwide board. ``There is a crisis. The boards are aware of this. Something has to be done.''
Of all the driving factors - an aging population, improving technology and rising costs - it is the impending rise in
managed health care that is most crucial, the company said.
Managed care is changing the way money moves through the health care system. Today, about 21 percent of all health plans in Hampton Roads are under managed care, said Karen V. Corrigan, the company's acting vice president.
By the year 2000, the figure is expected to hit 85 percent, she said.
Under managed care, health plans contract to provide care for a company's workers - the sick and the healthy, usually for a year. Increasingly, these plans provide that when the total costs of care exceed the contract value, the managed-care company must provide care at its own expense.
This creates an incentive to keep people healthy and cut costs - through more outpatient surgery, home health care, and other money savers like drug therapy.
``We've spent about 100 intense years worrying about the acute side of health care and not very much time looking at the preventative side, keeping people healthy,'' said Glenn R. Mitchell, president of Sentara Health System.
``We're going to concentrate on that for a while. It makes a lot of sense. If we're able to adjust to this new system, it'll be good for us and the community.''
Sentara Health System is now unwieldy with one systemwide board and six subsidiary boards: one each at its hospitals in Norfolk, Virginia Beach and Hampton; one for Sentara Enterprises, which runs the medical care centers, the home health agency and medical transport services; one for Sentara Alternative Delivery System, which runs two managed care companies; and one for Sentara Life Care Corp., the nursing home division.
There are 10 to 11 people on each board.
``The way they're structured now makes it difficult for us to focus on the continuum of care,'' said Deborah A. Myers, Sentara's director of public affairs. ``As we move to managed care, we need to focus not only on the sick, but we have to manage care of the well. We believe the new structure will allow us to do that. The current system would not.''
Most customers will not notice any difference, but the managers and doctors will.
``Historically, the health care industry was designed to take care of the health care needs of an individual, and it's one of the reasons we think costs are so high,'' said David L. Bernd, executive vice president and chief operating officer at Sentara.
``In the past, we've been paid by the number of illnesses we've treated,'' he said. ``Once you have a partnership with doctors, and the insurance company is taking a risk for the health status of the individual, then there is an incentive to keep people well.''
Fostering closer partnerships with doctors is welcome news to many physicians who in the current health care debate worry they have lost their voice in policy-making.
``It's a whole different system of practicing medicine and providing care,'' said Dr. Irving M. Pike, a gastroenterologist in Virginia Beach. ``Previously there hasn't been an alignment of incentives between the health care system and its physicians.''
In fact, physicians never have been involved in the cost debate. Their job had been only to treat patients and submit the bill.
``With reform, there is a driving force to bring a team approach to health care,'' he said. ``Those who manage the hospital, and its physicians, need to come together to find the best care with a more limited budget.''
No longer can hospitals simply earn money by filling up their beds, or promote doctors who admit patients to their rooms.
``Now the incentive is for hospitals to keep people well, and they will need the cooperation of the doctors to do that,'' he said.
The change will make Pike's job more enjoyable.
``It will take a lot of the frustrations I've had previously out of my work. My value to the system will be the prevention of cancer as opposed to just the cure and treatment.'' ILLUSTRATION: FILE PHOTO
Glenn R. Mitchell, president
of Sentara Health System
by CNB