New CEO: Dayton Children’s future remains strong

Larger hospitals in Cincinnati and Columbus are not threats

Deborah Feldman acknowledges she might seem an odd choice to run a hospital.

She has a background in government, not health care. She never attended medical school. But Feldman’s choice as president and chief executive officer of Children’s Medical Center of Dayton reflects the changing dynamics of operating a small pediatric hospital in an increasingly competitive health care environment, and the reliance on government funding to keep a 92-year-old institution afloat.

Feldman, who recently sat down with the Dayton Daily News for her first extended interview since taking the job in July, said the 15 years she spent running the day-to-day operations of Montgomery County government provided an invaluable training ground for administering a staff of more than 1,500 and a net revenue stream that exceeds $212.3 million.

“I thought this was just a wonderful chance for me to give back to the community in a major way and to be part of an organization that I have so much respect for,” she said.

She said her years as a county administrator gave her plenty of experience managing human services programs, and she knows how Medicaid — often the biggest single funding source for any children’s hospital — works. Her government experience means she knows how Columbus and Washington, D.C., work, an important skill for the hospital’s chief advocate.

Medicaid — the public health insurance program geared towards the poor and children — is at the top of the list for Feldman, and for every other children’s hospital CEO in Ohio.

“The biggest challenge is how we get paid,” she said.

Medicaid makes up about half of patient revenue for most children’s hospitals. For Dayton Children’s, Medicaid accounts for about 53 percent of their patient revenue. At Toledo Children’s, it’s 57 percent, and Cincinnati Children’s is 43 percent. At about $13 billion annually, Medicaid is the largest single line-item in Ohio’s budget, serves more than 2.1 million Ohioans and is perennially under threat of cuts.

Another issue, said Ohio Children’s Hospital Association president Nick Lashutka, is that Medicaid payments to doctors and hospitals do not cover the cost of treatments. In 2010, Medicaid reimbursements were $242 million short of the cost of treatments provided by the state’s six pediatric hospitals.

“It makes our job increasingly difficult,” he said.

Recruiting pediatricians

Medicaid helps also pay for graduate medical education — salaries and other expenses for medical residents who train at Dayton Children’s and other teaching hospitals. Medicare pays for residents who train at hospitals that serve mostly adults, and the funding is renewed automatically every year. But Medicaid funding for the training has to be renewed by a legislative vote.

Physician recruitment is another challenge facing Feldman and her peers.

There are not enough pediatricians who specialize in fields such as heart surgery or neurology to go around, and competition to recruit them is fierce, said Ken Roorda, a Seattle-based principal and leader of children’s health care practice at ECG Management Consultants.

“There’s competition nationally to recruit the best and the brightest, and graduates naturally are willing to move to an environment that is safe, stable and similar to the places where they’ve trained,” he said. “The big tertiary and quaternary university systems have an inherent advantage in recruiting new graduate sub specialists. The smaller places, the smaller markets, have a harder time.”

Last year, Dayton Children’s recruited 18 sub specialists, including three pediatric anesthesiologists, a pediatric pulmonologist, a child neurologist, a pediatric endocrinologist, a pediatric gastroenterologist, a pediatric orthopedic surgeon and two neonatologists.

“We had a really great recruiting year last year,” Feldman said.

Another challenge is patient volume — both in terms of having enough total patients to keep the hospital’s doors open and in having enough patients who need specialty care to keep those programs operational, said Christine Hartwell, national practice leader for child health with Health Strategies and Solutions, a Philadelphia-based consulting firm.

Since children do not need to be hospitalized as often as adults, that means hospitals have to extend their reach for patients over wider service areas, especially for patients who need specialized care, she said.

It means also executives at children’s hospitals have to think harder about what specialty services they offer to make sure they get enough experience to build up good outcomes, and to make the program supports itself, Hartwell said.

“As care becomes more sophisticated, there are, thankfully, fewer and fewer children who need the highly complex services,” she said. “The pediatric population base required to support that more complex care becomes larger and larger, which is why you’re seeing places like Cincinnati and Columbus expanding further outward. They have to go farther to find enough customers to do things in a top-caliber and efficient manner.”

Maintaining patient volume — and growing it, if possible, is important, Feldman said. Dayton Children’s saw an increase of 5 percent in babies admitted to its neonatal intensive care unit.

Children’s hospitals often have a unique position in health care. Unlike their adult counterparts, they are usually not part of a large network that includes owned-and-operated primary care and specialty practices that provide regular sources of patient referrals.

There are exceptions: Nationwide Children’s Hospital in Columbus and Cincinnati Children’s Medical Center both operate primary care practices, but those clinics are in their community’s poorest neighborhoods and the bulk of their patients are covered by Medicaid. Toledo Children’s Hospital is part of the ProMedica network, which includes pediatric practices, but it is also located within the main Toledo Hospital, not a freestanding facility.

The Dayton region’s pediatricians “are probably the most important relationships we have,” Feldman said, and maintaining and strengthening those relationships is critical. Pediatricians are under the same pressure to establish patient-centered medical homes as their peers who treat mostly adults, and they face the same cost pressures in setting up the infrastructures, including billing, scheduling and technology, as adult practices.

Going forward, she said, Dayton Children’s will be working with community pediatricians to address the issues.

Creating a vision

Shortly after arriving at the hospital, Feldman kicked off what she calls “the Future State process” — an effort to create a vision of what Dayton Children’s should look like by 2020, its 100th year. She hopes to have the process completed by December.

Keeping care as local as possible will be at the center of that vision, Feldman said. When children need to be referred to other hospitals, she said, Dayton Children’s wants to work to make that transfer happen “as seamlessly as possible,” she said.

Dayton Children’s has regional competition — Nationwide and Cincinnati Children’s main campuses are both about an hour and half drive away. In 2008, Cincinnati Children’s opened a freestanding emergency department and specialty care center in Butler County along Interstate 75. Dayton Children’s has eight locations in Allen, Clark, Greene, Montgomery and Warren counties, including an urgent care center in Miamisburg.

Both Nationwide and Cincinnati Children’s offer the highest-level specialty care, including organ transplantation and experimental therapies funded by federal research programs. And they’re big: Cincinnati Children’s logs more than one million patient visits, while Nationwide logged just under one million. Dayton Children’s averages about 290,000 patient visits a year.

But parents, not surprisingly, want to keep their kids close to home for care, hospital officials point out, and most kids will never need those highest-level services.

What communities want, Feldman said, is access to high-quality care close to home. Dayton Children’s earns high marks on all three quality measures the Ohio Department of Health tracks on its “Hospital Compare” tool, and it is part of the statewide initiative among pediatric hospitals to improve a number of key safety measures. It has a nationally accredited cancer care program.

Cincinnati and Columbus are not threats, Feldman said. “Competition keeps you sharp,” she said. And it keeps hospitals focused on providing the services their community needs in cost-effective, high-quality ways.

Dayton Children’s opened in 1920 as the Barney Community Center, providing free clinics, occupational therapy, clean milk and a lunch program. Over the years, it evolved into a convalescent hospital for children with polio, then a full-service pediatric hospital.

Going forward, it will keep changing, Feldman said, depending on community needs and economic realities. Some programs will grow; some will shrink.

The region has invested a lot in Dayton Children’s, she said, and residents want to know they’ve made a good investment.

“They want to know that we’re strong and we’re focused on the future and we have a plan, which is what our Future State shows,” Feldman said. “We are strong, and we do have a very strong and, I think, vibrant future.”

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