The healthcare industry continues to focus on the challenge of improving quality of care while managing costs. A group of Nevada’s healthcare leaders recently met at the Las Vegas offices of City National Bank to discuss this challenge, as well as new opportunities in the Silver State.
Connie Brennan, publisher and CEO of Nevada Business Magazine, served as moderator for the event. These monthly meetings are designed to bring leaders together to discuss issues relevant to their industries. Following is a condensed version of the roundtable discussion.
How do we get a healthy Nevada?
ANTHONY SLONIM: Let’s be frank. The quality of healthcare in Nevada is among the lowest in the nation and the cost is among the highest. We have to change the value proposition to be successful here. We can’t do it all at once. We’ve got to do it methodically and thoughtfully and with some attention to details so we can move those rankings and our citizens can enjoy the kind of healthcare they deserve. The social determinants of health certainly impacts quality. Here in Nevada, we have a great history of being a place where people go for fun. At the same time, those are the same things that create adverse health issues. Addiction, smoking, alcohol abuse and all of the secondary and tertiary things that result from those. It’s a really complicated and intertwined conversation.
DAVID STEINBERG: We need to affect change much lower in the system by having healthy neighborhoods, healthy nutrition in schools and talking about healthy behaviors. It’s a very complicated system. As a society, we have to look at where we can intervene that’s going to make a difference. I can tell you, it’s not when people have chronic diseases. It’s before those chronic diseases take place. Other societies that have better healthcare systems have much better metrics, whether it’s longevity or prenatal healthcare or a number of different measures. They spend a lot less on healthcare because they have better support in society or have better healthcare and nutrition and values growing up. We need to move back our focus a little bit and that’s going to be a huge effort.
BILL WELCH: Typically when they end up at our hospitals, they’re at an acute state of a condition. To address that [issue] is challenging, to say the least. When they leave our hospitals, they go back to the same environment that they came from, which in many cases is not a very healthy environment. There’s little support. A lot of acronyms have come and gone, and at the end of the day, the hospital is still the core foundation for the delivery healthcare system as a general rule. That isn’t going to be the case in the future. Hospitals are going to be a piece of the healthcare continuum, but they’re not going to be the primary piece. What we need to do is bring the payers to the table. Until the healthcare managed care organizations start talking about managing the health status of the population versus managing the dollar, we will have a significant uphill battle.
SLONIM: That last point you made is critical. If people were to give us a blank piece of paper and tell us to design the health system that we all wanted for patients, we’d never design it the way it is now. We’d do it differently. We have to be brave enough to take on that conversation. Hospitals are only one part of the healthcare continuum. There’s two contrasting things. One of them is health and does not equal healthcare. Healthcare is something we do to people. Health is a state of being. It’s a very different conversation. Problem number two is population health does not equal a healthy community. A healthy community is broader than healthcare entities delivering healthcare. It’s not health. It’s a public health conversation.
How integrated is healthcare?
JAMES SANCHEZ: What I’ve seen here in Las Vegas is that there’s a number of providers but there’s very poor coordination and care between various providers’ hospitals. That lack leads to significant increases in cost. Going forward, there’s always been this push to be more transparent with medical records from the clinic to the hospitals and vice versa. That just hasn’t happened. If we’re going to make changes, that would be the cornerstone for the future.
STEINBERG: The truth is we have great and quality doctors in Las Vegas. We have great technology. We have great hospitals in Nevada. What we don’t have is great cooperation and great vision of how they work together. The problem is, you can have great components, but without a system that concentrates on the entirety of the system, it is not a quality system. You can have the best hospitals in the world, you can have the best technology, but for us to get records? Impossible. When you look at quality healthcare, in most cases they’re integrated models. Everyone knows what the other person is doing and they share a common medical record number. We’re starting to get that.
WELCH: There are a couple things going on, first with the HIE (Health Information Exchange). Nevada does have an HIE. A private HIE has been moving forward now for a number of years. It’s been slow, but it is making progress. All of our large hospitals are part of the HIE and we have a fair number of physicians who signed on. The challenge is getting all the insurers to also sign because, to have an effective health information exchange, you need all the hospitals, all the doctors and all the payers. They are moving towards that and they are making progress.
RANDAL SHELIN: The technologies are there to share information. In fact, we want to share the information. When [the patient] comes in and we look at the patient’s record, we’d like to have access to their entire medical history, not just words like “pain”. We want the real medical history. What’s the patient’s background? Yet to get that, you have to pull it from different sources and you have to get through these different firewalls and compliant mechanisms to share that information. It’s not a simple process. Yes, we can do this. It just takes time.
