As Nevada’s hospital executives began gearing up quickly during March to deal with the challenges of the coronavirus, most of them could take some comfort from the knowledge that their institutions were working from a solid financial base.
From Henderson to Reno, the combination of good financial performance and increasing demands presented by population growth continues to fuel construction of new hospital facilities and the addition of new specialized programs.
But healthcare executives also are aware of the vulnerabilities of the hospital sector in Nevada — vulnerabilities that include reimbursement rates from government agencies that remain among the lowest in the nation, staff recruitment issues that have been a near-constant headache for years and the need to expand healthcare offerings for a fast-growing and aging population.
The hospital sector is a big piece of the state’s economy.
Making it Pencil
Nevada’s acute-care hospitals posted combined revenue of $6.8 billion and net income of $511.5 million last year, according to data collected by the state’s Division of Health Care Financing and Policy. To put that number into context, spending on hospital services alone totals nearly as much as the $7.1 billion a year spent at Nevada’s automotive dealers.
The 2019 revenues at Nevada hospitals were up 4.6 percent from the previous year, the state data shows, continuing a trend of consistent growth since the middle of the past decade.
A noticeable result of the sector’s growth is construction of new facilities.
Northern Nevada Health System, a subsidiary of Universal Health Services Inc., began work a couple of months ago on Northern Sierra Medical Center, the first new full-service hospital to be built in the Reno area for more than a decade.
Alan Olive, chief executive officer of the new hospital on a 22-acre site at Longley Lane and Double R Boulevard, said the new hospital is a response to market studies that found a need for more hospital services and more medical professionals in the region — especially given the growth of aging patients who are managing chronic illness.
The U.S. Census Bureau said the number of people 65 or older living in Nevada increased by nearly 16 percent during the last decade, an increase that’s slightly greater than the overall 14 percent increase in the state’s population during the decade.
The 470,000-square-foot, 200-bed Northern Sierra Medical Center is projected to open in February 2022. A 60,000-square-foot medical office building also is included in the first phase of the project, city records show.
Construction of a hospital, like any largescale, complex construction project, involves careful coordination of hospital staff, construction personnel and city officials.
“Any number of factors can affect a project of this size,” said Olive. SR Construction is general contractor on the project.
At the same time that it’s constructing the new hospital, Northern Nevada Health System is building its first freestanding emergency room in northwest Reno. It’s expected to open this summer.
The Southern Nevada experience of Henderson Hospital a few years ago demonstrated the demand for new hospital facilities.
When Henderson Hospital opened its doors for the first time in the autumn of 2016, its first patient already had been waiting outside the doors of the emergency department doors for 15 minutes.
Since then, demand hasn’t slowed, and the hospital continues to outstrip every projection that had been prepared before it opened.
“We exceeded our 10-year projections by the end of our second year,” said Sam Kaufman, chief executive officer of the Henderson Hospital, one of six hospitals operated by Valley Health System. “Everyone hoped for success. This is far more than just success. Our volume has been off the charts.”
In response, the hospital opened a second, free-standing emergency room near Green Valley Ranch in late 2018.
Other hospital organizations also are extending their reach with satellite and specialized facilities.
University Medical Center is adding two or three outpatient clinics a year at the same time it’s modernizing its main campus, said Chief Executive Officer Mason VanHouweling.
“We have also invested heavily to fulfill what we saw as a deficit in the Las Vegas continuum of care by building the Dignity Health Rehabilitation Hospital on our Siena campus,” explained Lawrence Barnard, president and chief executive officer of the Siena campus of Dignity Health-St. Rose Dominican and Nevada market president for Dignity.
The 60-bed rehabilitation hospital, which opened last April, offers specialized services for patients recovering from stroke, traumatic brain injury, amputation, neurological disorders, orthopedic conditions and spinal cord injury.
New facilities of any type require new staff, and recruitment already is a major challenge for healthcare organizations statewide.
Olive said, for instance, that Northern Nevada Sierra Medical Center will need to recruit workers to fill the estimated 1,000 healthcare jobs created by the new hospital. While full-blown recruitment won’t begin until about a year before the hospital opens, staff-building efforts already are underway.
“As you open a facility of this size and scope, you have to consider partnerships with medical and nursing schools,” Olive added. “These partnerships begin at the early phases of a student’s entry to their degree program and are fostered throughout their education. In addition, we have already begun building a pipeline of staff who are excited to support the new hospital.”
Recruitment was a challenge, too, before Henderson Hospital opened a little more than three years ago.
Along with nurses and other staff, Kaufman said doctors had to be convinced to practice at the new hospital. Executives of Henderson Hospital convinced some physicians to move their practices across town. Other physicians were recruited from around the nation. And some medical practices opened additional offices close to the new hospital.
Today, about 1,000 people hold jobs at the hospital, supporting the work of the 1,200 physicians who have hospital privileges.
