No Sleeping On The Job

Montserrat Day Hospitals

Montserrat Day Hospitals is a provider of day hospital facilities, operating three Licensed Day Hospitals and one of Brisbane’s largest Gastroenterology practices and an open-access endoscopy service. They also manage the practices of more than 20 specialist doctors.

Ben Korst is Montserrat’s Chief Executive. His role is to lead the company in its three main lines of business: day hospital operation, management of specialist doctors, and administration of the gastroenterology practice. “The day hospitals are where we are heading into the future,” says Ben, referring to the hospital’s model of operation.

Montserrat has recently followed the model of larger institutions, where doctors take on the role of ‘visiting medical officer’ (VMO). The VMO is a specialist Surgeon whom a credentialing committee has determined is a fit and proper Specialist to be undertaking procedures at a Montserrat facility. Once the Surgeon has seen a patient in consultation, the patients are scheduled by the doctor’s office at a Montserrat facility who are paid by the health fund, on behalf of the patient. I.e. the Doctor and the Hospital have no financial relationship.

A contrasting model involves doctors as the hospital owners who benefit from any profit. In a kind of ‘hybrid’ model, doctors own part or all of the facility, benefiting primarily from their own level of activity within the hospital: this rewards doctors who most use and bring profit into the hospital. This hybrid model is the one Ben says Montserrat is most closely pursuing as it aligns the interest of the hospital and Doctor when systems are in place to avoid conflict.

At present the operator of the hospital takes the whole commercial risk. A small unit might typically cost some $5 million to fitout and equip. As costs and risks escalate, it becomes necessary to share the risk (as well as the benefit) with doctors who are using the facility, and Ben explains that doctors are increasingly interested in this model. “One of the reasons why specialist doctors are now showing an interest is that for many years they have not really had any exit strategy,” he says. “It is not uncommon for a doctor to study for up to 15 years, then go into the public system, then go into private practice on a part-time basis before developing a full-time private practice, then retire 20 to 25 years later without an exit strategy.”

Though well compensated throughout their careers, when specialist doctors retire they are often on the lookout for junior specialists to take over part of their practice. If the doctor is a shareholder in hospital operations, they have the option to remain as such or sell their share to junior specialists who would become credentialed at the Hospital.

With years of training and experience, Doctors become highly skilled in their practice; it is not necessarily likely that they also develop business management skills. Some doctors are more entrepreneurial than others, but generally doctors do have a desire to create wealth through their career. So, many of them show a great level of interest in a trusted business model that enables them to do that. That is what Montserrat is endeavouring to create.

Ben himself does not wield a knife. His background is in corporate finance, having moved overseas to become Managing Director of a listed UK company and working around Asia-Pacific before returning to Queensland to run the day hospital business. Montserrat was set up 16 years ago by Dr Peter Stephenson, the current owner. According to Ben, Dr Stephenson “felt he could do it [run day hospitals] better, after establishing endoscopy and gastroenterology practices at some of Brisbane’s well-known larger hospitals.”

In many ways, day hospitals offer what other hospitals don’t. Clinically, facilities are just as good with outcomes as good as any large Hospital. But without the processes involved in a large overnight hospital, they deliver service to patients quickly and easily. Dr Stephenson’s motive for establishing the day hospital was not so much financial as it was to provide a better class of service.

While the healthcare sector is seen as relatively stable, it is becoming more and more expensive to establish new facilities. This is a huge barrier to small players. To fit out a single operating theatre will cost upwards of $1,050,000 – and the competitiveness of the sector means providing top-notch specialists and their patients with the latest and best equipment. Increasingly it is to the surgeons themselves that private health facilities must appeal, more so than to their patients; and that is where the facilities compete most directly. The specialists look for a number of factors including good, well-trained nursing staff, especially in the theatre. The latest and best equipment is also a priority.

In terms of human resources, Ben says that finding good nursing staff is less difficult than might be expected. There were openings for 20 jobs at Montserrat’s new hospital at North Lakes: “We didn’t place one advertisement,” Ben says. “We placed a billboard on the site and received close to 200 applications.”

According to Ben, co-owned day hospitals represent the way forward because they allow specialists to share in the wealth created by them. In the five months since the opening of North Lakes, the company’s fourth hospital, a record number of 23 specialists have joined the team. Ben explains that once this hospital is properly bedded in (excuse the pun), “expansion will move relatively quickly and we will aim both north and south of our current locations” into the Sunshine Coast and Gold Coast regions. Location is in some measure determined by the specialists: “For the urban model we don’t want to be more than about half an hour from the specialists’ home base,” he says, and proximity to an Accident and Emergency centre is also required.

Ben plans to open two new facilities within the next five years, as “Montserrat just does not have the human capital in our head office to do more than one facility at a time – at the moment.” The planning required for a single facility takes around twelve months, while construction and approval takes another year. This expansion plan excludes possible acquisitions, which Ben does not rule out. He declines to go into detail, but the company is also looking at expanding into other disciplines at existing hospitals as long as it complements what they already do and does not impact on practitioners that use the facilities. When asked where the plans for expansion come from, Ben says he spends a lot of his time listening to doctors and ideas just come up.

Day hospitals are also good for the patient. They involve convenient procedures which can be performed quickly because of improvements in techniques and equipment. In receiving treatment that does not involve an overnight stay, the patient returns home sooner. They are not exposed to ‘bugs’ endemic to overnight stays. Ben explains: “We eliminate the big three risks – infection, which just doesn’t exist as it does in overnight hospitals; falls from beds; and incorrect medication.”

Procedures include what might be termed ‘elective’ surgery. Cosmetic surgery has become very patchy in the last 18 months, says Ben, fluctuating with the availability of funds. Healthcare costs take up an increasing proportion of people’s incomes. “Upwards of 70 per cent of cosmetic surgery is financed [by banks, for non-medically necessary procedures], often by people who are not in high-income jobs,” he says. “As a result we have seen a decline.” Day hospitals tend to work best in higher-income demographic areas.

The growth of private healthcare facilities is boosted by waiting lists in public hospitals that, in Ben’s opinion, “are really out of control. In some southeast Queensland hospitals they can be as long as five to seven years. That’s helpful to a private hospital but less so to a patient.” On one aspect of healthcare, Ben is clear: “there should be no difference in the care that a patient receives in the public or the private sector.”

Because of government cutbacks, it is difficult for health authorities to spend on capital projects. Ben predicts more public patients receiving surgeries that are performed in private facilities, “which might save some capital and be a solution over the next three to five years. I think the private sector is very willing to negotiate fair and reasonable rates with the public purse to carry that sort of work… a lot of the time I think we can do it cheaper than the public sector.”

The choice between day or overnight hospital is one that often falls to the doctor rather than the patient, and it’s worth noting that a new generation of medics is using new techniques and changing the post-operative care procedures. “In some cases they are now doing procedures such as knee replacements in day surgery, providing the patient with after-hours nursing care as a better alternative to the conventional city-centre overnight hospital,” Ben explains. “It’s partly about cost but mainly about care. There are so many other factors in the cost equation.” He adds, “there are significant advantages in cost to getting procedures done in the outer-lying areas.”

One up for ‘fringe’ medicine, perhaps?

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July 20, 2018, 1:04 PM AEST

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