Doctor rich, patient poor, PMC dilemma PDF Print E-mail
Thursday, 12 October 2006 05:25
In the same boat as other rural hospitals, the Pondera Medical Center is experiencing a disturbing trend; lower admissions, which means lower revenues.
Jim Christensen, CEO/PMC, says “I am of the opinion that we are now seeing a trend, or at least a well-defined one year cycle, of reduced patient utilization at the PMC.”
And recent hospital statistical reports seem to bear that out. During the same period last year for example, the net gain for the PMC was $154,688. For the year to date, 2006, the net loss is $479,432.
With four physicians, Doctors Shawn Nesbo, Jenifer Dodge, Peter Barran and Jay Taylor, the PMC is doctor rich and patient poor.
While the clinic is posting positive numbers, nearly all the other departments (X-ray, lab, RT, OT, PT, surgery, cardiac rehab, and home health) are either well below average or well below budgeted numbers for the year to date.
The Extended Care Unit, usually at 97 to 100 percent occupancy in the past has dropped to a fluctuating 89-92 percent. Currently there are 53 residents in the ECU, with 59 beds available.
Christensen notes the industry as a whole has seen continuously decreasing numbers of inpatients and volume. “As with everything, the rural areas tend to be the very last to see the full impact of these trends. While the PMC is seeing fewer patients (in-patients) our urban friends (Benefis-Great Falls) are seeing the start of the next piloted trend, the baby boomer onslaught, where they are finding a difficult time meeting the needs of increased use and demand.”

And, the hospital’s monthly statistical report only backs that up. The first number after the department is for in-patient use Year to Date 2005, the second is for Year to Date 2006. Admissions-198-166; New born 62-50; In-patient surgical services 30-7; in-patient operating minutes 2,016-364; ER out patient visits 1,949-1,617; X-ray 210-122; Cardiac Rehab 1,302-134; OT/ip 746-452; PT/ip 677-592; Home Health Service visits 289-141, and the beat goes on.
Basically there are three reasons for the downward spiral. 1. Administrations over-optimism in the creation of the FY06 budget. 2. A  very healthy community and 3. The reimbursement regulation affecting accessibility and payment for services along with a portion of the population opting out or unable to afford insurance(s) well in excess of the government norms (16 percent national versus 20-22 percent in Montana).
Asked if this couldn’t have been budgeted for, Christensen explained, “We carefully reviewed statistics from the past five years, reviewed total averages, factored in a number of considerations, applied current market conditions, and reviewed variable ‘what if’ scenarios.”  From that, the overall picture indicated some degree of growth, so when everything got into the elevator and pushed the basement button, “they not only decline in light of the annual budget, they decline in the face of logic and history.”
Again, with a full slate of family practice physicians, employed by the PMC, it would indicate more patient volume that in turn should show increased utilization of nearly all services. But the cross-utilization has simply not occurred.
This raises a number of questions; is there overall improved health? Is there an attrition of WW II patients? Is it due to the PMC and other wellness programs? A tight rural economy? Better hand washing? More and more uninsured patients?
Christensen says, “Surely all are factors and each has some degree of reality, but they still do not add up to or explain the patient loss, particularly since the downward trend since last October (2006).”
As if the loss of revenue is not enough, the PMC has nearly $500,000 of past due payables, a large part of which are due to Kalispell (lab), Great Falls (CRNA) and Helena for workers comp.
“While it is not an acceptable business practice, it is fairly common in healthcare circles to have such debt floating with little or no assurance of ultimate payment,” Christensen said. And while rural healthcare is used to this, the PMC has not been down this road for over five years.
In order to reduce expenses, a number of items have taken place and that includes no reimbursed travel, no meetings, no capital items purchased, executive payroll reduced five percent along with reducing inventory and subscriptions, a freeze on wages and hiring, and no external education.
“We had hoped this down turn in volume was a fluke or temporary anomaly, but the reality is that we are seeing far fewer patients in virtually all areas, with a few exceptions,” Christensen said.
Nevertheless, more steps may need to be addressed.
This next stage has been referred to as downsizing or laying off, but Christensen prefers saying, “I am more confident in our efforts to ‘right size’ the PMC.”
During busy years, most businesses will tend to over employ, just as the obverse is true in lean years.
“Our efforts to date have not met the declining income losses and the next step is aimed at paring staff to a size that reflects our patient volumes” he said, adding, “When staff exceed(s) patients on a routine basis, it is time to adjust staffing.”
He said preparations are being made to do that in every department. PMC will be relieving excess staff where necessary or merging one position or more others for more flexible staffing which will reflect the real patient care census in every area.
Christensen said, “My estimates are that our efforts will yield a reduction of about 14 positions (saving about $15,000 per pay period) while still ensuring  for the care of our patients.”
All but three of the 14 positions have now been addressed through a blending of existing positions and attrition.
Future adjustments are possible through elimination of duplicate or extended  shift staffing and adjustments to schedules in various departments.
Christensen believes that patients and residents will not be impacted by these ‘rightsizing’ efforts as, “We closely align staffing to better meet patient/resident demand times throughout the day.”
Should volumes improve by November at the hospital, further reductions will not be needed.
However, if volumes remain low, “We have no choice but to continue evaluating our staffing and service size followed by service capability,” he said.
The need to make such adjustments is not new to rural healthcare, nor is tightening the cash flow.
The PMC’s current situation is comparable to similar years when expected patient demands were mismatched.
The only difference is the current decrease has been sustained for longer than an acceptable period.
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