BARD COATS: Look where it was 10 years ago compared to where it is now. There’s a huge shift toward that. We’re all making progress.
Is cyber security an issue?
STEINBERG: The other day I was standing in a meeting, my IT guy came in and was white saying someone might have hacked into one of our routers. It turned out it wasn’t an issue, but we’re all running healthcare businesses and no matter what we do, some of our biggest liabilities and risks basically are internet and security. Everything we do with HIPAA (Health Insurance Portability and Accountability Act) and PHI (Personal Healthcare Information), has huge risks that are brand new risks. Probably none of us have enough money in our budgets to really deal with those risks effectively. My PHI has been hacked twice.
MASON VAN HOUWELING: That [security] has certainly moved up closer to the top of my list. The healthcare industry is vulnerable. This is not just a matter of grabbing some files or some financial data. This is real. This is where they’re getting in and have the potential to shut down telemetry, which monitors all of our patients. They have the capability to shut down fire alarm systems and really cripple hospitals and healthcare institutions. That has certainly risen. We’re all having to screen things, be much more savvy with how to identify when something comes in from a ransomware perspective. We are targets and it’s got our attention.
Is finding quality workers an issue?
CAROLE FISHER: In hospice and palliative medicine, there is a shortage of competent and capable physicians. We actually just started a fellowship. We’re into it a couple years now. It’s one of 11 in the country. We’re growing our own physicians. There’s a proven success rate; if you train people here, they’ll stay here. We have been able to secure some folks that way. We’re working with some of the systems. We’re getting ready to work with UMC and some of their education efforts and really integrating and promoting palliative and hospice so that we train well. Just recruiting people to Las Vegas can be challenging. Sometimes we can find some great physicians and great nurses that just don’t want to live in our community. Although, our community has gotten so much better in terms of the infrastructure that we offer families.
WELCH: We talk about the nursing shortage in this city. It’s regional, but I know in Las Vegas and Clark County, it is substantial. [Hospitals] have to bring in temps to help cover the shifts. What’s interesting to me is 10 or 12 years ago, we forecasted this situation that we were going to be in and it took us three legislative sessions to get the funding approved to expand the nursing education in the state. Even with that, the hospitals came up with the money to fund all the initial startup costs so we could double the nursing programs in the state, but it wasn’t enough. When we doubled it then, we were so far behind that we were in last place. It wasn’t even going to make a dent in bringing us up [to where we needed to be]. It was just so we could still see the shadow of the person in front of us. That’s what’s happening with the physician training right now. We need to do a lot more.
SANCHEZ: It’s a large problem in the subspecialty area. Sub-specialists have cut back programs by more than 50 percent. The average age of a medical oncologist right now is 58. The people that are coming out want a nine to five job. They look at our practice and see how busy we are and they look elsewhere. They want to go somewhere where they’re assured they get eight weeks of vacation, that they are home for dinner at six o’clock and it just doesn’t happen. Also, the growth population has been tremendous when compared to any other state. Every time you add another doctor or two, you think you’ve got your bases covered. Suddenly there’s this influx of new residents to the state. I think that’s been part of the problem just trying to keep up with the growth and the manpower that it takes. The second part is the infrastructure. You can get all the doctors that you want, but if you don’t have quality nurses, quality nurse practitioners, physicians assistants, social workers … as they say, it takes a village to provide healthcare. We haven’t had that and we still don’t have that. Even through we’re building the community and the structure, we lag far behind.
VAN HOUWELING: Certainly, the workforce poses a problem, both on the physician and at the bedside. I think we all are struggling with finding good quality staff and the teaching of those. I’m encourage by the amount of interest in medical schools here and throughout the state and the growth in residencies. I think that will certainly help, especially when you look at the data on having a medical school. Physicians typically stay about 30 percent of the time. Having residencies and fellowships bumps that number up to 70 percent. I’m encouraged that there is hope on the horizon as far as teaching.
LEE PULLAN: It’s interesting to hear, as a citizen of Nevada, what some of the issues are and how we’re getting better. I went to a lunch at Roseman University and we were talking about if there will be enough residencies in this state to be able to grow the healthcare providers here and be able to come up with private funds and maybe how banks and others in the community can help do that.
How do insurance & reimbursements play a part?
BRUCE GILBERT: I’ve been involved with insurance and employee benefits for a long time now, and when I started out, ordinarily you’d have somebody whose employer provided a health plan that was, by our standards, extremely rich. You would have a $500 deductible perhaps and you’d pay a minimal amount to go and see a physician. What’s happened is, as the cost has increased more and more, that has been pushed back onto employees. I fully expect that to continue, unfortunately. I would also tell you that insurance has always increased. There’s never been a day over the course of the last 20 years where it rolled backward and all of a sudden we had a much better deal than we had before. I fully expect that will continue to be the case.
