Memorial Mission Hospital lost Asheville trust with mergers
Dr. John Russell
Once upon a time, Memorial Mission Hospital was a community hospital, funded by the community and run by the community and the physicians. Doctors, nurses and the allied staff were an integral part of the city of Asheville. It was a family hospital, its very name — Memorial — honored its sons lost in the World Wars. Mission was a charity hospital, caring for the least fortunate in our city. This service qualified it for nonprofit status.
Local management was uniquely equipped to engage in community needs and created an ultimate sense of trust between the public and health care providers.
The 1970s were a turning point for the hospital. The increased pace of medical technology required a new type of doctor called a subspecialist. They trained additional years to manage new diagnostic tools including fiberoptics, cineangiography, computed tomography, ultrasound and nuclear imaging, and treatment advances such as new pharmaceuticals, dialysis, ventilators, pacemakers and coronary bypass surgery. All improved the quality of care,longevity and quality of life.
Subspecialists were drawn to MMH. This was the beginning of the glory and the beginning of the end. I was a part of both. I was a cardiologist, a medical subspecialist.
This new era of care at MMH could serve a larger need than the 73,000 in Asheville in 1970. So we reached out to adjoining counties to explain what our hospital had to offer. Patients came, our reputation escalated, and by 1980 MMH had become a regional tertiary care referral center, the leading hospital in Western North Carolina.
Technologic driven health care was expensive. Changes in reimbursement for services dominated the hospital’s next transformation. Hospital financing was a heterogeneous source of federal, state and private players. Financing depended on “The Golden Rule”: whoever controls the gold makes the rules. Medicare was the primary source. The first major rule change was to eliminate individual service charges. Charges were bundled into groups according to diagnosis so reimbursement could be manipulated more easily by the Center for Medicare and Medicaid Services.
In the 1980s and 1990s a rapidly aging population and an enlarging group of chronic disease patients were more dependent on hospital resources. Medicare and Medicaid paid for approximately 50% of American health care. This was a heavy burden on the public coffers. Attempts at cost control by decreasing reimbursement (Balanced Budget Act 1997) competed with politically promised additions in coverage. Private insurers tried to control costs by forming managed care entities — HMOs and PPOs.
Hospital expansion to meet the demand, the financing changes and compliance with regulatory requirements needed more sophisticated business-oriented management. The hospital administrative sector exploded and eventually consumed 20-30% of the hospital expenses. The administrative bureaucracy now took over all physician in-patient services creating “service lines” to facilitate management.
The MMH purchase of St. Joseph’s Hospital for $90 million in 1998 eliminated an important choice for area patients. The combined Mission-St. Joseph’s Hospital dropped the Memorial name. The St. Joseph’s name was subsequently erased after Mission’s mergers and acquisitions in Franklin, Highlands-Cashiers, Brevard, Spruce Pine, Transylvania and McDowell hospitals who were all suffering under the yoke of rising health care costs. MMH became MissionHealth System, a hospital monopoly in WNC. And so ended the community hospital called Memorial Mission and the guise of its “nonprofit” status. MMH was a victim of its own success.
The network synergies and efficiencies of management then allowed Mission Health System to purchase physician practices. This was called “vertical integration.” It was driven by Medicare reimbursement of in-hospital diagnostic studies and treatments at significantly higher rates than physician office management.
Physicians as employees resisted being guided by a market ethic, and patients expected their doctor to be a caregiver, not a purveyor of a health service. Dissatisfaction with health care was multifactorial and prevalent.
Inflation in the major costs for hospitals — labor, drugs and supplies, as well as the exorbitant costs of the IT systems to meet regulatory compliance, the increasing litigious culture and the decreasing insurance support from government and private sources — threatened the future economic feasibility of Mission Health.
And so, in 2018, Mission Health became a portfolio company of a private equity for-profit conglomerate called HCA Healthcare, for $1.5 billion. HCA-Mission, a profit vs. patient-oriented business with replacement doctors and traveling nurses, is a disheartening successor for Memorial Mission Hospital. But the cost of the best health care in the world is unsustainable. Will national health care be next?
More:Opinion: Founding of Mission Hospital’s heart surgery program was in patient-centered care
More:Opinion: Physician reflects on sense of shared loss after HCA bought Mission Hospital
Dr. John Russell is a retired cardiologist who founded Asheville Cardiology Associates with Dr. Wade Saunders in 1971.
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