Mergers & Acquisitions in Healthcare

Episode Transcript

Speaker 1 (00:00):
Eight O six thirteen ten WIBA and full scope with
doctor Nicole Hemkiss, Wisconsin's direct care doctor. Of course, doctor Hemkiss,
she comes to us from Advocate MD. It is a
direct primary care practice with four locations right here in
the area east side of Madison, right on Fair Oaks AV,
Westside and Middleton on Glacier Ridge Road down in Jaysville

(00:21):
ten twenty one Mineral Point AV and the newest location
right on the Madison Fitchburg line right in the Beautiful
Nature Preserve on thirty two to twenty Siin Road. And
doctor not only are there for the four clinics of
Advocate MD. I'm always happy that I write the number
of doctors in pencil because I keep having to add more.

(00:41):
Eight doctors nine how many doctors are at Advocate MD.

Speaker 2 (00:46):
We will have eight once we have two new doctors
joining us. We have doctor Gina di Giovanni, who is
a native Soak Praie to SoC I should say.

Speaker 3 (00:59):
Born in Ray is there.

Speaker 2 (01:00):
And then we have doctor Jennifer Filben, who is also
a native Madisonian. So doctor di Giovanni is going to
join us next month and doctor Philbin's is going to
join us in a couple of months, so then we
will be an eight physician practice.

Speaker 1 (01:14):
That is so cool to hear it. I got to
jot that down. Eight physicians that advoca and what's going
to happen. I'm going to write it down and is
a han I added we're adding nine, which is it's
good here and for people who don't know this. Part
of the reason why why you're adding physicians is it's
really important to what you guys do at Advocate MD
for patients to have access to their doctors. And as

(01:37):
obviously advocate MD becomes the word gets out, becomes more popular,
you always make sure to maintain those those good ratios
for doctor to patient, don't you.

Speaker 3 (01:46):
Yeah, you know, you know.

Speaker 2 (01:48):
We're finding in more recent years we have more and
more businesses, small businesses, medium size, larger businesses that are
offering direct primary care services to their employees. You know,
most people get their insurance benefits, their healthcare benefits through
their employer. So this is a really key kind of
part of the growth of direct primary care is that

(02:09):
now employers are looking at this as a as a
really good option to offer to their employees, not only
lowering costs, but increasing access, increasing quality, and so once
that happens, you know, we kind of strategically would like
to have more clinics to make that more convenient. Obviously,
you know, we're not trying to remember years ago to
telling an insurance agent.

Speaker 3 (02:31):
You know, we are not trying.

Speaker 2 (02:32):
To compete with the you know, UW's and ssms of
the world, where we might have you know, twenty clinics
or clinics in multiple states. That's not what we're trying
to do. We're kind of focusing on you know, the
greater Madison, you know, Jansville area. But with that, obviously
it's more convenient for a patient to drive ten minutes
versus you know, thirty or forty minutes. So that helps

(02:55):
to have you know, a few more clinic locations.

Speaker 1 (02:58):
And it's and you mentioned some of the can venience
and kind of what you know, I mentioned working with
families and and but also businesses as well, And I
know that it's a big thing right now. It's a
very competitive labor market and having something like direct primary
care to offer employees is a fantastic is a fantastic
way to help retain and of course bring in potential

(03:19):
employees as well. As we talked with doctor Nicole Hempkiss
of Advocate MD. The website. Can learn more online Advocates
DPC dot com. That's Advocate DPC dot Comtel for Robert
and make it appointment. Become a member at Advocate MD
six oh eight two six eight sixty two eleven. That's
six oh eight two six eight sixty two eleven. Eight physicians,
four locations of Advocate MD. Again, you can learn more

(03:39):
online dot com. My first job I had when I
was a kiddo was at a bowling alley called Foxview
Lanes in Walkishaw and there used to be this bank
right on the corner. And then years later I drove
by and that bank had become a hospital, and I thought, well,
that is interesting to see in my family all is

(04:00):
nearby there. And these past week I've been inundated doctor
with stories about this ascension hospital that's being closed in
Walkie Shaw. What is going on there?