It’s not just brand-new hospitals that need to work hard to develop and retain staff.
Saint Mary’s Health Network — an organization founded 112 years ago — has a laser-like focus on the issue, said Tiffany Coury, an experienced hospital executive in northern Nevada who took the reins as chief executive officer of the Reno-based health network in January.
Among the steps undertaken by Saint Mary’s is a program called “Transition to Practice” that supports new nurses entering the workplace.
“It has been very successful for us, as demonstrated in our nurse turnover rate at less than 9 percent,” Coury said. “This is well under the national average of nearly 17 percent.”
St. Rose Dominican, meanwhile, begins building relationships with nursing students long before they graduate.
“Our most successful efforts come from partnerships built with local nursing programs and medical training offered at College of Southern Nevada, Nevada State College, and Touro University,” said Barnard.
UMC’s VanHouweling notes that recruitment of nurses is only part of the staffing challenge faced by hospitals.
“It’s not just the professionals who are at the bedside,” he said. “It’s the professionals who care for the patient behind the scenes as well, people such as IT staff. It’s a tight market across the board.”
He said UMC pays particular close attention to creation of a good working environment, one that reduces turnover and places less pressure on its recruiters.
“People really connect with our mission of caring for Clark County residents,” VanHouweling said. “We place emphasis, too, on shared governance. The voice of our professionals is heard.”
He said UMC’s turnover rate of approximately 10 percent compares with turnover of 19-20 percent at other hospitals.
Some public-policy issues contribute to the tight market for hospital professionals, said Barnard.
“Medicaid reimbursement rates in Nevada are among the lowest in the nation, and the state lacks a strong graduate medical education infrastructure,” he said. “Both of these issues need continued work during Nevada’s 2021 legislative session.”
The president of St. Rose-Dominican said lawmakers increasingly understand those issues, and the healthcare industry made some headway toward solutions during the 2019 Session of the Nevada Legislature.
In the next Legislative session, lawmakers are likely to hear detailed proposals for improvement from Gov. Steve Sisolak’s Patient Protection Commission.
The 11-member group, assigned to conduct a wide-ranging review of healthcare in the state, began meeting this winter under the leadership of Dr. John Packham, an associate dean at the University of Nevada Medical School.
Even with progress during the last legislative session, VanHouweling said Medicaid reimbursements from the state cover only a third of hospitals’ true total costs. Given that Medicaid accounts for $1 out of every $6 spent on healthcare in the United States, the funding shortfall is a big issue for Nevada hospitals.
VanHouweling expects some relief to come from the ongoing debates about healthcare financing on the national political stage, debates that try to find a balance between affordability and the desires of healthcare consumers.
“Our population demands the best,” he said. “That comes with a price tag.”
UMC in the meantime is focused on bending its cost curve to reduce the gap between costs and reimbursement levels.
The medical center’s executives are pushing suppliers hard for cost reductions, investing in technology to improve efficiency and ensuring that it carefully records every step of treatment so that it’s properly reimbursed for the care it provides.
And, VanHouweiling said staff retention becomes a key element in cost-control. It’s expensive to train new staff, and it takes time for new staff members to reach peak efficiency.
The most-effective cost-control measures of all are those that keep people healthy and out of the hospital.
Saint Mary’s Coury said hospitals are widening their focus, a development that holds important implications for business owners statewide.
“Hospitals continue to take on more ownership of patients even outside of the four walls of the hospital,” she said. “This can provide partnership opportunities with business owners to manage the health of their employees. The quality and cost effectiveness of a hospital system can directly impact the financial performance of businesses within our community.”
One of the nation’s most wide-ranging initiatives to improve the health of the population is underway in Nevada under the leadership of Reno’s Renown Health.
Working with Desert Research Institute, which is providing its expertise in data analytics and environmental science, Renown’s Healthy Nevada Project is collecting DNA samples from more than 35,000 study participants statewide.
The samples are analyzed by a genesequencing firm — Silicon Valley’s Helix — and some participants get an early warning of a genetic predisposition to some health problems.
Nevadans have flocked to the program and its free DNA analysis. The first 10,000 slots were filled within 48 hours when it was launched in Washoe County in 2016. The study expanded a year ago to include 25,000 participants in Southern Nevada.
Along with medical information, participants learn what their DNA reveals about their family ancestry.
Dr. Anthony Slonim, the CEO of Renown Health, has explained that the project is particularly important in Nevada because the state ranks near the bottom in many health-related metrics. In Washoe County, for instance, age-adjusted death rates for heart disease, cancer and chronic lower respiratory disease are a full 33 percent higher than the national rates.
Renown researchers expect to use the data to better understand the risks of cancer, cardiac and respiratory illnesses so that doctors can begin preventative actions earlier.
“Imagine if we can gather more data like this on a national scale and use it to change the future of health and healthcare?” Slonim said as the program expanded into Clark County in 2019.
