Healthcare Check-up: Hospitals Feel the Pain

Due to the stagnant, unfavorable economy, fewer people are obtaining healthcare, to avoid incurring costs and payments. They’re cancelling appointments, not picking up their prescriptions, self-treating and postponing medical visits, surgeries, treatments and other services. For Nevada’s hospitals, generally this means fewer admissions, emergency room visits and surgeries.

The sour economy has exacerbated an existing dilemma Nevada hospitals face: how to provide, and improve, quality healthcare, with smaller, shrinking budgets. Administrators and staffs have had to implement various cost-saving measures and get creative about how to endure the market, all while continuing to invest in and offer technologies, treatments and procedures that best serve Nevadans.

“The challenge for all leadership is to look at what’s happening with our economy, turn it into a positive and improve upon the level of service we provide,” said Mike Uboldi, president and chief executive officer of Saint Mary’s in Reno.

Statewide Trends

The number of uninsured people, or “self-pays” as hospitals refer to them, is rising. Many individuals who’ve been unemployed for some time have had their Consolidated Omnibus Budget Reconciliation Act (COBRA) health insurance benefits run out. The number of people filing bankruptcy also is high. In Clark County alone, between January and August of this year, 16,664 people declared bankruptcy, according to U.S. Bankruptcy Court statistics. Medicaid enrollment is up. Sunrise Children’s Hospital, for example, where 60 percent of patients are either on Medicare or uninsured, has had to beef up its resources for helping parents apply for Medicaid.

Northern Nevada Medical Center reports seeing more people with higher-deductible ($2,000-plus) health insurance plans.

“We’ve certainly seen a reduction in what people can afford to pay for care, which certainly is very challenging in Nevada where our unemployment rates are so high,” said Jim Miller, president and CEO of Renown Health.

As of August, 194,677 Nevadans were jobless. The unemployment rate was 14.4 percent, the highest in the United States, per U.S. Bureau of Labor Statistics data. This compares to the national average of 9.6 percent during the same period.

In addition, insurers are decreasing reimbursement for care. The federal government has cut Medicare payments for hospitals and physicians several times in the past few years and more may be on the way.

Medicaid reimbursement, which barely covers 70 percent of hospital costs now, survived cuts during the last legislative session, but could experience future ones.

Hospitals must absorb the costs not paid by patients or insurers. For example, in 2009, Sunrise Health System provided $95 million worth of uncompensated care, said Sylvia Young, the president and CEO.

“We continue to deal with a very challenging reimbursement environment,” she added.

New practices opening up that offer services hospitals do also eat away at potential revenue. For example, in Henderson, Crovetti Orthopaedics & Sports Medicine opened a facility for total knee and total hip replacement surgery patients to recover. Coronado Surgical Recovery Suites, located in the building where Dr. Michael Crovetti and his partners perform these outpatient surgeries, provides a private room, personalized physical therapy, 24-hour nursing, personal nutrition, constant surgeon and internal medicine oversight, and extensive education.

“As healthcare continues to change and as hospitals get sicker patients, this could be a national standard two years from now,” Dr. Crovetti said.

Entities like this take patients out of the hospital who traditionally would’ve been treated there.

“This recovery center in Henderson is concerning to us because right now if someone needs a joint replacement, they historically come to a hospital,” Young said. “It will absolutely have an adverse effect on those hospitals that are seeing the patients now.”

Amidst the adverse climate, however, quality at Nevada’s hospitals is improving. Whereas last year only two of the Silver State’s hospitals won HealthInsight Quality Awards, eight did this year. They include Sunrise Health System’s MountainView and Sunrise Hospitals; all three St. Rose Dominican Hospitals; Renown Health’s South Meadows Hospital; Mesa View Regional Hospital in Mesquite; and the VA Sierra Nevada Health Care System. This award recognizes medical entities for “their effective use of health information technology, patient care management practices, as well as reporting of and exemplary performance on nationally recognized quality of care measures.”

“We are continuing to improve, even in these times,” Miller said of Renown Health. “Even when we’re improving our efficiency, we believe quality and safety go hand in hand and those areas are improving right along with the other work we do. People shouldn’t have to worry.”

Hospital administrators are considering providing care at additional off-campus places, more convenient to patients, and evaluating ideal locations for that. Saint Mary’s recently opened a health clinic in a Wal-Mart in the Spanish Springs area of Sparks. It functions similarly to an urgent care, where patients walk in and are seen.

“It is the first of its kind, in an attempt to increase access to health care in a high-population area,” Uboldi said.