Speaker 3 (04:12):
Oh?

Speaker 2 (04:12):
So is that the is that the hospital that they know?
It's okay, interesting, It.

Speaker 1 (04:17):
Hit very this conversation hits really literally close to the
hometown for sure.

Speaker 3 (04:23):
Funny.

Speaker 2 (04:24):
So you know, I get these notifications of different healthcare
stories and one of the stories was specifically talking about Ascension,
and so Ascension is making changes. You know, I don't
even remember if I think they're based out of Illinois,
but I'm sorry, it's Saint Louis that they're based out of.
So Ascension is a large Catholic hospital system. You know,

(04:47):
we know that all these hospital systems that call themselves
not for profits or nonprofits that's to get all the
tax exemptions. They obviously make a profit. They usually build
more facilities when they do that. But the interesting part
is that you are seeing now some of these you know,
Catholic and non Catholic, but it seems that a lot
of them seem to be Catholic health systems that are
closing down hospitals or consolidating within Wisconsin.

Speaker 3 (05:11):
And you know, this is a very.

Speaker 2 (05:13):
Interesting and complex issue that we have to kind of
talk about, like is this a good thing? Is this
a bad thing? How does this affect patients? I guess
the first knee jerk reaction is a bad thing, right.
But the story with Ascension in Waukeshaw was that they
were closing down what they called it a micro hospital,
which was a new term for me. But they said

(05:35):
that they were closing this micro hospital, and that they
were consolidating some other services like ob services and behavioral
health and moving those two more centralized hospitals in the
Milwaukee area. Oh yeah, so it was a fifteen emergencies.

(05:55):
So maybe that hospital in Waukeshaw only provided emergency department
care and it's said low volume services. And you know,
it is also kind of you know, big picture to
look at all these different cities within Wisconsin and small
and medium sized cities that have their own hospitals, and

(06:15):
sometimes you think, like, how do they how do those
hospitals stay in business, you know, when they're not doing
us on a surgeries or they don't have a really
a lot of people, you know, sitting in the hospital admitted.
And you would call a lot of those federally qualified
health centers if they have fifteen or less beds. So
they get subsidized, subsidized from the federal government in some

(06:35):
cases subsidized through the state government to stay open, keep
their doors open. And I have my own beliefs in
terms of whether or not that's a good thing. Obviously,
we want people to have access to things like emergency
room care. You know, you shouldn't have to travel, you know,
an hour, you know, too far to get that sort
of thing. But I would say sometimes there are services

(06:56):
being offered that maybe aren't you know, completely necessary, but yeah,
so so looking at Ascension, it sounds like they are
trying to consolidate the lesser financially lucrative services to different
hospitals and things like you know, people might not realize this,
but things like oh b in emergency room care, those

(07:17):
for many places are money losing operations because the payer
mix with you know, for example, emergency room care. Right,
so you have to think you are required to take
care of patients, you know, regardless of their ability to pay.
So when somebody walks in, whether they have no insurance,
if they have you know, Medicaid or Medicare, they have

(07:38):
to provide services for them. Sometimes they get admitted to
the hospital. Sometimes they you know might need you know,
extended care. But obviously, the the rates in the emergency
room are not cheap. So if those people don't pay
that bill, then the hospital absorbs that cost. But like
you and I know, you know, really the hospital passes
on a lot of that cost to the other consumers

(07:59):
that have insurance, right, that's why the rates are so high.
But so I view this as them closing down a
hospital that they probably were not making good profit from.
And then again things like OB because again you might
see a higher rate of things like Medicaid badger care
with OB services and so those again and it's also

(08:22):
very high risk, right, So there's a higher rate of
medical malpractice in OB, So there's a higher risk of
the hospital getting sued, the doctor getting sued if there's
any sort of adverse outcomes.

