Hospital CEO: Emphasis shifting to outpatient care

Northwest Community Hospital executive talks about growth, layoffs

Northwest Community Healthcare's outpatient services will continue to grow even as the need for hospital beds shrinks, according to CEO Bruce Crowther.

Last week, the Arlington Heights-based hospital system announced it is going to open four new outpatient facilities, while cutting 110 jobs at Northwest Community Hospital. A combination of full- and part-time positions will be eliminated, totaling 3 percent of the Arlington Heights hospital's workforce.

Crowther would not specify which employees are being let go, but said the layoffs are not a means of funding the health system's expansion plans. The layoffs also don't necessarily mean a discontinuation of services or elimination of whole departments, but there will be some consolidation, he added.

Crowther said the emphasis on outpatient facilities is a direct result of the Health Care Reform law.

“This is all a response to health reform and it's going on throughout the country and throughout the Chicago area,” Crowther said. “We can anticipate lower (Medicare) payments, and we can anticipate a shift in incentives to less inpatient work and more outpatient work. Our inpatient volume here and elsewhere is falling and outpatient volume is rising.

“This is sort of a natural outcome of what they are trying to create in health reform. It's a major adjustment for the industry.”

Health care reform is designed to provide more people access to health insurance, and save hospitals, patients and taxpayers money in the long run, Crowther said.

“A large percentage of the population uses emergency facilities as their primary care. That's a very expensive proposition,” Crowther said. “If we can keep people healthy and avoid hospitalizations, their quality of life will be better. And having avoided those expensive hospital stays, the costs will go down.”

Ambulatory care services — diagnostic, day surgery, immediate care centers — which provide both preventive and follow-up care, already are a huge part of NCH's business, he added.

At present, Northwest Community Healthcare has four immediate-care locations in the Northwest suburbs as well as a FastCare Clinic in Palatine. The new outpatient facilities in Arlington Heights, Palatine and Schaumburg, along with a physical therapy facility in Mount Prospect, will open in 2013.

Meanwhile, the inpatient volume at the hospital has declined about 12 percent since last year. The hospital gets roughly 25,000 yearly inpatient visits, officials there said.

“When our hospital business shrinks, we have to adjust our costs accordingly, just as we have to accommodate the costs of our outpatient business,” Crowther said. “We're really just re-sizing to the demand for beds that we have today. The hospital becomes a place for only those very expensive, really acute kind of episodes. Over time, there will be a reduction in the number of beds used.”

Northwest Community Hospital has 496 authorized beds. That number may shrink based on future need, Crowther said.

At Illinois hospitals, any discontinuation of service or decrease in the number of beds must be approved by the Illinois Health Facilities and Services Review Board. The state board also must approve any capital improvement expenditure that is more than $12 million. Northwest Community Healthcare's expected revenue this year is roughly $500 million, a slight decrease from last year. The outpatient business represents about half of that, Crowther said.

The reorganization doesn't mean that Northwest Community Healthcare is doing poorly or that it will have to merge with another health system to ensure its survival.

“We are pretty well confirmed at being independent for the foreseeable future,” he said.

“We have nine or 10 buildings around that are not hospitals,” Crowther added. “As their ambulatory volumes grow, we will increase staffing. I'm sure we will build more sites.”

The competition in the health care industry is changing, he said, from hospitals competing with hospitals to more competition with outpatient and ambulatory facilities.

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Bruce Crowther
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