On Jan. 1, the Greater Hazleton Health Alliance became part of Lehigh Valley Health Network. Ronald W. Swinfard, president and CEO of the Allentown-based LVHN, called the merger a perfect fit for two organizations with similar goals and cultures.
The merger of the two health care networks under the Lehigh Valley umbrella is just the latest in a series of mergers and expansions in the region’s health care industry as it adapts to the changes brought about by the Patient Protection and Affordable Care Act – and other mandates and goals that doctors and hospitals are called to address.
“The health care industry is going to change more in the next two years than it has in its entire existence,” said Richard A. Anderson, president and CEO of St. Luke’s University Health Network in Fountain Hill.
The impact those changes have and will have on the region cannot be understated.
The Lehigh Valley Health Network and St. Luke’s University Health Network are, respectively, the No. 1 and No. 2 employers in the Lehigh Valley, with LVHN employing around 12,000 and St. Luke’s nearly 9,000.
Other hospitals also are major employers. In Berks County, the Reading Health System is the No. 2 employer with a staff of about 7,500.
The impact on the region from anything these organizations do will be significant.
Leadership of these hospitals need to adapt, change and, as Anderson put it, “do more with less” in order to survive as institutions and keep more than 20,000 people employed and a Lehigh Valley population of more than 650,000 people healthy and alive.
The mergers and partnerships the organizations have been entering, such as LVHN and Hazleton or St. Luke’s 2012 takeover of Warren Hospital in Phillipsburg, N.J., are part of those cost savings.
LVHN and the Reading Health System recently joined a consortium of hospitals in an effort to cut costs.
The consortium, called AllSpire Health Partners, also includes Lancaster General Health; WellSpan Health in York and three New Jersey organizations: Atlantic Health System, Hackensack University Health Network and Meridian Health.
The consortium will carry out joint activities in traditional areas of patient care services, research and education and will address economies of scale.
“By working together, we can share best practices that will open up a world of possibilities to both save costs and improve the health of all the communities we serve,” said Clint Matthews, president and CEO of Reading Health System.
LVHN and St. Luke’s also are partnering with the Pennsylvania eHealth Partnership Authority, an independent state agency, to become a pilot organization in the authority’s network of community shared services.
The exchange involves electronically moving health-related information among unaffiliated organizations to improve communication and efficiency.
Such mergers and partnerships are the future, said LVHN’s Swinfard.
“It’s absolutely a trend,” he said. “There are economies of scale. We are tasked with raising the quality of health care and lowering the cost, all while increasing the public’s overall wellness. You can do that more economically together than having the 5,100 hospitals in the country each trying to do their own thing.”
Some of the physical growth the health organizations have undertaken recently also is part of their fiscal strategy.
Reading Health System is spending $333.2 million for a new clinical building on Reading Hospital’s West Reading campus on South Seventh Avenue. The completion of the 476,000-square-foot project, which will be the system’s 13th clinical building, is slated for fall 2016.
LVHN is in the middle of a $21.4 million expansion at its Cedar Crest Campus in Salisbury Township and recently opened the $4 million Primary Care Associates of the Lehigh Valley Physicians Group on Broad Street in Bethlehem.
St. Luke’s last year spent $8 million to convert the former Pennsylvania Convention and Expo Center into the St. Luke’s West End Medical Center in South Whitehall and now has more than 150 sites providing various health care services.
And Easton Hospital has extended its reach, opening a health and wellness center on Sullivan Trail in Easton and an urgent care clinic in Bethlehem.
St. Luke’s Anderson said the key word is integration. Bringing health network services to areas that are more convenient for people to go to helps the efficiency of care.
He said that this way the physical therapist, primary care services, specialists and hospital visits all are coordinated under the same organization, which brings efficiencies, better coordination and less duplication of services.
Anderson said one thing St. Luke’s will be investigating in the near future is bundled payments.
It is working with other hospitals on a pilot program, which would have all network services billed through the hospital rather than separate bills for each care provider, as is the norm under the existing system.
Not only does Anderson think it has the potential to be more efficient for all involved, it will keep the organization one step a head of expected changes in the way the federal government will pay for Medicare and Medicaid services in the future.
Reading Hospital’s Matthews said its investment in infrastructure also will allow the hospital to attract and retain physician and clinical expertise to the region, which is key to its mission.
The growth and changes are vital, Anderson said.
“The smaller hospitals are going to have a harder time surviving this tumultuousness,” he said.
And with their most recent acquisitions and expansions, the Lehigh Valley’s two largest health care systems have such a large and diverse footprint that their leadership is confident they can weather the changes ahead.