Nevada’s hospitals are seeking ways to eliminate wasted time and assets, anything in the healthcare delivery process that doesn’t value patients, all to improve efficiency and drive down costs. Renown Health, for example, has partnered with Seattle’s Virginia Mason Hospital and Medical Center, which has applied Toyota’s Lean Principals to healthcare and has been practicing it ever since. Renown has been training executives and leadership teams, and implementing programs to transform healthcare.

Hospital administrators’ attention is focused on healthcare reform. While wondering how it will play out, they’re assessing what needs to be done, much of which remains unknown. The federal government has yet to issue guidelines. At Carson Tahoe Regional Healthcare, administrators and physicians both are having intense discussions on how they can together survive the changes to come, said Ed Epperson, president and CEO of Carson Tahoe Regional Healthcare. He expects similar conversations are happening at other hospitals, as well.

“Everybody in the medical field knows that there is a very strong possibility of the government creating global payment to hospitals and physicians,” Epperson added. “There are demo projects around the country already, and yet there’s no definition of how that’s going to work or unfold.

“There’s the general uncertainty about what’s happening to our economy, and what’s next,” Epperson said. “It’s difficult to plan your future around that.”

Hospitals on both ends of the state are being affected by this economy and are having to do more with less.  They are having to find new, leaner ways to operate  while coping with stricter scrutiny than ever before.

With three major hospital systems in the Reno and Sparks area alone, and another in Carson City, all with ancillary services as well, Northern Nevadans have choices when it comes to where to obtain healthcare. For the hospitals, competition is fierce.

“We’re all trying to compete in a declining volume environment,” said Mark Crawford, president and CEO of Northern Nevada Medical Center. “It gets to the point where you start to beat each other up.”

Saint Mary’s

Volume at Saint Mary’s has declined. Uboldi attributes much of this to people leaving the area, and fewer people visiting and needing healthcare while here.

“Although we have moved market share almost 2 percent, we are not able to keep up with the amount of outward migration that is currently happening with people,” Uboldi said.

In early October, the hospital laid off 20 employees in management and administrative support positions. In February, it eliminated 15 administrative positions. It has put a hiring freeze on new managers. The management team has taken voluntary furloughs.

In terms of changes in operations, the hospital has implemented ways to improve getting patients through the system.

“Our sacred mission is to maintain our patient care,” Uboldi said. “Around that we are decreasing our costs as much as possible.” At the same time, Saint Mary’s has enhanced its offerings.

“Although we’ve been in challenging times economically, we have had access to capital to continue to address the infrastructure and technology needs to advance our position within the market,” Uboldi said.

This year, Saint Mary’s opened a hybrid vascular operating room ($3.2 million), added a new cardiac catheterization laboratory ($2 million), and opened a Brain Tumor Center that utilizes the CyberKnife, a non-invasive radiation therapy machine that significantly reduces patient recovery time.

Northern Nevada Medical Center

While performance metrics for Northern Nevada Medical Center (NNMC) have been down the last three years, the hospital currently is gaining in market share. This is due to its smaller size and, therefore, ability to deliver more personalized care, Crawford said. An example of this is the hospital’s guarantee that every patient who presents to the ER will be evaluated and screened within the first 15 minutes or their visit is free.

NNMC has also created cash discount prices for several diagnostic tests and primary care office visits, like a $99 mammogram, and also provides bimonthly health fairs where the community can get certain services for free or at reduced prices.

Three years ago, the hospital positioned itself for growth and has reinvested just under $4 million each year since. This year alone it established a Stroke Center, opened The Headache Center and purchased a $1 million MAKO orthopedic robotic system partial knee resurfacing or replacement (MAKOplasties). Before year’s end, it will spend $500,000 on a move from analog to digital mammography and launch a rehab and sports medicine center.

The focus on bedside care also will continue.  “It’s about making sure the patient has a good experience, one they want to return to when they need us again,” Crawford said.

Renown Health

Renown Health’s patient numbers have remained steady and, in some areas, have grown, said Miller.

“Overall, the organization is operating more efficiently, so we can continue to take care of people,” he added.

The health system has consistently purchased new technology and added services. It acquired and had installed a TomoTherapy Hi-Art Treatment System for radiation delivery (a $3 million investment), spent $1.5 million on equipment for computer-assisted surgery and expanded its da Vinci Robotic Surgical System. It established the Renown Children’s Hospital and Renown Children’s Cancer Center.

“In many cases, we don’t think it’s a time to stop working on technology that provides higher quality, safer and more-efficient care.”

Last year Renown purchased a D-SPECT Cardiac Imaging System, a camera that provides sharp images of the heart in two to four minutes, quickening evaluation and diagnosis.

