Top executives of Detroit's five major hospital systems are developing a plan to put satellites of federally qualified health centers into their emergency departments and pay the health centers a monthly fee for each patient the centers treat.

While the plan is in the early stages, the executives have met several times this year and expect to come up with a strategy before the year's end, said Nancy Schlichting, CEO of Henry Ford Health System in Detroit.

“We are looking at opportunities to better integrate the health systems with the federally qualified health centers,” said Schlichting, who chairs the uncompensated-care committee developing the plan.

“The goal is to reduce the burden of uncompensated care on the health systems — but more importantly, to provide better access for patients.”

Over the past two years, uncompensated care has increased by more than 20 percent for the major health systems in Detroit, including Henry Ford, William Beaumont Hospitals, Detroit Medical Center, St. John Health System and Oakwood Healthcare.

According to audited financial statements and estimates, uncompensated care for the five systems grew some 22 percent, to about $810 million in 2008 from $660 million in 2007. Uncompensated care includes bad debt and charity care.

In 2008, the combination of rising uncompensated care and investment losses wiped out much of the profit margins of the health systems. Several, including Oakwood and Beaumont, posted sizable losses.

“Most of the patients who come into the emergency department for routine medical care are uncompensated. If you have a sore throat, you are sick, but it is not an appropriate ED admission,” said Brian Connolly, Oakwood's CEO. “We don't have reimbursement for that care.”

The key to the plan, however, is using the satellites. The capital costs for the new satellites could come from federal stimulus dollars.

“Hospitals refer patients from their emergency departments to health centers now, but there is a barrier. People will not go if the health center is in the neighborhood and not even if it is across the street from the emergency department,” said Jesse Thomas, CEO of Molina Healthcare of Michigan in Troy, who chairs the hospital-health center subcommittee.

Locating the health center within the hospital emergency department is the only way to ensure that patients will seek care there, he said.

It is expected the clinics in hospitals would be open extended hours, including evenings and weekends, to accommodate the typical walk-in, non-urgent emergency department patient.

Thomas said the average cost for an uninsured patient in a hospital emergency department can be as much as $500.

“Costs at a health center would be $40 to $50. ... Hospitals know they can't entirely eliminate uncompensated care, but they can reduce it,” he said.

Thomas said one funding model that seems the most practical is for hospitals to pay federally qualified health centers a negotiated monthly payment for each patient transferred into the health center.

“We are looking at different investments we may take to tie those FQHCs to the health systems,” Schlichting said. “You look around the country and see public hospitals tied to FQHCs. We don't have that model. I am encouraged by the very good participation from all the health systems.”

When uninsured patients are referred to the health center, Schlichting said, they can be enrolled in a medical home where they have their own primary care physician to manage their care.

“We want to help patients have a medical home to avoid more serious health problems when they don't have a doctor,” Schlichting said.

Wayne Bradley, executive director of the Detroit Community Health Connections, said hospital executives are realizing that working more closely with the health centers can be financially beneficial.

“If hospitals can give us those dollars, we can provide those services where the costs are lower, and the hospitals can save money in the long run,” said Bradley. “Rising charity care is a devastating problem for the hospitals and for federally qualified health centers.”

Bradley said the health centers can care for uninsured patients at a fraction of a hospital's cost.

Another goal of the committee is to come up with a plan to reduce the impact of the state's announced 4 percent reduction in Medicaid payments, effective July 1, Schlichting said.

“The governor's executive order is of great concern to us. The cuts in the Medicaid program and the increases in the uninsured (are) a double whammy,” Schlichting said.

Thomas said Medicaid health plans, such as Molina's, would benefit because their members also sometimes misuse hospital emergency departments.

“Our folks will be redirected to the FQHC that we contract with,” Thomas said. “We can be favorably affected by this model.”

Kim Sibilsky, executive director of the Michigan Primary Care Association, which represents the federally qualified health centers, said hospitals historically have chosen to help fund health centers in their markets.

For example, Henry Ford financially supports Community Health and Social Services, and Oakwood supports Western Wayne Family Health Centers. In 2007, when St. John closed Detroit Riverview Hospital, it later opened St. John Detroit Riverview Center. When Trinity Health closed Mercy Hospital in 2000, the Catholic health system opened the Samaritan Center.

“This is very nice but limiting when you look at the burgeoning needs,” Sibilsky said. “This model has been overwhelmed by the increasing uncompensated care costs. It doesn't work anymore, because the penetration of the health centers is extremely low.”

Paul Propson, executive director of Covenant Community Care in Detroit, said expanding the health centers is difficult because they have limited federal and state funding sources.

“Unless the local resources grow, there is a limited ability for community health centers to meet the rising demand. We have capacity to grow,” Propson said.