Becker's Hospital Review

Sign up for the COMPLIMENTARY Becker's Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 I remember having a discussion with one of my CEOs who came from a larger facility, and he was questioning our staffing ratios. Finally, I said to him, look at the place you came from. The low census was 180 [beds filled] and high census was 220. OK, what was our census yesterday? Twenty-two. Last week? Eight. He stopped and said, "OK, McConnell, I see where you're heading with this." Our [filled] bed counts fluctuate too much. The opportunities we have are to become centers of excellence. We have five orthopedic surgeons in our area and at our hospital. That's one of the reasons our revenue is what it is. We've become a center for orthopedic surgery. We tend to get referrals from the Bighorn Basin, which is the northwest section of Wyoming, because of that. There are still opportunities for hospitals to pick up certain specialties and do them very well. Rural hospitals can't compete with the big hospitals, but we can compete with them on how we care for patients. Sometimes, that is missing at a larger facility. We can carve out our niche there. We can offer a lot better bedside care, and our physicians can spend more time with patients — and patients leave feeling they were really tended to quite well. Q: There's never an easy answer to this, otherwise it wouldn't be asked anymore: What are some of the main problems with our healthcare system in your eyes, and what would you do to fix them? PM: My degree in college was in economics, so I look at this from an economic standpoint. The biggest issue that is driving the industry is hospital inflation, or healthcare inflation, compared with the consumer price index. If you pull up the CPI from the U.S. Bureau of Labor, you'll see hospital and healthcare inflation is almost always double what consumer price inflation is. The issue is for most of the hospitals in the country, they are running negative Medicare and Medicaid margins. So they shift that cost to other payors, and our input costs are not going down. When half of your patients do not pay you more — Medicare and Medicaid — you have to double your charge increases to the remaining patients just to cover your increased costs, like wage increases. There was a May 1993 article in the Wall Street Journal. They quoted an economist named James Ukockis and accurately quoted him as saying you can't sufficiently suspend the laws of economics to control both price and quantity at the same time. And when I look at healthcare reform, the goals are high-quality healthcare at a low cost and access for all. Everybody wants that, but the problem is that violates the laws of economics. You can't control price and quantity at the same time. The ACA is a good first step to increase access, but you can't control price and quantity at the same time Q: What advice can you offer to other critical access hospital CFOs? PM: With increasingly more complexity and the evolution of regulations and pressures we have, I don't see how a hospital can survive as a standalone facility. I would strongly encourage other rural hospitals that are having some difficulty to reach out to larger management companies to see if they can support them. I'm employed through Quorum Health Resources, and it would scare me to death to be a CFO in a standalone hospital without the resources that I have. You can still maintain your independence and be autonomous, but we still have the benefits of a large organization to help support us. Also, do everything you can to provide the best patient care. At the end of the day, that will determine your survivability. It's how your patients react to the care you provide. n 41

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