Now in 'position of strength,' MetroHealth seeks partnership

MetroHealth plans to seek out other hospitals and health systems to enter into a "strategic partnership," in the hopes of enhancing services and reducing costs.

As the system concludes an "extraordinary year," and enters a "very promising" 2018, president and CEO Dr. Akram Boutros believes the system has a lot to offer, and now is the right time to begin looking for such opportunities. The system's board of trustees agreed, approving a resolution in December to engage an adviser to help evaluate strategic partnerships.

"From our point of view, MetroHealth is at the best position it has been in decades," Boutros said. "That creates a position of strength, which — coupled with enormous changes and uncertainty in government payers and significant consolidation within Northeast Ohio and the U.S. market — makes it the right time for us to seek relationships with either a national or regional partner."

The resolution approved by the board of trustees explicitly takes off the table any merger, sale of assets or any affiliation or joint venture that would result in any change in control of the system.

Selling a minority stake of MetroHealth also is not an option, as the system doesn't have the authority to sell any stakes, "neither do we want to," Boutros said.

But beyond those parameters, the system hasn't determined any specific model for a partnership.

"MetroHealth today is in excellent position to meet the immediate healthcare needs of the community," the board resolution states. "However, the long-term prospects for standalone safety net hospitals may be less certain."

According to the resolution, safety net hospitals face numerous challenges — declining government reimbursement, uncertainty about the fate of the Affordable Care Act and other reform efforts, the move toward value-based payments, the population health shift, declining inpatient services, market disruptions, industry consolidation and increasing consumerism.

A partnership could help combat many of these challenges, as well as offer financial and clinical advantages, Boutros said.

The purchasing power of a larger network could help reduce costs by consolidating back-office enterprises, such as IT and the purchasing of insurance or medical equipment.

MetroHealth also would look for a partner with clinical expertise that could help expand the scope of services and benefit the continuum of care.

With a strategic partnership, national provider contracts would be more available to the system, such as clinically integrated networks. It could also allow more opportunities for research and education and help MetroHealth recruit clinical talent, Boutros said.

"We're approaching this from a position of strength," he said. "Unlike other hospitals that only seek partnerships when they are in trouble, we are looking at this at the height of MetroHealth, which I think is a prudent thing to do from a board and management standpoint."

Since Boutros joined MetroHealth in 2013, the system has had discussions with "over half a dozen large and moderate size health systems within Northeast Ohio," he said, declining to name the institutions. But nothing ever came to fruition, for a variety of reasons, he said. For one, some larger health systems are often looking for acquisitions or mergers. Plus, ongoing relationships require a lot of investment over many years.

"There's been, at times, a lack of appreciation for what MetroHealth brings to the table," Boutros said. "And that's been reasonable because we were developing our population health team. People needed to see that MetroHealth can achieve its promise, and it took us some time to demonstrate that. … And frankly, five years ago, the future of MetroHealth was in question. I don't think it is today."

An adviser, which Boutros said the system plans to select in the first quarter, will help define goals, establish metrics, identify partnership models, find preferred partners and evaluate success of the partnership. The hope is to put out an RFP in the second quarter and have a partner identified by the end of 2018.

Boutros said he wants to see local, regional, state and national parties apply for the RFP process. Partnering with a for-profit hospital or system would "hold significant hurdles," while nonprofit and other public health systems would be easier and "much more aligned with our mission and values," he said.

Faith-based organizations also would be an option, so long as the partnership allows for MetroHealth to continue as a secular public hospital and not conform to faith-based requirements.

"What I would tell you is that there is also significant synergy in mission and future focus with health systems like Geisinger," Boutros said. "They're focused on population health, so are we. They have an academic and research based platform. So that's an opportunity, we think."

He hopes to see systems like the Mayo Clinic, Johns Hopkins and the University of Pittsburgh Medical Center interested in a partnership. He also mentioned Toledo-based Promedica.

MetroHealth has a lot to offer a partner, Boutros said. A strategic relationship would enable the system to leverage its strengths to help other institutions.

The system's expertise in managing Medicaid patients and achieving high quality and low costs is becoming an attractive asset as other large health systems and hospitals struggle to do the same. Other programs that the system brings to the table include its trauma services, its nationally recognized population health and primary care services and its physical medicine and rehab centers.

Plus, MetroHealth is embarking on a nearly $1 billion campus transformation plan, including a plan to replace its aging patient towers. This, Boutros believes, will help attract high-caliber health systems.

"I think this is about changes in healthcare landscape that are coming at a very rapid rate, and it's about our commitment to the population that we serve at MetroHealth," he said. "We want to make sure that no one in Cuyahoga County is left without healthcare."

"Now in 'position of strength,' MetroHealth seeks partnership" originally appeared in Crain's Cleveland Business.