Outside Innovation

Informed Customers Seek Control of Imperiled Rural Hospital

Here’s the next installment in the continuing saga involving our rural hospital and physicians’ practice at the tip of a peninsula in Boothbay, Maine, that serves a year-round population of 7,000 mostly self-employed people and retirees as well as a 4-month summer population of 21,000. Patients arrive by sea from nearby islands and fishing boats, by air via helicopter, and by land by car or ambulance. To recap briefly, St. Andrews Hospital, and its shorefront tip-of-the peninsula property, was given to the community by a multi-generational doctors’ family to maintain a hospital and a nursing school 105 years ago.

In 1995, St. Andrews was designated a Critical Access Hospital by Medicare and became part of the Maine’s rural health strategy to ensure that people in sparsely populated areas had access to critical services—notably 24/7 Emergency services. In 1997, St. Andrews became the first hospital to join an integrated healthcare network with Maine Medical (in Portland, ME), now known as MaineHealth. This worked pretty well until 2007.

The Community Lost Any Say in the Hospital Strategy. In 2007, MaineHealth merged the boards and management teams of St. Andrews with those of another nearby hospital, Miles Memorial in Damariscotta, ME, and formed a third wholly owned subsidiary, Lincoln County Healthcare, whose goal was to achieve economies, improve care, and better serve the people in the region. What went wrong was that, at that point, St. Andrews’ Board of Trustees and management were absorbed into a single 3-way Board (Lincoln County Healthcare, Miles Memorial Hospital, and St. Andrews Hospital). This board has 50% employees of Miles Memorial, including 7 physicians. The people on the Boothbay peninsula are no longer adequately represented, and they don’t have their own separate board to set strategy for their hospital.

Why Do Investors Love Amazon? What Makes Amazon Tick?

There’s a topic that our Patty’s Pioneers group had been buzzing about all last week: Why, when Amazon.com posted a 45% drop in net income and a loss for 2012 of $39 million, did its stock go up? And why, when Apple announced an increase of 18% in revenues to $55 billion for the quarter and net income of $13 billion, did its stock go down?

Apple’s stock vs. Amazon’s stock from Dec 23^rd to Jan 29^th

In the midst of the lively debate, Scott Jordan posted a link to a great article in the Atlantic by Derek Thompson on February 1st, titled: “Why Amazon Is Special and Apple Is Not—in 1 Paragraph.” Derek Thompson writes: