How an Idaho Critical Access Hospital Became One of the Lowest Cost U.S. Hospitals

Cassia CFO Brian Hickenlooper credits his hospital’s ability to provide cost-effective care to three specific strategies: an extensive use of clinical practice guidelines, a higher ratio of primary care physicians to specialists, and access to resources and knowledge from owner Intermountain Healthcare.

Cassia Regional Medical Center may only have 25 beds, but it has accomplished something that many larger providers would envy. Cassia is ranked among the lowest cost hospitals in the United States for Medicare patients. Being part of Intermountain Healthcare—which has been held up as a benchmark of high-quality, efficient care by President Obama and many others—is a major factor in Cassia’s ability to hold costs down, says CFO Brian Hickenlooper.

The Centers for Medicare & Medicaid Services paid the Burley, Idaho-based Cassia Regional Center $35,975 per chronically ill Medicare patient during the last two years of life between 2001 and 2005, according to the 2008 Dartmouth Atlas of Health Care (see the exhibit). That’s $10,437 less than the national average of $46,412. 

Cassia is a critical access hospital (CAH) serving a two-county agricultural area with a total population of about 40,000. Another CAH, Minidoka Memorial Hospital, 10 miles away in Rupert, Idaho, is significantly smaller than Cassia, according to CFO Brian Hickenlooper. “We probably do two thirds of the healthcare business,” he says. “They probably do a third.”

The next largest hospital is the 165-bed Magic Valley Regional Medical Center in Twin Falls, Idaho, about 40 miles away.

Just how does a small hospital with limited resources become such a model of efficiency? Hickenlooper credits the enviable ranking to several common-sense tactics that have translated into real dollar savings.

Following Best Practices

Hickenlooper attributes Cassia’s efficiency in large part to practice guidelines the CAH has adopted from owner Intermountain Healthcare, a Salt Lake City-based, not-for-profit system with about 20 hospitals in Utah and southeastern Idaho.

Intermountain is a fully integrated system that includes hospitals, clinics, and health plans.

Intermountain employs a portion of its physicians. “At our site, we employ about 20 percent of the physicians,” says Hickenlooper. “Employed physicians make up a small, but important portion of physicians practicing at Intermountain, but they are critical to the integration of clinic data used to develop best practice.”

One practice guideline Cassia has adopted aims to keep congestive heart failure (CHF) patients out of the hospital by helping them manage their care at home. “That’s a big focus,” says Hickenlooper. In conjunction with physicians, Intermountain Healthcare’s cardiovascular clinical program put together brochures and other educational materials to teach CHF patients how to better care for themselves. Patients are instructed, for instance, to monitor their diet and weight and be aware of any possible fluid retention, which might signify a problem, says Hickenlooper. Hospitalized CHF patients also receive extensive education on home care for when they’re discharged.

Another guideline advocates the use of specific clinical protocols, such as ensuring that patients have received a pneumonia vaccine. The protocols are designed to improve patient care management and get patients discharged sooner rather than later, says Hickenlooper.

“We have continued to look at best practices from a global perspective,” he adds. “Currently we are in the development of a full continuum of care model for uncomplicated maternity care. This model includes all prenatal, delivery, and postpartum care. Our multidisciplinary team is working together using our local and Intermountain system resources of physicians, nursing, finance, and health plans in the development of clinical best practices to minimize variation and provide excellent care each time for each patient.”  In addition, Intermountain is creating a structure to align financial incentives for the hospital, physicians, and health plans.

“Our objective is to continue to roll out a similar process for many of the high-volume clinical service areas we provide in our community,” says Hickenlooper. “As we do so, we expect a continued return of lower costs by minimizing variation and increasing collaboration, while providing high-quality care.”

Primary Care Physicians Versus Specialists

A second reason for the low-cost of care at Cassia is the hospital’s use of primary care physicians rather than specialists, says Hickenlooper.

“In a larger facility you can have multiple physicians working on the same patient. They may end up ordering the same type of lab work, or the same types of X-rays, duplicating the services as they’re trying to assess their specialty component of the patient’s care,” says Hickenlooper. At Cassia, the internal medicine or family practice physicians initiate the care, and only call in the general surgeon or other specialist as needed. The physicians are also adept at working as a team, rather than independent components, says Hickenlooper.

In reviewing the financial data from the Dartmouth study, Hickenlooper says he found that hospitals with higher costs also had higher specialist versus primary care costs.

“I think ours is split the other way,” he notes. “Our costs are probably more primary care than specialists, and the primary care cost is lower than the specialist cost.”