SHELIN: The challenge is going to be, with significant decline in reimbursement, how do you maintain that level of quality to provide for our patients? Certainly here in Southern Nevada, we have some of the lowest reimbursement rates in the country. It’s an extremely competitive environment. That brings out the best of us in terms of trying to get the most efficiencies out of your practice. As we move forward into value-based medicine, it’s encouraging us to get involved with alternative payment methodologies. I applaud CMS’s (Centers for Medicare and Medicaid Services) efforts because they’re trying to get the best health value for our population with our limited healthcare dollars. At this point, I don’t know how much lower reimbursements can go. A lot of physicians are saying, “Look, if we reduce reimbursement further, it gets to a point where I’m not going to be able to provide the same level of service I have.” We have to find that right balance between the cost and efficiency of what we provide.
WELCH: Every legislative session for public health policy, somebody comes to the legislature and decides we need to start checking all newborns for these additional tests, or for cancer patients or for heart patients. Do they fund it? No, they don’t fund it so that’s just a cost that we, the system, have to absorb. The other thing is, you have the expansion of medicaid. In the doubling of that population, it more than doubled the utilization. We used to only run around 13 or 14 percent medicaid population in the state as far as the hospital industry is concerned, and that’s when they represented 7 percent of the population. Now they’re representing 14 to 16 percent of the population and we anticipate to cap out somewhere between 25 and 30 percent of our volume being medicaid. Medicaid only reimburses hospitals on direct costs about 47 percent of cost. You add in the UPL (upper payment limit) programs and all these reimbursement schemes, and we get to be around 57 percent of cost. The problem that we’re going to run into as far as what drives healthcare costs or insurance costs in the hospital industry, we’re going to hit 74 percent of patients under some government funded program that does not pay cost. There’s that unfunded cost that we are having to absorb. For Nevada hospitals, that represented approximately $1 billion in 2014.
What changes has the ACA affected?
GILBERT: The idea of having essential benefits that had to be applied to everybody, the idea of people not having to pay for some of the services that they receive, has changed the amount of monies that are required in order for payers to deal with the populations. It’s really interesting when you think about it, people are not required to pay for preventative care. Nonetheless, the Hospital Association says they’re still coming to the emergency room. There’s a terrible disconnect there. It’s something we’ve all talked about, actually. The system has to be integrated between the caregivers, the payers and everybody else that’s involved in this particular equation.
COATS: I think we’re all better off than we were 10 years ago in this state. We have to continue to get stronger and better and deal with the system as it is. Hopefully the ACA (Affordable Care Act) will get tweaked. It’s a wonderful thing to get over a barrier and finally get to the point of considering an uninsured population. The expansion of medicaid in this state up to 650,000 people has put a burden on all of us, but I think all of us want that to work somehow through some mechanism and end up with a smaller population who don’t have healthcare. It’s just obscene that we let that occur in our country. There will have to be tweaks to get that done. The obligation for us to create that is still heavy.
VAN HOUWELING: The ACA has been positive for us. Our uninsured has gone down from 40 percent of our gross revenue down to 11 percent. That’s had an upside for the hospital, which has allowed us to reinvest back into the hospital. Again, we’re being a lot more strategic in some of our service lines and growth. I think it will be here for a long time. Once you give a benefit, it’s hard to take it back in our society. There’s certainly going to be some gives from everyone to try and make it sustainable. There will be some shifts in the dollars and where it’s going and how it’s flowing through CMS.
How do you handle regulations?
VAN HOUWELING: I was sitting in my office one day and I actually went through everything that I had to be an expert in. I think I came up with about 20 regulatory agencies that I had to at least know enough to get through the surveys to make sure we are able to keep the hospital’s doors open. I would tell you there’s a surveyor in our hospital every day. There’s a surveyor coming in and looking at life safety, work safety, patient safety, waste disposal, things that can be harmful to the environment and making sure we’re properly disposing of that. They are all important.
SLONIM: I’m very careful in my daily work not to reach too far beyond my arm’s length. Nothing screws things up more than when I get involved with a detail that I shouldn’t be involved in. For the team, it re-prioritizes their work and it’s probably from left field and not relevant. In some ways, I think that same metaphor should be used for regulation. I’m fine with regulation [until] it starts to mandate care that is several arm’s lengths away from what the regulation was intended to accomplish. That creates the burden for me. When we’re down in a detail of patient care or the staffing ratio, that’s where people are trying to manage something too far beyond their means to manage it, and that creates problems for me like I create problems for my employees when I get involved in something I shouldn’t be involved in.