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North Bay Business Journal

Monday, October 28, 2013, 6:50 am

Meritage ACO effort shows positive early results

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    Dan Verel, Business Journal Staff ReporterNearly a year after becoming the North Bay’s first accountable care organization under the federal health care overhaul, Meritage Medical Network is reporting positive, albeit preliminary, results on readmission rates and improved outcomes.

    The ACO, which received approval from the Centers for Medicare and Medicaid in January 2013, is known as the Meritage Care Transition Model. Established under the Affordable Care Act, the ACO initiative seeks to reduce hospital readmissions among Medicare beneficiaries by way of financial incentives for providers and hospitals, leading to more coordinated care and thus less costly, often duplicative care.

    To that end, at Marin General Hospital between May 1 and Aug. 31 of this year, a total of 35 patients completed the Care Transitions Program, with only one patient being readmitted to the hospital within 30 days. That equals a readmission rate among Medicare beneficiaries of 2 percent, compared to a national Medicare hospital readmission rate of 18 percent.

    “Managing transitions and avoiding preventable admissions is one of our goals,” said Andrea Kmetz, RN, director of care management for Novato-based Meritage Medical Network. “We have a trained staff of RN case manager who visit patients in the hospital before discharge, visit them at home within 48 hours of discharge, and sit down and make sure they understand their medications, and that they get the appointment for follow-up care that they need.

    “Every patient gets a home visit, which is something that is unique among other ACOs,” she added. “Everyone is seen in their own home.”

    The entire ACO population, across Marin, Sonoma and Napa counties, includes about 16,000 fee-for-service Medicare patients seen by about 250 physicians, excluding Medicare Advantage beneficiaries.

    While the data so far is promising, Ms. Kmetz said Meritage Medical Network won’t know the full scale of effectiveness until about year or so, given the relative newness of the ACO model.

    Still, it’s in everyone’s interest to stem costly hospital readmission rates among a population that is often elderly but, with the right approach, is manageable, Ms. Kmetz said.

    “The hospitals are facing a penalty if their readmission rate is higher than the norm, so we’re going to help the hospitals avoid that penalty,” she said, referring to an element of the Affordable Care Act known as value-based purchasing, which will reward or penalize hospitals on how well they match up with others in the industry and how well they improve over time.

    The Meritage Care Transition Model ACO is taking part in the “shared-savings” model, one of three models developed by CMS for ACOs.   The medical network is looking to expand the care transition model outside of its ACO population. The network has some 700 physicians across the North Bay and works with numerous hospitals, among them:  Marin General, Petaluma Valley, Sonoma Valley, Palm Drive and Santa Rosa Memorial.

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    Meritage Medical Network was also recently named as a top performer by the Integrated Healthcare Associations, one of 45 physician organizations to earn the distinction and one of three in the North Bay.

    Out of nearly 200 physician organizations, the 45 top performers achieved the highest overall benchmark for quality in 2012 based on the IHA statewide Pay for Performance program measures.

    Awards are based on performance in three pay for performance quality measurement domains: meaningful use of health information technology, patient experience, and clinical measures that include priority conditions such as cardiovascular, diabetes, musculoskeletal, respiratory, and prevention.

    In addition to Meritage, North Bay top performers included: Sutter Medical Group of the Redwood, part of the Sutter Pacific Medical Foundation that operates in Marin, Sonoma and Lake counties,  and the Permanente Medical Group‘s Marin-Sonoma service area, which includes medical centers in San Rafael and Santa Rosa, as well as its Napa-Solano service area that includes Vallejo and Vacaville.

    For a full list of top performers, visit www.IHA.org

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    Revamped Napa Medical Center

    Napa Medical Center, a 66,000-square-foot medical office building adjacent to Queen of the Valley, has undergone significant renovation in the last two years, with New York-based Seavest Healthcare Properties pumping more than $3 million into the property it purchased in 2011.

    Seavest bought the property, formerly the Trancas Medical Center, out of foreclosure for approximately $11.2 million. Since then, efforts to revamp the property known as “The Pink Palace” have accelerated, and the facility is poised to attract new tenants, according to Lloyd Mallah, vice president-asset manager at Seavest.

