LMH gives up on proposal to move management of ER to large national firm, reopens negotiations with Lawrence company
photo by: Journal-World File Photo
Story updated at 4:28 p.m. Monday
After an outcry from its medical staff and members of the public, LMH Health has abandoned its plans to reach a cost-savings deal for a large, national company to manage the hospital’s emergency department.
Instead, LMH will reopen negotiations to renew its contract with a Lawrence-based company that has been providing the emergency room with doctors for more than 25 years.
LMH leaders said they hope to settle on the basic terms for a letter of intent for a new deal with Lawrence Emergency Medicine Associates within three weeks.
“We have said from the beginning that we want to keep our local providers and LEMA in a way that is sustainable for both parties,” LMH President and CEO Russ Johnson said via a written statement. “I’m encouraged that we are getting to that place together.”
LMH officials said in a release Monday afternoon that it had “stopped its current contracting efforts with Envision Physician Services.” At a board meeting last Wednesday, Johnson announced the hospital had reached a tentative agreement with Envision to begin providing physicians for the emergency department and LMH’s hospitalist program, which provides care to patients receiving inpatient care at LMH.
The reaction from members of LMH’s medical staff and general community members was swift. Envision is a large, hedge fund-owned entity that has received some bad national press in recent months, including a contemplated bankruptcy filing and its CEO abruptly resigning after congressional committees began looking into the company’s billing practices.
By the end of the week, the hospital’s board of trustees had convened a special Friday evening meeting that attracted nearly 300 community members via Zoom. Board members convened the meeting after their phones, emails and other devices “blew up” with messages expressing concern that most of the emergency room doctors would not go to work for Envision.
Board members urged Johnson and LMH administrators to pause their negotiations with Envision. By Monday afternoon, the pause had become a full stop.
“We are pleased to be back in conversations toward a goal that we both shared throughout this process: providing great care for our community through an arrangement that supports our physicians and advanced practice professionals in remaining here,” Johnson said via the release.
What remains unclear are the financial implications of LMH’s new strategy. When announcing the Envision deal, Johnson said he liked the company’s expertise and its strong regional presence, as the management firm that operates ER departments in several Kansas City hospitals, including St. Luke’s and Overland Park Regional Medical Center. But Johnson also said he estimated the Envision deal would save LMH about $5 million over three years, compared to what it would pay LEAP to manage the ER and hospitalist programs.
LMH Health, a nonprofit, posted about a $16 million operating loss last year, after decades of strong finances. It also has posted large losses thus far in 2020 related to the pandemic shutdown.
Monday’s announcement didn’t provide details on whether LEMA has agreed to change the financial terms of its previous proposal. Johnson said the next steps will be for administrators from both groups to have more detailed conversations, culminating with a joint meeting between leadership of the hospital’s medical staff, LEMA administrators and the LMH Health Board of Trustees and hospital administrators.
Prior to Monday’s announcement, public statements between LMH and LEMA leaders had turned acrimonious, with both sides accusing the other of spreading misinformation about the deal. Dr. Scott Robinson, who founded LEMA in 1994 and currently is its president, said he was on board with working with the hospital on a new deal.
“This has obviously been a tough road with some detours, but that’s not always surprising in the challenging world of healthcare,” Robinson said in a statement. “I told Russ that if we weren’t getting sideways with each other from time to time, we wouldn’t be doing our job. It is good to be seeing this come together.”
Robinson and other members of the LEMA staff had expressed concern that Envision would significantly change staffing levels at the ER department by limiting the number of doctors on duty at any one time and caring for many cases with lower-level providers, such as physician assistants or nurse practitioners. Envision officials never made any public statements about their plans for the department, as a final contract was never reached with the Nashville-based company.
Others expressed concerns about costs that would be passed along to patients. Dr. Marc Scarbrough — who is both an LMH trustee and a physician in the LEMA group — told board members about a story of a colleague who had first-hand knowledge of a $1,600 physician services bill Envision had sent a customer for performing three stitches on a cut finger. Current physician charges at Lawrence ER are closer to $400 to $800 for such a procedure, Scarbrough had estimated.
Multiple doctors and nurses had publicly come out against the deal, and hospital administrators came under heavy criticism. One online petition calling for the firing of Johnson garnered more than 1,800 signatures, although LMH board members on Friday expressed strong support for Johnson.
On Monday, Robinson said he was grateful for the outpouring of support LEMA and its doctors had received.
“We appreciate the unbelievable support of our community,” Robinson said in a statement. “But this is Lawrence, Kansas, and it is no surprise its residents would speak out.”