At the same time that researchers look for ways to improve residents’ health and reduce their hospital use, many hospitals around the state aggressively market the speed, convenience and effectiveness of their emergency rooms.
The marketing makes sense, said Kaufman.
Emergency rooms account for a large proportion of hospital admissions — sometimes, as much as 90 percent of new patients first arrive through the ER — and Henderson Hospital’s emergency department’s reputation for good quality and speedy service played an important role in the hospital rapid acceptance in the community.
On the other hand, hospitals want to educate patients about the appropriate use of emergency rooms, which are a highly expensive way to deliver routine medical care.
Hospitals also look for marketing edge in the ratings and rankings provided by organizations such as The Leapfrog Group, a national group of employers and other healthcare purchasers, or Healthgrades, an online resource that bases its rankings on clinical outcomes.
Those rankings appear to influence consumer decisions.
“The consumers are very knowledgeable. They’re going online. They’re doing their research. Transparency is everywhere,” Kaufman said.
Hospitals statewide are positioning themselves in the marketplace with new medical services, sometimes testing the market with a smaller initiative before launching full-blown specialty programs.
Henderson Hospital’s recently launched stroke-care program, for instance, is expected to provide the foundation of a neurosurgery program. Its growing neonatal intensive care unit supports a specialization in women’s health.
The new services, and the new facilities that support them, result in continued and significant improvements to healthcare in the state, said Barnard.
“There are amazing things happening in our hospitals today. And there is truly wonderful care available here in southern Nevada,” Kaufman said. “If anyone tries to tell you that tired old joke — ‘Where’s the best place to go in Las Vegas if you’re sick? The airport’ — tell them they’re wrong. That’s now completely false. There is a great number of us here who are committed and working hard to make sure we continue to grow and improve.”
The Future of Construction is Lean
Redefining traditional industry methods to improve outcomes.
As many companies search for ways to improve internal and external operations for current and future building, expansions and improvements, numerous programs have emerged to refine traditional models and improve their effectiveness, but none have been as successful as the methods incorporated into lean construction.
The Lean Construction Institute (LCI) was founded in 1997, with a mission to advance the construction and design industries through their coined lean approaches to project design and delivery. According to the LCI, lean methods seek to develop and manage a project through relationships, shared knowledge and common goals.
LEAN practices challenge traditional work processes and siloed knowledge, by reorganizing processes for the betterment of the project. Furthermore, the elimination of wasted time and optimization of man hours results in improved productivity, a reduction in safety incidents, and cost saving for all parties involved in the project.
When a lean program is implemented into a construction project, the process incites actions that continuously enhance every function and include all stakeholders, from the head of the company to the trade partners. It also applies to the processes, such as procurement, logistics and the cross-organizational lines into the supply chains.
By improving standardized activities and operations, lean construction strives to reduce waste. When done correctly, it also refines the workplace, eliminates redundancies and trains the staff to recognize and reduce waste in all future processes.
The lean approach is centered around gaining knowledge by taking action. To ensure the success of our lean program, every project team needed to become self-directed, allowing constraints to be resolved from within each group rather than tasking management staff with the delegation of issues to various team members.
>Projects, recently completed by our team, Trellis Centennial Skilled Nursing Facility, Henderson Hospital Third Floor Buildout, and Northern Nevada Medical Center Third Floor Renovation, are tremendous examples of success as a result of the integration of a lean construction program. Methods, which were introduced to our staff over a set timeframe, have now been adopted by all project teams, leading to increased productivity on site and improved delivery.
Consistent training and active participation have been instrumental in the implementation of our lean program. Everyone involved with a project, from the chief executive officer to everyday staff and stakeholders, is engaged on all levels of the operation, which has led to the successful completion of many projects.
As a general contractor, we take on the role as partner to our clients, and are tasked with providing creative and adaptive planning, design and construction solutions that coincide with the clients’ company culture, business and community.
By selecting the appropriate contract relationship for the client’s needs, the process can be optimized so that the client will experience improved forecasting, cost reliability and on-time completion, taking away any concerns regarding the construction of the project.
No two project are identical, we help our clients choose the best project delivery method based on the specific project requirements. This is an important factor on how we help our client succeed. We carefully evaluate the standards particular to each project and explore the available models for delivery that provide the best fit. Guidance is provided for the client to make informed decisions to meet the project’s unique needs.
The incorporation of a lean process requires patience and courage to take risks at critical stages to drive resources in order to meet objectives and achieve optimum results. The implementation and ongoing integration of the lean method is a journey, not a point in time, guided around the principle of continuous improvement.
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A note from all of us at SR Construction – During these uncertain times, it is of the utmost importance that we remain united. We are immensely grateful to the healthcare professionals that are working tirelessly around the clock to ensure the safety and wellbeing of our communities. Together, we will get through this.