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Hospitals hoping to improve services, save money through allian

by Nora Edinger

REGIONAL EDITOR

Augusta Healthcare is not about merging, it's about planning, according to one partner in an alliance between Fairmont General, Monongalia General and St. Joseph's hospitals.

"We're concentrating on fixing things and creating some new opportunities," said Richard Graham, president and chief executive officer of Fairmont. "We've been working on down-in-the-trenches issues rather than publicizing the name."

Indeed, the alliance has remained so quiet since its 1998 inception even some employees were unaware of its existence. Graham said that is because Augusta is about planning for solid, separate, community-based growth, not creating a unified health system. Each hospital maintains a separate board of directors.

"It started out with similar philosophies," Graham said of the alliance between Fairmont and Monongalia. St. Joseph's of Buckhannon, which is also affiliated with a Catholic order, joined the system later.

The alliance is also about money.

Since the federal Balanced Budget Act went into effect in 1997, West Virginia hospitals have been struggling to cope with underfunded Medicaid and Medicare patient expenses.

According to figures provided by the West Virginia Health Care Authority, state hospitals lost $35.8 million in patient services in 1998, the most recent year on record. This is the first such loss in history.

Regionally, several hospitals were among those posting patient-services losses. WVU Hospitals (which includes Ruby Memorial of Morgantown) lost $3.3 million, Broaddus of Philippi lost $444,000, Fairmont lost $798,000, Grafton lost $401,000 and St. Joseph's lost $668,000.

By adding other sources of income (such as investments and office rental) into the pot, all except Broaddus were still able to turn at least a small profit.

"The board of directors at Fairmont General has to figure out each year how we will pay our bills and keep the lights on and continue to provide this free care," Graham said.

By balancing some expenses across the three institutions, Graham said Augusta members are definitely saving and, sometimes, making money.

For example, St. Joseph's is purchasing a number of long-term care (nursing home) bed slots Fairmont did not need to replace a portion of its small psychiatric unit -- and bolster its income. The state has a moratorium on new long-term care beds, forcing the need to buy another institution's slots.

Graham said the three hospitals may also someday share the cost of an endocrinologist to assist with a large diabetic population, a cost none of them could afford individually. They are also sharing expenses on staff training and software involved in complying with some new record-keeping regulations.

Monongalia, which offers open-heart surgery, also provides a solid link between the smaller communities and such services, Graham added of another alliance benefit, although patients can still choose among other providers.

In turn, Fairmont and Monongalia staffing capabilities may eventually bring some new acute care procedures to St. Joseph's. Fairmont may also begin to offer some cancer treatment in Marion County.

Fairmont's possible move to I-79 may also play into the alliance, providing a smoother transportation link between the three hospitals, Graham said.

"That's Augusta's potential," Graham said, "planning together and sharing some of your resources."

The presidents of St. Joseph's and Monongalia were unavailable for comment.

Such hospital partnerships abound in the North Central Region.

The most pronounced is West Virginia United Health Care Systems, which includes Davis Memorial of Elkins, Broaddus, United Hospital Center of Clarksburg and Ruby.

"There are a good deal of partnerships and a good number of independent hospitals," said John Law, spokesperson for the West Virginia Hospital Association.

Law believes the move to merge is generally more about access than money, meaning hospitals are trying to improve services to a local community even if the local hospital is not the entity to offer them.

He said the partnerships vary widely, from almost total unification of services to a loose planning partnership such as that pursued by Augusta.

Regional editor Nora Edinger can be reached at 626-1403 or by e-mail at nedinger@exponent-telegram.com.

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