With significant changes likely coming to health care in the U.S., Ivinson Memorial Hospital is looking at a new operating structure its board hopes will help the facility prosper going forward.
The IMH Board of Trustees voted Jan. 25 to start exploring options in shifting its operating structure from a district hospital to a nonprofit. This would mean its governance would be handled by an 11-member nonprofit board rather than the current elected Albany County District Hospital Board of Trustees, Chair Guy Warpness said.
“Hospitals all over the U.S. are going to this model,” Warpness said. “It allows you to actually pull and attract more functional experts in different areas.”
District board members are not required to have any particular expertise in medicine or hospitals, Warpness said. Having a nonprofit board of community members with expertise in a variety of areas could improve the hospital’s operations, he said.
“It’s better than me or anybody else that decides, ‘I’d like to run for hospital board,’ and win,” Warpness said.
“It doesn’t mean I’m qualified to be there — it shows I won an election. Of course, everybody on this board has a true interest in what we’re doing and believe in what we’re doing, so it’s not that we just decided to wanted to be on a board. But this allows for more functional experts and more expertise in actually running a hospital (to make decisions).”
While the district board would retain ownership of IMH, the hospital would be leased to the nonprofit board. IMH Marketing Manager Kendle Dockham said the nonprofit board could not only make it so experts are making decisions, but also increase efficiency.
“It’s going to enable us to be more nimble and make those big decisions that need to be made quickly with more education,” she said.
Warpness said the first nonprofit board would be appointed by the district board, but would be self-perpetuating going forward. Three yet-to-be-named district board members are expected to sit on the first nonprofit board to allow for a smoother transition, he said.
“We want to make sure the history is there of the hospital and everything that’s going on,” Warpness said.
The nonprofit board would meet with the district board at least two times annually for review, Warpness said. Operational standards would be included in the lease. Should the nonprofit board not meet those standards, it would be given a chance to make improvements. But in the event the district board decides the nonprofit board cannot meet the lease requirements, Warpness said the district board would take back the reigns.
“Let’s say they’re struggling financially ... we would give them a six-month cure period,” he said. “But eventually, if the metrics of the hospital were declining outside of those cure periods, the Board of Trustees would have the right to take control of the hospital once again.”
IMH currently operates on a fee-for-service model, where hospitals receive a fee for each service provided. However, more hospitals are moving toward value-based reimbursements from Centers for Medicare & Medicaid Services, where providers are paid based on the quality of services, Warpness said. With IMH’s financials strong and a cohesive Board of Trustees, he said it’s the right time to make the transition to a nonprofit.
“That’s the trend, that’s the way we’re going, and it’s not a bad thing,” Warpness said. “It’s probably the way it should be, and we have no problem with that. This will give us that opportunity to position for it.”
Under the value-based reimbursement model, hospitals that perform well receive more funding than those that perform poorly, Warpness said. IMH’s hospital profile available at www.medicare.gov shows the hospital received patient ratings at or above state and national averages in categories such as those who responded they’d definitely return to IMH and gave it a rating of 9 or 10 on a scale from 0-10.
“Our percentages are very good right now compared to the national standards,” Warpness said. “It makes us to where we can be more competitive at recruiting and retaining doctors. It will help us get those doctors in we need.”
Government-run health care is in the decline as Congressional Republicans, led by President Trump, have begun repealing the Affordable Care Act. With an uncertain future, transitioning IMH to a 501(c)(3) entity would allow it to grow and make meaningful changes more efficiently than a district hospital, Warpness said.
“I wish we had a crystal ball where we knew what would happen with the ACA,” he said. “But we don’t have one, and if hospitals are going to be successful, they need to be able to function like a business.”
The transition process is expected to take several months, but Warpness said the board hopes to be ready to move ahead with the new structure in place by Jan. 1. Employee forums, meetings with local physicians, community feedback sessions and more public information are available at www.invinsonhospital.org.