MIDDLEBURY — The Porter Medical Center Board will affiliate itself with the University of Vermont Health Network (UVMHN) if the Porter community ultimately determines that such a partnership — rather than remaining independent — is in the best interests of PMC’s future as it could net Porter long-term financial stability and some major upgrades — including a new medical office building.
The potential affiliation is a decision that will be made by this coming spring, Porter officials said.
PMC Interim President and CEO Dr. Kniffin also revealed three other entities had stepped forward as prospective Porter suitors: Tennessee-based Quorum Health, Dartmouth-Hitchcock Medical Center, and Rutland Regional Medical Center.
Kniffin said UVMHN emerged as the “clear choice” from among the four wooing Porter, due in part to geography, familiarity, reputation, and the fact that half of current PMC clients received at least a portion of their medical services at the University of Vermont Medical Center, according to Kniffin. Half of Porter’s medical staff also trained there, he noted.
“They’re already a virtual, natural affiliation (with UVM),” Kniffin said.
Still, the PMC board took a close look at the other potential suitors, he said.
“We have evaluated other potential partner options and had multiple conversations, presentations and face-to-face meetings with the leaders of interested organizations,” Kniffin said. “It is abundantly clear that if we choose to partner, our best partnering option would be with the UVM Health Network. That is now the only affiliation option that we are considering, should we decide to make that choice.”
The PMC Board has spent more than a year considering whether the organization should continue to operate independently or partner with another health care provider. Porter administrators have dubbed the conversation, “Our Legacy — Creating a Vision for Porter’s Future.” PMC has hosted a dozen informational forums with staff, providers and the general community to engage them in this conversation and solicit their thoughts, ideas and concerns about both options, Kniffin said.
PMC includes the hospital, Helen Porter Healthcare & Rehabilitation and 12 physicians’ offices throughout the county.
“What we have heard loud and clear from our community and our providers and staff during our forums is that maintaining local access to the highest level of health care services appropriate for a community hospital is essential,” Kniffin said. “That includes access to local primary and specialty care, maintaining all of our current inpatient and ancillary hospital services, as well as the skilled nursing care offered by Helen Porter Healthcare and Rehabilitation Center.”
Top PMC officials confirmed this news during an exclusive interview with the Addison Independent late last week. Those officials shared the news on the condition that it be embargoed until Monday, Aug. 15, the date on which PMC stakeholders were to be officially informed of a possible partnership with UVMHN.
The Independent will reach out to other PMC stakeholders — including Porter personnel and community members — in a follow-up article for this Thursday’s paper.
WHAT WOULD AFFILIATION MEAN?
Kniffin and Porter spokesman Ron Hallman said while affiliation would likely give UVMHN the final say on major operational decisions, PMC would still retain a good measure of autonomy.
Porter workers would remain PMC employees. Porter providers would remain employed by PMC for a period of 18 months, at which time they would transition to a network-wide UVM medical group.
While Kniffin said there are no guarantees in health care these days given the seismic changes in the industry, affiliation is not expected to result in any layoffs or affect employees’ compensation.
“That is a real concern of our employees — that they have job security, and that is totally appropriate and understandable,” Kniffin said.
“Our finance people and their finance people tell us the big financial advantages would not be from layoffs, but from better interest rates, improved purchasing and shared services.” Kniffin noted.
Hallman said an affiliation with UVMHN could also translate into savings in such expenses as capital, legal, risk management, compliance, insurance and third party contracting.
Kniffin pointed to Central Vermont Medical Center’s affiliation experience with UVMHN, which he said resulted in no layoffs.
“In fact, they are growing.”
Porter officials believe affiliation, in turn, would result in a busier PMC.
“Our goal is to do more, not less,” Hallman said. “We actually have the capacity to see more patients. We have more capacity in our operating rooms to do more procedures. We have capacity at Helen Porter to have more long-term care residents. We have capacity that (UVM) doesn’t have. If we are partnered, they have a very strong mission-driven financial interest to keep us busy.”
So Porter would no longer see UVM as a rival.
“It no longer means we are competing for dollars,” Kniffin added. “If we have patients coming down here from (Chittenden County), the revenue goes into the same pot.”
Addison County patients would continue to be served locally. But UVM would enhance local care by extending the services of its specialists, as well as call coverage. So if enough local patients need the services of a dermatologist, for example, UVM could assign one of its specialists to PMC for a certain number of days per month, officials said. This would save the patient a trip to Chittenden County. And having backup from UVM would guarantee uninterrupted service in some of the more thinly staffed PMC departments, according to Kniffin.
“We have enough (patient) volume for one nuclear medicine tech,” Kniffin said. “But if you have one nuclear medicine tech, they can’t go on vacation; they can’t get sick. So we have two half-timers. Those things are very challenging, and it would be nice to have some depth there.”
Hallman noted PMC would retain its own board of directors. Porter would also place one of its own on the UVMHN board, which in turn would have a spot on PMC’s panel.
Appointment of the PMC president/CEO would require approval from the UVMHN board.
There would be no change in core services for five years, and any change in such services would require “collaborative strategic planning” between UVMHC and Porter, according to Hallman.
PMC’s “core services” include medical and surgical care; obstetrics; laboratory and radiology; long-term care and rehabilitation; emergency and primary care; women’s health; infusion services; cardiology; orthopedics; podiatry; ophthalmology; otolaryngology (ear, nose and throat); and urology.
