Unprecedented changes in the medical field are causing a wave of consolidation said Chris Anderson, CEO of Baptist Health Systems, speaking to the Jackson Rotary Club.
Baptist has been in the Jackson community for more than 100 years, started by two physicians in 1908. It was associated with the Mississippi Baptist Convention and has been ever since. It is a faith-based non-profit organization created to serve Christ and the community.
“Even though our organization has been around 100 years, it seems likely 90 percent of the activity has occurred in the last five to 10 years, as health care has quickened its pace and there’s been a lot more consolidation,” Anderson said.
A Mississippi State study showed that 31 of Mississippi’s 90 hospitals are financially threatened. This has led to unprecedented consolidation, especially since Mississippi chose not to expand Medicaid, depriving Mississippi hospitals of a billion dollars a year in federal money.
Baptist used to serve mainly the three Jackson metro counties and central Mississippi. That’s changed rapidly.
Just in the last few years, Baptist has acquired hospitals in Carthage, Yazoo City and Kosciusko.
“It is becoming really difficult to succeed in this environment whether you are a provider, a doctor or a clinic, so they seek a partner.”
“We have also partnered with an increasing number of physicians. The people who are probably most stressed are the small physicians across the state. We have spent a lot of time and capital and energy over the last five to 10 years finding great physicians and partnering with those physicians to ensure that they have a stable environment and can continue to serve patients in their communities,” Anderson said.
“We now have 31 clinic locations across Mississippi, about half primary care and about half specialty. “We are not operating in a vacuum. We are operating in a competitive environment and a heavily regulated environment.”
In the past, medical care operated on a pay-for-service model. You paid for an X-ray. You paid for a doctor’s visit. Now the system is moving to a value-based model with incentive and penalties for outcomes that are better or worse than standard.
“Our payments now move up and down based on how well we do, how well we take care of patients.” Anderson says the new system has faults, but the idea behind it is good.
“But to do that well has required significant changes in the way hospitals and physicians do their work. The technology and tools and analytical capabilities are very different from what we’ve had in the past. After 30 years of doing things one way, it’s difficult to turn on a dime and change a mindset or a way of practicing.
“Consumerism is very different. All my physician friends just love it when patients have been surfing the net for a week and they come in and know what their diagnosis ought to be. There is an awful lot of information that is now available to all of us. It’s helpful and it’s good but not all that information is always accurate. So how do we use that technology to empower consumers in an appropriate way and how does that intersect with the financing system. Higher deductibles and higher out-of-pocket costs are changing not only how patients research their illness but what patients will accept and where they go.”
Anderson noted there are now 165,000 health care apps. For 100 years, most medical investments were for clinical technology such as MRI devices. Now most medical investments are for digital tools to help the consumer. “That’s been a radical change empowering consumers and changing the way we take care of patients.”
A patient in Kosciusko, using telemedicine, can interact with a cardiologist in Jackson in real time. “That wasn’t available even 12 months ago. We haven’t even figured out how to document and charge for that.”
Enormous sums are now required to be spent on cybersecurity to protect health care data. Drug prices going up 12 percent a year while hospital reimbursements are only going up one percent.
In the new value-based model with more risk and technological investment, scale matters. For a clinical computer system, the lowest bid was over $60 million for five years.
While researching a new computer system, the Jackson Baptist execs visited Memphis. During the process, they realized they shared the exact same mission philosophy. “It was remarkable over two days how much we felt like family.”
“The conversation started about what we can do to support each other and it led to our boards meeting and discussing the opportunity of putting two really strong systems together.”
Baptist Memphis was already in Booneville, Calhoun City, Columbus, Oxford, DeSoto and New Albany and owned other Tennessee hospitals and clinics. The merged entity is now the primary health care provider in more than 50 counties in Mississippi, impacting 1.7 million residents every year. It is the third-largest employer in Mississippi with 7,000 Mississippi employees out of 13,000 total. More than 300,000 Mississippians will go to Baptist emergency rooms. Baptist is now the size of Vanderbilt and Ochsner.
Anderson said the merger won’t slight Jackson, which will continue as the Mississippi headquarters. Baptist just announced moving 250 jobs to downtown Jackson in the three floors of the Regions building.
In addition, the Jackson hospital is in tip-top shape. “While the medical center moved from the east side of State Street to the west back in 1976, about five years ago we took that entire facility and built it back out from the inside, one or two floors at a time.
“If you have not been in the hospital the last five or six years, you will be surprised to see how modern the facility is on the inside. It’s a 40-year-old building, but the only thing that is 40 years old is the concrete behind the walls. We are really proud of what a modern medical center we have downtown.”
Health Grades, an independent rating agency for hospitals, ranked Baptist in the top two percent in the country based on published, objective clinical metrics.
Baptist was recognized as one of the top 70 out of 4,000 hospitals when ranked by patient satisfaction.
Since the March merger with Baptist in Memphis, Baptist has become the first magnet designated hospital in the state of Mississippi. This is a designation from the American Nurses Association based on a standard of performance only seven percent of hospitals in the nation achieve.
