Hospitals in Nevada: An Industry in Transition

Hospital administrators are working very closely with purchasers of care and insurance carriers, to needs while striving to be competitive with costs.

Brian Brannman

Some things that don’t change in healthcare: the importance of patient outcome, patient experience, patient compliance and patient ability to pay for services.

Other things in healthcare are changing rapidly: bio-engineered medications to treat specific patients, imaging devices take the place of exploratory surgery, the model for healthcare, the way hospitals are reimbursed for services.

Changing and Growing

Today, hospital administrators are working very closely with purchasers of care, various health plans, insurance carriers and health maintenance organizations, to meet their needs while striving to be competitive with costs.

“We try to make certain we’re providing the kind of services wanted in a population, and in a way that provides the quality of care and keeps costs down,” said Brian Brannman, vice president of operations, Sienna Campus, St. Rose Hospitals. “Cost has become a very big issue and everybody is looking to be as efficient as they can and be staffed appropriately.”

There’s a concern that while the number of uninsured and self-pay patients will continue to decrease even though mandatory healthcare coverage hasn’t taken off as rapidly as expected, patients will end up moving from decent insurance plans to Medicaid, and Nevada’s Medicaid program may not be up to covering hospitals’ costs.

Plans that don’t cover the hospitals’ costs of care put pressure on those systems. While some of the plans on the Silver State Health Insurance Exchange have the potential to reimburse fairly well, it seems likely that reimbursement rates in general are going to decrease.

“So we’ve got to be really good at squeezing every bit of waste and excess cost from the system that we can,” said Brannman.

“All hospitals are looking at lower reimbursement and we’re looking at costs increasing, and that’s for the insured,” said Alan Olive, CEO, Northern Nevada Medical Center (NNMC). “So what we have to do then as a provider whether it be a hospital, a physician, a clinic, a health plan, we have ownership in the lowest cost, the highest quality and the highest patient experience.”

Olive suggests hospitals learn to work together rather than as competitors, working collaboratively to find things they can do to reduce costs and address care models in their communities.

The Affordable Care Act (ACA) didn’t take anybody by surprise. Hospital administrators have had time to plan. Renown Regional Medical Center CEO Greg Boyer said the hospital has been taking a triple aim, trying to reduce costs, improve patient experience and improve the health of the population as the changes in healthcare come into play.

Though it may not have been a surprise, ACA did do away with some healthcare offerings. A program for indigent patients through Clark County Social Services disappeared overnight, said Lawrence Barnard, CEO, University Medical Center of Southern Nevada (UMC), and that program paid 30 percent above Medicaid.

While it may be too early to understand how the ACA will effect hospitals and healthcare providers, hospitals are preparing for the influx of patients who will now have health insurance and access to care. Saint Mary’s Regional Medical Center and Medical Group staff in Reno are working with Access to Healthcare, a non-profit network that helps those at federal poverty level find and manage healthcare.

“One of the difficulties for patients that have not had insurance before and are accessing healthcare for the first time is just navigating through it,” said Helen Lindholm, CEO, Saint Mary’s.

Preparation includes growing the primary care network rapidly, expanding facilities for primary care outpatient throughout the Truckee Meadows to meet the needs of the population, said Lindholm. Saint Mary’s is looking to venture into obstetrical clinics targeting women who are just gaining access to Medicaid.

One of the problems mandatory healthcare coverage has created is that many people who received Medicaid insurance under the plan are accessing emergency rooms for primary care needs, said Olive. “So what that’s done is increased utilization of emergency rooms across the state, which is inappropriate and the highest cost model you can use.”

Since 80 percent of healthcare needs can be met outside the hospital, NNMC will focus on extending its outpatient presence. The second part of the solution is a model of integrated healthcare where the hospital system purchases a health plan.

Centennial Hills Hospital in Southern Nevada is expanding their women’s services including labor and delivery suites and a neonatal intensive care unit, in response to community needs.

In Southern Nevada there’s not much focus on expansion as hospital growth out-paced the population during the economic downturn when residents didn’t always end up populating new developments. “In some areas of the county, you’ve got more beds than patients,” Brannman said. In other areas hospitals have become victims of their own success: emergency rooms are overflowing and there aren’t enough beds. So St. Rose Hospitals have an active expansion underway in Henderson, doubling the size of the ER and adding some 110 beds.

At Southern Hills Hospital and Medical Center administration identified a community need for mental health services. After determining that the demographic needing the services were at retirement age, the hospital created a geriatric program that includes NICHE certification – the Nurses Improving Care for Healthsystem Elders program.

