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01/23/2019

Hospital Seeing Rise in Uninsured Patients

Great River Medical Center and SMC Regional Medical Center have seen a significant drop in insured patients, according to Mississippi County Hospital System Chief Executive Officer Chris Raymer.

“The other challenge that we’re facing — we can see the effect of it this year over last year—  is the decline of the insured population with the changes in Medicaid and some of the other legislative changes around insurance,” Raymer told the hospital board on Monday. “We have seen a distinct decline in insured patients. In the Arkansas Works program alone in Arkansas, 18,000 people have lost Medicaid due to the Arkansas Works requirements. Again, different reasons for that, but it affects the hospital and the percentage of Medicaid that we have and it increases our charity care.”

“Last year we had around $8.8 million of uncompensated care — that means care to people that didn’t pay or couldn’t pay,” he continued. “That’s an important number for us. We’ve seen that grow over the last couple of years. Last year it was just right around $8 million, so $800,000 increase just in one year of uncompensated care.”

Raymer noted there are some legislative proposals and court cases that may combat some of that.

“The Arkansas Works program is in suit now; Kentucky got theirs overturned, their work requirements, because they determined it was unconstitutional,” Raymer said. “Arkansas has a similar suit to the Medicaid program, so if that is reversed we will see some of that come back. It just depends on what they do with that case. I don’t know how far along that case is, but it is being heard by the Supreme Court in Arkansas.”

Raymer added insurance companies are adjusting requirements to be an inpatient, which is also affecting the hospital financially.

“They always adjust them to reduce the inpatients because that’s where their biggest expenses are,” Raymer said. “We are not seeing a decrease in volume; we’re seeing a decrease in inpatient admission…This past year we’ve had an increase in volume, but more of that has gone to the outpatient volume as opposed to inpatient. The reimbursement is probably a third of what you get for inpatient.”

According to Chief Financial Officer Randy Nichols, admissions are down about 15 percent.

That statistic is partly to blame for the hospital system losing $2,300,468 in 2018, he said.

“We are still down about 15 percent on admissions and that’s what is reflecting in the financial statements,” Nichols said. “That’s where the losses have come from. Observations are up slightly, but that does not trade even money. A Medicare admission brings you at least $5,000, maybe more. Observation is normally about $1,800, so the trade off is not good at all. The reason that they push you more and more to observation besides that payment is a very subtle thing that happens to you. If you are a Medicare patient and you do not get the three-day stay, but yet you need the skilled care after you stay or rehab you don’t get it because you don’t get the three-day inpatient stay. That is another way that they are controlling what they are paying out. They are taking away people’s healthcare without them really knowing how it happened to them…That’s why United Healthcare made $8 billion. They took it from their patients and the hospital. They used us as a conduit.”

Nichols noted that accounts payable was at 45.4 days in December with a balance of $2,374,000. Accounts receivable was 60 days gross; 39 days net. He added  the 32-week projection on cash flow is 47 days.

“We would like to be up in the 90s,” Nichols said. “That would be a little bit more security for us. The hospital can burn through a lot of cash fast, and 40-50 days isn’t a really good pad.”

He said the next UPL payment in March should put the hospital back up closer to 60 days.

County Judge John Alan Nelson said the hospital system has come a long way in the last decade.

“I know y’all aren’t happy with the financials; I can see that,” Nelson said to the board. “But as far as the public relations I can see it’s turned around 180 degrees just looking at those numbers.”

Nichols responded, “Well, we don’t measure cash in number of hours anymore.”

Nelson remembers well the hospital system being on life support financially 10 years ago.

“I have been bragging on the hospital system and you, (chairman) John (Logan), for doing everything y’all have done, because in 2009 I remember very well what went on in these halls and walking around with 5 gallon buckets,” Nelson said. “And measuring our days out in like 200-plus, so very, very scary times.”

Nichols added, “We were actually bankrupt. Nobody said it.”

Nelson said he remembers getting excited when finding $30,000.

“Now here we are where St. Bernards wants us now, something that I never dreamed we would actually get to,” Nelson said. “I can see we are on our feet. I know we are not where we want to be financially, but we are so much further than we were eight years ago that it’s startling. And I tell that all over the county when I talk about the tax.”

Nelson has been pitching the proposed extension of the hospital tax, which is scheduled to sunset in 2020. If extended to 2051, the tax would be split between the hospital and renovations to the Blytheville and Osceola courthouses. There would be $14 million for Blytheville courthouse improvements and $2 million in work to the Osceola courthouse if voters approve the measures on Feb. 12.

Nelson said extending the hospital tax “will keep us up on our feet.’

“In my research, there’s 25 other hospitals in the state of Arkansas that has revenues from sales tax — Little Rock, Hot Springs, and all over,” the county judge said. “If we are going to be in the game, I think we’re going to have to be there with them and we’re going to have to have a tax to support our revenues in the hospital until things turn around.”

Mississippi County Chief Operating Officer Paul Peiffer  noted the other three hospitals that St. Bernards work with have a higher local support of tax than the local hospital system.

“We don’t want people to think that St. Bernards comes in here and we don’t need a tax,” Peiffer said. “Their other three hospitals average a higher percentage than what we currently have.”

On Nov. 1, MCHS entered into an administrative service agreement with St. Bernards.

In other news, Raymer reported that physician recruitment will be key in the next few years, pointing out some local physicians are discussing retirement, including the hospitalist.

 “Physician recruitment is going to be a big thing for us the next few years,” Raymer said. “We’ve got some physicians that are getting up in age and talking retirement. Dr. Landis has been talking seriously about retiring, so those are challenges we will be facing in the next couple of years.”