HCMC striving to attract more patients with private insurance

Two years into Jon Pryor's tenure as chief executive of Minnesota's largest safety-net hospital, Hennepin County Medical Center shows signs of modest financial progress.

Patient visits are up, administrative costs are down and an operating loss has been replaced by a profit.

But one critical goal has proved more elusive — attracting more patients with private insurance, which pays higher reimbursements than government-sponsored plans.

Only 20 percent of the county system's patients come with private insurance, a share that hasn't budged since 2012. Medicaid patients made up 45 percent of the system's patients in 2014, while Medicare patients made up 28 percent. Nearly 7 percent came without insurance.

In an interview last week, Pryor, CEO of Hennepin Health­care System, the public subsidiary corporation that operates the hospital, downplayed the unchanged patient mix. Because of health care reform, the number of Minnesotans who have insurance has soared, especially those enrolled through Medicaid.

"The fact that we've maintained is not a bad thing," Pryor said.

Hennepin County Board members most familiar with the complicated system were measured in their praise of the hospital's performance, while firm on the need for more private-insurance patients. The board watches over the hospital because county property taxpayers cover costs for charity patients as well as for capital projects.

Although Pryor came into his position stressing the importance of increasing the privately insured numbers, he now says it's only part of the work to be done. He also mentions often the importance of "owning downtown" in terms of where patients choose to go.

But he admits that work remains.

"The key to our growth is to focus on convenience for our patients," he said, adding that weekend and longer clinic hours will help.

Pryor takes credit for steering the hospital from an operating deficit of $27.4 million in 2013 to a surplus of $7.2 million in 2014. Inpatient visits have increased from 27,352 in 2013 to a projected 30,036 in 2015.

He espouses a management philosophy called "Lean" and pulls four books from his office shelf on the topic, noting how slim they are. Lean's stated goal is to "maximize customer value while minimizing waste."

County Board members, however, still want to see more patients on commercial insurance attracted via top-notch care and more aggressive marketing.

"The trick is to get people who have other choices to use HCMC," said County Board Chair Jan Callison.

Callison, who also sits on the Hennepin Healthcare System board, said uncompensated care — the county's coverage of charity patients — is down from $24 million in 2013 to $18.5 million in 2014. "That's good news for Hennepin County taxpayers," she said.

Callison was measured in her praise for HCMC's progress under Pryor. The hospital has identified needed changes and deserves some credit, but it's also been lucky in getting more money from the state, she said.

"There's still work to be done," she said, adding that the system must be "competitive and recognized for high-quality care. … Folks may tend to view it as the poor people's hospital, and that is a challenge."

In terms of drawing a greater share of privately insured patients, Callison said the county doesn't have hard targets. But she said it's crucial for HCMC to improve patients' experience so they want to come back. That includes attention to everything from cleanliness and safety to accurate diagnoses.

Commissioner Mike Opat was more pointed in his criticism of Pryor, crediting Medicaid expansion for much of HCMC's fiscal strength and saying, "It would be nearly impossible to lose money."

Opat, a former member of the HHS board, said he's most disappointed in Pryor's failure to increase the percentage of commercial patients, saying patient satisfaction hasn't been well served.

"Dr. Pryor is adept at bombarding folks with numbers, but overall, the commercial share has not increased, and that is hugely disappointing," he said.

One seemingly easy recruitment target has been untouched, Opat said. Fewer than 10 percent of county employees, who are commercially insured, are patients in the Hennepin County heath system. The "lack of urgency" in drawing county employees into the system is "regrettable," Opat said.

Pryor acknowledged that marketing has not been at the forefront of his work so far. "We do recognize that we're going to have to tell our story," he said.

Pryor has also been focused on preparations for a new 322,000-square-foot downtown outpatient clinic that will be key in attracting privately insured patients.

The County Board approved $10 million last year to buy the land. The clinic, to be located across from the Emergency Department, is expected to improve patients' experience by putting primary and specialty clinics under the same roof.

The new clinic will be key to attracting new patients, but Pryor also counseled patience, saying much of his first year involved setting up his management team.

"To have much of an impact at this point, it's very early," Pryor said of his tenure. "We're just at the beginning of our Lean journey."

Rochelle Olson • 612-673-1747

Twitter: @rochelleolson