Infrastructure changes include remodeling the main laboratory ($3.5 million-plus), automating the pharmacy ($3 million), and creating new vascular surgical laboratories.

Carson Tahoe Regional Healthcare

Carson Tahoe Regional Healthcare is experiencing lower patient volumes, particularly when it comes to services involving patient decision-making, but doing well at its main facility, Carson Tahoe Regional Medical Center, because it’s oriented more toward non-elective surgeries and medical conditions. In fact, hospital admissions have been higher than expected this summer. In addition, people needing hospitalization tend to be sicker on presentation than in the past, which Epperson attributes to these patients previously putting off care.

The Carson Tahoe health system’s urgent care centers track how many patients who are advised by the urgent care physician to go to the ER actually do. During a strong economy, about 30 percent of those people didn’t show at the ER. Today, that number is about double.

In response to the economy, the administration and management now meet weekly to assess, discuss, analyze and plan. They more intensely focus on the revenue cycle and scrutinize potential investments.

“It’s a constant surveillance of what’s going on, what’s happening with volume, what’s happening with long-stay patients and how we are reacting to it,” Epperson said.

The hospital is updating its Cardiac Cath Lab ($1 million), expanding its geri-psychiatric services with an outpatient component and implementing a Women’s Health Institute.

“Despite all the challenges, we continue to do well, feel like we have a good future and will be here to take care of people,” Epperson said.

Sunrise Health System

Along with strains due to the economy, Southern Nevada’s hospitals also have had to deal with an oversupply of hospital beds in the market. Nearly 400 new ones have been added since the end of 2008.

Sunrise Health System is among the hospitals in Southern Nevada that are working on improving efficiency and lowering costs. It has capitalized on its affiliation with Hospital Corporation of America (HCA) to maximize on economies of scale when possible, like with the purchase of supplies and medical devices. Sunrise consolidated in certain areas like marketing and sales, patient billing and collections, and staff recredentialing. Other efforts include owning equipment rather than leasing it, implementing energy conservation methods and eliminating paper records in radiology. The result has been a 5 percent reduction in overall operating costs.

The health system has renovated and enhanced its surgical services, for example, installing high-definition screens for physicians to use during surgeries. It purchased a pharmacy robot that places a bar code on every medication (about 10,000 labels daily).

This year, construction will start at Sunrise Hospital to add a 30-bed inpatient rehabilitation department. A $34 million expansion at MountainView Hospital will begin in the spring. The ER Department will be expanded, and a 12-bed Intensive Care Unit will be added.

As far as procedures, more surgeries to remove tumors in the tailbone are being done, via the minimally invasive eXtreme Lateral Interbody Fusion (XLIF). Sunrise Children’s Hospital now uses a cooling technique on premature or high risk-born babies in the nursery.

“We certainly saw an impact from the economic downturn and continue to see those effects, but people rely on us,” Young said. “And they continue to do so.”

St. Rose Dominican Hospitals

Changes at the three St. Rose Dominican Hospitals this year alone include new technology, new procedures and infrastructure enhancements.

The San Martín Campus now uses the new HALO360 and HALO90 Systems to treat Barrett’s esophagus, a heartburn-related problem. Physicians there also now provide minimally-invasive heart surgery, the MICS CABG procedure.

The Rose de Lima Campus now owns a new Wide Bore 450w 1.5T Magnetic Resonance Imaging (MRI) machine, which means a larger opening and greater patient comfort.

The Siena Campus is getting its Emergency and Operating Rooms upgraded and expanded. The changes will allow staff to serve patients more efficiently.

The Valley Health System

The Valley Health System, which contains five hospitals in Southern Nevada, is completing a $26 million expansion and renovation of its surgical services. A $12 to $15 million expansion of surgical services to include four additional suites at Summerlin Hospital will begin in 2011.

Desert Springs Hospital boasts a new wide-bore MRI and a new FD-10 Cath Lab. This summer Centennial Hills Hospital opened its Occupational Health Center.

New procedures offered include high-dose, precision radiation utilizing the CyberKnife, and a heartburn and acid reflux treatment via Transoral Incisionless Fundoplication (TIF).

Easing the Pain

Nevada’s hospitals face unknowns related to the economy and healthcare reform. Despite those and other ongoing challenges, they continue to work toward improving the quality and efficiency of the care they provide, and plan for the state’s future healthcare needs.

“Only time is going to tell how all of this will sort out,” Uboldi said. “I think everyone is watching carefully and praying we’ll start to see a leveling, and hopefully a rebound, in the economy.”