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Albuquerque Business First

By Dennis Domrzalski, Reporter- Albuquerque Business First

Lovelace Health System has offered to enter into a bed-sharing agreement with the University of New Mexico Hospital as an alternative to UNM building a new $146 million hospital.

Lovelace CEO Ron Stern made the offer in a Feb. 22 letter to Steve McKernan, CEO of the UNM Health Science System.

The offer came after Bernalillo County Commissioner Wayne Johnson asked Stern and Presbyterian Healthcare Services CEO Jim Hinton in a Feb. 15 letter “to help identify the most appropriate way” to allocate $90 million that UNMH gets annually in property taxes to care for indigent patients.

“After much reflection and discussion of options, Lovelace now is authorized to offer UNMH a solution that may save the taxpayers $146 million and allow for cooperation between the downtown hospitals to ensure the best health care for people of this state,” Stern’s letter said.

UNMH officials said they hadn’t talked with Stern about Lovelace’s proposal and that it would not alleviate the need for a new hospital.

“Hospitals are not hotel rooms. The condition of the patient and the expertise of the team involved in their care is the sole determinant of where they should be treated,” said Billy Sparks, executive director of communications of the UNM Health Sciences Center. “This proposal, which has not been discussed, in no way lessens the need for our plans to provide more beds for our patients.”

Paul Roth, dean of the UNM School of Medicine and chancellor for health sciences at UNM, also said he’d had no discussions with Stern about the bed-sharing offer.

“If we did, it would violate our ‘Capital Conditions of Participation’ with (the U.S.) Centers for Medicare and Medicaid Services, since we cannot transfer patients or make any decision regarding patient disposition in the basis of insurance or ability to pay,” Roth said.

UNMH has said it needs the new 185,000-square-foot, 96-bed adult care facility because it doesn’t have enough adult inpatient beds at its current hospital.

In a letter to Johnson Feb. 22, Stern said the Albuquerque metropolitan area won’t need another hospital for the next five to 10 years because the federal Affordable Care Act will work to keep people out of hospitals and emergency rooms where care is more expensive than in a doctor’s office.

Stern’s letter also suggested the $90 million in property tax money that UNMH gets for indigent care should be dispersed among a variety of providers.

“It may no longer be appropriate that one institution receives the entirety of the mill levy when other institutions bear similar costs. We propose that the health care dollars should follow the patient, no matter what health system that patient uses,” Stern wrote to Johnson. “It has become possible in the last decade to track patient costs and reimburse the health system that provides that service. In effect, the county health care money would go to the provider and not to one institution.”

“Lovelace Health System is asked to bear the burden of more than $82 million in uncompensated care each year, while Presbyterian bears a similar amount,” the letter said. “In short, UNMH receives the entirety of the mill levy money but Presbyterian and Lovelace must absorb millions of dollars in uncompensated care without any reimbursement from the county or any other source.”

Critics say the new hospital would expand UNMH’s role beyond its legal mandate of caring for the indigent.

Johnson said he had not received a formal reply from Presbyterian or Hinton. A spokeswoman for Presbyterian said she had no immediate comment on the issue.

In a prepared statement, Johnson said:

“The changing health care environment demands that Bernalillo County engage in a significant discussion about the challenges facing us, priorities, and how health care dollars coming from taxpayers ought to be used.

“With the ACA on the horizon, will that funding be necessary, and if so, what should the future uses of those funds be? Should they stay the same or should they change?”

Stern’s letter to Johnson said the area needs more clinics spread throughout Bernalillo County.

“The Affordable Care Act will drive people away from hospitals and emergency rooms towards more clinics and primary care doctors,” Stern’s letter said.

Stern’s letter also said the Lovelace Medical Center in the Downtown area has an occupancy rate of 61 percent and could easily take overflow patients from UNMH.

Johnson’s office said the issue is scheduled to be discussed Tuesday night at a 5 p.m. County Commission meeting in the joint city council-county commission chambers at One Civic Plaza.

UNMH has an $800 million annual budget, $90 million of which comes from Bernalillo County property taxes. The rest from the state of New Mexico, grants and insurance payments.

Lovelace CEO Ron Stern, pictured, has extended an offer for Lovelace to enter into a bed-sharing agreement with the University of New Mexico Hospital as an alternative to UNM building a new $146 million hospital.

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