Home > Uncategorized > Franklin Hospital – Quality problems should raise red flags

Franklin Hospital – Quality problems should raise red flags

Post on March 21, 2008 by 5 Comments »

Word today from Jean Fisher and Sam LaGrone in the News and Observer is the federal government will shortly stop paying for Medicare and Medicaid patients to get treatment at for-profit Franklin Regional Medical Center.  Franklin has been attempting to get permission from state regulators to move from the rural area where it is now located down to the more populous and wealthier area of the county.

Only major quality problems that threatened patients’ lives and health could prompt this extraordinary action.  You don’t have to look far to see the results of loss of Medicare payment (or “certification”).  Another rural hospital in North Carolina, Haywood Regional, just lost its Medicare certification and is in dire straits – the CEO has resigned, Blue Cross is now also joining the federal government in refusing to pay for patient care, doctors are scrambling, and it may well have to shut down.
Haywood got a February 12th notice from federal regulators that Medicare payment would stop 12 days later.  Regulators took the promised action on February 24th.  Federal regulators notified the public yesterday (click to see the official letter) that Medicare payments at Franklin Regional would terminate March 30th, in ten days.

Franklin’s response has been to stonewall.  The hospital spokeswoman refuses to describe what regulators found and other information is sketchy.  David Strong, President of UNC Hospitals/Rex downplayed the letter, saying it wouldn’t have any effect on UNC/Rex’s partnership with Franklin to move the hospital closer to the wealthier area of Wake County.

This response, of course, is simply outrageous.  And, just to make it worse, remember Franklin is a for-profit hospital that has made profits of around $10 million in each of the last two years. 

Franklin and UNC/Rex have been touting their partnership to build a new hospital and talking about quality care.  Now it turns out that Franklin has made major mistakes so serious to patient health and safety that it may lose something as basic as its ability to treat Medicare and Medicaid patients.  It sure doesn’t seem that Franklin CEO Brian Gwyn’s statement in a recent letter to the editor that “Quality is at the heart of Franklin Regional Medical Center..” is correct.  At the time the letter was written, Gwyn must have been aware of the problems that federal regulators recently identified.  Or, if he wasn’t, that’s a cause for even more concern.

State regulators must, by law, consider whether a hospital is providing quality care when they are deciding on permission for a move.  I’ve raised the quality issue already in my official comments at the public hearing several months ago held by state regulators.  Back then, I pointed out the quality requirement and then noted that on many basic measures of hospital quality, Franklin Regional ranked far below state averages.  I wrote about the issue here at the Progressive Pulse as well.

Looks like there were even more problems at Franklin Regional than I thought.  If this deal wasn’t embarrassing enough to UNC/Rex, it just got a good deal more so.  Why is UNC/Rex willing to invest over $30 million in a venture with a for-profit company that is so focused on making money it can’t even give quality care to patients at its current hospital?

At a minimum, Franklin needs to immediately release all information regarding what federal regulators found and detail a plan – to the public and not just to federal regulators – as to how they will fix what went wrong.  Franklin has put itself in the public eye and asked for public support for its move and it is only fair they let the public know what is going on with such a serious issue as this.  State regulators should refuse permission for any hospital move at the very least until Franklin is able to demonstrate it can actually provide quality care at its current facility.  Finally, UNC Hospitals and the UNC system need to start to exert some more oversight and control at Rex.  They could start by letting the Rex CEO know that immediate threats to patient health and safety need to be taken seriously.

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Comments (Closed):4

  1. richard s myers
    March 24, 2008 at 5:13 pm

    March 24, 2008

    There are many fine hospitals throughout the state of North Carolina that provide quality healthcare, as defined by the federal government and other independent organizations. However, there is one hospital that stands above the rest as providing excellent quality care, outcomes and patient safety. Last week Rex Healthcare was named a Thomson 100 Top Hospital award winner. Ask any hospital executive and they will tell you that this is the most prestigious, meaningful list to which any hospital can be named.

    The Thomson 100 Top Hospitals National Benchmark for Success award names 100 hospitals that achieve the highest national score based on the hospital’s combined rank on eight separate measures of hospital performance that affect patients in the community. Some of these include:

    • Patient outcomes – survival rates for all patients, plus low rates of surgical complications, such as infection and sever bleeding after surgery.
    • Patient safety – avoiding unwanted events, such as respiratory failure, infections, and unexpected deaths in low-risk diseases.
    • National treatment standards (core measures) – a set of basic care practices that all heart attack, heart failure, pneumonia, and surgery patients should receive. Core measures were developed by the National Quality Forum as minimum basic standards.
    • Efficiency – length of patient stay and average expense. In the best hospitals, all parts of the organization work together to do the right thing for the patient at the right time.
    • Financial stability – A high performing hospital must be well-managed financially so it can attract the best healthcare professionals, acquire new technology, and expand services to improve results for patients.

    Thomson states that award-winning hospitals mean that patients are less likely to have complications, adverse patient safety events or die unnecessarily. Patients are more likely to receive care efficiently at a reasonable comparative cost. And, the community can rely on the hospitals as a well-managed major employer that will continue to invest in newer technology and services needed by the community.

