Regional News/Midwest: Statewide health information exchanges to share information in five states, and other news

COLUMBIA, Mo.—Statewide health information exchanges in Missouri, Kansas, Nebraska and Illinois will be able to send and receive basic healthcare messages between each using the federally developed secure messaging protocol. The Office of the National Coordinator for Health Information Technology at HHS launched an effort in 2010 to develop a simplified method of “peer-to-peer” health information exchange under the American Recovery and Reinvestment Act of 2009. Federal health IT authorities saw the system, dubbed Direct, as the key component of its broader program to establish a Nationwide Health Information Network that could serve a highly mobile population or regions that encompass multiple states. Direct enables hospitals and physicians with already-established trust relationships to send and receive basic clinical messages such as referral letters, lab results or patient-care summaries. It contrasts with the broader NWHIN technology of query-and-response enabling a clinician or researcher to query a universe of records for a single patient across multiple providers through regional health information organizations, or a network of RHIOs, and obtain copies of those records. Missouri, Kansas and Nebraska are the latest states to link together using Direct. Missouri and Illinois previously announced they were exchanging test messages. Last April, ConnectVirginia, a statewide exchange based in Richmond, launched its services with Direct and offered a year of free messaging as an inducement to get members to use it.

—Joseph Conn

NAPERVILLE, Ill.—Officials from 330-bed Edward Hospital in Naperville and 277-bed Elmhurst (Ill.) Memorial Hospital signed a letter of intent to merge. The parent companies—Edward Hospital & Health Services and Elmhurst Memorial Healthcare—include more than 50 locations with 7,600 employees and 1,680 staff physicians. The transaction includes Linden Oaks Hospital at Edward, a 94-bed psychiatric hospital in Naperville. Leaders of the organizations expect to complete the deal by the middle of the year, pending regulatory approvals. The new not-for-profit system would have revenue of more than $1 billion, according to a news release. Northwestern Memorial HealthCare in Chicago, which acquired its first suburban hospital in 2010, was interested in acquiring Elmhurst, but negotiations broke down last year. “Together, Edward and Elmhurst can enhance the quality and cost-effectiveness of healthcare while still maintaining our strong local community focus,” Edward President and CEO Pamela Davis said in a news release. Davis would serve as CEO of the new yet-to-be named system. The latest documents filed with the IRS showed that Elmhurst failed to turn a profit in fiscal 2011, posting an $11.3 million deficit on $364.9 million in revenue. Edward made a $31.2 million profit during the same timeframe on $493.7 million in revenue. A spokesman commenting on behalf of both hospitals declined to say how the new organization would be structured and described the move as a straight merger. It's unclear what role Elmhurst President and CEO Peter Daniels would hold. The spokesman said only that Daniels played a key role in the merger talks and continues to play a critical role at Elmhurst.

—Ashok Selvam

ANN ARBOR, Mich.—Eight Michigan physician groups have partnered with the University of Michigan Health System to form an accountable care organization. The ACO, known as Physician Organization of Michigan ACO, or POM ACO, was one of 106 new ACO contracts announced by the CMS on Jan. 10, as part of the agency's Medicare Shared Savings Program. According to officials leading POM ACO, the initiative will build on the University of Michigan Health System's experience with ACOs. UMHS took part in a CMS demonstration project that launched in 2005 and served as a model for its ACO program. UMHS is also in its second year of participation in the CMS' Pioneer ACO Model program. “This is part of our statewide mission, and our goal of using our knowledge to improve care through new practices, policies and partnerships,” Dr. Ora Hirsch Pescovitz, executive vice president for medical affairs at the University of Michigan and CEO of UMHS, said in a news release. “Additionally, it builds on several years of our experience and demonstrated success developing ACO models.” The eight other participating groups, located across the state's Lower Peninsula, include Lakeshore Health Network, Muskegon; Crawford Mercy Physician Hospital Organization, Cadillac; and United Physicians, Bingham Farms. POM ACO will comprise more than 1,800 physicians who care for roughly 81,000 patients, according to UMHS.

LINDENHURST, Ill.—A proposal by Vista Health System to build a $131 million hospital in Lindenhurst, about 50 miles north of Chicago, would add more beds to an area that already has a substantial surplus, according to a report by the staff of the state healthcare planning board. The plan by Waukegan, Ill.-based Vista to build a 132-bed facility 13 miles west of its existing facilities would increase the oversupply of hospital beds in Lake County, which already has 86 more beds than needed, according to a report by the staff of the Illinois Health Facilities and Services Review Board. The project has already met opposition from rival hospitals and from some religious groups and not-for-profits that say Vista hasn't adequately invested in its Waukegan hospitals. The board is expected to take up Vista's plan Feb. 5. Vista, a subsidiary of publicly traded Community Health Systems, plans to soften the impact of the new facility by eliminating 108 beds from Waukegan, where it operates two hospitals. Vista Medical Center East, the acute-care hospital, is licensed for 336 beds, but no more than 200 of those beds are staffed. In a statement, Vista Health System CEO Barbara Martin downplayed the findings in the staff report, saying they “were very similar to staff reports for hospitals that have been approved by the review board.” Vista, which was acquired by Franklin, Tenn.-based Community in 2006, unsuccessfully sought state approval to build a hospital in Lindenhurst five years ago. Now, hospital executives say the need for the new hospital is even stronger.

—Crain's Chicago Business