The hospital in my little town was one hundred years old this last year. It was launched by three local physicians, Dr. Nathan Griffin, Dr. Charles Lamson and Dr. Anna Littlefield, in collaboration with women in the community. A local woman of some prominence, Jane Tracy, made an older home, “The Old Morgan House,” near the center of town available to be used as a hospital which was opened on October 1, 1918. The original hospital building has now been enlarged and repurposed as the town library, The Tracey Memorial Library.
The original six bed “hospital,” was replaced in 1923 with a totally new structure with 12 beds located further up Main Street on a piece of donated land. That is where the hospital stayed for 35 years. The building still stands and is pictured in the header for this post. It has now become condominium units.
Things move slowly. People started talking about a larger hospital in 1946, but it was not until 1958 after an appreciative “summer resident” had donated fifty acres near the edge of town that a new hospital was built with Hill-Burton funds. The facility is now a 25 bed “critical access hospital” with an active EW. Between 2007-2009 New London Hospital was renovated to provide all private rooms. The specialty services have been expanded and a Medical Office Building has been built. The hospital is now affiliated with the Dartmouth Hitchcock Medical Center in nearby Lebanon, New Hampshire. I live less than two miles further away from the current hospital and the center of town. I frequently see helicopters carrying patients north from New London Hospital to Dartmouth Hitchcock. Perhaps someday I will take that ride.
For 100 years the hospital has been evolving to meet our needs, and our needs continue to change. The history of our little hospital is an example of the intertwined nature of local hospitals and the communities that they serve. Across the country in little towns, and in large cities, hospitals are often the largest employer and have huge political presences. The questions are not whether they are important, and not whether we will continue to need them, but rather what their role should be in improving the health of the nation, and how should we finance them. There are many other connected questions. Are they the best place to train the next generation of healthcare professionals? Do we use them in the most efficient way? What are we overlooking and disadvantaging when we make hospitals the center of our thinking about healthcare? Do their own interests distract and displace the attention from other issues and concerns of equal importance? I will not answer all of these questions, but I find that thinking about the history of my local hospital, and of hospitals in general, is a good starting place for thinking about the hospital resources we will need in the future.
The Hill-Burton Act was passed in 1946. It is an example of a piece of legislation that probably could never be passed today. Between 1946 and 1997 it provided billions of dollars of federal money that enabled the construction of a hospital in thousands of little towns across the country. My mother’s brother was a Citadel trained civil engineer. During World War II he was in the Army Corps of engineers and was building bridges for our tanks and soldiers to cross rivers in Europe in their effort to defeat the forces of Hitler and Mussolini. After the war he came home and started building Hill-Burton financed hospitals in places like Pikeville, Kentucky and Shreveport, Louisiana.
I have always thought that the Hill-Burton Act passed during Harry Truman’s presidency was second only in transformational significance to President Eisenhower’s Federal Aid Highway Act of 1956 that built our Interstate highways. Like the highway act, Hill-Burton was an excellent example of a federal investment that created jobs while providing valuable infrastructure that enabled the country to become what it is today. Hill-Burton could have made even a bigger impact in the march toward universal access if it had been administered as it was written. Theoretically it required hospitals that received funding to provide free care to a certain number of the poor people in their communities each year who had no private insurance. That component of the law was ignored until the seventies.
If you start looking into the history of our local hospitals, you will see that quite a few were built in the fifties and sixties, presumably with Hill-Burton dollars. In the first twenty years Hill-Burton financed the construction of over 5,000 hospitaIs and clinics. The goal was to create 4.5 hospital beds per 1000 people. I was not surprised to discover that my little town was a beneficiary of the Hill-Burton Act that was made possible because after the war there was a sense of shared responsibility to create a better future for everyone.
I have been interested enough in Hill-Burton to make it a point to look at the cornerstones of small town hospitals in a few towns. I know that there was a Hill-Burton pile of bricks in every little Southern or Southwestern town I ever passed through and they are all over New England. The evidence is fading fast. I am on the Guthrie Health board, and a few years ago we tore down a Hill-Burton facility in Corning, New York and replaced it with a new, smaller facility built with Lean architectural design and located out on Interstate 86. My uncle’s work in Pikeville is gone. Pikeville Medical Center is now housed in beautiful gleaming towers of glass and steel.
Despite our continuing investments in bricks, mortar, steel, and glass are we, or should we, be approaching the end of the era when the hospital was the center of all things medical? I am sure that my view of history is distorted and only partially right, but let me trace the history as I know it and then continue the trajectory on into the future.