New and Improved

Groundbreaking new technology arrives daily, but do hospitals need all of it? Everybody wants a robot because advertising is driving up consumer demand, Brannman indicated, but that doesn’t mean that everyone needs one.

“Robotics certainly has a lot of potential for the future, but currently it’s very expensive,” said Brannman. “A lot of folks have invested in it because they don’t want to be the only hospital or system that doesn’t have a robot.” Eventually he expects demand will grow, but in the meantime hospitals have laid out a great deal of money and may only be using robots for a dozen cases.

With a lot of new technology, hospital administrators are waiting to see how applicable it is. “The technology is changing so quickly the prudent CEO will weigh the benefits and costs of the new technology with the improved care and safety,” said Kimball Anderson, CEO, Southern Hills Hospital.

How the technology is used is also important – Southern Hills’ new 64 slice CT scanner is going into the emergency room so there’s no need to take emergency patients back to an imaging department.

Renown administrators take into account the costs of new technology for the nonprofit hospital. While the hospital has surgical robots, its not trading in its 64 slice CT scanner for a 128 slice scanner to gain two seconds of time. “You have to spend your money wisely,” said Boyer.

Today’s imaging technologies allow doctors to avoid many exploratory surgeries. Doctors at Centennial Hills can access imaging devices right in OR during spine surgery, and have access to some of the most technologically advanced imaging equipment, said Sajit Pullarkat, CEO/managing director, Centennial Hills Hospital, Valley Health System.

Prime Healthcare Services, which owns Saint Mary’s, invested $50 million in new technology over the last few years. “We are well ahead of the curve, not just for our region, but nationally,” said Lindholm.

NNMC’s TeleStroke program, allows rural physicians access to on-call neurologists when dealing with stroke patients. The neurologist reviews patient data remotely. E-visits allow patients to use technology similar to Skype – “Skype on steroids,” said Lindholm – for virtual doctor’s appointments without traveling to the office when sick.

UMC is a safety net hospital, so while there’s always cutting edge technology that could be had, it’s more important to hire the right physicians and staff. “At the end of the day, a hospital is just a building,” said Barnard. “We can pick up trauma and take it off campus, if trauma were to be destroyed. It’s about the people, not the technology,” he added.

Whatever other changes hospital administrators are dealing with, electronic healthcare records are giving them the most headaches. ACA made participation mandatory and hospitals are scrambling to comply.

Ideally patients fill out paperwork one time and healthcare providers share. But federal privacy laws mean each provider uses a portal to transmit information, an awkward system that is particularly difficult for small rural hospitals that don’t have huge IT staffs, according to Joan Hall, president, Nevada Rural Hospital Partners.

On the Wish List

New technology and healthcare coverage aside, on the wish list of every administrator is a healthy population.

“We know for a fact that we will have more patients that are insured and have some kind of healthcare coverage,” said Lindholm.

That’s a plus. The goal is to have a healthy population. With well care and coordinated healthcare, the hope is patients will go to the hospital only in the event of catastrophic illness.

Which actually leads to a slightly different consideration: that patients accessing hospitals in the future may be much sicker than those entering hospitals now. Healthcare is evolving from hospital-based services to same-day, minimally invasive surgical procedures in outpatient facilities. That may mean patients won’t be still convalescing in hospital on day eight after laparoscopic gall bladder removal. It also means those patients who need to be inpatients are a lot sicker. So while the change has led to more hospitals creating or acquiring outpatient procedure units, it means “the intensity has increased, and you have to figure out how to optimize your facilities for that,” Brannman said.

Hospital administrators are also working to reduce re-admissions by providing a continuum of care so the patient is discharged and goes on working with sub-acute care facilities and outpatient services.

“We’ve added an outpatient therapy center that’s located in the medical office building right next to the hospital, and that provides physical, occupational, speech and pulmonary therapy to the community extension of the healthcare continuum,” said Pullarkat.

Boyer compared today’s healthcare environment to the HMO days. “But what’s different now is there’s a quality component and financial motivation to get there, so we’re adjusting our care from episodic care to management care of patients on a preventative basis. I think the hospitals of the future will have a lot of preventative programs to manage chronic conditions and to keep people healthy.”

“If we can get people to start focusing on their own health, it will help healthcare in the city overall,” said Barnard. “It’s changing that mentality of people coming into this hospital only when they need to, at the point of dire sickness and dire health, and some of that is avoidable.”