Facing a challenge: Hospitals in northwest Oklahoma struggle with old, new problems

Aug. 02--ENID, Okla. -- Patient migration, physician recruitment and increasing costs are just a few of the troubles some hospitals in northwest Oklahoma are facing as several recent government promises remain unfulfilled.

"There's quite a struggle going on right now, and some of it's old and some of it's new," Fairview Regional Medical Center CEO Roger Knak said.

Physician and patient shortages

Patient volumes in Fairview have significantly dropped, according to Knak.

"The decline started in 2008, when we had the economic downturn," he said. "It's maintained down. I'm not sure what it is, but it's a nationwide trend that inpatient is down."

In Fairview, the average daily inpatient census is down to 3.6 patients, while emergency room visits run an average of 135 per month.

"It becomes another concern, and I think that's probably part of the federal government's thought process, when you look at hospitals like Fairview, Okeene, Seiling, all of us are running roughly at (a) three to four patient daily census," Knak said. "The question is, 'Well, can we shut those down and pick that volume up in Enid and save that cost?'"

A patient perception that metropolitan areas provide higher level care is probably the biggest challenge for Integris Bass Baptist Health Center, according to President Edward Herrman.

"You have the Medicaid cuts, the Medicare cuts, but if you've got full community support for your programs, then it makes it really easy to continue to provide the care, regardless of payer source or where they're coming from," he said.

One study indicated approximately 40 percent of people in rural communities will go to a metropolitan area for surgery, Herrman said.

"Which is, for us here in Enid, really ridiculous," he said. "Because we are the hub for northwest Oklahoma. So we treat everybody from here to Guymon. We are the highest level of care and most complex care provided in all of northwest Oklahoma."

Another struggle "plaguing rural America" is a physician shortage, Knak said.

"That is also becoming another crisis, (with a) change in the physician demographic as requirements in rural Oklahoma, or rural America, for physician practices (to) become a general person that covers clinic, covers the ER and covers the hospital," he said, adding it becomes a quality-of-life issue for graduating physicians.

St. Mary's Regional Medical Center CEO Stan Tatum said there is a "dramatic shortage" in primary care physicians in the state.

"The biggest challenge that these rural hospitals face, and we're included in this, is physician recruitment," he said. "And I think everybody's having trouble recruiting physicians, particularly primary care, but specialists are the same way. It can take years to recruit a specialist into your facility and they tend to migrate to the urban areas because of quality-of-life issues, where they don't have to take calls as often.

"You look at these rural hospitals and the doctors are leaving them right and left."

Herrman agrees there is not enough primary care in northwestern Oklahoma.

"For us, we don't really just worry about Enid, that's not just our worry, we worry about all of northwest Oklahoma," he said. "When you have people driving an hour and a half to come and get OB services, that's difficult on patients."

There are some specialties that are more difficult to hire, and those usually follow national trends, Herrman noted. Gastrointestinal specialists are difficult to find, with approximately 120 graduated across the nation each year.

"That's just a difficult recruit, period. Outside of that, I would say we've been very fortunate because we have the OSU Family Practice Residency here, and that's had a tremendous impact for northwest Oklahoma on the number of primary physicians we've been able to keep in the area," he said.

Waiting on promises

"With the passage of the Affordable Care Act, there were certain promises made to hospitals, including that everyone would be insured," Knak said. "In return, there was a reduction in reimbursement rates that was set up and was approved, thinking, 'well, if everyone is insured we won't have to worry about the uncompensated care.'"

Due to the rollback of the employer mandate to provide coverage, the "very rocky rollout" of the Affordable Care websites for the purchase of insurance and the failure of roughly one-half of the states to expand Medicaid -- which was part of the promise to cover the uninsured -- hospitals have seen a reduction in reimbursement, he said.

"We still have, running roughly at nine percent uncompensated or bad debt," Knak said. "So if you take a look at gross revenues and write nine percent of it off the top as uncompensated care, then that was a challenge that was supposed to have been met with the rollout of the Affordable Care Act, the rollout of the expansion of Medicaid."

A high underinsured rate remains, he said.

"With the Affordable Care Act, a lot of the people that have accepted the exchange plans are taking high deductible plans, which are basically catastrophic illness plans. So they still have a significant out of pocket," Knak said.

