Scotland Health Care System officials forecasted dramatic changes as the hospital and its affiliates adapt to a new health care environment.
Some 90 people attended the system’s annual Community Meeting Tuesday night, where the system’s CEO, board chair, treasurer, and chief of staff reported on the achievements of 2012 and the challenges ahead.
The cost of care
System treasurer Jane Rogers reported that the system’s operating margin decreased by 3.8 percent from 2011 to -2.2 percent, a trend she said could not continue.
“For every $100 in net operating revenue we generate, $2.20 is going against our reserves to run operations,” said Rogers. “The decline in margin over the past year reflects the decrease in reimbursement that the system is receiving from its major payer sources, such as Medicare, Medicaid, and managed care. These reductions are expected to continue in the future as we embark on health care reform. This is not sustainable.”
In 2012, care for 46 percent of patients was paid for by Medicare, with 21 percent paid for by Medicaid, 22 percent by commercial insurers, and 10 percent of patients in the category of uninsured.
That 10 percent of patients responsible for their own health care costs represents a two percent increase from 2011. Health care costs for that group were discounted by $2.5 million last year.
Overall, the health care system contributed $18 million in “community benefit,” including discounts to self-pay patients, $2.9 million in charity care, $5.2 million in “bad debts” from patients unable to pay and unwilling to apply for discounts or charity, and a combined Medicaid and Medicare shortfall of $7.8 million. These numbers are unlikely to improve in the near future.
“We know with assurance that we will get less money for those 65 percent of our patients that come to us that rely on the federal government,” said system CEO Greg Wood. “Our economy in the region is slowly improving, but we know that the 10 percent of folks that don’t have any money and don’t pay us anything will not diminish in the future.”
Due to investment payoffs, the system’s overall margin was a positive 2.8 percent.
Though 2012 marked a decrease in the average wait and discharge times in the Scotland Memorial Hospital emergency room, a 10 percent increase in patients has stretched the limits of the current facility, constructed in 2007.
“We were seeing 15,000 patients a year, so this community came together and we raised $3 million to build a new emergency room,” said Nancy Walker, chair of the Scotland Health Care System board of directors. “We built it for 35,000 patients, and we thought it would last us 15 or 20 years. We were wrong; we now have 45,000 patients. We have outgrown that emergency room by leaps and bounds and we are beginning now to figure out how we can add some space.”
Scotland Memorial Hospital and its laboratory passed Joint Commission and College of American Pathologists inspections during the year.
“Joint Commission surveys every aspect of the hospital from the cleanliness of the corners in the halls to the surgical records and is just a complete once-over,” Walker said. “We passed this with no concerns and we were able to get a three-year accreditation. That is incredibly important because this is the gold standard for hospitals, and once we have that, Medicare and Medicaid accept that and that means that we do not have to worry about them also coming to review us.”
The system also implemented electronic medical records linking the hospital with its doctors’ offices and clinics.
“Here we’re very much ahead of the curve because Congress mandated that this be in affect by 2014, and we started this in 2012,” said Chief of Staff Dr. Donna Richardson.
Richardson also reported an increase in patient satisfaction in 2012, with 83 percent of patients rating their experience as “excellent,” up from 74 percent in 2011.
“You can grade us as poor, fair, good, or excellent, and we only count ourselves as doing a good job if you rate us at the top,” Richardson said.
“We’ve grown in several different ways this last year: we successfully opened an offsite endoscopy center, our cardiac catheterization lab volumes exceeded our projections,” Richardson added. “The Scotland Cancer Treatment Center is now a Duke teaching site, so oncology fellows from Duke, these are doctors in their very last years of training, come here to work with Dr. [Kelvin] Raybon.”
Also, 11 new physicians joined the staff at the hospital and practices throughout Scotland, Robeson, and Marlboro counties: gastroenterologist Sebastian Abadie, radiologist Onyinyechi Agbara, physiatrist Ehsan Alam, radiologist Gil Brock, podiatrist Millicent Brown, internal Raymanda El Khoury, hospitalist Michael Gilliam, medical oncologist Kathleen Lambert, obstetrician and gynecologist Linda McClain, anesthesiologist Utpal Patel, and general surgeon Leslie Salloum. That staff is now comprised of some 70 active physicians, 81 affiliated physicians, and 39 nurse practitioners, physician’s assistants, and nurse midwives.
The way forward
Wood called for a “radical redesign” of Scotland Health Care System’s operations in order to continue to fulfill its mission in the face of a national health care overhaul.
“The challenges out there aren’t going to change much as the Patient Protection and Affordable Care Act, Obamacare, continues to be implemented,” he said. “It started with that multimillion-dollar information system throughout our hospital and our practices that absolutely has made us less efficient than we used to be. In the long run it will make us more efficient, in the long run it’s going to be safer, but in the short term it’s extremely expensive and makes us less efficient.”
He also said that remaining the health care provider of choice for residents of Scotland and surrounding counties would be paramount to the system’s continued operations, as will streamlining the manifold capabilities of the hospital and its affiliates.
“How do we take advantage of the Scotland Physicians Network, Hospice of Scotland County, the Edwin Morgan Center, Scotland Memorial Hospital, our new IT systems, our partners at Healthkeepers and Century Care to get each patient the right care at the right place,” Wood asked. “How do we create that wow experience everywhere and every time so that we will remain the chosen provider? If we do not do that, we will not grow.”
Hospital policies going forward will likely be made with a view to eliminating waste and cutting down on bad debts.
“We are community-owned, so how we use our resources is a stewardship obligation,” said Wood. “We’ve got to capture all dollars owed to us; it’s about charges, it’s about coding, it’s about collections. We have to bend the cost curve as they like to say in Washington. It has to do with figuring out a better way, a more efficient way to use our labor, how to evaluate the services we provide in the best way possible.”