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Hospital leader talks U.P. economy, changes

SINOTTE

MARQUETTE — UP Health System Market President Brian Sinotte briefed the Economic Club of Marquette County Monday night on nationwide changes in health care and local economic impacts.

While Sinotte said UPHS-Marquette staff have been busy preparing for the hospital’s move from its current complex along College Avenue to the new facility off Baraga Avenue in April, his discussion focused on what health care means to the community and ongoing changes in the industry that he believes “anyone involved and engaged in any community across the United States should be at least mildly concerned about.”

Beginning the discussion with a quote from business management consultant and author Peter Drucker, Sinotte said hospitals are “the most complex human organization ever devised.”

Since becoming CEO of UPHS-Marquette in 2016, Sinotte was promoted in February to market president of the health system, now overseeing operations at UPHS-Bell and UPHS-Portage hospitals.

“We have a footprint across the Upper Peninsula,” Sinotte said. “What we’re doing here locally is making sure that the core element of our community, which is health care, is strong and vibrant and sustainable long-term.”

Some of the challenges have been changes in federal legislation, particularly the Affordable Care Act, new competition coming into the market, rising pharmaceutical costs, aging patients and employment costs.

As expenses continue to grow more than revenues, Sinotte said hospitals are being pressured to maintain a sustainable margin, otherwise they risk being shut down.

“What we spend is a percentage of our gross domestic product,” he said. “Back in 1980, we were kind of close. Back then we were high, but not that much higher than others (countries). We have outpaced everyone dramatically on what we spend as a nation on health care. We’re spending more than others but we’re not getting the outcomes we’re hoping to achieve.”

After regulations of the ACA took effect, hospital margins fell 39 percent in three years, which led to bankruptcies, closures and layoffs.

In 2018, 21 hospitals closed throughout the country, Sinotte said. In Michigan, there were over 200 hospitals in the 1980s, but now there are 133.

Hospitals throughout the country have had to merge with others to maintain sustainability, he noted.

In November, LifePoint Health Inc., which owns and operates UP Health System along with other regional health care systems across the nation, announced the completion of its merger with RCCH HealthCare Partners, which is owned by funds managed by affiliates of Apollo Global Management.

“The old model wasn’t working. The investors had spoken. Everyone across the U.S. is running from rural health care in droves,” Sinotte said, stating that Apollo’s goal is to create a model for rural health care delivery. “They’re really the only one doubling down on that sector of the industry, which I applaud it for, but it’s not simple.”

UPHS-Marquette is the area’s largest employer with over 3,000 employees. The hospital pays a $215.1 million payroll annually, $3.1 million goes to charity, $9.4 million in taxes and $2.4 million to community benefits and sponsorships.

“We have great people ready to take care of you every day should you need it, so at least give it a chance,” he said. “Are there things we can do and will do better? Yes. We’re working every day to become that kind of system where the outlier experiences are truly that — outliers.”

If patient out-migration, or people leaving the area for their health care, were cut in half, Sinotte said the job growth would be profound.

“We’re working very hard to create a long-term sustainable viable model here in Marquette,” he said.

Sinotte noted several achievements of UPHS-Marquette over the last few years, including:

≤ A 51 percent improvement in patient outcomes, which includes reducing falls, hospital-acquired infections and other common health care challenges;

≤ Earning Chest Pain Center and Cardiac Cath Lab Accreditation from the American College of Cardiology; and

≤ Receiving Blue Cross Blue Shield distinction for hip and knee replacements.

Last year, UPHS-Portage and UPHS-Marquette were awarded an “A” from The Leapfrog Group’s Fall 2018 Hospital Safety Grade.

The Leapfrog Group is a national organization committed to improving health care quality and safety for consumers and purchasers. The rating system assigns an A, B, C, D or F grade to hospitals across the country based on their performances in preventing medical errors, infections and other harms among patients in their care.

Jaymie Depew can be reached at 906-228-2500, ext. 206.

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