Legislation would make it easier to convert hospitals to outpatient centers in Maryland

Hospitals trying to get more outpatient center

When it opened in the 1970s, Bowie Health Center was the first of its kind in the state — an emergency center not attached to a hospital and in a free-standing building.

Only two other stand-alone medical facilities have opened in Maryland since then, one in Germantown and another in Queenstown. But demand is growing for these facilities, and they could become even more common now under legislation pending in the General Assembly.

The legislation sponsored by two powerful committee heads — state Sen. Thomas Middleton, chair of the Senate Finance Committee, and Del. Peter A. Hammen, chair of the House Health and Government Operations Committee — would make it easier for hospitals to shut down and convert to stand-alone facilities focused solely on outpatient and emergency care.

It's an effort to catch up with the reality hospitals face today as admissions decline, more care is shifted to outpatient settings and the costs of maintaining aging facilities mount. Such conversions already are happening in Laurel and Havre de Grace and are expected elsewhere.

Hospital officials say the growth of free-standing facilities certainly does not mean the end of traditional inpatient hospitals. Patients still need surgeries requiring overnight stays in hospitals, and the outpatient and emergency centers can offer complementary care and serve as feeders to hospitals.

"Hospitals aren't going anywhere, but they're going to shrink," said Mark Arsenault, vice president of Bowie Health Center, which has added a new CT scan machine and is renovating to add private rooms and ultimately serve twice as many patients. "They're going to be much smaller."

Making it easier to get smaller is the point of the legislation. Under current law, hospital administrators must go through what they call a drawn-out process to secure a "certificate of need" from the Maryland Health Care Commission. If the legislation passes, free-standing facilities affiliated with full-service hospitals that already have a certificate of need would face a more streamlined process.

Hospital officials say they need the ability to quickly open these centers as they face increasing pressure to reduce inpatient stays and readmissions, and meet cost constraints set by the state's rate-setting commission. Opponents of the legislation say it would make it easier for hospitals to reduce services and avoid the backlash they might face from communities when they try to shutter a hospital.

"Hospitals have been given incentives to treat people in the hospital when necessary, but if at all possible to treat people in the lower-cost community settings," said Carmela Coyle, president of the Maryland Hospital Association.

Inpatient admissions at Maryland's hospitals declined by nearly 100,000, or 15 percent, in the past decade, according to the hospital association.

Members of the 1199 SEIU United Healthcare Workers East labor union are fighting the legislation, in part to protect jobs.

They say it creates a much-too-rapid timetable for such an important decision on whether a community loses a hospital. Under the proposed legislation, a hospital would apply for a conversion and get community input, then the Maryland Health Care Commission would have 45 days to make a decision. The certificate of need process can take many months and sometimes years under the current law.

"We recognize why they want to do this, but we can't see how this is in any way collaborative," said Claudia Balog, a SEIU senior researcher. "We want to see that the community will have a voice in what their health care looks like."

Middleton said he proposed the legislation to help hospitals meet requirements to keep a special Medicare waiver the state has that allows it to set the rates hospitals charge private insurers and Medicare. Maryland is the only state in the nation with such a waiver from the federal government.

Elsewhere, Medicare typically reimburses hospitals at a low rate, and hospitals make up for it by charging patients with private insurance a higher rate. While Medicare may pay more in Maryland, state officials have been able to keep the rate of hospital cost increases lower than in other states.

A recent update to the waiver agreement required hospitals to meet new criteria that focused on preventive care and keeping costs down. The hospitals agreed that their costs cannot grow faster than 3.58 percent in the first five years of the revised waiver. Failing to do so could result in a loss of the waiver.

"It is very, very important to keep the waiver," Middleton said. "Hospitals have got to perform. They have to push a lot of the services out into a community setting."

Decisions on whether to close a community hospital can be contentious.

When Dimensions Healthcare announced last summer that it would transition Laurel Regional Hospital into a $24 million ambulatory care center with 30 inpatient beds and limited services by 2018, the news sparked resentment from members of the community.

Dimensions said the hospital was losing money and patients, but many wondered if the company wanted to shift resources and patients to a new hospital it's planning with the University of Maryland Medical System in Largo. The Senate recently passed a bill that would set aside about $461 million from the state and matching funds from Prince George's County over a four-year period to build the new hospital.

University of Maryland Upper Chesapeake Health recently announced plans to replace Harford Memorial Hospital in Havre de Grace with a new hybrid care center closer to Interstate 95 even as it expands its Bel Air hospital.

And residents of Chestertown are worried that University of Maryland Shore Regional Health may convert its hospital in the Eastern Shore town into an ambulatory care center with outpatient service and emergency care, while shifting those hospital beds to its hospital in Easton. They fear a closure would mean having to travel many miles to get to a hospital, putting people in danger.

State health officials and the legislation sponsored by Middleton and Hammen exempts that hospital from the bill because of these concerns. They said the exemption gives lawmakers and the health care system that runs the hospital more time to work with community members to develop a plan to address health care access problems unique to rural communities.

The new legislation would require the hospitals to get public input, a lesson Middleton said the legislators learned from the situation in Laurel.

"When you look how at how people felt when they found out that Laurel would be shut down — the community was in outrage — it tells you there needs to be more community input."

The legislation has a good chance of passing because of the support of Middleton and Hammen. It is also backed by the Maryland Health Care Commission and the Health Services Cost Review Commission, which sets hospital rates in the state.

Democratic Del. Geraldine Valentino-Smith of Prince George's County, who represents parts of Laurel and sits on the health subcommittee of the Appropriations Committee, said lawmakers should make sure adequate access to health services is a key component of the legislation.

"As policymakers we remain conscious of the need to continue to make sure there is access to affordable and quality health care in all geographic regions," she said.

amcdaniels@baltsun.com

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