Jim Suver: healthcare reform is unavoidable
Hospital CEO talks about how RRH is adjusting to make the most of its resources
News Review Staff Writer
With healthcare costs spiraling out of control, reform is imminent regardless of the political outcome this November, said Ridgecrest Regional Hospital CEO Jim Suver.
In a recent address to the Ridgecrest Exchange Club, he outlined the current and future challenges of being in the business of delivering health care and what the local institution is doing to preserve its limited resources in the face of uncertainty.
“The healthcare industry in this country is changing. At this point, if we don’t have some kind of reform, we won’t be able to save it,” said Suver. “And in order for rural hospitals like ours to survive, we are having to evolve as well.”
Chief among those changes is the new designation of RRH as a critical-access facility, which Suver characterized as a “paper adjustment” that increases the hospital’s reimbursement by an estimated $6 million a year.
Federal Medicaid reimbursements are paid based on a national average, not actual cost, said Suver. While urban institutions can spread those costs over a much higher number of users, RRH’s ability to offer the same diverse services to a much smaller market has grown unsustainable.
“Our reimbursements do not come close to paying the cost of the care and have not for many years,” said Suver.
Depreciation and interest on the hospital’s new tower have only increased that delta. “We got to the point where we could no longer survive on that.”
Based on the new designation, Medicaid reimbursements now pay the actual cost of the care provided. The proviso that seems to have caused some alarm in the community is the news that the hospital is now under a mandate that patients must be transferred to another facility if RRH goes over its maximum capacity of 25.
“This is a little misleading, though, because we are really talking about different types of patient designations,” said Suver.
He said the 85-bed facility will continue to serve up to 26 patients in its skilled nursing facility and 35 in its outpatient pavilion. “Neither of those count against the number we are talking about.”
The newly renovated emergency department — which has also doubled in capacity — can also hold patients for monitoring that do not count against that number.
“Right now our average census in the hospital is 21-23 patients. In the rare instance where we go over that number, we would transfer patients. But it would be an infrequent event, and it would not happen in a case where, for example, you have a mother in active labor.”
Suver also discussed the significant impact health care has on the U.S. economy. Because benefits have become such an important part of employee compensation packages (as high as 50 percent of an employer’s cost for compensation), “we are no longer able to stay competitive in the world economy.
“I do know that if we keep spending on health care at that rate, we won’t have any industry left because there will be no one left who can afford to pay for that.”
He said that some of the steps to reversing that model include shifting power from insurance companies back to physicians, focusing on a “wellness model” of health care (rather than the current “sickness model”) and partnering more effectively with the system’s users in order to allocate medical resources more effectively and efficiently.
Part of the cost of health care is driven by the dysfunction of a system that turns away un- or under-insured patients when they seek preventive care or early treatment, then mandates that service when it reaches crisis levels — and when it uses a vastly higher number of resources.
Suver said that two components of reform that he hopes are implemented regardless of partisan ownership will be finding “medical homes” for these users, and designing a system that incentivizes personal investment into healthy lifestyles.
Part of this can be resolved by reform shifting the power from insurance companies — an entity typically motivated by keeping its own costs down with less consideration to the cost and convenience of the provider and the user — back to the physician.
In 2010 the hospital launched the Rural Health Clinic, which serves the un- and underinsured population by giving them access to low-cost care. In addition, it gives those users a medical professional to coordinate their care and advocate on their behalf.
This not only provides higher quality care to the patient, but allows the hospital to more efficiently manage its resources by serving those needs in a less urgent setting — and at a greatly reduced cost than it would have had to spend in the emergency department.
Suver pointed out that although the industry is still driven by a “sickness model” — providers make money when people are sick — the continuing trend of rising costs and diminishing reimbursements is forcing institutions to reevaluate that in order to preserve longterm viability.
“What we need is for people to feel the pain of being sick. That is a huge social change for the United States, but we cannot keep going at the rate we are,” he said.
“And I am going to tie this back to the broader effect on our economy. Employers cannot keep spending more and more or we don’t have any industry left, then we lose health care because we no longer have anyone to pay for it.
“We can’t afford to lose health care. But the only way we keep it is by partnering with users so they understand that if we don’t all give something, we all end up with nothing.”Story First Published: 2012-10-31