hometown health - ga health care fall industry update 2010
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HomeTown Health - Ga Health Care Fall Industry Update 2010. Current Georgia Rural Hospital Scenario. HomeTown Health - Ga Health Care Fall Industry Update 2010. Basis for HomeTown Health Observations Approximately 50 hospital visits since May 1, 2010 - PowerPoint PPT PresentationTRANSCRIPT
HomeTown Health - Ga Health Care Fall Industry Update 2010
Current Georgia Rural Hospital Scenario
HomeTown Health - Ga Health Care Fall Industry Update 2010
Basis for HomeTown Health Observations1) Approximately 50 hospital visits since May 1,
20102) Four 2 day Budget Writer Visits to rural hospitals3) Recent 2-3 Dinner with Senator Goggans, Rep
Channell, Lunch w Sen. Tommie Williams4) Two national conferences5) Study Forecast with Dr Carolyn Bordeaux SBO
HomeTown Health - Ga Health Care Fall Industry Update 2010
19 Hospitals currently in consolidation or major financial distress, i.e. major cuts
HomeTown Health - Ga Health Care Fall Industry Update 2010
Self Pay Higher Insurance Premiums driving industry from providing health care
Obamacare has caused insurance premium increase for small business to be at least 15% up to 35%
Higher deductibles Higher- Co-pays
Essentially have created a class of insured self pays
Consequence Rural Ga Hospital Net Revenues down 5%-15% since Jan1 2010
HomeTown Health - Ga Health Care Fall Industry Update 2010
Payor Mix has amplified Self Pay to an overwhelming component of net revenue
Next slide illustrates
HomeTown Health - Ga Health Care Fall Industry Update 2010
Major Issue
General PPS Hospital Actual Data
Payor% cost reimbursement
% Net Revenue by Payor
Weighted Reimbursement by Payor
Medicare 95.00% 42% 39.90% Medicaid 85.60% 20% 17.12% No Pay 2.00% 13% 0.26%
Commercial 150.00% 25% 37.50%
Weighted Loss 100% 94.78% Net Revenue Cost recovery Loss requiring subsidy $18,000,000 94.78% $ 939,600
Wow! To 18%
HomeTown Health - Ga Health Care Fall Industry Update 2010
Rural PPS Hospitals in Georgia – Status?
HomeTown Health - Ga Health Care Fall Industry Update 2010
Positives for Stand Alone Rural PPS Hospitals Virtually No operational positives except best
administrators in the industry Medicaid Rate Increase designed to offset Provider
Tax – 1st Medicaid Rate Increase since 1998
HomeTown Health - Ga Health Care Fall Industry Update 2010
Negatives for Rural PPS Hospitals Very poor Payor Mix 85.6% of cost paid for Medicaid In counties of highest unemployment Cannot support specialties like surgery due to demographics Encumbered by cost to charge ratio Major subsidy dependent Demographics do not support surgeons or specialist except on part
time basis thus insufficient Commercial
HomeTown Health - Ga Health Care Fall Industry Update 2010
Current Threats Provider Tax-Medicaid Rate Increase disparity from 2008 baseline Provider tax could be reopened leading to an expanded provider tax and loss of CAH
exemption, especially if model revisions are used to reopen the subject Days Cash below 10 days Can’t recruit physicians Macs /Racs Bank covenant violation State Computer Conversion – ACS to HP Medicaid expansion to + 33 million Simply run out of cash Loss of UPL and dilution of Private DSH Gubernatorial Transition – no state budget experience
HomeTown Health - Ga Health Care Fall Industry Update 2010
The Issues - What Are They?
HomeTown Health - Ga Health Care Fall Industry Update 2010
Issues Budget $2 billion more to cut in 2012 Half billion more to cut in 2011 Revenues down this year as much as 15%-20% Unemployment still over 10% in most rural areas Self Pay soaring to 15%-20%
GRHA
2012 State Budget Implications
2008 $21.0 Billion
2011 $17.5 Billion
2012 Cut another $2 billion
2012 Possibly to $15 billion
HomeTown Health - Ga Health Care Fall Industry Update 2010
GRHA
2012 State Budget Implications
1) Rural Health Care Access Loss – No OB, 32 of 34 CAH’s2) No OB in 5 PPS plus 4more to drop3) Virtually no surgery in rural hospitals4) Up to 17 rural hospitals can close or reconfigure in 2012 – 4
PPS and 13 CAH5) Major Program elimination
1) Current Instructions from OPB – 4%,6%,8% cuts 20112) Headline – Cooperative Extension Scaling Back
- 24% budget in 2 years- Eliminated 80 extension agents
HomeTown Health - Ga Health Care Fall Industry Update 2010
GRHA
2012 State Budget ImplicationsMake the case 1) Budget = 85% Education, Corrections, Medicaid2) Medicaid Stimulus stipulation says cannot cut eligibility thus
only rates which are already at 85.6% of cost.3) Can we take $2 billion out of Corrections and Education? No so
everything else goes!!!??