There also are a lot of companies that cannot or will not provide insurance for employees, he noted.

A recent study indicated that 21 percent of Major County's population was uninsured before the Affordable Care Act was implemented, Knak said. As of July 1 -- a year later -- 21 percent of the county's population remains uninsured.

"So the Affordable Care Act really did nothing to provide increased number of insured population in our area," he said.

Herrman said probably 80 percent of those signed up for insurance provided through the Affordable Care Act were forced to go to the market due to their previous insurance policy type.

"It (has) not really had much of an impact here on our uninsured. And a lot of our uninsured here would have qualified for the Medicaid piece," he said. "The good thing is, is Insure Oklahoma got extended again for another year, but the state needs to do something and develop that into a program that's sustainable in place of the Medicare expansion, because I don't think the federal government's going to extend it indefinitely."

Funding cuts and other struggles

A 2 percent sequestration went into effect in 2010, Knak said.

"That has been extended," he said. "As a critical access hospital, we're set up to be paid at 101 percent of cost. So then you add the sequestration to it, which is a 2 percent reduction in the Medicare payments and that puts us (being) reimbursed at 99 percent of our cost for Medicare. So, we're reimbursed under our cost."

He said the sequestration affected all Medicare providers.

"What we see now is Medicare's not paying their fair share, the insurance companies have really backed off their reimbursements -- based upon, I guess public outcry of the high cost of insurance," Knak said. "When Medicare and Medicaid don't pay their fair share, then it gets shifted to commercial insurance, which has helped drive up the cost to insure."

Cuts to Medicare, particularly for rural hospitals, have been significant, Tatum said.

"We're typically much higher Medicare than the urban hospitals -- St. Mary's is about 60 percent Medicare -- so when 60 percent of your business gets cuts of two to four percent, it's going to be significant," he said.

Some rural hospitals have even higher numbers of Medicare and Medicaid patients than St. Mary's, Tatum noted.

"It's not uncommon for a rural hospital to be 75 percent Medicare. Medicare typically does not pay you enough to even cover cost. Medicare pays us about seven percent below cost," he said.

Six to seven percent of St. Mary's business comes from Medicaid patients and, in October, the state will cut Medicaid reimbursement, Tatum said.

The effect the Affordable Care Act has had on Integris Bass Baptist Health Center has been centered on what the governor chose not to do, Herrman said.

"Not accepting the federal funds, then cutting actual Medicaid funding has had a huge impact, will have a huge impact for this year," he said. "The one thing that probably has happened with the cut in Medicaid this year, is that's one of the rare occasions that cuts have extended to providers. There's a lot of times that Medicare may make changes or cuts but they've been extending the provider fee year after year -- when it's supposed to have sunset -- which is good because we can't afford for them to cut the provider's fee, because it's already hard enough to get enough primary care physicians.

"But with them not excluding physicians, even on the last cut, here in Oklahoma, with Medicaid, it was almost eight percent."

Herrman said there will probably be providers who will start limiting the amount of Medicaid they are going to accept, meaning those patients will show up in emergency rooms and hospitals will have to work harder to contain costs.

"Because, we're basically going to get paid eight percent less to do the same work that we did the whole entire year, last year," he said.

Di Smalley, regional president of Mercy in Oklahoma, said when there are cuts in reimbursement, hospitals have to look at how they do things and become more efficient.

"In the critical-access world, it's the Medicare patients that are paid a cost-based rate. So what's important in critical access hospitals, such as (Mercy Hospital) Kingfisher, is that we keep a good balance of Medicare patients and private pay and insurance patients," Smalley said.

Rural hospitals are facing another issue with the Affordable Care Act requirement for an Electronic Health Record.

"They actually will incur penalties if they don't have it in the near future, and that can be very expensive, to acquire that technology," Tatum said.

There were decreased efficiencies in Fairview with the implementation of the Electronic Health Record, according to Knak.

When it was first installed, productivity was cut in half, he said.

A year and a half later, productivity is still down, and there is the added cost of the EHR and the decreased volume in patients, Knak said.

"There are benefits to the EHR, but on a patient volume and revenue side, it's not necessarily a benefit," he said.

___

(c)2014 the Enid News & Eagle (Enid, Okla.)

Visit the Enid News & Eagle (Enid, Okla.) at www.enidnews.com

Distributed by MCT Information Services