Speaker 3 (08:32):
So that's a high risk, lower reward field.

Speaker 2 (08:37):
And of course we need OB you know, we need
labor delivery departments that we need OB doctors, right, So
it's one of those things where it's like a balance
between you know, where can we get these these services from,
but also the hospital needing to be able to provide
those services and still be able to be financially you know, viable.

Speaker 1 (08:55):
And this isn't the We'll talk to about one of
the hospitals up in the Clare area as well, facing
a similar demise, as we talked this morning with doctor
Nicole Hemkiz of Advocate MD. The website for Advocate MD.
Learn more about direct primary care what it pairs with
a little bit about the let's just say a little
bit everything about the cause. That's one of the cool
things too about direct Primary Care is pricing, transparency, talking

(09:16):
about seventy dollars a month for the average person to
become a member at Advocate m D. You'll learn more
all about that online ADVOCATESDPC dot com. That's Advocates DPC
dot com. Telp number six eight two six eight sixty
two eleven. That's six 'oh eight two six eight sixty
two eleven. And as we talk about how things are
playing out here in Wisconsin, Walkishaw is not alone. Oh

(09:36):
Claire is also is also dealing with something similar, aren't they.

Speaker 3 (09:41):
Yes, So this was a big deal that happened.

Speaker 2 (09:43):
I think you know either January or March of this
year where we had two i would say medium size hospitals.
It was Sacred Heart and Euclaire and Saint Joseph and
Chippewa Falls that closed down. And you know, you heard
the politicians kind of coming out and saying, you know,
this is.

Speaker 3 (09:59):
They didn't like.

Speaker 2 (10:00):
And you know then I think there is even bills
being proposed by one of our state senators about preventing
hospitals from being able to close, which I'm not exactly
sure how that would work, but so yeah, the concern
then is, you know what happens if you live in
a city that in most cases, if you live in
a small or medium sized city, you probably have one

(10:20):
hospital or maybe two. So if that one hospital closes,
then maybe the next closest city is thirty minutes away. Again,
if you need something like emergency room services, that's a
big deal. If you, you know, have something like an
elective surgery, it's probably not that big of a deal
to drive thirty minutes or forty minutes to get that done.
But those two hospitals were owned by Hospital Sisters Health System,

(10:41):
again another Catholic hospital system that's out of a different state,
you know, And it brings up this idea of you know,
when you have these large health systems, right, so most
hospitals used to be, including some of our of our
three hospitals in the Madison area, those used to be
all of them were basically community hospitals. And you can

(11:02):
make the argument now that they're all none of them are,
that they're all part of like larger health systems, but
they used to be community hospitals, meaning that they were
kind of independently owned and that they, you know, weren't
part of this gigantic network of you know, we own
ten or fifteen or forty hospitals across the country and
multiple states. But that is kind of what is happening now.

(11:24):
So there are very few independently owned hospitals anymore. There,
you know, very few that are community based, that you know,
aren't based out of another state. And for me, that's
that's an unfortunate thing because I think that you can
better serve the needs of your community when you're based
in that community.

Speaker 3 (11:42):
I think you you you know the.

Speaker 2 (11:44):
Challenges, you know the resources, right, you know, the people
that live there, and if the people making the decisions
are out of Saint Louis or out of you know,
someplace out west, you know, they don't really understand for
you know, necessarily what Wisconsin. You know, what the patients
in Wisconsin need. It's it's mostly financially based. So yeah,

(12:06):
you had those two hospitals close up in northern Wisconsin,
and then you had Marshfield Clinic, which is another very
large health system.

Speaker 3 (12:15):
I guess you'd consider that central Wisconsin.

