Peak Vista Community Health Centers officially merged with Plains Medical Center on May 1, a move Peak Vista President and CEO Pamela McManus called “strategic.”
In the nonprofit merger, Peak Vista’s 16 locations combined resources and governorship with four rural health centers in Limon, Flagler, Strasburg and Kiowa.
Peak Vista is and, before the merger, Plains was recognized as Federally Qualified Health Centers (FQHCs), which offer affordable services across the country to people facing monetary and location-related access barriers.
“This was not a financial rescue at all,” McManus said. “[The PMC] board talked about strategic planning and the future of [its health centers]. With all the changes in health care, for smaller health centers, it’s harder for them to maintain services because they are required to maintain the same compliance as larger ones.”
McManus said the clinical side of operations will go largely unchanged. The administrative side, however, will see a few differences.
The rural health centers had a four-person executive staff. Former Plains President Morgan Honea accepted an executive director position with the Colorado Regional Health Information Organization just prior to the merger. The remaining executive positions “will be rolled into” Peak Vista’s existing executive team, McManus said. The remaining executive team includes Vice President of Finance Peggy Micklich, Vice President of Project Management Bill Lyons and Cindy Tacha, vice president of integrated services.
Plains’ board had its final meeting in April. With the merger completed, the original 12-member Peak Vista board will remain, and during the discussions it was agreed three Plains board members would join the Peak Vista board starting this month.
“I’ve been a supporter of this merger since the beginning of this conversation,” said Matt Reay, former board chair of Plains Medical Center who will fill one of Plains’ three new board positions. “I believe, along with the rest of the PMC board, that this really is the right decision for us. It really answers questions we’ve been working on.”
Those questions, Reay said, include how to improve services to patients and help ensure the long-term vitality of clinics and health care in rural eastern Colorado.
“This is a big first step toward doing that,” Reay said.
McManus said the Peak Vista board had a focused process leading to the merger.
“Every time the board makes high-level decisions, it asks if the decision makes sense for the mission of Peak Vista,” McManus said. “It also evaluates if this is sustainable and if the need is there. On all of the criteria, this [merger] met those requirements.”
McManus said Honea approached her last year about merging the health centers. Both sides first completed an extensive due diligence phase that examined land, equipment, staff and legal records.
McManus said Peak Vista prior to May 1 was fully accredited by the Accreditation Association for Ambulatory Health Care. Plains had not been accredited.
“Having an outside agency come in and give a good quality stamp is important to us,” McManus said. “There were some things that need to change to assure that accreditation. Nothing is major. One is we are on different electronic health records. We are going to have to be on one to ensure the information and patients can be seen at any of the sites.” McManus said PMC executives budgeted for a conversion.
McManus said the rural health centers will maintain the same providers, hours and services, and Plains could benefit from technology upgrades including a telemedicine system by which primary-care providers in rural settings can communicate via teleconferencing with specialists.
“What we believe will change significantly is the consolidation of administrative processes,” McManus said. “We’re combining processes, so there will be some economies of scale. We’ll operate under the same financial system and billing and we’ll go on the same electronic health records, so there won’t be the maintaining of two different records.”
In 2012, Peak Vista’s locations in El Paso and Teller counties served 66,000 patients. That number increased to 70,500 in 2013. Post-merger, the expanded Peak Vista will serve 80,000 patients with almost 700 employees.
McManus said Peak Vista has witnessed a 2 percent growth this quarter over the same time last year, for several reasons.
“For one, our staff provides amazing care and services,” she said. “Another reason is the [Affordable Care Act] open enrollment and Medicaid expansion means people now have coverage who hadn’t had it before.
“We’re especially seeing an increase in services in our dental program. People have put off dental care and now they have some coverage.”
McManus said Plains’ patient numbers were static pre-merger but that is “not unusual in rural communities.”
Reay said the eastern communities have been positive about the merger.
“We’ve had great outreach and we’ve put information out to the communities through a number of different organizations and methods to let them know about this change,” he said. “The response has been very positive. We’ve talked about the reasons the Plains board went forward with this merger and how it will benefit clinics and patients in the long run.”
Peak Vista budgeted neutral for new hires this year, McManus said, but the health clinics are experiencing enough growth that Peak Vista may need more staff to meet patient demand.
McManus said mergers similar to this one “are more and more common.” In 2007, People’s Clinic in Boulder merged with Clinica Campesina, a four-clinic nonprofit based in Lafayette. McManus said Peak Vista interviewed executives involved with that merger to find strategies that would work in southern and eastern Colorado.
“There aren’t too many [mergers] done out of strategy,” she said. “A lot are done as rescues.”
Peak Vista receives federal grants but is not a federal agency, McManus said, explaining Peak Vista’s federal funding made up 11 percent of its budget last year.
“That’s a fairly small percentage,” McManus said.
Board bylaws for Peak Vista stipulate 51 percent of its strategic board must be health center patients. All of Plains’ board was patient-run, she said. Peak Vista’s board, according to McManus, is “well over 50 percent” patients.
The board is not responsible for the organization’s financial decisions, but does approve budgets, new sites and services and the strategic plan, and it reviews quality indicators, McManus said.