Lower than two years after opening a state-of-the-art $26 million hospital in Leadville, Colorado, St. Vincent Well being almost ran out of cash.
Hospital officers mentioned in early December that and not using a money infusion they’d be unable to pay their payments or meet payroll by the top of the week.
The eight-bed rural hospital had turned a $2.2 million revenue in 2021, however the windfall was largely a mirage. Pandemic reduction funds masked issues in the way in which the hospital billed for companies and picked up funds.
In 2022, St. Vincent misplaced almost $2.3 million. It was prone to closing and leaving the 7,400 residents of Lake County and not using a hospital or rapid emergency care. A $480,000 bailout from the county and an advance of greater than $1 million from the state stored the doorways open and the lights on.
Since 2010, 145 rural hospitals throughout the U.S. have closed, based on the Cecil G. Sheps Middle for Well being Providers Analysis on the College of North Carolina. However covid-19 reduction measures slowed that development. Solely 10 rural hospitals shut down in 2021 and 2022 mixed, after a document 19 in 2020. Two rural hospitals have closed already this 12 months.
Now that these covid funds are gone, many challenges that threatened rural hospitals earlier than the pandemic have resurfaced. Business analysts warn that rural amenities, like St. Vincent Well being, are as soon as once more on shaky floor.
Jeffrey Johnson, a accomplice with the consulting agency Wipfli, mentioned he has been warning hospital boards throughout audits to not overestimate their monetary place popping out of the pandemic.
He mentioned the inflow of money support gave rural hospital operators a “false sense of actuality.”
No rural hospitals have closed in Colorado prior to now decade, however 16 are working within the pink, based on Michelle Mills, CEO of the nonprofit Colorado Rural Well being Middle, the State Workplace of Rural Well being. Final 12 months, Delta County voters saved a rural hospital owned by Delta Well being by passing a gross sales tax poll measure to assist help the power. And state legislators are fast-tracking a $5 million fee to stabilize Denver Well being, an city safety-net hospital.
John Gardner took over as interim CEO of St. Vincent after the earlier CEO resigned final 12 months. He mentioned the hospital’s money crunch stemmed from selections to spend covid funds on tools as an alternative of working prices.
St. Vincent is classed by Medicare as a important entry hospital, so the federal program reimburses it based mostly on its prices. Medicare superior funds to hospitals in 2020, however then recouped the cash by decreasing funds in 2022. St. Vincent needed to repay $1.2 million on the identical time the hospital confronted greater spending, a rising accounts-payable obligation, and falling income. The hospital, Gardner mentioned, had mismanaged its billing course of, hadn’t up to date its costs since 2018, and didn’t credential new clinicians with insurance policy.
In the meantime, the hospital started including companies, together with behavioral well being, residence well being and hospice, and genetic testing, which got here with excessive startup prices and extra workers.
“Some companies the hospital was taking a look at stepping into have been past the conventional menu of important entry hospitals,” Gardner mentioned. “I believe they misplaced their focus. There have been just a few unhealthy selections made.”
As soon as the hospital’s upside-down funds grew to become clear, these companies have been dropped, and the hospital decreased staffing from 145 workers to 98.
Moreover, St. Vincent had bought an accounting system designed for hospitals however had hassle getting it to work.
The accounting issues meant the hospital was late finishing its 2021 audit and hadn’t offered its board with month-to-month monetary updates. Gardner mentioned the hospital believes it might have underreported its prices to Medicare, and so it’s updating its studies in hopes of securing extra income.
The hospital additionally bumped into issue with tools it bought to carry out colonoscopies. St. Vincent is believed to be the highest-elevation hospital within the U.S., at greater than 10,150 ft, and the tools used to confirm that the scopes weren’t leaking didn’t work at that altitude.
“We’re peeling the onion, looking for out what are the issues that went improper after which fixing them, so it’s hopefully a ship that’s operating pretty easily,” Gardner mentioned.
Quickly Gardner will hand off operations to a administration firm charged with getting the hospital again on monitor and hiring new management. However officers anticipate it may take two to a few years to get the hospital on strong floor.
A few of these challenges are distinctive to St. Vincent, however many will not be. In keeping with the Chartis Middle for Rural Well being, a consulting and analysis agency, the typical rural hospital operates with a razor-thin 1.8% margin, leaving little room for error.
Rural hospitals working in states which have expanded Medicaid below the Reasonably priced Care Act, as Colorado did, common a 2.6% margin, however rural hospitals within the 12 non-expansion states have a margin of minus 0.5%.
Chartis calculated that 43% of rural hospitals are working within the pink, down barely from 45% final 12 months. Michael Topchik, who heads the Chartis Middle for Rural Well being, mentioned the speed was solely 33% 10 years in the past.
A hospital ought to be capable to maintain operations with the earnings from affected person care, he mentioned. Extra funds — reminiscent of supplier reduction funds, revenues from tax levies, or different state or federal funds — ought to be put aside for the capital expenditures wanted to maintain hospitals updated.
“That’s not what we see,” Topchik mentioned, including that hospitals use that supplemental earnings to pay salaries and hold the lights on.
Bob Morasko, CEO of Coronary heart of the Rockies Regional Medical Middle in Salida, mentioned a change in the way in which Colorado’s Medicaid program pays hospitals has damage rural amenities.
A number of years in the past, this system shifted from a cost-based method, much like Medicare’s, to 1 that pays per affected person go to. He mentioned a rural hospital has to employees its ER each night time with at the least a health care provider, a nurse, and X-ray and laboratory technicians.
“In case you’re paid on an encounter and you’ve got very low volumes, you possibly can’t cowl your prices,” he mentioned. “Some nights, you would possibly get just one or two sufferers.”
Hospitals additionally wrestle to recruit employees to rural areas and sometimes should pay greater salaries than they will afford. Once they can’t recruit, they have to pay even greater wages for non permanent journey nurses or docs. And the shift to an encounter-based system, Morasko mentioned, additionally sophisticated coding for billing , resulting in difficulties in hiring competent billing employees.
On high of that, inflation has meant hospitals pay extra for items and companies, mentioned Mills, from the state’s rural well being middle.
“Crucial entry hospitals and rural well being clinics have been established to offer care, to not be a moneymaker in the neighborhood,” she mentioned.
Even when rural hospitals handle to remain open, their monetary weak spot can have an effect on sufferers in different methods. Chartis discovered the variety of rural hospitals eliminating obstetrics rose from 198 in 2019 to 217 final 12 months, and the quantity now not providing chemotherapy grew from 311 to 353.
“These have been two we have been in a position to monitor with massive knowledge units, however it’s throughout the board,” Topchik mentioned. “You don’t have to shut to be weak.”
Again in Leadville, Gardner mentioned monetary lifelines thrown to the hospital have stabilized its monetary scenario for now, and he doesn’t anticipate needing to ask the county or state for extra money.
“It provides us the cushion that we have to repair all the opposite issues,” he mentioned. “It’s not excellent, however I see gentle on the finish of the tunnel.”
KHN (Kaiser Well being Information) is a nationwide newsroom that produces in-depth journalism about well being points. Along with Coverage Evaluation and Polling, KHN is likely one of the three main working applications at KFF (Kaiser Household Basis). KFF is an endowed nonprofit group offering data on well being points to the nation.
USE OUR CONTENT
This story will be republished free of charge (particulars).
Leave a Reply