Speaker 2 (12:17):
That they did a merger with Sanford Health, which I
was not familiar with Sandford Health, but I guess they're
based out of either South Dakota or North Dakota, someplace
in the Dakota's And they said it's one of the
largest private health systems in the country, so that they're
not a Catholic system and they might be a for profit.
I'm not sure about that. But so Sandford Health and

(12:39):
Marshfield Clinic merged. And again then you wonder, why does
a hospital system out of you know, South Dakota want
to come to Wisconsin, And so they're looking at this
as a you know, getting a better footprint. So all
these health systems want to you know, go into different states,
and you know, it's it's it's all kind of financially driven. Again,

(13:01):
It's not that they are looking at Marshfield Wisconson and saying, oh,
it looks like they need, you know, better healthcare and
Marshal Wisconsin. It's it's all just them looking at it
as a financial investment.

Speaker 1 (13:11):
It's it's it's it's interesting when we started this conversation too,
talking about the closure of that smaller hospital in Walkie Shot,
I think of the hospital, the main hospital in Walkie Shots.
It's interesting as we talk about these mergers and acquisitions
that have been going on with hospitals. Is it was
a sad day for me when I when I drove
into town and saw Waukee Shaw Memorial Hospital, the hospital

(13:34):
I was born at, in the hospital my mom was
born at, my grandmother was born at the same hospital,
all of a sudden had a new name and a
new logo of a giant like that hospital for a
long time for the community was very much like a
sense of pride that like that was ours and now
there's like this new company that owns it, and it's
kind of it's kind of you know, the as we
talk about all the all the concerns and issues, there's

(13:56):
also kind of like like it kind of hurts. I
got to tell you the truth. Doctor, When you see
it's like, oh my goodness, this little hospital that could
is now like part of a big old conglomerate of
healthcare systems. You're like, what exactly happens? So we're gonna
talk and I know you've got some very much experience
spending time in Alaska in other places about small town

(14:16):
hospitals and small communities. We're gonna talk with the doctor
about that and so much more. If you haven't had
a chance to check out online the website ADVOCATESDPC dot com.
That's Advocates DPC dot com. It's a great morning to
do that. Whether you're looking for a fantastic option for
primary care for yourself, your family, or an employer looking
for some great options for your employees, definitely check out
Advocate MD. The website Advocate DPC dot com. That's Advocates

(14:40):
DPC dot com. Tell if we're to making an appointment.
Become a member at Advocate MD six oh eight two
six eight sixty two eleven. That's six oh eight two
six eight sixty two eleven. More of full Scope with
doctor Nicole Hemkiss next here on thirteen ten WIBA, A

(15:00):
twenty three thirteen ten WIBA and full Scope with doctor
Nicole Hamkiss, Wisconsin's direct care doctor. You can learn more
about doctor Hemkiss all eight doctors as a matter of fact,
at Advocate MD, as well as there are four locations
all online Advocates DPC dot com. That's Advocates DPC dot com.
Tel for making a point, Become a member at Advocate
MD six oh eight two six eight sixty two eleven.

(15:22):
That's six oh eight two six eight sixty two eleven.
Don't forget. We'll maybe talk with the doctor about open
enrollment as well as some other options for you when
it comes to direct primary care. But continuing on our
conversation doctor about what's been going on with consolidation and
other things, and especially you think of you know, small towns,
and you know there's it really does have an impact

(15:46):
no matter where it is, but especially some of these
small communities that you know, the people really did kind
of rally around that was the place to go. They're
being hurt quite a bit by these mergers, aren't they.