HomeTown Health - Ga Health Care Fall Industry Update 2010
GRHA
2012 State Budget Implications1) There is no health care unity! Silos2) There will be agency and program pickoff’s/closures3) There is no statewide health care mission nor strategy4) New Governor will have overwhelming budget issues to override individual health care programs needs5) There is a 2012 $140 million FMAP shortfall due to Congressional underfunding
HomeTown Health - Ga Health Care Fall Industry Update 2010
Ga Health Ga Health Care Industry Update 2010Care Industry Update 2010
FQHC’s
AHEC’S CSB’s Rural Hospitals
Health Care Silos
Nursing Homes
Urban Hospitals
Public Health
GRHA
Four largest Rural Health Care Issues
1) State Budget Shortfall through 2016 per SBO2) Profit differential between urban and rural hospitals
a) Rural health care gets painted with urban high profit brush3) Loss of rural presence in legislature
a) 2 or more senators lost due to censusb) 4-6 state representatives lost due to censusc) 20 or more legislators retiring or getting beat in Nov 2010
4) Georgia Physician Shortage1) 300 shortage to date2) 300 shortage more as a result of Health Care Reform
HomeTown Health - Ga Health Care Fall Industry Update 2010
GRHA
The Future of Georgia’s Rural
Health Care
HomeTown Health - Ga Health Care Fall Industry Update 2010
GRHA
The Future of Rural Health Care1) Rural Hospital Closures2) Regionalization3) Consolidation of programs4) Accountable Care Organizations – ACO’s
1) 5000 Medicaid covered lives5) Telemedicine6) Health Care Reform
1) $500 billion cut in Medicare2) $500 billion penalties and fraud recovery
HomeTown Health - Ga Health Care Fall Industry Update 2010
The Future of Rural Health Care 1 of 61) Rural Hospital Closures
1) 5-10 rural hospitals can close in next two years2) Will destroy 5-10 economic engines3) Will destroy immediate access to health care to 100,000 Georgia
citizens 4) FQHC’s compete with rural hospitals for volume until hospital
closes then FQHC has to re-engineer itself with no local acute care referral station. Federal funded FQHC trumps locally/state funded delivery systems until they fall then FQHC’s have major problems. $10 million annually to state from Feds.
5) Example McRae Hospital closed last year
HomeTown Health - Ga Health Care Fall Industry Update 2010
GRHA
The Future of Rural Health Care 2 of 61) Regionalization
1) It takes 40,000 population to support a hospital and 33% commercial
2) It takes general surgery and Orthopedics3) Local hospitals have to either consolidate or collaborate
resources4) Example – Ty Cobb closing two hospitals to make one
HomeTown Health - Ga Health Care Fall Industry Update 2010
GRHA
The Future of Rural Health Care 3 of 61) Consolidation of programs
1) Public Health will consolidate with duplicate agencies2) Territorial silos have to be torn down to eliminate duplicative
services3) Example-
1) If every district does something different and state says standardize and eliminate non-core work
2) Orthopedics in Southeast Georgia – Tattnall, Jenkins, Screven, Jesup
HomeTown Health - Ga Health Care Fall Industry Update 2010
GRHA
The Future of Rural Health Care 4 of 61) Accountable Care Organizations – ACO’s
1) 5000 Medicaid covered lives2) They are ill-defined but mandated in the health care reform
package3) Will result in capitation type organizations which will require
new collaborations
HomeTown Health - Ga Health Care Fall Industry Update 2010
GRHA
The Future of Rural Health Care 5 of 61) Telemedicine
1) This is the new glue2) Two new grants
1) $2.5 million for program expansion2) $1 million over 3 years for national telemedicine extension
center3) Currently 170 sites with 40,000 consults
1) Will add 67 sites immediately due to new grant2) Hospitals, nursing homes, CSB’s, Corrections, Public Health,
school nurses, trauma, stroke,3) Will evolve to in-home on-line delivery of health care via
telemedicine – on line consults
HomeTown Health - Ga Health Care Fall Industry Update 2010
GRHA
The Future of Rural Health Care 6 of 61) Health Care Reform
1) $500 billion cut in Medicare2) $500 billion penalties and fraud recovery
2) The State Medicaid program will take the brunt of cuts3) Cuts will translate to local unfunded mandates and loss of local
subsidy4) Major expansion of Medicaid while ICTF and UPL go away and
EMTALA, “prudent lay person” language, and “meaningful use” language will dictate
HomeTown Health - Ga Health Care Fall Industry Update 2010
GRHA
And then there is the provider tax
will it be reopened?
