Alex Paul
Shifting Samaritan Lebanon Community Hospital to a critical access facility is just one of several steps being taken to stop the flow of red ink incurred as the result of changes in health care reimbursements in recent years..
SLCH chief executive officer Becky Pape said several key areas are being addressed in the effort to reduce a $7,620,543 loss incurred as of November 30, 2004. Total operating revenues for the time period were $76,029,302, down about $5 million from 2003 ($81,289,160.)
Pape outlined issues impacting the bottom line during the hospital’s annual meeting held Jan. 25.
“Inpatient stays continued to decrease and the numbers of inpatients were approximately 20 percent lower than in 2003. Lebanon mirrors a national trend in this regard. More conditions are managed on an outpatient basis, surgeries are less invasive with a shorter recovery time and these developments contributed to our census changes. To match our inpatient volumes some staff reductions were implemented. While this was difficult, it was a necessary component of matching our volumes with fixed costs. We continued to monitor patient satisfaction throughout this change and saw no decreases in our satisfaction scores.”
After a month-long trial project, the hospital is applying for critical access designation, which will provide much higher reimbursement for patients with Medicare and Medicaid.
Currently, the facility is reimbursed based on an average cost basis. But, since East Linn county has a high percentage of elderly and lower-income persons, whose health conditions are often more severe than those in more affluent communities, the hospital actually receives only a portion of actual patient costs.
Federal and state officials have long recognized the plight of rural hospitals facing the same issues nationwide. In 1997, via the Balanced Budget Act, critical access designations were enacted. The goal was to bring actual reimbursements more in-line with costs for rural hospitals.
The designation carries with it several mandates:
— The hospital must be located in a rural area.
— It must have a bed limit of 25 or fewer.
— Average length of stay must be less than 96 hours.
— It must be located at least 15 miles from another hospital or certified as a necessary provider of services.
Pape said the proposal to become a critical access hospital had some staff members and residents of Lebanon and Sweet Home concerned about a possible closure of the facility that has served the communities for more than a half century.
The hospital, which has 49 beds, has experienced a decline in census for several years. The average census a few years ago was about 29, explained Wendie Wunderwald, director of nursing services. Average patient census for the past two years has been about 23.
“There were people who were concerned that if we went past the 25 census number, we would transfer patients elsewhere,” Pape said. “We didn’t and we wouldn’t.”
Pape said there are currently 900 critical access hospitals nationwide and that number is expected to grow to more than 1,500 in the next 18 months.
The patient census does not include those persons in observation areas or waiting to deliver a baby, Wunderwald said.
Once the hospital’s application is complete, the State of Oregon will complete a survey of the facility and then pass the information along to the federal government for approval. “That could be as early as late February,” Pape said.
The next step will be issuance of a new medical number for the hospital.
In addition to the critical access designation, SLCH is also working to recruit more physicians and specialists into the system and to educate their own nurses and other staff members via an on-site partnership with Linn-Benton Community College.
“We’re working especially hard recruiting orthopedic surgeons and obstetricians,” Pape said. “The orthopedic staff members are vital because as the baby boomers age, our bones will become brittle and we’re going to need specialists to take care of us.”
The new healing garden, an innovative approach to health care, is drawing national attention, Pape said, but it’s also helping the hospital with recruitment efforts. The garden was paid for by community donations and the hospital foundation.
“When doctors make their junkets along the West Coast, they might look at three or four hospitals at a time,” Pape said. “When they see the healing garden, the education center and the investment that is being made here, they go away quite impressed. We’re being told that we consistently rank in the top two.”
Pape said that although the fiscal health of the hospital is important, the facility has always focused on its main mission of providing quality health care to East Linn county, regardless of economics.
That holds true at each of the area clinics, where doctors provide care based on need, not on the ability of someone to pay. In turn, clinics associated with SLCH are also facing budget issues.
“We take our financial issues seriously and we’ve undertaken the STARs program–Samaritan Teams Achieving Results–system of commitment to quality and efficiency,” Pape said. “The goal is to look at our internal systems, our prices, our work flows and staffing and to find the best possible efficiencies and balances.”
“We thought we were efficient, but we learned that we weren’t always,” added Wunderwald. “We had a lot of areas for improvement.”
A consulting firm was used initially to implement the program, but was phased out as more and more staff members received training.
In a cost and efficiency move last August, the equivalent of 23 full-time staff jobs were reduced, Pape said.
While the move had its negative side, it also had positive factors including a more predictable and fuller work schedule for remaining staff members, fewer canceled days and a more consistent working staff.
The hospital’s investment in the training and education center is already paying dividends, Pape said. The first class of 24 students to graduate from the radiological technology program have all found jobs.
“Investment in education and training pays off not only for the hospital but for the community as well,” Pape said. “A few years ago, we spent up to $8 million per year for temporary staffers. Now, that number is virtually nothing.”
The new educational wing will help train registered nurses, certified nursing assistants, phlebotomists, operation room simulation, as well as work with life-like mannequins for training hospital staff and area EMTs as well.
“The training center will bring all kinds of good things to the Lebanon and Sweet Home areas,” Pape said. “We hope to partner with area high schools to get students interested in health care careers at a young age. There are so many options available to them.”
Wiley Creek Community is a third arm of the hospital’s outreach efforts and it too has been losing money.
“It’s such a wonderful facility,” Pape said. “It’s really important to us. Client satisfaction there is practically perfect.”
Pape said the Sweet Home-based facility strives to make residents feel at home at all times, whether they are living in independent housing or assisted living units.
Staffing of the facility, opened in 1998, has a low turnover rate and quality of care is exceptional.
“We believe Wiley Creek can be stabilized and that there is room for expansion,” Pape said. “We’re very interested in all of the economic development projects underway in Sweet Home and we believe there is a definite need for a facility of this type. There really aren’t a lot of places of its caliber anywhere in the Northwest.”
Currently, 40 assisted living units are occupied and there are 18 independent homes.
The hospital owns more land adjacent to the complex, which could also be developed.
Pape said the SLCH Foundation plays a vital role in helping fund development projects at the hospital.
“Much of what we accomplish is the direct result of community support and our foundation,” Pape said. “We could not do it without our foundation’s commitment and support.”
Highlights of SLCH annual meeting held Tuesday, January 25:
— 161 members of the hospital auxiliary donated more than 15,711 hours in 2004.
— The Auxiliary purchased some $35,000 worth of equipment and supplies for the hospital.
— Net assets of the SLCH Foundation grew from $3,225,445 on Jan. 1, 2004 to $3,616,704 on Dec. 31.
— SLCH employees donated $47,999.38 to the LCH Foundation and United Way during October 2004.
— The annual fall campaign raised $5,800 for the Evergreen Hospice.
— The Board reaffirmed its commitment to Wiley Creek Community in Sweet Home and stressed the need for a continued close relationship with the hospital.
— Had total operation revenue of $76,029,302 (through Nov. 30 unaudited) compared to $81,289,160 (through Dec. 31 of 2003).
— The hospital received full accreditation from the Joint Commission for Accreditation of Healthcare Organizations.
— Added the following physicians to the staff during the past year: Kent Toland, MD, urology, Corvallis; Michael Halferty, MD, emergency medicine, LCH; Ohnn Nahm, MD, internal medicine, Corvallis; Virmeet Singh, MD, gastroenterology, Corvallis; Fu Xinuy, MD, oncology, Corvallis; Laura Maskell, MD, emergency medicine, LCH; Kelly McCann, internal medicine/pediatrics, Main Street Clinic.
— The new medical staff president for 2005 is Dr. Mark Donnelly.