Speaker 2 (16:01):
Yeah, you know, I think that the future of small
hospitals and small towns will be you know, we'll have
to see what happens with that, because I think up
until this time, you know, small hospitals have been in
some of these places. It's one of the main employers,
right the hospital and the school, you know, And what
we see happening in a lot of Wisconsin small towns

(16:24):
is that you know, maybe there was a factory or
a couple of companies there that employed most of the people,
and then that factory closes down, so you have the
hospital and the school that are the major employers, but
unfortunately the hospital you know, might not be busy enough
to kind of maintain those that, you know, that level
of staffing or needs. And like I said, I think

(16:45):
that it's important that people have access to emergency care.
But you know, as somebody that's worked in some small
towns and medium sized towns, you know, sometimes what's happening
in these small hospitals that they're bringing in you know,
very specialized physicians to do you know, kind of like
subspecialists to do these specialized procedures and surgeries, and that's

(17:07):
not really necessary, right, So they're having to pay a
doctor a lot of money to be able to kind
of advertise like, oh well now we have this, you know,
this specialist that you can you know, take advantage of.
And and I think that part is not necessarily a
good thing.

Speaker 3 (17:24):
I think that adds a lot to the cost.

Speaker 2 (17:25):
And again it's more of a marketing tool than necessarily
something that is needed by the population there. And if
it's something where you you know, need to have a
very specialized surgery, you know, it's probably better for you
to go to a larger tertiary care center or an
academic facility, even though you have to drive a little
bit more because that doctor will be more experienced in

(17:45):
doing that procedure or that surgery, and you probably want
to have the most experienced person doing it. So I
disagree with some of those tactics, but I do think
we will see kind of smaller hospitals continuing to clothes
and kind of consolidate into these medium size and larger towns. Obviously,
that means a lot of people are getting sent to

(18:08):
places like Madison and Milwaukee. They're getting triage in these
towns and getting again if it's something like trauma, somebody
needs any kind of very sub specialists that that town
doesn't have. Even if you think about things like patients
that are critically ill, do you really want to be
in an ICU in a very small hospital where they're

(18:31):
not really that experienced in taking care of people who
are that critically ill, and they don't in some cases
even have a physician that's there overnight in that hospital.
That to me is not necessarily the best thing for
the patient. There's a lot of risk and liability in
those sort of situations, So I think that those type

(18:52):
of patients probably should be sent to someplace where they
have a physician in house twenty four hours a day
that's comfortable with taking care of very sick patients. But
so I you know, my thought would be that, you know,
we will see small town hospitals become more of ers
and trioge centers that will then be able to send
them to higher acuity facilities when that's necessary. So it's

(19:16):
not that the hospital would close down completely, and I
don't think that that would be a good thing, but
maybe it would just offer less services to patients. And
I think that that would probably be kind of the
trend that we see the.

Speaker 1 (19:28):
Type of care offered as well. And I want it
before I just one thing that kind of popped into
my head here, doctor, before we talk a little bit
about openrolement. I do like for those those communities, is
there a role for things like direct primary care and
other things as you know, as these small community hospitals
maybe shift focus. I think of, you know, for a

(19:48):
lot of people unfortunately they're there, if they're sick, they're
going into like an urgent care or something like that,
or or in a small town maybe getting a chance
to maybe even see their doc. If that stuff shifts,
is there, like more are we seeing in even some
of the small communities around Madison, people saying, you know what,
We're going to go to direct primary care because the

(20:08):
hospital that we used to go to, where the clinical
we used to go to is the corporate structure has
changed and they've changed what's offered at that clinic.

Speaker 2 (20:17):
I think that I'm a firm believer that direct primary
here could work anywhere, And there are DPC clinics in
small towns now. There's a great DPC doc in Darlington, Wisconsin,
which is pretty small.

Speaker 3 (20:29):
I don't know how many people are there.

Speaker 2 (20:31):
And then there's a DPC clinic in Ryanlander, Wisconsin, which
I also think is a pretty small place. So I
think it can definitely work anywhere. I think there are
some challenges with being in more rural areas. Again, sometimes
the demographic there is that you have a lot of
patients that are on Medicaid and Medicare, and so sometimes
I guess the financial implications of having to pay a

(20:54):
little bit extra, even though it's not a lot extra
for some of those people, might be a little bit
more challenging. But in terms of access and the quality
of the care that you get, for sure, you can't
really beat the direct primary care system. So I think
that there's always a place for that, even in rural
areas in Wisconsin. As you said, Sean, it's going to

(21:14):
become I think, harder and harder to get even things
like urgent care in most places, you know, in Wisconsin
and in other places around the country.