WHY AFFILIATE?
As previously chronicled in the Addison Independent, PMC has been battling through some rough financial times.
PMC officials have drafted a fiscal year 2016 budget of roughly $89,990,000 that reflects 83 days of cash on hand (savings), which is still substantially below the industry standard of 120 days of cash on hand to be deemed a healthy/sustainable organization.
Porter last February cut 17.5 full-time equivalent positions, including 8.5 in the nursing category. Former Porter CEO Lynn Boggs resigned soon after.
Information supplied by PMC indicates the organization would have to find significant cuts and/or revenue enhancements amounting to $857,000 in fiscal year 2017, $1.75 million in fiscal year 2018 and $2 million in fiscal year 2019 in order to achieve a total margin of approximately $8 million and remain independent and financially capable of delivering the services local patients have come to rely upon — but unable to make anticipated and necessary investments in necessary new technology or improved facilities. Affiliation with UVMHN, according Porter officials, would allow PMC to achieve a total operating margin of just under $10 million, a threshold they said would allow the organization to “thrive.”
Affiliation could also lead to professional development opportunities for PMC staff, officials said.
“Our nurses want to take care of sicker patients, but we don’t have a volume of sick patients,” Kniffin said. “So there would be an opportunity to send our nurses up to UVM because they want to go up and expand their skills and bring those skills back to us.”
Hallman said PMC leaders are looking to achieve two primary goals.
“One is to create scale by bringing the organizations together, because scale is going to be rewarded in the future of payment reform and global budgets and accountable care organizations,” Hallman said. “But as you build scale, you want to maintain small local access and identity for a community, so they know they are going to see the same providers, same staff, and same core services. Our goal is to be able to maintain who we are and what we have been able to do in this community, while simultaneously taking advantage of scale, which is absolutely required in the future world of payment reform.
“It is really hard to be a small community hospital these days,” Hallman added.
Kniffin compared the current UVMHN/PMC courtship to a relationship between two people. The two medical entities are currently “dating.” If they move forward and sign a non-binding letter of intent, it would be akin to “moving in together.” And if they strike a deal, it would become a “marriage.” And, like a wedding ceremony, members of the PMC family will be able to raise objections. A future divorce would likely mean PMC would have to pay back UVMHN for any of the “cool stuff” it obtains through the partnership.
And what kind of stuff might that include?
For starters, a revamped electronic medical records system. PMC’s most recent budget called for an updating of its current Meditech system at an estimated price tag of $3 million to $4 million, according to Hallman. Affiliation would lead to UVMHN equipping PMC with an “Epic”-brand system. This is a better system than PMC currently uses and would allow the two health care providers to read all of their combined patients’ records, Kniffin explained.
“We need to be able to communicate quickly and effectively,” he said of the electronic medical systems upgrade.
Also on PMC’s wish list: Construction of a modern, on-site medical office building around the year 2021 that would consolidate some of the county’s physicians’ practices and accommodate visiting specialists. Such a structure, which Kniffin said has been ball-parked at around $30 million, is currently far beyond PMC’s financial grasp.
The PMC board will spend the next two- to four months seeking input from the community and staff on whether to opt for affiliation. If the answer is “yes,” the board will begin preparing the documents needed to officially align with UVMHN.
Hallman said affiliation could take effect by next spring, if that is the chosen path.
“What is going to drive (the decision) is what’s best for our community and our patients,” Kniffin said.
While the numbers make affiliation sound like a tough offer to refuse, Kniffin said one can’t underestimate the importance that some in the community place on having an independent PMC and who might consider partnership the end of an era and a “defeat” of sorts.
“There are a lot of people who have worked here for many, many years and have a lot of sweat equity in this organization,” he said. “They love the place, care about the place and take pride in it.”
Officials reiterated the importance of the upcoming decision.
“I think that we take very seriously our responsibility to ensure that whatever decision we make is the right decision for this community and this organization,” Hallman said. “Even though the evidence seems to speak to the value of this potential relationship, we have a very serious decision to make regarding an organization that has been here for 91 years.”
John Brumsted, M.D., is president and chief executive officer of the UVM Health Network and the UVM Medical Center. He provided the following statement on PMC’s potential affiliation with UVMHN.
“In the course of Porter’sdeliberations about remaining independent or affiliating with another institution, they issued an RFP to health care organizations regarding what a potential affiliation would look like,” he said. “We were one of four respondents, and at the end of their RFP process, I am pleased to say they identified us as their potential partner. Should they choose affiliation, we look forward to discussions that will lead to their joining the UVMHN.”
Jill Mazza Olson, vice president of policy and legislative affairs and interim co-executive officer of the Vermont Association of Hospitals and Health Systems, also weighed in on the potential partnership.
“The VAHHS is proud of PMC’s dedication to engaging the local community in substantive discussions about their shared future,” she said. “In today’s challenging and rapidly changing health care environment, all of our hospitals are learning to collaborate with each other and with other local organizations to provide the highest quality care. As our hospitals explore the benefits and efficiencies of strengthening ties with one another, they recognize the vital need to maintain local governance within the communities they serve.”
PMC has scheduled a community forum on affiliation for Wednesday, Aug. 24, at 7 p.m. at the Middlebury Regional EMS headquarters at 55 Collins Drive.
Reporter John Flowers is at [email protected].
Sidebar: What is UVM Health Network?