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Singing River Health Systems plans to request bond money for EMR system

Singing River Health Systems in Pascagoula has plans to ask Jackson County to float a $37.5-million bond issue, mostly to pay for the purchase and implementation of electronic medical records (EMRs) and diagnostic cross-reference systems.

It could be the start of a trend for county-owned hospitals across the State of Mississippi.

A combination of money available through the American Recovery and Reinvestment Act and mandates included in the Patient Protection and Affordable Care Act has changed the financing game for hospitals, said Chris Anderson, CEO of Singing River, which operates hospitals in Pascagoula and Ocean Springs.

No longer is borrowed money to be spent strictly on brick-and-mortar items like new clinics. Nor is it only reserved for expensive equipment.

“I’ll tell you, I’ve been in healthcare 25 years or so, and I really don’t remember financing clinical technology before,” Anderson said last week in an interview with the Mississippi Business Journal. “We finance CAT-scans and MRIs and things like that sometimes. I think the difference now is these (electronic systems) are so huge and so complicated that it makes sense to do that.”

There’s a financial incentive, too. Among the handouts included in 2009’s stimulus bill are what amounts to rebates for hospitals that buy and implement large and sophisticated databases that track a patient’s medical history, past and present prescription drug usage, and everything in between. In Singing River’s case, the available $11 million in ARRA money would pay for about a third of the cost of the technology.

The hospital, however, would not be eligible to receive the money until it meets a thick ledger of meaningful use criteria, chief among them that the system actually be up and running.

Toward that end, Anderson and his staff have made Jackson County supervisors aware of their intent to ask for $37.5 million in bond money to pay for the program, but haven’t officially made the request for it yet. The bond debt would be serviced, Anderson said, by hospital revenue. Singing River’s annual operating budget the past several years has hovered around $400 million, Anderson said.

To go with the financial incentive in the stimulus, the Patient Protection and Affordable Care Act penalizes, starting in 2015, acute care providers who do not have the EMR system in place in the form of reduced Medicaid and Medicare reimbursements.

With the ARRA carrot and the PPACA mandate waiting on the horizon, does Anderson think Singing River’s plan will become the blueprint moving forward for county-owned hospitals in Mississippi?

“That’s a great question,” he said. Lenders, he added, are not as reticent to turn loose of tens of millions of dollars for non-brick-and-mortar hospital projects as they were a few years ago, which could lead to similar financing mechanisms like the one Singing River will employ.

“(Lenders) are certainly more comfortable with this now,” Anderson said. “That was probably not the case in the past. I’m sure one of the things they’re looking at, they understand ARRA, they understand there’s going to be some money available, they understand how we evaluate (return on investment). They’re trying to match up what they do in their business with opportunities to work with us. That’s across the board, whether you’re talking about the bond market or some other type of financing vehicle. Certainly, everybody that wants to be in acute healthcare is going to have to have this technology in the not-too-distant future. That takes in just about every hospital there is.”

For Singing River, the process leading up to the eventual bond request started about a year ago.

“The system we selected, we were going to have to pay for it over a three-year period,” Anderson said. “It was a little pricier than we had anticipated going in on the front end. (The ARRA money) was enough that it caused us to decide that we wanted to do it quickly so we could be ready to receive those funds when they were available, and it helped us understand that financing this project made a lot of sense because we could marry up the investment with the recovery of both the hard and soft return. The project makes sense for 100 reasons, in addition to the ARRA funding. If it wasn’t a good project, we would not have done it just because there was the ability to recoup some of the investment.”

EMRs aren’t a new concept; electronically storing medical information is in its third decade of existence. There’s a reason for the push for hospitals to move as quickly as ever toward them, Anderson said: They and what is called a “decision-support system” that go along with them work.

“One of the better examples I can think of is the pharmaceuticals,” he said. “There are somewhere approaching 10,000 drugs on a hospital’s formulary now. Imagine a physician caring for an elderly patient who’s on 20 or 30 or 40 different medications. You have 20-letter names on some of these drugs and the only difference will be an X or a Y. We call them look-alike sound-alikes.

“When you have human beings prescribing, making decisions and passing that information to someone else, what a decision-support system allows you to do is, when a caregiver is at the bedside, with a tablet in their hand, to evaluate a pharmaceutical intervention and know immediately whether it’s the proper course of treatment rather than having to go to a big book with thousands of pages in it and look it up. It will match what you think you need to prescribe against the other medications the patient’s on to make sure it won’t result in a bad interaction with another. It’ll take into account height, weight, age-appropriate dosage, it will even offer a cheaper generic alternative if one exists. It leaves a documentation trail, too. It automates what has been historically been an enormously cumbersome process. It’s not enough to just throw it in a repository, because you can do that in a book.  It’s how the technology enables you in real-time to do things faster, better and safer than you did before.”

Shannon Coker, director of advocacy and communications for the Mississippi Hospital Association, wrote in an email to the Mississippi Business Journal that the MHA hasn’t kept tabs on the potential for what Singing River is doing to be the start of a trend.

“The Association doesn’t typically get involved with these types of monetary requests from individual hospitals,” she said.

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About Clay Chandler

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