Michigan groups battle for better heart care - Column

When the executives of Sparrow Hospital, in Lansing, Mich., applied for a certificate-of-need (CON) for an open-heart surgery program, they thought it would be a routine process.

After all, the 502-bed, non-profit medical facility--the largest in the region--already had all the other equipment and programs it needed to become a comprehensive care hospital. The medical facility had community support, and a newly hired trauma specialist, and it met all CON requirements. These requirements included data "borrowed" from other hospitals, as existing application procedures allowed, to indicate demand for the program in the region. (Applicants are allowed to cite statistics from other hospitals to justify the need for the proposed facility.)

But the approval process was anything but routine and, in the end, it was a blow to Sparrow and eight other facilities, all of which were denied similar CONs.

Changing the incentives

Sparrow officials in part blame two coalitions--the Greater Detroit Area Health Council (GDAHC) and the Economic Alliance, a Detroit-based coalition of business, labor, hospitals, physicians, government, and consumers--for blocking their CON approval. Officials of the two coalitions--who argued that there was already an over-supply of surgical heart care facilities--are very pleased with the outcome.

GDAHC was organized 37 years ago to deal only with hospital quality issues, but it began focusing on regional health questions in 1982. It now serves seven counties, and represents 428,000 employees and more than 1 million covered lives. Most of Michigan's large corporations are members of the coalition, including General Motors, Ford, Chrysler, Kmart, Detroit Edison, and Michigan Gas Co.

James B. Kenney, GDAHC president and chief executive officer, says the coalition began over a year ago to look at issues involving heart care in the region, including medical appropriateness, clinical outcomes, and efficiency. "We wanted to change the incentives, which are now all directed toward payment for volume, to payment for value," Kenney explains.

Business and labor formed the Southeast Michigan Regional Heart Consortium and invited regional heart care centers and specialists to participate. All 13 already existing heart care centers in the region agreed to participate and to help fund an effort to improve the quality and efficiency of heart care and to reduce the risk of cardiovascular disease in businesses and communities through early detection, educational activities, and promotion of lifestyle changes.

Of the nine proposed heart-care programs, the two coalitions--the GDHAC and the Economic Alliance--fought all of them.

A media blitz

The coalitions began an extensive media and direct-mail effort to educate community leaders about the negative implications of proliferating open-heart surgery centers. Labor, as well as management, participated in the educational campaign. "The approach we took focused not just on cost," says Kenney. "We also emphasized the quality of care implications."

That strategy was backed by a second coalition, the 11-year-old Economic Alliance, which has worked with GDAHC on other issues and whose agenda is to influence state policy, primarily in regard to the overall business and jobs climate in Michigan. It is the only state-level organization chaired by both management and labor; the 70 member organizations that participate on the board include Consumer Power, General Motors, Ford, United auto Workers, and Michigan Teamsters.

At its annual meeting each year, members of the alliance voted to determine the most important issues affecting businesses in the state. "It is an action-oriented group," says Dick O'Brien, vice president, corporate personnel for General Motors, Detroit, and co-chairman of the Economic Alliance. "We are looking specifically at items involving state regulations that affect the climate for business and labor within the state."

Reaching consensus

"Once we have a consensus of business and labor, we put forth that position with representatives in the state government, including the governor, and then attempt to influence that legislation to the extent that we can," O'Brien says.

Unfortunately for the nine open-heart surgery CON applicants, they bucked up against two of the priorities that the alliance had set--first, to examine excess capacity in the state in terms of open-heart surgery centers, and, second, to support strong CON requirements to contain what it considered a plethora of new hospital facility and service expenditures.

O'Brien is not sure how the heart care facilities, if approved, would have affected member companies' costs. But, he says, "We were also concerned about quality. Our data show that those open-heart surgery centers that handle fewer than 200 procedures by surgeons performing fewer than 55 surgeries annually -- a relatively small facility--compared with a hospital handling 900 open-heart surgeries, with surgeons performing at least 260 procedures annually, have a risk of death six times greater than in the larger unti."

The alliance's message was delivered by phone, mail, and directly to Gov. John Engler by General Motors CEO Jack Smith.

But O'Brien says, "Other coalitions can effect these same kinds of changes. It goes far beyond a Mr. Smith talking to the governor. The CON was a very limited piece of that entire discussion. It primarily deals with being able to present, in a logical fashion, the reasons why you believe certain actions should or should not be undertaken."

Imperfect criteria

The crux of the two coalitions' argument was that the criteria for CON approval were imperfect because they allowed hospitals to "borrow" cases from other hospitals anywhere in the state to meet the volume requirement standards. "We raised the question on that, and said that needed to be changed," says Kenney. Under Michigan law, such changes could not apply to applications already in the pipeline. A "groundswell" of hospitals, as Kenney puts it, rushed in their CON applications, at which point, says Kenney, "the purchasers were effective in getting the Certificate-of-Need Commission and governor to make the fairly unprecedented move of making new criteria immediately effective that did not allow 'borrowing' data in CON applicaitons."

Appealing the decision

However, the story isn't over yet for Sparrow Hospital. Joseph Wald, director of public relations at Sparrow, argues that "denying our application is not cost benefitial. We transfer 400 heart care patients a year to other facilities, and we estimate they bear an additional cost of more than $1 million a year for extra days in intensive care and repeat testing."

Sparrow is appealing the CON denial based on what it considers an illegal change of approval procedures midway through the CON review process. The appeal is expected to be heard this fall by the County of Ingham Circuit Court in Lansing, Mich.

In the meantime, both coalitions are taking other steps to save money. The Economic Alliance is supporting legislation related to CONs, not just for open-heart surgery, but for any additional "brick and mortar" in the state, as O'Brien puts it. The alliance is also concerned with licensing of health care professionals, in terms of expanding the professional's practice, and not limiting the number of providers.

For example, says O'Brien, "a bill was going to be proposed saying that if a company came out with a prescription drug preferred provider organization, the company would have to include virtually every outlet that dispensed prescription drugs in that preferred provider. That doesn't give us any opportunity for leveraged purchasing in the state. We thought that was unnecessary legislation and inappropriate, so we became involved in that issue."

COPYRIGHT 1993 A Thomson Healthcare Company
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