Hospital feels first effects of healthcare reform

McCOOK, Nebraska -- The "balanced scorecard" that Community Hospital of McCook, Nebraska, reviews each quarter to keep itself on track as a successful organization is experiencing a slight "imbalance," a tick that the hospital's CEO attributes to the early impact of the federal government's healthcare reform.

"Due to healthcare reform, insurance premium rates are increasing, and we're not seeing as many commercial insurance patients," Jim Ulrich, president and chief executive officer of Community Hospital, said following a board of directors meeting Feb. 16. These circumstances are affecting the "Finance" seed of the hospital's four-pronged balanced scorecard, Ulrich said.

"We've seen a nice improvement in the score of the 'People' area," he said, meaning that the hospital experiences higher levels of employee satisfaction and a low turn-over rate. The seeds for "Service" and "Quality" have remained fairly consistent, Ulrich said, "but 'Finance' is down ... due primarily to lower-than-budgeted operating margins."

Ulrich said Community Hospital is seeing patients with Medicare insurance as anticipated, "but not commercial insurance patients, because of insurance premium rate increases."

Because of those increases, Ulrich said, employers are faced with several options to lesson rate increases:

* Pass the increases on to employees;

* Increase deductibles; or

* Peel back benefits.

"This dynamic has resulted in a decrease in the amounts of services typically provided to patients with commercial insurance, "Ulrich said.

Another dynamic affecting the "finance" seed, Ulrich said, is the insurance industry's move to require pre-authorization of more services, especially radiology and imaging services. "This can indeed slow down that process," Ulrich said.

"It's proven we're not doing unnecessary tests," he said. "There just tends to be more questioning of them."

Ulrich pointed out, "Community Hospital is doing well financially. We're just not meeting our goals as well as we would like."

Ulrich said he continues to be involved in legislation at the state and national levels, in the Nebraska Legislature and in the halls of Congress, to protect and preserve access to healthcare in rural America.

In Nebraska, Gov. Heineman's budget proposes a 5 percent cut in Medicare reimbursement to hospitals. Although family medicine doctors are exempt from that cut, Ulrich said, reduced reimbursement to Community Hospital could impact the hospital by slightly less than $100,000 a year.

Ulrich said he continues to interact with the Nebraska Legislature, as the healthcare industry supports a new cigarette tax that could offset the Governor's proposed Medicaid cut to help fund the state's budget shortfall. "The Governor does not want a new tax, but," Ulrich said, "this is a new tax the health industry could stand behind."

Ulrich said Community Hospital has hired Brian Smith, a new CRNA -- certified registered nurse anesthetist -- who will start in May. The hospital continues to recruit to fill other positions in other areas of the hospital, Ulrich said.

Community Hospital staff and patients have been in the new patient wing -- finished as "Phase 1" of the hospital's $29 million expansion and renovation project -- since January 29. "It's been very busy on the floor," Ulrich said. "There have been lots of new babies. We've really put the LDR (Labor-Delivery Room) to test already," he chuckled.

Personnel have discovered some "kinks" in the new building, as is normal for any new building, although "nothing patient-oriented," Ulrich said.

The emergency room entrance is open again in its original location, although the door has been moved from the north to the east. While construction workers are continuing some finish work on the exterior, "it's not a construction zone anymore," Ulrich said.

Between Phase 1 and Phase 2, specialists are removing and disposing of the asbestos in the ceiling and floor tiles of the former patient pods. "This a 35-day process," Ulrich said, a process that is air-tight, sealed and separate from occupied areas of the hospital.

Starting in mid-April or early May, the pods will be torn down, the ground leveled and footings poured for Phase 2 -- a new surgery wing, outpatient spaces for observation rooms and patients receiving pain medications and chemotherapy, a pharmacy area, a community and staff conference room and healing garden.

Phase 2 is projected to be finished in April/May 2012.

The expansion/renovation project is planned to continue into a "Phase 2B," Ulrich said, pending board approval of the remodeling of the existing surgical wing into business offices, health information management offices, and respiratory therapy and radiology facilities.