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EP66 - A Micro-Hospital Telling Its Story on How It Is Taking Healthcare Back with Chase Westen

Trisha’s guest this week is Chase Westen, Chief Administrative Officer with Phoenix ER & Medical Hospital.  This is a micro-hospital located in Chandler, Arizona, and he shares how he is able to maintain a five-minute or less wait time for patients.  We also discuss how to triage patients to determine if they are in an emergency or non-emergency situation, and then guide them to where they can receive effective treatment.  With the rising costs of healthcare, they are very transparent in their costs.  This is a timely and interesting conversation, and I hope you enjoy it as well!

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In this episode, we talk about…

[2:25] What a micro-hospital is and the background of Phoenix ER & Medical Hospital

A micro-hospital  is a hospital with fewer than 10 inpatient beds and 20 overall beds.  They take every service you can imagine, and try to fit it into a nice little package.  At Phoenix ER & Medical Hospital, they do almost everything except for surgery, ICU, and labor and delivery.  They have full radiology, lab, pharmacy, ER, and a medical unit for inpatient care.  The micro-hospital has three inpatient beds for overnight stays as well.

Chase shares that Phoenix ER & Medical Hospital was founded and operated by seven physicians.  One of them has done this across the country, and six other physicians in the area wanted to take healthcare back.  With micro-hospitals popping up, generally the staff are the ones that want to make sure they are able to really take care of the patients.  Patients aren’t just numbers, because the employees aren’t just numbers.  Phoenix ER & Medical Hospital’s tagline is, “Experience the difference.”  They really believe in that, not just for patients but for employees as well.

[4:38] Understanding health insurance

Phoenix ER & Medical Hospital is technically an out-of-network provider for all insurance (including Medicaid, Medicare, and Tri-Care), but the federal mandate is that insurance companies honor in-network benefits for emergency situations.  That is both a federal and a state law, and it allows them to take care of patients without worrying about insurance.

On their website, you can find a video that thoroughly explains how people can pay for healthcare at the micro-hospital with or without insurance.  Chase shares that there are a lot of scare tactics out there when it comes to insurance.  Ultimately, they are there to care for patients.

A frequent question is, what about the people that don’t have insurance?  State law requires that they can still get evaluated by a physician.  Through this evaluation, the physician can determine whether or not they are in an emergency situation.  If not, they can quote them a price and the potential patient can determine whether or not they want to be treated.  If they do not wish to be treated at the micro-hospital, the physician can recommend next steps and guide them toward another location where they can receive treatment.

[7:21] How to handle a busy micro-hospital and what to do during overflow situations

While Chase says they are not always busy at the micro-hospital, they tend to be busiest on Mondays.  During the pandemic surges in 2020, they had almost a thousand percent increase over the weekend.  He praised the team for working as hard as they could during that time – they were able to adapt to going from 17 patients to 170 patients per day.

During those times, they could not maintain their five minutes or less wait time.  With the pandemic surges, they could not reach out to other ERs because every hospital was overflowing.  Outside of the pandemic, they have been able to connect and collaborate with Chandler Regional and a new medical center from Banner in the area in order to take care of the community.

Chase tells a story of how this collaboration works for patients.  When they first opened the micro-hospital, a man came in with his wife who was not feeling well.  When he found out they did not take Medicare, he decided to go over to Chandler Regional without being seen by the physician at Phoenix ER & Medical.  They got over there, waited for an hour, and then were told it would be at least another couple hours.  He then called back to Phoenix and asked if there was still no wait.  There was no wait, so they came back over for evaluation.  She got a CT, and in 45 minutes they were back in a room at Chandler Regional because she needed surgery.  She was in a room getting ready for surgery, therefore, before she would have even been seen in the ER at Chandler Regional.

Another man came in and asked to get checked out because he had been experiencing chest pains for three or four days.  As the doctor walked into the room to examine him, the man had a heart attack.  The nurses were able to use the defibrillator and get him stabilized, and then he was on the ambulance over to a cath lab within 20 minutes.  They are really able to streamline and triage things that are above their level of service.

[11:37] Maintaining the five-minute or less wait time

Volume tends to pick up at the end of the day, and if they all of a sudden have a hundred patients show up at the same time then the five-minute wait time cannot be maintained.  Chase has worked in other small hospitals, and he has learned how to streamline the process.  Physical sight lines and using cameras in the waiting room keep things moving along.  If the nurses have taken care of their current patients, they can look at a monitor of the waiting room.  As soon as someone walks in, they’re ready to go to them and start the evaluation process.  Once a person has a wristband on, a nurse can triage the situation and determine appropriate next steps.

[13:16] The patient triage process

A lot of the nurses at the micro-hospital have experience within the valley at larger hospitals.  In addition, nursing leadership has trained the registration staff – not to be clinicians, of course, but to recognize red flags.  If someone comes in saying they are dizzy, for example, the registration staff can call for a stat check.  They are knowledgeable about specific trigger words and making decisions accordingly.  

[14:51] Thinking outside the box and hands-on leadership

Chase is a pharmacist by trade, and he started by taking on responsibilities in the lab. They tried to hire lab technicians and they were very set on doing everything in one way.  Healthcare innovation, Chase points out, requires looking at the laws and rules and taking what you really need to do to make sure you have good patient care.  

Taking care of the patients like you would take care of your own family members is what has made them so good at what they do, in Chase’s opinion.  Outside-the-box thinking allows them to keep their five-minute or less wait times because people come up with new ideas and they run with them.  

