Rural Hospitals are in Trouble Who will rescue them?

By Edward M, Neville

A dying bread

Before America became such a technological wonder, it used to be the Wild West. One would think that times have changed and that there isn’t a place left in America where Taxi’s, buses, and trains don’t exist, and where it takes a three hour drive through long and lonely roads to get to a town in where a small mall, or a larger variety of restaurants might exist.

The truth is; there are over 1,800 towns in America with no movie theaters, large shopping malls, or the other luxuries that we all take for granted from living in, or within one hour of a large city.

Why is this important?

Because in the 1940’s, the US Government established RURAL HOSPITALS, to care for the citizens of those type of towns; each town consisting on average, of about 2,000 residents and surrounding country residents of between 5,000 and 10,000.

These people are critical to our history, they are thriving Organic Farms and farmers, and they are the root of where we as settlers came from, and it’s still who we are deep down inside.

Many will say that this way of life is over, and that we as a people don’t relate to them anymore.

I say that you are wrong and I can prove it.

It’s said that Music moves us, and connects us. National surveys show that approximately 60% of the US enjoys a country song once in a while and that 25% of all Americans listen only to country music.

It’s simple, we still relate to hard work, determination, relationships, & to both God and Country.

We began a path in this county towards chemically altered foods, and then (GMO) - genetically modified foods, and large companies breading and growing our children’s food by large companies where money ruled over human food consumption safety.

Americans and people all over the world are now demanding a movement back toward organic, foods. These foods are now being produced by those farmers in these last surviving towns.

With all the hype from Government to provide Health Care to all Americans, there are sectors of people, and Medical facilities that aren’t part of the governments’ plan any more.

Here’s why.

The USA, as of the writing of this article, is over $18 Trillion Dollars in debt, and we can’t provide free Health Care to all people, without:

• Increasing the national debt further,
• Reducing medical and processing costs, shutting down hospitals, or
• Increasing taxation through some open and or hidden tax manner

With the Government wanting and feeling the need to control more and more, the laws that are in place now and those coming down the road; are forcing all hospitals and including non-profit Rural Hospitals to participate in Government and State submissions of an enormous amount of patient data.

Because the laws are so new, there is little if any true guidance from the government on how to submit this type of data.

Remember, we are talking about non-profit RURAL HOSPITALS. Because these locations are so remote, it’s difficult for them to attract a large pool of expert applicants that can help with State, Federal and National Hospital Data submissions.

And, because they are non-profit Hospitals, their salaries for high-level experts are normally 50% less than what an expert employee would be able to acquire from a Hospital near a larger city.

The process, in a very simplistic view goes something like this:

• Government places mandates on all hospitals to submit and track patient data
• State follows suite and places a number of similar mandates on all Hospitals
• Rural Hospitals (Like all others), must update all computers and EMR software
• EMR Software over 10 years is roughly $4 million dollars with support costs
• Technology, Hardware, and IT Staff can cost another $2.5 Million over the same 10 years
• Small EMR Software vendors can’t always comply with Government Mandates
• With failed (Meaningful Use) government data submission; yearly fines can rise to $750k
• A Rural Hospital falls further behind, and no one comes to their rescue
• The town suffers the loss of a major employer and a much needed medical facility
• The ripple effect hurts many down its path

Is this really happening? Has it happened already, and what is the trend?

In the past 5 years, over 45 RURAL Hospitals with nearly 2,000 hospital beds have already closed and decimated their community and towns. Often times forcing town residents to drive over three hours one way, for what could be a life threatening injury or issue – all in where minutes could determine whether the person lives or dies.

The recent Affordable Care Act meant to help many, is actually accelerating the death of these much needed facilities. A one size fits all model of mandates, simply doesn't work for smaller RURAL hospitals.

When the government expects a certain number of patient visits, or a certain level of revenue; or when the government expects to see an enormous amount of patient data to be:

• Collected
• Verified
• Technologically connected with other departments
• and submitted within days, or months

They forget that small hospitals in RURAL towns of under 2,000 residents can’t truly have high- revenue, or a large number of patient visits per month, or that the hospitals are staffed with the proper expertise to help them process all of that data in the time-frame being asked for, by the government agency.

Or even that these small hospitals have a solid enough Electronic Medical Records Software vendor, able to deliver the proper technology.

