MSHA observes five years as area health care network

By Thomas Wilson
Five years after buying out the regional presence of then health care conglomerate Columbia-HCA, Mountain States Health Alliance has produced a positive cash flow, spent millions on improving its facilities and seen a higher level of reimbursement for TennCare patients treated at its hospitals.
"We have had a lot of services combined over the last five years," said Dennis Vonderfecht, MSHA's president and CEO. "We have eliminated a lot of service duplication."
Vonderfecht met with Star editorial staff members Monday and talked about MSHA's growth from the Johnson City Medical Center Hospital to a regional health care network of eight hospitals, 21 primary/preventive care centers and 13 outpatient care sites.
MSHA formed after Johnson City Medical Center Hospital, Inc. acquired six facilities owned by the Hospital Corporation of American in Northeast Tennessee on Sept. 1, 1998. Mountain States Health Alliance took its official name in Jan. 1999.
The MSHA network includes Indian Path Medical Center and Indian Path Pavilion in Kingsport, Sycamore Shoals Hospital in Elizabethton, North Side Hospital, Johnson City Specialty Hospital, and the James & Cecile Quillen Rehabilitation Hospital in Johnson City. MSHA also operates the Johnson County Health Center in Mountain City.
MSHA vice president of marketing, Ed Herbert, said that although a good deal of health care services have been consolidated during the past five years, other departments have expanded to accommodate needs in human resources and marketing. "We had to grow some because the other hospitals didn't have those services," said Herbert.
Vonderfecht said the organization saw cash flow jump into the positive ledger for the first time last year. The system's cash revenue rose from $36 million in 1998 to roughly $86 million in 2002, he said. JCMCH financed the hospital by issuing more than $200 million in bonds and funded approximately $41 million in debt service last year. Vonderfecht said reduced interest rates in recent years have allowed the system to refinance debt "several times" to save money.
Along the way, MSHA facilities have added new services to accommodate changing trends in health care - moving from an out-patient environment to more "patient-centered care". The intensive care unit at JCMCH will undergo a $12 million expansion to accommodate a rapid rise of intensive care needs for trauma care.
Over the past five years, JCMCH adult ICU days have increased 23.6 percent; the number of heart surgery patients has risen by 24.7 percent; WINGS Air Rescue flight services have increased 23.4 percent, and acute admissions from outside Tennessee to JCMCH have increased 65.5 percent. The new ICU is expected to be completed in March 2005.
MSHA has forged affiliations with Harvard Medical School, Massachusetts General Hospital and St. Jude's Children's Hospital in Memphis to provide various medical protocols and care once reserved for patients capable of reaching the hospitals.
The Sycamore Shoals Hospital Emergency Department was updated with a multimillion-dollar renovation soon after MSHA took the reins from HCA. Today, the hospital's emergency department treats thousands of Carter County residents each year.
Sycamore Shoals Hospital treats the highest rate of TennCare patients -- an estimated 35 percent of all patients -- of any facility in the MSHA hospital network. TennCare's reimbursement rate rose from 40 cents on the dollar five years ago to nearly 70 cents on the dollar this year, Vonderfecht said. Still, Vonderfecht said the sheer cost and the fact that 25 percent of the state's population uses TennCare created an enormous burden on the state's government and taxpayers.
"We can't afford a program like TennCare in this state," he said. The Bureau of TennCare reports the state health insurance program provides health care coverage to roughly 1.4 million Tennesseans who are disabled or uninsured.
The Johnson City Medical Center is designated as a "safety net" hospital by the state requiring treatment for TennCare patients. The Bureau of TennCare announced in October 2002 it would allocate $50 million in quarterly payments to safety net hospitals in 2003. That allocation -- roughly $5 million to JCMCH -- has also given MSHA's cash revenues a boost, Vonderfecht said.
Vonderfecht denied waits of stay at the Johnson City Medical Center's Emergency Department were excessively long, citing the three-hour waits in hospital emergency rooms as industry standards. Herbert said the organization's "Ask-a-Nurse" program helped citizens gauge their need to visit an emergency room and provided waiting time at MSHA facilities.
"There are going to be waits," Vonderfecht said. "We're always going to get complaints."
MSHA also has a $4.5 million capital improvement plan on the table for Indian Path Medical Center. Located in Sullivan County and competing with health care system rival Wellmont Health Systems, Vonderfecht said MSHA officials were very pleased with the hospital's performance. He said a new CEO will be taking the reins of the hospital after Jan. 1.