Lahey Health CEO: How two-way patient transfers cut costs [Interview]

Massachusetts healthcare costs have skyrocketed in the past decade due to what one expert says are unique features of the state's healthcare landscape. But one Bay State healthcare system is working to get costs under control with the novel approach of transferring teaching hospital patients to community care settings.

Since 2004, Massachusetts' healthcare budget has increased by $2.8 billion, and residents' pay 36 percent more than the national average for care. Lahey Health CEO, Howard Grant, M.D., pictured, attributes the costs to the fact that large providers don't treat patients in the appropriate settings. Although academic medical centers provide top-notch care, they are also expensive and cost more to run because they are designed and staffed to treat the most complex patients, he says. They cost more to run than community hospitals, which often treat less complex patients but provide the same level of care. 

"The thing that seems to distinguish Massachusetts from other places in the country is that a disproportionate amount of care gets delivered in higher-cost tertiary hospital settings," Grant told FierceHealthFinance in an exclusive interview.

A substantial portion of care can be handled in high-quality, low-cost settings such as community hospitals, which continue to struggle financially, he said. In the last two decades, Grant said, more than half of Massachusetts hospitals have closed, all of them community providers, and many of them serving lower-income patient populations.

But, he says, the integrated healthcare system has found a way to address the problem. The Burlington, Massachusetts-based organization has implemented a program that facilitates the transfer of patients from its tertiary facility to community healthcare settings and vice-versa, depending on their specific healthcare needs. In the past year, Grant told FierceHealthFinance, the program has transferred 800 patients from teaching to community settings. But details on cost savings were not available at press time.

"We made a commitment as an organization that we were going to do everything we possibly could to keep patients… close to home for their care," he says. "The quality is comparable [to teaching hospitals], the cost is lower, both for the patients themselves and for the local employers, and it's also more convenient for patients and their families to be care for closer to home." 

"The overall implications are that costs are lower for everybody when we do that," he says.

The majority of community hospitals, meanwhile, see no incoming transfers, he said, with most of their transfers outgoing rather than inbound. "We've really changed the dynamics of culture within our organization to make people mindful of it all the time," he says, "and what was initially a novel experience for both our staff and our patients has become fairly routine for us to look at opportunities to move patients through the community hospitals."

Current healthcare costs and their apparent acceleration are both unsustainable, Grant says, and Lahey's leaders and staff "feel a significant responsibility to demonstrate that you don't have to compromise quality by introducing strategies that allow more patients to be cared for in community settings."