What the lawmakers, are thinking

First, let’s hear a few comments that have leaked out from Open Microphones, and off the cuff remarks by those people in places that could influence tough medical mandates:

• “The rural, hospital is going the way of the dinosaur”
• “These hospitals are so poorly managed that they don’t deserve to stay open”
• “Because we fund them, they are overstaffed and spend frivolously”
• “Rural hospitals with these many employees only care for 10 patients a day at best”
• “These hospitals are not held accountable”
• “These small towns need good City Doctors that are used to seeing 40 patients a day”
• “They lack the skilled workers to stay open”
• “10 years at best; only large streamlined hospitals and software providers will survive”
• “The sad truth is, 75% of Rural Hospitals will not meet required mandates by 2018”

How to fix the problem

Fixing a problem when the cards are rigged against you; is not easy. But is it possible?

Well, the answer is yes.

First of all, a Rural Hospital needs to act fast, not in many months, or years, but rather in days.

The hospital can do this on its own; however the CEO’s, CFO’s, CNO’s, and CIO’s, need to be of one mind, and make changes at lightning speed.

These executives and their Board of Directors need to embrace FEAR, and use it as a motivational factor. Time is not on their side.

For each hospital department a number of areas need to be monitored, and quickly improved. Those areas are:

• Doctors: Are they seeing enough patients, and if not, the ratio of doctors needs to be reduced. A doctor of a RURAL Hospital should be seeing at a minimum 50% of the amount of patients that a sole CITY Practitioner is seeing, and that number can be as high as 40 patients per day.

• Nurses: Often times, RURAL hospitals are overstaffed, because they compare themselves to other rural hospitals, instead of to profitable ones. A visit to a number of many rural hospitals and one sees a staff of 8 to 10 employees in an emergency room, caring for 1 patient. The normal response when asked about this ratio is: “We need enough staff for when an emergency happens”. Here’s an area that needs further creative thinking, on how to bring-in employees, only when they are needed, and pay them only when they are working.

• Overage in Technology: Go to a large profitable hospital, and you see large $3k to $5k printers placed strategically in the hospital where 10 to 20 employees can access the print job. Yet, a tour of random rural hospitals and one quickly notices that almost every single employee has a printer, and when asked, they state: “I don’t want to walk down the hall to get a print job”. There are key employees and departments that need easy access to printers; however a more efficient plan needs to be created in order to reduce costs. This applies to all technology throughout.

• Old Technology: This goes without mention. Computers are running 7 year old operating systems, equipment and computer software programs are not placed on a renewable cycle 3 to 5 year cycle plan. Placing the right amount of effort on the right technology plan, is as important as hiring the right person for the job. Many locations go for the cheapest EMR Software vendor, and don’t think of why these companies are selling software so cheap. Many of these vendors don’t have a large enough infrastructure, funds in reserve and or enough employees to support 1 RURAL hospital, let alone 500 hospitals. Analysis has shown that the 10 year cost of a “Cheap” EMR software vendor, equates to the identical cost of a large established EMR vendor like:

• EPIC
• CERNER
• Allscripts, or
• {Forgive the exclusion of other large and established EMR vendors}

Smaller vendors often times will nickel and dime a small hospital to death. And because they lack a large enough team – their software is not usually ready to aid a hospital in PASSING a governmental mandated submission, and failure to comply to these government mandates is an extremely costly mistake.

• Security: What security? Honestly, executives at all hospitals, especially the rural hospitals that we are focusing on, need to address security. Are executive and other employee work areas clean? Not just clean, but ultra clean and are documents locked up? During a number of random security audits, 78% of rural hospitals were found to have
  • Executives not in their offices,
  • Critical employee offices and their doors unlocked
  • Extremely sensitive documents available for any passer bye to acquire
  • Hospitals had no security guards
  • No greeters to ensure that patients were not going into “employee only areas”
  • Computer screens un-locked for any wondering eye to glimpse a patients file

Talking about HIPAA and creating policies on HIPAA, and or firing employees for a single HIPAA violation does not warrant good security. It must be wide spread for all employees, starting with the executives.

• Employee management: There’s a new book, which I won’t mention, that talks about taking your top, and middle performers and praising them. And, taking what you feel are your low performers and isolating them, and degrading them in order to force them to quite.

This is a terrible plan, and one in where it’s very risky. First of all, poor performers need to be praised for the areas in where they shine, and told what areas they need to fix and how. Degrading a human being; perhaps one that’s burned out over the years, and isolating them can create a potentially huge risk.