    Rex is honored to be recognized for our hard work and focus on quality that is pervasive throughout the organization – from our board of trustees to our medical staff to our co-workers. A hospital cannot apply for this award. It strictly uses statistical information to select top performers from more than 3,000 hospitals across the country.

    As the only hospital in North Carolina selected to this list, other hospitals will want to know about programs in place and work being done by our co-workers and medical staff to achieve such high scores for patient safety and quality. One hospital has the opportunity to learn as a partner what it takes to implement programs for improved quality performance. If the state approves the CON application to move Franklin Regional Medical Center to Youngsville, FRMC will have the opportunity to learn from one of this country’s best hospitals to improve the health of residents in that county.

    Richard S. Myers, M.D.
    Chairman
    Rex Healthcare Board of Trustees

  2. Adam Searing
    March 24, 2008 at 8:52 pm

    Dr. Myers:

    I’m sure Rex provides quality care. I’ve never written or said it didn’t – in fact, quite the opposite. However, as Chair of the UNC/Rex board, I have a few questions for you:

    1. Why did the UNC/Rex board think it appropriate to use over $30 million of public funds to invest in a venture with a for-profit hospital chain? If the reason was, as you say, to improve quality at Franklin, why should the public be asked to subsidize the operations of a multi-million dollar for-profit hospital corporation? Can’t they use some of their millions in profits to improve quality on their own?

    2. Since even $30 million doesn’t give UNC/Rex a majority partnership, how can you be expected to exercise control over hospital operations (including those that affect quality) at the new facility? Will, for example, patients be given the same charity care options at the new joint venture as they are at UNC/Rex? If not, how do you justify that $30 million investment?

    3. Do the statements of your CEO downplaying the significance of the federal government’s notification letter to Franklin worry you at all? Shouldn’t the CEO of a major public hospital be clear that quality care is important when he speaks to the media?

    Thanks for your comments.

  3. Richard S. Myers
    March 29, 2008 at 9:35 am

    Mr. Searing:

    Thank you for your questions. I read the final paragraph in your posting as an insinuation that Rex doesn’t take patient health and safety seriously. I wanted to point out statistical measures of performance that reflect the level of seriousness Rex’s places on patient safety, quality and outcomes. Discussions of quality take place every day at Rex. This work resulted in Rex being named one of the top 100 hospitals in the country, the only one selected from North Carolina.

    To answer your specific questions, Rex is a private, not-for-profit healthcare system that operates independently from UNC Health Care. Rex is responsible for its own operating and capital budgets, and does not receive any funds from UNC Health Care. No public funds will be used to partner with Franklin Regional Medical Center in building or operating the new hospital.

    There are examples of for-profit and not-for-profit hospitals throughout the county that come together to jointly own hospitals. In these situations, the not-for-profit hospital’s mission of providing care to everyone in the community dominates the relationship. This will be no different in the relationship between Rex and HMA. In addition, Rex’s charitable mission remains the same – no matter where care is provided. Rex has one of the most generous charity care policies in the state (and the most generous in Wake County), providing more than $80,000 each day in charity care. By partnering with Rex, HMA will also gain the experience of implementing proven programs to increase patient safety and quality care.

    The president of Rex Healthcare understands the importance of providing quality care. As a leader in healthcare, he knows that hospitals all around the country, including our state, receive letters from the federal government seeking corrective actions for a variety of issues. Most hospitals address issues and implement corrective measures.

    Thank you for allowing me to clear up any misconceptions you have about Rex.

    Richard S. Myers, M.D.
    Chairman
    Rex Healthcare Board of Trustees

  4. Adam Searing
    March 31, 2008 at 9:55 am

    Dr. Myers:

    I know it’s more fun to answer the question you’d like rather than the question that was actually posed, but if you read my comments at the UNC/Rex-Franklin CON hearing or some of my other posts, you’ll find that I report on the high quality standards at Rex repeatedly.

    I find it disingenuous to say the least that you continue to insist no public funds are involved in UNC/Rex’s proposed partnership with for-profit Franklin. That’s like saying no public funds were involved in the Treasury’s $30 billion bailout of Bear Stearns because no direct federal budget money was on the line (unless, of course, those questionable financial instruments now guaranteed by the taxpayers really aren’t worth a thing).

    As you are a member of the UNC Healthcare System board of directors – whom Rex must answer to and get approval for decisions such as the Franklin deal – you are familiar with the UNC Healthcare annual report where it states:

    “On an annual basis, the Board of Directors of the UNC HCS reviews the budget for UNC P&A and approves a budget for UNCH and REX.”

    Rex isn’t an independent entity – it’s a part of the UNC Healthcare system, financially and in every other way. One look at the UNCH organizational chart will tell you that. Rex couldn’t have done this deal without approval from UNC, and, last time I looked, UNC was still a public hospital.

    Finally, I’m amazed that you state at the new proposed Franklin Regional Medical Center Rex’s (really UNC Healthcare’s) charity care policy will be in effect. I have seen nothing in writing in the CON application about that. If true, that would make Franklin’s CON application much stronger, so I’m puzzled why it isn’t in there. I can’t believe for-profit HMA, who owns Franklin, would ever agree to such a policy but I guess stranger things have happened – however I’d like to see it in writing in an official document.

    Thanks for being part of the discussion.