Lawrence Leonard
CEO
Shannon Medical Center
San Angelo, Texas

Organization Information
The tertiary hospital referred to in this report is part of a not-for-profit health system comprising the hospitals, a 501A not-for-profit physician clinic, health plan, and regional clinics. The sole member of each of these entities is an estate that was left by a local ranching family in 1932. A board of seven trustees oversees the operation of the estate; the health system board is composed of the seven trustees, two physician members, and four community members; and the hospital board is composed of the seven trustees and/or three physician and community members.

The 300-bed hospital is the region’s largest acute care facility. The campus includes the acute care hospital, women and children’s hospital, two medical office buildings, two urgent care centers, a radiation oncology center, a behavioral health center, and two wellness and fitness centers. The range of services includes an open heart surgery program, an in-house rehabilitation unit, a dedicated oncology unit, a skilled nursing unit, neonatal services, a regional poison control center, a helicopter service, home health and a same-day surgery center. The hospital also offers a wide range of community educational and preventative programs.

The hospital is located in a community of 90,000 people; the population of the county is an additional 15,000. The hospital also serves as a major referral center for 15 surrounding counties that are considered rural and are generally sparsely populated. The total population of these surrounding counties is 75,000. Other metropolitan areas are 90 miles to the north, 120 miles to the west, 250 miles to the east; no cities exist between the facility and the Mexican border 150 miles to the south.

The only other acute care hospital in the community is part of a for-profit corporation. This 120-bed hospital offers a full range of acute care services. The other facilities in the community are a for-profit behavioral health center and a long-term acute care hospital.

The hospital has an open medical staff of 200 physicians and 75 percent of these physicians have their primary practice at the hospital. The other physicians practice primarily at the other hospital. Most physicians in the community have medical staff privileges at both hospitals.

Summary
This tertiary hospital was located in the only part of Texas not covered by an emergency air ambulance service. The hospital is a magnet for healthcare services for a 15-county area and has a network of 15 rural health clinics in these counties. To support the emergency care in these communities and to provide a better link to the hospital facility, a low-volume cost-effective air ambulance service was needed.

Description
This area surrounding our Tom Green county has been faced with hospital closures over the past several years. As hospitals closed, we were asked to develop solutions for the medical issues encountered by the populations once served by those facilities. Our task included developing primary care clinics to provide basic medical care, and dealing with medical emergencies.

The need for emergency medical services is increased because interstate highways cross many of the communities in the area, and the communities must deal with multiple trauma victims from auto accidents in addition to other accidental and medical emergency patients. The administration of the hospital realized that not only did the hospital have the responsibility to support the emergency services for the citizens of these communities, but also had to find adequate support for the providers that would be dealing with the emergencies in the clinics. The distance of a clinic from the tertiary hospital can be as far as 100 miles in some cases.

Most of these counties had volunteer emergency medical services. The ambulances were old and would often break down during transport of patients. The medical equipment on these ambulances was often out of date and the volunteers were for the most part inadequately trained to deal with true emergency patients.

The administration began to seek solutions for the emergency support of these counties and the idea of an air ambulance was being considered, and consulted the medical staff. The medical specialists did not express any concern over the proposed new program. The general surgeons and orthopedic surgeons were concerned about the potential of a large increase in the number of trauma patients. This was an important issue that needed to be resolved before proceeding.

The hospital board’s main concerns were the financial risks of the program and the increased liabilities of providing this service. My task as vice president was to come up with a proposal that would meet the needs of the rural counties and address the concerns of the medical staff and the hospital board.

Administrative Decision
The first task was to find a proposal for a helicopter service that would satisfy the board’s concerns. We evaluated three service options: purchase, lease, and a modified lease. The first option, purchasing the helicopter and running the program in-house, was turned down because we did not have the expertise to develop a new program from the ground up and because this option had the greatest financial risk for the hospital.

The second option was to lease a helicopter and have the leasing company provide the pilots and the aircraft maintenance. Under this proposal, the hospital would be responsible for providing the medical personnel and medical equipment. The hospital would also be responsible for the billing and collecting of the air ambulance fees. This option provided the expertise necessary, but the financial risk was still too great because the hospital would be were obligated for the lease on the helicopter. We were also concerned about the hospital’s lack of expertise in billing and collecting for an air ambulance service.

The third option that was considered came from a company that was willing to provide the helicopter, pilots, and maintenance. The company would bill and collect for the air ambulance services to cover their expenses. The hospital would provide the medical personnel, medical equipment, landing site, and crew quarters. We chose this option because this company provided the necessary expertise and the financial risk to the hospital was fixed to the cost of the medical personnel.

