A struggle. Challenging. A new reality. Just some of the ways local hospital officials describe the most recent 12 months under the umbrella of the Affordable Care Act, which continues to dominate the discussion in the health care environment.
Four hospitals across Tennessee have shuttered this year, as rural facilities in particular continue to battle decreased reimbursements, volume drops and already smaller scales. Dozens of other medical centers in the state, including at least four in the Upper Cumberland, have been tagged high risk for closure. It’s not a headline unique to the Volunteer State – dozens of hospitals have closed across the country – but many officials in Tennessee are pointing to the decision, at this point, to not expand Medicaid as another stressor for rural facilities in an already stressful environment.
“This isn’t just talking and semantics. These are real challenges,” said Bill Little, CEO at Highlands Medical Center (HMC) in Sparta. “It’s not changing and it’s not going away and it’s only going to get harder over time.”
Elsewhere in the region, Cumberland River Hospital in Celina, Cumberland Medical Center in Crossville, Macon County General Hospital in Lafayette and Riverview Regional North and South in Smith County, were all flagged in 2012 by the Tennessee Justice Center, a not-for-profit that focuses on health care delivery for low-income residents, as among 54 facilities in the state at risk for major cuts or closure because they have, on average, lost money over the past three years or have only had positive revenues due to DSH payments, disproportionate share hospital payments for providing care to people without insurance.
While Cumberland River, Cumberland Medical Center and Jamestown Regional Medical Center (JRMC) have all since found new affiliations – JRMC linked up with Franklin-based Community Health Systems in January – it’s still “very difficult for small rural hospitals” in this current environment, JRMC CEO/CFO Lynette Pritchett said. Community Health Systems, for example, closed a hospital in Brownsville effective July 31.
“We’re surviving. We’re making enough money to keep the doors open, but it is a struggle,” Pritchett said. “We have an awesome team here, and we do what we have to do to be successful.”
But it’s hard when patient volumes are down, Pritchett said. She says several people in the Fentress County area have lost their TennCare coverage, and as a result, are delaying treatment because they feel they can’t afford it.
In White County, Little says they’ve seen a 25 percent increase in uncompensated care since the ACA has gone into effect. At Cookeville Regional Medical Center, CEO Paul Korth included more than $25 million for free medical care in the most recent budget. In Jamestown, approximately 45 percent of patients are on Medicare and another 25 percent on TennCare.
“We work with people on payment options, but ultimately this is a business as well,” Pritchett said. “Doctors have to work harder to get the patients in the hospital, because they have to meet difficult criteria and patients have to be much sicker than they used to be to get in the door, and then they have to argue with the insurance companies once they’re in to get the payments for it.”
Last year, Gov. Bill Haslam declined to expand TennCare, the state’s Medicaid program, as part of the Affordable Care Act, amid concerns that the state would have to shoulder some of the cost of covering individuals who would be added to the rolls. He is working on an alternative called the “Tennessee Plan,” in which the state would use federal money to subsidize private insurance plans to expand coverage. The plan may be submitted come fall but no other details were released.
“It’s tough,” Little said. “We experience extremely high bad debt, folks who don’t have the ability to pay, and that number’s as high as it’s ever been because people are without insurance. And the way the (health care) law was designed, the expansion of Medicare by states was to be funded by payment reductions to hospitals. But those payment reductions happen whether or not the state expands Medicaid. So it’s kind of a double hit to us.”
Added Korth, “I do know from talking to hospital officials in other states that have expanded Medicaid, they have seen a reduction in their bad debt/charity care patients. They are seeing positive results. Our hope would be that the state would expand Medicaid to cover more individuals and give more individuals some type of coverage.”
In the interim, cuts have and still are being made. JRMC has implemented an across-the-board flex-to-volume staffing model, in which staff levels shift according to the volume. Korth said CRMC is examining all facets of the hospital’s operations – from capital purchases and expansion projects to personnel and staffing. He said an external company is currently working with them on appropriate staffing levels, considering the medical center’s size, volumes and patient acuity.
“We have some capital projects on hold. Salary initiatives for individuals are on hold. We have a lot of travel requests that are on hold,” Korth said. “There’s a lot we’re doing financially to continue to operate the hospital as efficiently as possible.”
But in other ways, there’s growth. HMC has actually ramped up its surgical staff with additional personnel. Little said they set a record for number of surgeries there in July. “You don’t see as many inpatients, so we have to look at ways to evolve as a facility and grow in different ways,” Little said. “We just have to think differently.”
JRMC is also adding a new general surgeon in January to boost volumes. CRMC hired 19 new physicians in the last year and invested in a new da Vinci surgical robot.
“Of all the things we’re doing at the facility, we’re not sacrificing on quality. You never compromise patient care,” Korth said. “We are looking at everything we spend money on to see if we can tighten the belt but still maintain care. It’s a challenge. We have to make conscious cost decisions that don’t affect outcomes, but there’s hard choices that we have to make when we’re facing hard truths. This is our new environment.”
As for regional facilities still being considered “high risk,” there’s little denying it’s a struggle. While HMC is not on “life support” per se, Little says they’re not out of the danger zone.
“Our community still supports our hospital very well. We’re lucky in that regard,” Little said. “Does that mean I’m not worried about next year? It absolutely doesn’t mean that, because it’s just going to get harder every year.”
And a hospital closure can be devastating for a community, he added – often, a medical center is the county’s largest employer, and in the case of Highland’s, one of the county’s biggest tax payers as well.
“And from an economic development standpoint, it’s really hard for a community to grow and recruit industry if you don’t have health care services in the immediate area,” Little said. “So there is definitely a downstream effect to what’s going to be happening. And it will continue to happen.”