    “We bought the building with the intention of renovating it,” Mr. Mallah said. “To that point, over the last two and half years, we’ve invested $3.5 million in the building. Some of that was just maintenance, but also a lot of cosmetic changes. We painted the building, added new signage, and redid the lighting.”

    The new complex also received new elevators and new landscaping, among scores of other seemingly minor yet important aesthetic upgrades, Mr. Mallah said.

    At 66,000 square feet and three stories, it’s easily Napa’s biggest medical office building, an attraction for Seavest, which specializes in health care commercial real estate across the U.S.

    “That’s why we saw this as a premier medical destination,” he said.

    Previous owners of the building, Napa Medical Building Investors, purchased the property for $ 17.5 million in 2007 and made $2 million in improvements. But after the collapse of financial markets in 2008 and a 20 percent vacancy rate, the property fell into default.

    The complex has always and will continue to house a group of physicians from neighboring Queen of the Valley.  It’s now about 75 percent leased, Mr. Mallah said, with key tenants including Redwood Regional Medical Group, Harvest Pediatrics, Clinic Ole, UCSF, Davita Dialysis and other private practice physicians.

    “We’d like to get it higher,” Mr. Mallah said. “One of the unique challenges is that Napa seems to be a market where the real estate is owned locally.” That may have led to the perception that a big New York investor was charging into a small market without taking into account local aesthetics, Mr. Mallah said.

    “It took a while to take off,” he said. “We’re not trying to make this a building that looks like it’s in the middle of Chicago. We’re a small nimble owner who happens to have a tremendous amount of experience with health care buildings. What we’re trying to create is a diverse group of physicians, internal medicine and specialists who can add value to each other.”

    The Napa Medical Center is the first property in California for Seavest, but Mr. Mallah said the company has an eye on potential growth in the region and elsewhere in the state, particularly as more health systems shift to outpatient and medical office complexes from hospitals, a development of the Affordable Care Act.

    “Expanding to the West Coast is definitely a goal of ours. Right now we’re seeing so many hospitals drive projects off campus, and those outpatient facilities are exactly how they’re doing it,” Mr. Mallah said.

    Indeed, in Santa Rosa, Sutter Health and Hammes Company just broke ground on an 80,000 square foot medical office complex next to its forthcoming $284 million hospital, while Kaiser Permanente is exploring a 10-acre parcel in Southwest Santa Rosa for a possible medical office building complex.

    Seavest brought in a new property management firm, San Francisco-based CAC Real Estate Management, while marketing and leasing is being handled by San Carlos-based Bayside Realty Partners.

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    Terry Newmyer last week resigned as chief executive officer of Adventist Health’s St. Helena Hospital Region and Northern California Network, which includes hospitals in Vallejo, St. Helena, Clearlake and Mendocino County.

    Steve Herber, MD, executive vice president and chief medical officer, was appointed as interim CEO.

    In a note to the Business Journal, Mr. Newmyer said he felt it was time to step down after coming to St. Helena in 2009. He was brought in to help  St. Helena Hospital and turn around its financial woes, which at one point was losing about $1 million a month before his arrival.

    “I feel the reason for this job is fulfilled and we have a need for a new emphasis from the CEO office, including setting the best possible culture among employees and care givers for advancing in the new era we have entered,” Mr. Newmyer said, referencing coming changes related to the implementation of the Affordable Care Act and other industry changes.

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    Satellite Healthcare, a not-for-profit provider of kidney dialysis services and sponsor for kidney research, recently opened a Rohnert Park location at 6265 Commerce Blvd.

    Based in San Jose, Satellite Healthcare operates dialysis centers throughout Northern California, and in several states nationwide. The Rohnert Park location is the sixth opening in the Bay Area this year, with new locations opening Daly City, Oakland, San Jose and San Leandro since March.

    “As a not-for-profit dialysis provider it’s our mission to serve the needs of the local community,” said Marc Branson, Satellite Healthcare’s executive vice president. “The new center in Rohnert Park will allow us to do just that in an area where Chronic Kidney Disease is increasingly prevalent.”

    Satellite Healthcare has more than 40 in-center locations and 18 home dialysis centers nationwide, with more than 5,500 patients.

    Submit items for this column to Staff Writer Dan Verel, 707-521-4257 or dverel@busjrnl.com.

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