HEALTH CARE: VitalCare showing improved vital signs

PETOSKEY – The prognosis is good for 20-year-old VitalCare, Inc., a healthcare services organization that provides home, hospice and respiratory care, private duty nursing and home medical equipment.

According to Jerry Worden, vice president of finance at Northern Michigan Hospital in Petoskey and a VitalCare board member, the company ended its 2001 fiscal year in the black, with an operating gain of over $400,000 on revenues of $12 million. Last year the company closed the year with a $1.2 million loss.

The cure, says Worden, was three-fold: an executive director, Nancy Martin, MSN, RN, who came in with “a good attitude and the knowledge we needed to make changes appropriate to the organization”; the management team; and the transition to the Prospective Payment System of reimbursement, which is based on patient need rather than Medicare-determined cost.

When Martin took charge in June 1999, she had her work cut out for her. Less than two years prior, VitalCare had merged with Health Wares, yielding an unwieldy 332-employee firm that served 16 counties in northern lower Michigan and the eastern Upper Peninsula–a 10,000 square-mile reach.

Martin instituted a comprehensive restructuring that included downsizing the staff to 228 by April 2001 and changes in management and operations to better integrate the company’s product lines and information systems.

VitalCare’s “core” home health care service has rebounded, according to company officials, by focusing on case management under the new Prospective Payment System, “which actually pays us more fairly than the old (Medicare) cost-based system,” says Worden. “We’re better able to manage the patient within cost parameters.”

The home medical equipment and supplies division had reduced its service area during the restructuring.

“The thought was that we were trying to cover too far a geographic region; we traveled hundreds of miles to deliver certain types of equipment,” explains Worden. “Now we’re looking more strategically, perhaps finding a partner in the (outlying) areas or alternate ways of getting equipment there, and making sure we’re taking care of our primary service area.”

Future plans call for an End of Life Institute, dedicated to hospice education, on the company’s Hospice of the Straits Hospice House campus in Cheboygan. (Hospice House was recently featured by Bill Moyers in a PBS special on the subject.)

With the demand for home health care expected to surge as the population ages and technological advances offer non-hospital based treatment opportunities, Worden says the company is optimistic.

“Home health care and treating patients in their homes is the key desire of many people. As we all age, VitalCare sees that as a continuing need.” BN