photo by: Journal-World File Photo

The Lawrence Memorial Hospital emergency room sign is shown in this file photo from 2008.

The company overseeing the care at Lawrence’s only emergency department is set to go from a Lawrence-based company to a large, national firm.

LMH Health announced Wednesday that it has reached a tentative deal to end its more than 25-year partnership with a local physicians group that oversees the hospital’s emergency room and replace it with a hedge fund-owned entity that provides ER services for many Kansas City-area hospitals, including St. Luke’s and Overland Park Regional Medical Center.

Plans call for Envision Physician Services to begin employing the doctors and other advance practitioners — like physician assistants — at the LMH emergency department on Nov. 1. Envision will start employing hospitalists — doctors who provide care to a variety of patients admitted for inpatient care — at LMH on Oct. 1. Nurses and other non physicians in both departments will continue to be LMH employees.

Hospital President and CEO Russ Johnson said he likes the depth of expertise and the “bench strength” provided by Envision, which employs more than 30,000 physicians nationwide. But Johnson also said financial considerations were a significant part of the deal.

LMH pays a physician group to operate its emergency department and hospitalist programs. Johnson estimates that the cost difference between Envision and the Lawrence-based company could be as much as $5 million over a three-year period. He said that was too big of a cost-difference for nonprofit LMH to ignore.

“We are a missional organization that does about $25 million a year in charitable work,” Johnson said. “The ability to do that work comes down to making decision like this.”

But the leader of Lawrence Emergency Medicine Associates said he was “extremely disappointed” in LMH’s decision, and is worried that a large number of the existing emergency room doctors will leave and that community confidence in the LMH emergency department will erode.

“In the big scheme of these big companies, LMH is the least of their worries,” said Dr. Scott Robinson, who is the president of LEMA and founded the group in 1994. “For me this is my heart and soul.”

Robinson also said LMH should be wary of Envision and some of its past practices. The CEO of the Nashville-based company abruptly resigned in February, which was shortly after two congressional committees began looking into billing practices of Envision, which have included allegations of patients being surprised by costly out-of-network charges.

Johnson said LMH was aware of those concerns, and have told Envision that the contract with LMH, which is still being drafted, must contain provisions that protect patients from such charges.

He also expressed confidence that LMH’s emergency department will continue to provide high-quality of care, and hopefully will employ many of the department’s existing doctors. But he also acknowledged ending the partnership with the Lawrence-based group was difficult.

“This has kind of been a heart-wrenching decision, but it is a principled decision and it will take our organization forward in a more effective way,” Johnson said.

Doctor questions

How much patients notice the new deal may depend on how many of the existing doctors on the ER and hospitalist staffs agree to stay and work for Envision. On Wednesday, no one could answer that question.

The ER staff has 11 board-certified emergency medicine physicians — all of whom have ownership stakes in LEMA — and five advanced practice providers, Robinson said. The hospitalist staff has 14 doctors and six advanced practice providers.

Robinson said he expects a high amount of turnover in the medical staff. He thinks the loss of that experience, especially in the ER department that works with police and first responders in the community will be significant.

“It takes awhile to get to know a system and how it flows,” Robinson said. “When you lose people who have years of experience in this community, you lose a lot.”

Johnson said retaining as many of the current physicians as possible will be important to making the Envision deal successful. He said Lawrence has had good success in attracting new doctors to the community, and is confident that would continue to be the case in the future.

“But we would rather keep the good ones that we have,” Johnson said.

He said he did expect some doctors to not make the switch to Envision, but provided no estimate on a number.

“We know that a number of our doctors are apprehensive about this,” Johnson said. “They have communicated that. They like the arrangement they are in. We will work with LEMA and Envision to make a smooth transition. We are going to empower physicians and make sure they know they are wanted here.”

Money matters

Robinson said he thinks LMH executives made up their mind early in the process to go with Envision because the company provided a “lowball offer.”

“Anybody should know there has to be a reason for that,” Robinson said.

He contends that, despite the major difference in size between LEMA and Envision — it was bought by the hedge fund KKR & Co in 2018 for $6 billion, The Wall Street Journal has reported — the two firm’s cost structures aren’t that different.

Robinson said he is concerned that Envision either will come back to LMH later seeking more money, or else will be providing care previously provided by doctors with mid-level providers, like physicians assistants or nurse practitioners.

Johnson said LMH officials are confident in the care Envision will provide, and used a matrix of more than 40 standards to evaluate the company’s proposal. Johnson said he believed the hospital had an obligation to consider the financial differences between the Envision and LEMA proposal because ultimately patients end up paying for higher cost services.

While Johnson said he couldn’t guarantee that going with the lower contract would result in a reduction in the rates charged by the ER department, he is confident it will benefit patients.

“I would love to say the ER charge will go down by $35 or something, but I think people can see that economics of it are still sound,” Johnson said. “As we gain efficiencies, it does lower our cost structure.

“One of the universal truths in health care is is the need for hospitals to provide higher value and lower costs.”

Process issues

LMH evaluated one other proposal from the national health care provider TeamHealth. LMH began the process of considering its options in February. Johnson said he thought this was the first time in more than 25 years that LMH had taken outside proposals for the ER services contract.

However, Robinson said he did not learn from LMH that the contract was being opened up to other firms. Instead, he learned that LMH had issued a request for proposals from a competitor in Kansas City who was considering bidding on the contract.

Johnson acknowledged that he did not adequately communicate to LEMA how the process was going to work in its beginning stages.

That wasn’t the last of the process questions, though. The hospital’s board of trustees never took a vote on the change in providers. Technically, the board did not make the decision but left it up to the hospital’s administrative staff. Board members, though, did talk about the contract for more than two hours in a closed-door executive session on Wednesday.

Prior to Wednesday, there was scant knowledge about any of the details LMH was considering. Wednesday, for example, was the first time the names of any of the potential providers were announced publicly. The board of trustees agenda also made no mention that the emergency room contract was up for discussion. It was brought up in open meeting under the CEO’s general report. Board members made no comments about the issue during open meeting, but rather waited until the executive session to discuss the matter in detail.

Johnson said the matter was discussed in executive session because the hospital needed counsel from its attorney, which is one of the allowed reasons public boards can meet behind closed doors.

Robinson said he was disappointed in the process and felt there should have been more discussion in public before agreeing to go with Envision. But he also acknowledged that his emotions were raw after the news of the day.

“It just amazes this change was made,” said Robinson, who said he was uncertain of his future plans.