Chase takes a very hands-on approach to leadership.  “If it’s not nursing, if it’s not clinical, I’m probably running it,” he says.  He fixes air conditioners, hangs TVs, does the hiring, and more.  When he started to need some help, he was able to bring on someone he had worked with in the past who had a similar mindset.

[18:11] Pricing transparency

All of the pricing is readily available on the Phoenix ER & Medical Hospital website.  As mentioned earlier, the micro-hospital is out of network for all insurance plans.  It is possible, however, that people could self-pay for less than they would pay depending on deductibles and what insurance will actually reimburse.  You also need to consider the costs involved with going to specialists and getting tests done.

Chase describes his own comparison related to his previous shoulder surgery. For this type of surgery, you would go to a specialist, pay a co-pay, and then they would say you need an MRI.  The insurance won’t let you get an MRI without getting an x-ray first.  You have to pay for the x-ray, and then you have to go back to the specialist for him to look at it and say yes, you need an MRI.  Then you have to go through prior authorization and get the MRI.  For Chase, his co-pay for the MRI ended up being about $400.  If you bring a prescription from a doctor to the micro-hospital, you can get an MRI for $350.  It is more cost-effective, and it avoids everything related to the x-ray and the prior authorization.  You get the test done faster, which means you get the surgery faster. 

[20:09] How the location serves the micro-hospital

Chase shares that the location in Chandler, AZ has its pros and cons as far as their patient population and business model.  Their main demographic would be insured people, because they do not take Medicaid.  They don’t have government programs that reimburses them for non-insured patients, and that has been difficult for them.  Overall, however, their community is generally employed and insured.

[22:11] Building the facility

There are very strict rules on how to build a hospital, and it was a huge learning curve for the majority of the physicians and for Chase as well.  It is not an easy task, and you have to tear everything out of the space, make it an empty shell, and then redo the whole thing.  They added 200-300 square feet to the front of the building, and they had to put in a large transformer to support MRI capabilities.  There is also a tank underneath the hospital.  If there was ever a radiation spill or they had to use a decontamination shower, that has its own tank.  

[24:09] Chase’s outlook on healthcare policies and regulations supporting micro-hospitals

Right now, the majority of people who want to do micro-hospitals are physicians. When you become a physician-owned hospital, it is very difficult to take Medicare because of Stark Law issues.  If a patient comes in with Medicare and you order a normal blood panel, you’re technically in violation of that law. 

Chase explains that they aren’t saying they are going to order an MRI on everybody – that is why they are transparent with pricing and with their processes.  They don’t allow physician owners to be a part of the ordering process.

It becomes difficult to have local healthcare, as a lot of it comes down to reimbursement rates.  Reimbursement rates have to be high enough to keep up with inflation, because rent continues to go up.  Local pharmacies struggle to be successful because they don’t have the negotiating power of a Walgreens or a CVS.  Most physician-owned hospitals are more cost-efficient than non physician-owned hospitals, but unfortunately a few bad apples ruin it for the group.

[28:09] Chase’s views on the future of micro-hospitals

Chase absolutely sees more micro-hospitals coming to the market.  They are already seeing expansion with their sister facilities across the country.  He notes that there will likely always be large facilities that are specialized and have the ICU.  There has always been a problem of overuse of the ERs.  Micro-hospitals are the middle ground between an urgent care and a large specialized facility.  They can take care of most issues, and if they can’t, then they know where to send you.

Ultimately, people don’t want to go into a waiting room for hours and feel like they’re bothering the doctors and nurses.  Chase shares that they ended up seeing a lot of people who would tell them they didn’t want to go into the hospital because they knew it would take four hours to get their chest pains checked out, for example.  

There is a large market for this kind of innovative healthcare, but Chase wonders if they will have the staff to continue it.  Every medical field is starting to be short-staffed, so more micro-hospital locations could put a strain on staffing – especially in rural and other areas that are already harder to staff.

[30:20] Chase’s first job 

Chase’s father was a vice president of sales, and Chase would clip coupons from the Sunday newspaper to buy soda for his father’s employees.  That was the first job he remembers having, but his first real job was helping to build Pottery Barn Kids at Chandler Mall.

[31:05] What Chase would be doing for a living if he was not running a micro-hospital

Chase is also a real estate agent, and he renovated his house by himself.  He enjoys real estate, but he shares that he would also love to be a marine biologist.  He loves sea animals, and tries to spend time near the ocean when he has time off.

[31:40] What Chase is reading for news and information

Chase avoids news for the time being, because he feels like he needs to take a purely informational stance on what his healthcare facility is doing and providing.  He researches what is being put out by the CDC, the FDA, the Pharmacy Board, and the Arizona Health Department.  Chase is frequently in contact with people in those programs, and he also speaks with his clinical counterparts to get their opinions.  Chase and his colleagues really try to take in all the information and make the decisions that are right for their community.

[32:59] What Chase does for self-care

Chase tries to take time out of his day to appreciate his family and their health.  

[33:54] Whether leaders are born or trained

Both nature and nurture come into play with leadership.  Chase’s mother tells him that he was born to be a leader, but he also grew up in an environment where that was fostered.

Links to resources:

Phoenix ER & Medical Hospital: www.phoenixerhospital.com

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Schedule a healthcare real estate investment strategy consultation: https://docproperties.com/free-consultation-trisha-talbot/

About Trisha:

WEBSITE: www.docproperties.com

LINKED IN: https://www.linkedin.com/in/trishatalbot/

Email inquiries to: info@docproperties.com

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