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Challenges of Becoming A Regional Referral System .14
Challenges of Becoming A Regional Referral System .14
Abstract
The U.S. health care system must change
because of unsustainable costs and limited
access to care. Health care legislation and
the recognition that health care costs
must be curbed have accelerated the
change process. How should academic
medical centers (AMCs) respond? Teaching
hospitals are a heterogeneous group,
and the leaders of each must understand
their institutions goals and the necessary
resources to achieve them.
Clinical leaders and staff at one AMC, the
University of Kentucky (UK), committed
to transforming the AMC into a regional
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Financial planning
The financial planning process was the
most significant and challenging, but also
the most transformative. First, UK leaders
needed to define the financial resources
necessary to achieve the goals set for UK,
and then they needed to determine the
feasibility of generating these resources.
The institutions leaders determined
that UK would need to invest more than
$800 million over 8 to 10 years to expand
clinical programs, recruit faculty, acquire
new technology, and build facilities.
Generating such extraordinary resources
would be possible only if every party in the
institution shared a coordinated strategy to
work toward significantly greater inpatient
volumes and to increase the overall
revenues and operating margins in order
to support a substantial bond issuance.
Strong margins and a substantial bond
issuance were necessary to fund capital
construction, program development, key
recruits, and technology.
Strategic planning
Through the strategic planning process,
UK leaders identified three key initiatives.
First, clinical efforts on campus needed
to focus on advanced subspecialty care
and destination clinical services such as
Level 1 trauma, full-service subspecialty
pediatrics, advanced cancer care, and
solid organ transplantation. UKs
motto became We need to assure all
Kentuckians thatno matter how ill they
are or how complex their needsthey
can get care in Kentucky and not have to
worry about whether their insurance will
allow them to go out of state. Second,
UK focused on developing mutually
beneficial relationships with community
providers, working to keep care local as
much as possible and to transfer patients
to UK only when clinically appropriate.
Finally, UK leaders recognized that UKs
success depended on an unwavering
emphasis on efficiency, outstanding
quality, uncompromised safety, and
patient satisfaction.
Facilities and academic planning
Through the facilities planning process,
UK leaders evaluated every clinical
building and recognized that the core
facilitythe Albert B. Chandler Hospital,
which dates back to 1960would not
accommodate an increase in patients with
complex medical problems. Therefore,
UKs leaders initiated a building project
to serve both present and anticipated
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Article
Figure 1 UK HealthCare inpatient discharges from fiscal year (FY) 2003 through FY 2014. The
number of discharges for 2014 is a projection.
Partnerships
Historically, UK strategies focused on
traditional geographic service areas
encompassing the eastern half of
Kentucky (Figure3). UK HealthCares
primary geographic service area (Fayette
County) included a population of
approximately 300,000. The secondary
geographic service area consisted of the
16 neighboring counties, which had a
population of approximately 450,000.
About 40% of admissions were patients
with a very high CMI, referred from UKs
tertiary market of 46 counties with a
population of 1.2 million. Together, these
created a total market of approximately
two million people.
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Figure 4 The redefined market boundaries for UK HealthCare. UK HealthCare is a regional referral center for destination clinical services.
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Article
Table 1
Population Base Needed to Support Destination Services Volume Targets
Procedure
Kidney and kidney/
pancreas transplants
Liver transplants
Estimated
incidence per
one million
Kentucky
residents
Aspirational
volume
Population
required
to achieve
aspirational
volume
Population
required
to have 50%
of market
share
34.34
110
3,203,560
6,407,119
16.82
60
3,566,603
7,133,206
Heart transplants
5.30
25
4,716,703
9,433,407
Lung transplants
8.07
25
3,099,548
6,199,096
28.13
150
5,331,760
10,663,520
68.3
250
3,660,322
7,320,640
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Article
In Sum
References
1 Fuchs VR, Emanuel EJ. Health care reform:
Why? What? When? Health Aff (Millwood).
2005;24:13991414.
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