As anyone who has tried
As staff writer Rick Jurgens reported earlier this month, Chief Executive Officer James Weinstein has announced plans to lay off 3 to 5 percent of the system’s workforce by the end of the year and review the clinical services D-H offers as part of an effort to optimize revenues and cut costs to the tune of $100 million. Those reductions are not insignificant, even taking into consideration that D-H has a $1.6 billion annual budget and employs more than 9,000 people throughout the system, which includes the state’s only academic medical center and its flagship hospital in Lebanon. The goal of the cuts, Weinstein says, is to create a “sustainable” health care system, which is presumably one that pays for itself, and to do it quickly. How those workers who will be laid off sustain themselves is another question.
This decision comes in the wake of the system posting an unexpected $12 million deficit for the fiscal year that ended June 30. That deficit, Jurgens reported, arose in part because revenues were overestimated by $40 million and expenses jumped $115 million as a result of a changeover to a new billing system and outsourcing revenue management operations to a Texas-based outfit. It’s hard to imagine that an organization as large and sophisticated as D-H would be caught off-guard by a structural deficit of that size, but that indeed appears to be the case. The unfortunate result is that the fate of people and programs will be decided under the gun, with all that implies for possible misjudgments.
Also disheartening is that D-H has pulled out of an accountable care organization because of financial losses. ACOs, which were authorized under the Affordable Care Act, attempt to improve care and lower costs through better collaboration and coordination by health care providers. Although D-H did succeed in cutting costs and saving money, while meeting quality goals, it did not save enough to meet federal standards necessary to avoid financial penalties and thus pulled the plug last fall.
Accountable care organizations, the model for which ironically originated in research done at Dartmouth, are in the forefront of the effort to move the nation’s health care system away from fee for service and toward one in which health care providers are rewarded for keeping patients healthy, not for how many procedures they perform or how many tests they order. And that thinking is central to D-H’s ambitious effort to try to “change the world,” in Weinstein’s words. Indeed, D-H is seeking to build “a whole new economy with . . . new jobs, new ways, new careers,” he told Jurgens during an interview in May.
Of course, this does not mean that D-H’s future efforts in the ACO realm are doomed to failure, only that the model remains unproven. Dr. Elliott Fisher, director of the Dartmouth Institute for Health Policy and Clinincal Practice and one of the architects of ACOs, told The New York Times recently that he remained cautiously optimistic but conceded that, among Medicare recipients, “the model has yet to achieve the benefits many advocates hoped for.”
Somehow this all reminds us of a riddle famously posed to a reporter early in the Iraq war by Gen. David Petraeus: “Tell me how this ends.” No one could then, nor can they now. We hope that D-H’s leaders have a better answer to the puzzle of the system’s future, and a clearer one than presented by, say, a hospital bill. If so, they should get the word out, the sooner, the better.