Hospitals evolved as a convenient and charitable way for physicians to see indigent patients who could not afford to pay for house calls or for nursing services in their homes. No wealthy person of the mid nineteenth century would have wanted to be hospitalized. As surgery evolved, and as technology developed, the hospital became an efficiency. ICUs evolved in the mid twentieth century as knowledge and technology evolved. I practiced in what was clearly the golden age of hospitals. By the mid sixties we were using 900 hospital days per year per thousand people. We had the beds and it would have been a shame not to use them. When I was a cardiology fellow in the early seventies we would admit a patient for five days for a diagnostic cath! We reasoned that they should be in the hospital for 2 days to be “stabilized,” and participate in our research protocols before the cath. Then there was the day of the study. We were taught that it would have been risky to send a patient home sooner than two days after a study. Now a person needing a diagnostic cath arrives in the morning, and is home for supper. We have made progress in other areas. By the early seventies we had decided that a “transmural,” Q wave producing myocardial infarction could go home in three weeks rather than the six weeks that was standard practice a decade or so earlier. Now such a stay is measured in days.
One real reason for hospitalizations when I was a pup was for diagnostic work ups. Insurance would not pay for an outpatient workup. If you needed a barium enema or an upper GI you probably needed to be in a hospital, right? If you had an ulcer you were likely to need some sort of gastric surgery. A Billroth II or a pyloroplasty and vagotomy would definitely keep you in the hospital for a while. Well, all that changed with H2- receptor antagonist and proton pump inhibitors and the discovery that it was not pizza and stress that caused your ulcer, but rather helicobacter pylori. Hill-Burton built us a lot of hospital beds. For most of the last quarter century the challenge has been to avoid using them.
The early financial success of Harvard Community Health Plan, and I assume it was also true at Kaiser, was because we drastically cut hospital days per thousand by doing the diagnostic work ups of most conditions in the ambulatory environment when appropriate. Moving work from the hospital to a lower cost environment remains one of the most effective ways of lowering the “total cost of care.” Another reason that we now see hospital days falling and one of the most compelling reasons for hoping that we might bring the cost of care into a sustainable range that does not distort our ability to pursue public policies that might improve other social determinants of health is the improved prevention and management of chronic disease. Too many of our residual hospital days are from the inadequate management of ambulatory care-sensitive conditions (ACSCs). It is also true that many of those with chronic conditions that do need hospitalization can be cared for more comfortably and efficiently in their own homes than in the hospital. “Hospital in the home” is a growing concept here and around the world. Many hospitals are struggling because of these changes in practice patterns. Some have responded to the financial challenge of lower hospital utilization by growing their ambulatory footprint, employing primary care physicians, and using their leverage with payers to demand the same enhanced charges for ambulatory services that they could collect in the hospital.
Do not misunderstand me. I am not saying there is no need for the hospital in the future. More than ever we need the hospital for tertiary and quaternary care. What is killing us financially is having the hospital be a “revenue center” for health systems. The hospital should be managed as a “cost center.” It is possible to view most of the tensions in the management of our care delivery systems over the past forty years as a finance struggle between fee for service payment and capitation. A capitated system of care seeks to deliver care in the most clinically and financially appropriate environment. A fee for service system has a very difficult time not building its budget by the expectation of the number of services it might deliver. When investments are contemplated or made in any business the first question is: “What is the ROI (return on investment)?” The ROI in any hospital investment is returned by the utilization of that investment. We are expecting a lot from hospitals when we ask them to be parsimonious with the use of the services that they have made 7 and 8 digit investments to provide. In an environment where “the market” does not function well they have no compelling reason to deliver care in the most clinically and financially appropriate environment.
What we know from our experience with the era of managed care, and have reproduced somewhat with some Medicare Advantage programs and ACOs, is that when we pay for the value and quality of care of populations and consider our stewardship of resources from the position of cost management rather than revenue generation, we can move closer to the Triple Aim objectives of quality and sustainable costs.
The concept of “cost center” also applies to the ambulatory environment. In the next post I will focus on questions about the cost issues and opportunities we have in the ambulatory environment. The answer to the questions that I will ask will not be that fewer people need to deliver more services to larger populations in smaller environments. That strategy produces lower levels of patient satisfaction, lower measured quality, and professionals reporting that they feel burned out. There must be a better way, and I think that sometime in the future we will find it.
