Economy taking toll on Rangely District Hospital

RANGELY I Cutting staff hours, leaving vacant positions unfilled and marketing long-term care and assisted living options are among the steps Rangely District Hospital is taking to fight a recession that feasibility studies predicted would be over by now, Chief Executive Officer Nick Goshe said last week.
With the exception of long-term care, first-quarter hospital numbers are down across the board, from clinic visits to admissions to out-patient procedures. Goshe said the statistics are the lowest the hospital has seen in years.
“The volume in the last three years has been steadily falling,” Goshe said. “Several things account for that. The (Blue Mountain Energy) mine has a $6,000 deductible. Lots of businesses’ co-pays have doubled in the last two years. We’re in the same boat. We spend 10 percent of our budget to cover our employees …It’s a reflection of what’s going on in the community.”
What’s going on, Goshe said, are anti-energy measures by state and federal governments that have taken their toll on the lifeblood industries of the Western Slope, which, in turn, affect those industries’ support services. Another factor is the uncertainty of how President Barack Obama’s Affordable Healthcare Act will impact medical care.
“When the energy industries are hurting, we get less money for operations and fewer of their people seek medical care,” Goshe said. “With Obamacare, there’s an assault on healthcare, too. The government says healthcare is too expensive, but the things they’re doing to fix it – I’m not sure it’s going to fix it. It may make things worse.”
That some residents choose to go elsewhere for services RDH provides is also on Goshe’s radar, although he said measures like external reviews of doctors’ charts and the CEO responding to patient complaints are in place to provide accountability. Keeping the same doctors employed over time and bringing a retail pharmacy to Rangely are other ways the hospital has tried to meet community needs, he said.
To address the drops in volume, Rangely District Hospital has cut staff hours for full- and part-time employees in nursing, the clinic and laboratory, radiology and billing departments, among others. Two nurses, rather than three, now cover shifts in the acute-, ER- and long-term care wings since the hospital is not renewing its contract for a full-time traveling nurse.
The hospital will also leave vacant the position left open by physician assistant Diana Wright.
“We’re currently averaging 23 clinic visits and four ERs (emergency room visits) per day,” Goshe said. “Of the ER, only 20 percent are critical. We’re talking a very small volume of patients right now.
“I’m trying not to cause panic, but whenever you say we need to cut a bit, it causes some panic,” he said. “I’ve been meeting with staff and departments, letting them know, ‘Hey, guys, we’ve been in a four-year recession and don’t see any signs we’re coming out of it this year. We have to make sure we’re taking some steps.’…We didn’t cut anybody from full-time, we didn’t lay people off or move anybody from part-time to below part-time.”
Goshe said some departments have come up with their own strategies for cutting hours, like moving from four 10-hour shifts to three 12-hour days.
The hospital is also switching to a higher insurance plan and actively promoting what is currently its biggest draw: long-term care and assisted-living facilities. In addition to the 10 full beds in the long-term care unit, half of the acute-care beds have been opened to long-term care patients and Eagle Crest Assisted Living only has two rooms available right now.
That a 73,000-square-foot hospital building has opened in the midst of falling numbers might seem frightening at best, devastating at worst.
However, because the $38.7 million bond issue approved by taxpayers in 2010 fully funded the new building and equipment, Goshe said there is no correlation between falling revenue and building expenditures. Rather, the new facility may have averted larger financial problems in the future, he said.
“The old building was completely depreciated,” Goshe said. “The new building has a new depreciation schedule, which means we’re getting paid around $1.5 million from Medicare this year. In the next five to 10 years, that means we have more money for operating, which helps us in a downturn.”
Goshe also said that, without the new facility, the hospital’s statistics over the last five quarters would have been “disastrous” because a life-safety state inspection conducted in November would likely have required the old building’s firewall to be brought up to code. That cost, in conjunction with a failed hospital vote and falling volume, would have left the hospital with no way to pay for the upgrades, Goshe said.
Why wasn’t something done sooner?
“It was in the back of our minds, but we were under pretty big scrutiny by bigger banks,” Goshe said. “We’d had a feasibility study done by (national accounting firm) Eide Bailly and had also done a Moody’s credit review for the hospital district.”
“What all of them saw was very positive,” he said. “The feasibility study saw us doing very well with the new Medicare pay structure, even if our stats were what they were in 2010.”
Once the hospital building was under way, putting Electronic Medical Records (EMR) into place and getting ready for the move—widely viewed within the healthcare industry as the two most difficult tasks a hospital can face—put all other considerations on hold.
“We couldn’t cut before now,” Goshe said. “It took a quarter to figure out where we really were. The feasibility studies showed us coming out of the recession by now, which corresponded with opening our doors.”
Debbie Johns, owner of Monument Medical Consultants, a healthcare billing service in Grand Junction, said she has also seen the decline of oil and gas companies affect healthcare across Colorado.
“We’re seeing fewer employers able to provide insurance for their employees or employees being dropped to part-time status so insurance goes away,” she said. “A lot of times, we observe that our populations are more acutely ill before they seek medical care because of the cost. In the pre-authorization world, we definitely see higher deductibles and people without insurance; the impact of the oil and gas departure is not just limited to Rangely.”
Johns said that shifts to health care exchanges and changing Medicare cost structures help create an additional “juggling act” that is difficult for companies to handle.
But as the hospital looks ahead, Goshe sees room for concern and hope. Maintaining a federally mandated Electronic Medical Records system at an estimated cost of $500,000 per year is one challenge. But barring a virtual shutdown of the oil and gas industries, Goshe said the hospital will continue to be a critical part of the community’s maintenance and growth.
“Based on what we’ve done right now, we’re sustainable into the distant future,” Goshe said. “It’s hard to say what will happen with legislative decisions. But with what we know now and our current volumes, we are sustainable.
“I think every business has to look at expenses and revenues and adjust not just annually but quarterly, maybe even quicker,” he said. “We had a lot going on with EMR and moving in. Now we’re adjusting to the realities of the economy.”