Leader Blues

Wednesday, December 20, 2006

TOP STORY >>Rebsamen examines its future role

By GARRICK FELDMAN
Leader editor and publisher

Kurt Meyer, chief executive officer of Rebsamen Medical Center in Jacksonville, was looking at a newspaper article Monday morning about another hospital expansion, this one in Maumelle. “It takes patients away from our area,” Meyer said.
Meyer has been at Reb-samen for five years. The city-owned facility, which is a nonprofit and is losing money, has watched investor-owned hospitals going up in the area which cater to patients who can afford specialized care or who have insurance that pays most of their bills.

Rebsamen cannot collect almost half the amount it bills for services and writes off millions of dollars every year for charity care that other hospitals don’t bother to offer the needy. Rebsamen cannot turn anyone away, while for-profit hospitals do that all the time, he said. “We’re getting left with patients who are not wanted in investor-owned hospitals,” Myers complained in an interview. “They can pick and choose.”

Rebsamen is undergoing “a strategic review” as it seeks to find its role in an increasingly competitive environment where the U.S. government cuts back on Medicare, Medicaid and Tri-Care payments, which represent the bulk of Rebsamen’s revenue: The elderly, the needy and the military. Middle-class patients who can pay more out-of-pocket expenses are often grabbed by flashier new hospitals owned by doctors and other investors who offer highly profitable surgeries and more specialized care.

Meyer said the hospital’s board of directors next year will make recommendations to attract more specialists to Rebsamen and offer more services and even consider building a new facility closer to Cabot, whose population, estimated at 22,000, is rapidly catching up with Jacksonville. Lonoke County does not have its own hospital, but Rebsamen considers the northern part of that county part of the market it serves.

Meyer would not be specific but hinted there is land available on the Pulaski-Lonoke county line for a hospital that could attract more patients from the next county, provided more doctors offer more up-to-date services in a modern setting.
Rebsamen is in a 45-year-old building, which needs remodeling or replacing, he said. The board will have to decide what to do, Meyer said. While Arkansas Surgical Hospital in Maumelle will almost double its size, Rebsamen has seen more competition move into North Little Rock and Sherwood.

Baptist has built a modern hospital near McCain Boulevard, with satellite clinics run by doctors with more lucrative deals than what Rebsamen could offer them. St. Vincent North has moved into Sherwood, again offering more up-to-date facilities.
Meyer doesn’t apologize for the equipment Rebsamen offers. In fact, it was the first in the area to install a multi-detectional CAT scanner that does a total body scan in two minutes, he said. “We’re one of the cornerstones of the community,” said Meyer, who added that communities suffer when they lose their hospitals. Rebsamen has 500 employees with an annual payroll of $17 million. It made $1.7 million in im-provements last year.

Meyer works for Quorum Health Resources of Plano, Texas, which has managed Rebsamen, under different names, for 25 years. Rebsamen has 90 beds, of which 60 are occupied on average. Last year, the hospital billed patients and healthcare providers $88,622,000 for services, but collects just $46 million because the government and insurers do not pay what they’re charged. In addition, the hospital this year has written off 7.1 percent of its budget as bad debt. Last year, that figure was 6.8 percent, or about $6 million a year that cannot be collected.

Rebsamen also provides $1.5 million in charity care a year, which investor-owned hospitals don’t offer to the needy.
The hospital lost $803,798 this year and is relying on its reserves for operating revenues. Rebsamen would break even if it collected just 15 percent of its bad debt.

As baby boomers age and prepare for retirement, costs will rise, Meyer predicted. What’s more, insurance companies wait 90 to 120 days to pay the hospital, which hurts cash flow. Rebsamen had 3,622 admissions this fiscal year, slightly down from last year’s 3,665 admissions. It had 57,778 outpatient visits, down considerably from 61,547 last year. Intensive care is down from 734 to 686 this year.

The hospital performed 1,850 surgeries this year, compared with 1,727 last year. Some make money for Rebsamen, while others are performed at a loss because of underpayment from the government and insurers and lack of adequate insurance by patients. Rebsamen’s nerve center is its emergency room, which had 21,147 visitors this year, down significantly from last year's 23,134. Both figures are above the maximum limit set for the emergency room at 20,000 patients a year. The emergency room has 12 beds, far more than many area hospitals, which often keep the size of their emergency rooms at a minimum to reduce the number of walk-in patients who have no insurance.

Many patients have no doctors and use the emergency room for all types of medical treatment, from colds to cuts and bruises. “Emergency-room care is the costliest medical care,” Meyer explained. “They need tests because the doctor doesn’t know you.” “We’re encouraging patients to see primary-care doctors,” he added.

The hospital has thriving geriatric and women’s health services, but, again, Rebsamen doesn’t get reimbursed for all of its expenses, Meyer said. “We’re seeing a surge in women’s health services,” Meyer said. That department is up from 662 patients last year to 680 this year. Geriatric care and rehab are steady at 300 and 200 patients a year respectively.
Meyer said 80 percent of the hospital’s revenue comes from three government programs: Medicare (for the elderly), Medicaid (for the indigent) and Tricare (military and their dependents).

The government has tight controls on reimbursements for those programs, as do insurance companies when hospitals bill them. The government now pays a flat fee for services after federal prosecutors accused hospital chains of overcharging Medicare and Medicaid in the 1990s. Hospital chains were forced to repay billions in overcharges. Meyer said Rebsamen could get tougher on collections — for example, collecting the Medicare deductible of $950 up front. He said the hospital writes off $17,000 to $20,000 a month in Medicare debt it cannot collect.

“Patients will have to pay more up front,” Meyer said. Medicaid pays for hospital stays up to 30 days, regardless of the services needed and the length of stay at the hospital. Bad debts are up, while reimbursements from the government and insurers are down. For example, Rebsamen used to receive a bonus of up to $500,000 a year for taking care of a high number of Medicare patients, but that payment has been discontinued, Meyer said.

“We need to look at strategies,” he continued. “How can we get patients who can pay? We can’t depend on Medicare, Medicaid and Tricare.” Meyer continues to meet with community leaders to spread the word about the hospital and its unmet potential.
“I have a sense of accomplishment when I go home at night,” he said. “We make a difference in people’s lives.” Next: Where Rebsamen is headed.