Hospitals face a ‘perfect storm’

Sunday, February 29, 2004

AKRON, Ohio - No one will accuse the Summa Enterprise Group of running with the herd.
With a combined 57 years of HME experience, the brain trust at Summa Enterprise feels confident it can sell its HME template to hospitals.

At a time when many hospitals seem to be exiting the HME business to focus more resources on their core acute-care operations, Summa’s moving in the opposite direction.

Last spring, the for-profit arm of Summa Health System started up an HME, CornerStone Medical, with the intent of perfecting the equipment company and exporting the model to other hospitals. Summa landed its first client in November. That’s when Robinson Memorial Hospital in Ravena, Ohio, hired it to create a disease state management program to improve compliance for COPD patients.

“There are a lot of hospitals out there, and they are in the same situation we all are in healthcare,” said CornerStone President Tom Sayre, “They have increasing costs and demand and declining reimbursement. Our CEO calls it the perfect storm. I think delivering an HME program through a hospital based program is very efficient.”

To some, it may seem like an unusual time to be offering such a service. In December, President Bush signed the Medicare Prescription Drug Act, which calls for big cuts in durable medical equipment reimbursement. Additionally, federal authorities have expressed concern that many hospital/HME joint ventures are little more than disguised kickbacks.

Sayre admits the current DME market holds its fair share of challenges, but he’s undaunted. Summa tows the letter of the law when it comes to healthcare regulations, he said, and this is not the first time the industry has faced reimbursement cuts.

“Just because I see other people not doing it or hospitals not doing it, that just gives me more reason to get into it - I view it as an opportunity,” he said. “This is not just developing a revenue source. If we do our job right, we’ll keep the patient out of the hospital.”