Speaker 1 (21:23):
As we as we wrap up this week two, doctor,
I think it's important as we're as we're talking about
kind of the time of the year that we're in. Also,
I hear a lot of talk of open enrollment. It
is a good time for people to think about insurance
benefits and also explore direct primary care and the options
that are available to people. And I think it's a
good reminder this time of year to definitely check out

(21:44):
direct primary care, isn't it.

Speaker 3 (21:47):
Yeah.

Speaker 2 (21:47):
So, I think most people somewhere in the you know,
usually around Thanksgiving or you know, between Thanksgiving and Christmas,
you are probably getting presented your options from your company,
and they're asking you to choose one of those options.
And if one of your options is to pick a
higher deductible plan, so you might not need a plan
that has a two hundred dollars deductible or even a

(22:08):
thousand dollars deductible because most people are not going to utilize.

Speaker 3 (22:12):
The healthcare system that much.

Speaker 2 (22:13):
You know, we know that most people don't meet their deductible,
you know, except for every seven to eight years. So
what that means is you're paying a lot more for
your insurance through the premiums and you're not actually utilizing it.
You're not meeting your deductible. So that means you're basically
paying out a pocket for everything. You're not actually taking
advantage of the insurance part of it. So what I
always suggest people look into is moving more towards the

(22:35):
higher deductible plan and using direct primary care as a
way to fill that gap so you don't have to
be you know, sometimes it can be a little nerve
wracking to you say, like, okay, I have a four
thousand dollars deductible or a five thousand dollars deductible. Keep
in mind that is like in the worst case scenario, right,
so something catastrophic happens, you need surgery, you have an
accident where you need you know, an emergency room, those

(22:57):
sort of things.

Speaker 3 (22:58):
But for most people, we.

Speaker 2 (22:59):
Aren't experienced that every year, right, So if you have
a direct primary care that's going to fill the gap.
That's going to be your urgent care, your chronic disease management,
your preventive care, all that stuff you can take care
of and you won't have all those out of pocket
cost and then you still have the insurance that's sitting
there for more truly, what insurance is intended to be

(23:21):
for catastrophic things that come up, and that's going to
save you a lot of money on the month to
month premium when you think about it, even if it's
of a difference of you know, fifty or one hundred
dollars a month, one hundred dollars a month, that's twelve
hundred dollars a year. So twelve hundred dollars a year
that you've saved through insurance premiums, and then that's going
to more than cover for your DPC membership.

Speaker 1 (23:43):
It's a pretty great, great setup, and as we talk
about all the great benefits to being a member at
Advocate MD, it's a good day to explore direct Primary
Care and Advocate MD the website ADVOCATESDPC dot com. That's
ADVOCATEDPC dot com. Speaking of Thanksgiving coming up this week,
time friends and family about direct Primary care as well
I do that, and I'm like, wait, what if they

(24:04):
have had a chance to learn?

Speaker 3 (24:05):
Thanks?

Speaker 1 (24:06):
I do what I can, doctor, I do it. I
get people. Absolutely, I'm not kidding. People love hearing about
it because that's such a cool model. You can learn
more online ADVOCATESDPC dot com. That's Advocates DPC dot com.
Telpht number six oh eight two six eight sixty two
eleven to make an appointment to become a member at
Advocate MD again at number six oh eight two six
eight sixty two eleven. Doctor, you have a happy Thanksgiving it.

(24:28):
We'll do it all again in about a week.

Speaker 3 (24:31):
You too, Sean.

Speaker 1 (24:32):
Take care. Doctor colehemkis of Advocate MD. Certified Financial Planner
Tracy Anton comes your way next right here. Thirteen to
n Wiba