The hospital board approved this third option in 1994. I was given the task of working out agreeable solutions for the medical staff and finding solutions to help the local communities with their emergency care concerns.

The first step was to develop a plan to help with the emergency support of our rural communities. The addition of the air ambulance would greatly enhance the emergency services. but we also wanted to support local provision of care. The hospital developed an emergency medical service (EMS) training program to improve the skills of the volunteers and also provided training for advanced cardiac life support. These courses were delivered in the local communities. The emergency department physicians agreed to serve as the medical directors for the local emergency services and to support the training of the volunteers.

To support the local providers that were faced with dealing with multiple trauma victims, the hospital agreed to send additional medical personnel on the helicopter that would stay in the clinic to help stabilize patients while awaiting transport.

The hospital helped the local communities construct and develop landing sites in their communities. We also sent out personnel to develop global positioning satellite (GPS) coordinates for high-risk sites in remote areas. This planning would greatly enhance the air ambulance system’s ability to quickly access patients in these areas.

Additional education was provided to train the appropriate personnel on how and when to access the service. Hospital personnel met with local providers, EMS services, and Department of Public Safety and local law enforcement agencies. This training is an on-going process.

A communication center was set up to track the helicopter on flights and to help coordinate other emergency support services during major crises. The center was developed in conjunction with the local fire department, which provides both local EMS services for our community and for the rural areas. The communication center is also responsible for activating the hospital’s trauma team.

The administration met with the hospital’s trauma surgeon to help deal with the concerns of the medical staff. Both parties believed the hospital already received the majority of the trauma from the region and did not anticipate that the implementation of an air ambulance service would result in a large increase in cases. The hospital agreed to provide financial support for the surgeons when the trauma team was activated and to monitor the amount of referrals for any major increases in volume. The trauma surgeon also maintained that patients transported in the air ambulance would receive better care prior to arriving at the hospital and quicker transport and thus would have better outcomes and potentially require less time to treat once they arrived at our facility. If warranted, the hospital agreed to help recruit additional surgeons to support the program. Over time 68 percent of the referrals proved to be medical and that amount did not substantially increase the number of trauma patients coming to the facility.

Results
The air ambulance service was started in 1994 and is still in operation today. The program began with an average of 18 transports a month and in 1999 averaged about 30 flights a month. We are expecting about 35 flights per month for the coming budget year (2000).

The service performed close to expectations every year without any problems until 1999. The owner of the air ambulance company that we had contracted with died and the new owners did not provide the level of service that we felt was required for the safety of the program. The flight nurses became concerned about maintenance practices, and after many meetings with the company, we decided to change vendors. During the change, the helicopter crashed on a training flight. Although no one was hurt, the helicopter was destroyed. We canceled our contract three months early and brought in the new vendor.

The new relationship required us to lease the helicopter and be responsible for the billing and collections. With the knowledge gained over the previous five years, we felt capable of managing the program and taking on the additional financial risk.

The previous program had been underwritten $350,000 to $400,000 per year. Under the new contract, we estimated that a break-even could be achieved at 32 flights per month. In the first five months of the new contract, we averaged 39 flights per month, so we are very optimistic that the financial effect will be better for the hospital under this new arrangement.

The hospital implemented a subscription program approved by the Texas Department of Health in February of 2000. This program allows individuals in our community to buy a policy to supplement their health insurance benefits for air medical transport. The subscription program will accept payment in full for the cost of the air transport after payment of the insurance benefit and any deductibles or copays. Our estimate is to net $100,000 the first year to further offset our operational losses.

In meetings with people from our rural communities, the one service that is always mentioned is the air ambulance program. The most important aspect of the program is the difference it is making in the lives of patients. One of the first patients transported was from a community 70 miles from the hospital. The patient had an aortic aneurysm and was in critical condition. As the patient was arriving in the operating room the aneurysm burst. The patient lived but would have died if he had been transported by ground ambulance. We have witnessed many cases like these since the program started, and we are convinced that we made the right decision when we began the program in 1994.

Lawrence Leonard, FACHE, is currently president and CEO of Shannon Medical Center in San Angelo, Texas. Mr. Leonard has served the Shannon Health Systems Regional Network in various capacities since 1972. His contributions to the field included developing primary care clinics across west and central Texas, developing the MedPlus program, and La Esperanza Clinic, a federally qualified health center. He currently also sits on the management committee for the development of an integrated healthcare delivery system in his region. He has been an affiliate of the American College of Healthcare Executives since 1983 and earned Fellow status in 1999. This case study represents a part of his Fellow project and was voted one of the best case studies of 1999.