He points out that the strategy has also resulted in improved patient satisfaction because patients feel more involved with their own health care if a primary care physician is working with them on a regular basis.

“And,” he adds, “our clinical outcomes are still high quality.”

System Advantages

Being part of a larger system also has its advantages, says Hickenlooper. Patient education, for example, is more challenging for stand-alone CAHs, such as Minidoka.

“We’ve been sharing a lot of our clinical education materials and those types of things with Minidoka staff because of limited resources,” says Hickenlooper.

In addition, Cassia’s affiliation with Intermountain has helped the CAH recruit a range of physicians who can offer a diversity of services unique to a CAH. The hospital has a full-time team that includes about 10 family practice physicians, three orthopedic surgeons, three obstetricians/gynecologists, three internists, two general surgeons, and one ear, nose, and throat physician.

Physicians also like having access to specialists within the Intermountain system to consult with on cases and educational matters. “Intermountain is looked at as a leader in health care, and I think physicians like having that,” says Hickenlooper.

Cost-Based Reimbursement

While it’s certainly commendable, Cassia’s low-cost ranking may come as surprise given the hospital’s CAH designation. Wouldn’t staff be less concerned about keeping costs down when working in an environment where reimbursements are based on cost?

Hickenlooper says this simply is not the case at Cassia. Rather, Cassia’s 400 employees feel a sense of ownership of the hospital and more of a duty to work as a team, he says.

“We realize that what we do impacts the patient, and the costs impact our financial viability down the road. We want to be able to be here for the community,” says Hickenlooper. “We’re a not-for-profit organization, and we want to make sure we meet our mission of meeting the community’s needs.”

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Brian Hickenlooper is CFO at Cassia Regional Medical Center, in Burley, Idaho, and an HFMA member in the Idaho chapter (Brian.Hickenlooper@imail.org).

Additional Resources:

For more on this topic, access the 2008 Dartmouth Atlas for Healthcare at www.dartmouthatlas.org. (Wennberg, J.E., et al., Tracking the Care of Patients with Severe Chronic Illness; available at  www.dartmouthatlas.org) The report compares cost-efficient Intermountain Healthcare, Mayo Clinic, and Sutter health system against high-cost providers in the Los Angeles area. For example,

Exhibit

Cassia’s  Ranking on the 2008 Dartmouth Atlas Report

Cassia Regional Medical Center (2001-2005)
Variable	Rate	Percentile	Absolute
		Rank	Rank
Total Medicare reimbursements per enrollee during the last two years of life	35,975	3	2,801 of 2,892
Total Medicare reimbursements per enrollee during the last six months of life	18,085.8	1	2,842 of 2,892
High-intensity ICU/CCU bed inputs per 1,000 decedents during the last two years of life	10.2	50	1,815 of 3,646
SNF bed inputs per 1,000 decedents during the last two years of life	59.2	41	2,490 of 4,269
Home health sector reimbursements per decedent during the last two years of life	2,118	37	1,822 of 2,892
SNF/Long-term care sector reimbursements per decedent during the last two years of life	6,058.7	29	2,045 of 2,892
Outpatient sector reimbursements per decedent during the last two years of life	6,196.2	26	2,115 of 2,891
Medical and surgical unit bed inputs per 1,000 decedents during the last two years of life	35.7	26	2,674 of 3,646
Hospice sector reimbursements per decedent during the last two years of life	1,259.5	26	2,131 of 2,890
Total FTE primary care physician labor inputs per 1,000 decedents during the last two years of life	8.6	22	2,228 of 2,892
Hospital bed inputs per 1,000 decedents during the last two years of life	46.7	21	3,372 of 4,271
Intermediate-intensity ICU bed inputs per 1,000 decedents during the last two years of life	0.8	20	2,910 of 3,646
RNs required under proposed federal standards per 1,000 decedents during the last two years of life	42.9	17	2,997 of 3,646
Total ICU bed inputs per 1,000 decedents during the last two years of life	11	16	3,050 of 3,646
Inpatient sector reimbursements per decedent during the last two years of life	18,561.2	2	2,818 of 2,892
Total FTE physician labor inputs per 1,000 decedents during the last two years of life	14.8	2	2,827 of 2,892
Total FTE medical specialist labor inputs per 1,000 decedents during the last two years of life	2.1	0	2,871 of 2,892

Source: Chart compiled based on data from the Dartmouth Atlas of Health Care, 2008.

To access your organization’s data, visit the Dartmouth Atlas home page.