HR departments at small rural hospitals aren’t needed full time, and survey after survey show that over 82% of them only work 28% of the time. HR employees are better used in multiple areas, and or part time. If an HR employee is fully utilized in a rural hospital, and the hospital is constantly hiring employees – something is wrong. If HR is terminating employees every month, then again, something is wrong. Expanding an HR employees’ role to also police sensitive document security, could be a wise move.

• Finances and Payroll: A CFO is always a wise choice to have in-house. There are billers, coders, and others in the financial area than need to be managed and that need a good CFO to guide them. One area that needs to be considered by the CEO, is in hiring an outside firm to handle all Payroll services. Reducing this burden and paying it as a service has grown with small, medium and even very large companies. There are drawbacks on both sides, but often times the better choice is to outsource payroll, and it’s just another one of the many moving parts to be considered.
• Training: As a consultant, one of the first things we look at is the level of efficiencies or lack thereof, in any organization. Whether it’s with internal IT services and how often IT is contacted to resolve problems, and or if it’s failed Meaningful Use governmental attestation submission reports; a lack of training is usually the first barrier to poor metrics. When employees aren’t adequately trained; when they don’t have resources to back them up and or guide them, the employees feel overwhelmed and often panic. The resulting panic, forces a “Fight or Flight Response” and they avoid doing the work that needs to be done. Creating a simple set of “Quick Fact Sheets” and an “Emergency Training Ambassador” often removes the fear, and builds confidence that eventually spills over into other employees.

Consequences of Failure:

• Failed Meaningful Use:
  • Fines: Average $10k to $20k per month, plus 1% to 2% of all patient payments
  • Lost Benefits: Attestation Incentives ranging $24,000 to $44,000 per submission
  • * Numerous submissions can occur per year
  • Total Yearly Loss: Between $200k to $750k depending on (fine% Times revenue)
• Lack of Training:
  • Frustration: Increased stress on support-staff and employees, and patients
  • Higher Turn-Over: Increases work-loads and increases employee turn-over
  • Poor Marketing: Increases organic negative marketing, reducing revenue
  • Increased technical assets: Low training, is compensated with costly technology
  • Total Yearly Loss: Significantly compounded to cause closure of your facility

There are many other areas that need to be addressed. The wisest thing that a rural hospital can do is to contract either a Turn-Around specialist, and or a firm that focuses on all aspects of a hospital; and doing exactly what they say. Hiring a consultant and not following their advice is a waste of money. If you are not willing to follow; then don’t hire them.

One tip: There are a number of Medical Management companies focused on helping these folks; however, be weary of those that charge a large monthly recurring fee, month after month, and year after year; for services that are only rendered when needed.

An honest medical management company will have some areas that are recurring, but should have others that are not.

Monthly charged services can be:

• IT Management, (Normally a daily management issue)
• Meaningful Use Management (Normally on-going, and staying on-top of legislation)
• Marketing Management (Initiating, tracking, and managing: Fee goes down after setup)

However services such as the following should only be charged as needed:

• Physician and employee recruitment, filtering & placement (10% to 20% of salary)
• Interim positions (As needed: Normally 20% above the interims temporary salary)
• Negotiation of assets (Can be as high as 50% of the saved funds, and As needed)
• Security Audits (As needed)
• Standards: Best Practices and Process Enhancements (Twice a year, or as needed)
• Clinical Work Flow: Process improvements (One week per quarter – more or less)
• Full HR Management: Alerting IT of new & terminated employees
• Financial Audits: Financial performance and inventory optimization (As needed)
• EMR Software Vendor 3rd party comparison: helping filter out weak vendors

Any business that charges you for services that aren’t visibly seen by your employees shouldn’t be paid for by your hospital. A simple test is to ask 10% of your hospital the following question: “What do you think company XYZ does for us?” If they don’t know, then either your executive staff hasn’t communicated the services being provided clearly, or there aren’t any visible services being rendered. If that’s the case, I’d suggest looking around for a more honest provider.

Another tale sign is this. Have you been under Hospital Management?

For how many years has your hospital been under a 3rd party management firm?

If your hospital isn’t running perfectly after 3 to 5 years, immediately terminate the partnership. You have a duty to your employees, and above all, to your patients and the community.

You don’t have another 3 to 5 years to save your hospital; don’t waste it on bad partners.

Remember, a good management company will transform your hospital in 3 to 5 years, and save you from going the way of the dinosaurs. A great management company and or consultant will transform your hospital in approximately two years, with metrics to prove their performance.

For a free talk, feel free to reach out to me. If I can’t help you, I’ll refer you to someone that “honestly can”.