HomeTown Health - Ga Health Care Fall Industry Update 2010
GRHA
PoliticsHomeTown Health - Ga Health Care Fall
Industry Update 2010
HomeTown Health - Ga Health Care Fall Industry UHomeTown Health - HomeTown Health - Ga Health Care Fall Industry Update 2010
pdate 2010
This election may tip the balance of power away from old sourcesANALYSIS
Posted: August 2, 2010 - 12:19am | Updated: August 2, 2010 - 3:19amBy Walter C. Jones
ATLANTA - The makeup of the ballot shows how unusual this election is and provides evidence of how much Georgia is changing.
For one thing, it's already clear that South Georgia has lost much of its influence. The remaining candidates for U.S. Senate and governor are all from above the Gnat Line.
Veteran politicians from below the line saw their careers and hopes sputter as the primary returns were counted July 20, including Democrats Dubose Porter and David Poythress from Middle Georgia and Republicans Eric Johnson and Jeff Chapman from the Coast.
Another South Georgia giant fell in the Democratic primary for labor commissioner, former House Speaker Terry Coleman of Eastman to metro Atlantan Darryl Hicks, at least unless a
challenge changes the decision.The only candidates from below the Fall Line remaining on the statewide ballot are
Democrats Ken Hodges of Albany, the nominee for attorney general, and J.B. Powell of Blythe near Augusta, the nominee for agriculture commissioner.
Urban takeover of legislature
Carter: Budget math hard to figure
This new math is killing me!Seriously, how can 4.7 percent and 12.7 percent average out to be 1.3 percent?
When it comes to the state of Georgia's budget, that's what a lot of financial gurus are saying actually has happened during the first two months of this fiscal year.
In July of this year, revenues were up 4.7 percent from a year ago and in August they were up 12.7 percent from the same time last year. So that means that revenues are up 8.6 percent from where they were for the same two months last year, right?
Not necessarily. After all, if we look closely at the numbers much of the gain in revenue this year is due to fewer individual income tax refunds being issued by the state than last year. Many will remember that overdue income tax refunds were processed and paid out in
July and August of '09 and subtracted from that month's total tax collections.This year the state was timely in paying out the refunds in May and June. Couple this with the number and amount of tax refunds are
down this year and the number comparisons are understandably inaccurate.Nevertheless, there is reason for celebration and optimism, albeit guarded. August marked the fourth month in a row for growth in tax
collections after 17 straight months of declines.So, if we are trending in a positive manner and revenues are increasing, why has the governor ordered all state agencies except the
Department of Education to brace for a 4 percent cut in this year's budget and prepare for up to a 10 percent cut next year?Remember is that the current fiscal year 2011 budget has a revenue growth of 5.09 percent built into it and if the actual growth thus
far has only been 1.3 percent then we need to be prepared for a shortfall. The next few months should give us a clearer picture.Another reason is that Gov. Sonny Perdue is being conservative so that the next governor won't immediately have to order more cuts.
But the overriding factor in the 4 percent cut is to cover the shortfall of $140 million in the federal Medicaid assistance funding percentages (FMAP) that Congress failed to approve late last month.
Medicaid is the government's health insurance program for the poor that is primarily funded by federal matching funds drawn down with state dollars. It is the fastest growing entitlement program in government, as states have expanded eligibility and benefits.
Unlike other states, Georgia has been fiscally responsible in managing Medicaid. We spend $6,000 per person in poverty on Medicaid. New York spends $18,000 per person. Only 18 percent of Georgians are on Medicaid as opposed to 26 percent in New York.
Unfortunately, federal funding allows states that spend more on Medicaid to receive more matching funds, leaving states like Georgia holding the bag. For instance, while Georgia will receive about $240 million in FMAP from this latest approval, New York will receive
$2.4 billion.The 10 percent budget cut preparation that Perdue has ordered for FY '12 is in anticipation of a $1.8 to $2 billion shortfall that is
expected due to slow revenue growth as well as the loss of federal one-time stimulus funds.State Sen. Buddy Carter, R-Pooler, represents portions of C
Fmap loss
HomeTown Health - Ga Health Care HomeTown Health - Ga Health Care Fall Industry Update 2010
Georgia Legislative Changeover Coming
30+ new Representatives Nov 2010 16 new Senators Nov 2010 Pending Census Change
Up to 8 Rural Representatives lost Up to 3-4 rural Senators LostLoss of institutional knowledge
HomeTown Health - Ga Health Care Fall Industry Update 2010Health - Ga Health Care
Georgia Legislative Medicaid PoliticsRep Mickey ChannellSenator Greg Goggans
HomeTown Health - Ga Health Care Fall Industry Update 2010
So what to do?
•Adhering strictly to proven operations benchmarks1)Performance Benchmarking
a.$103,000/FTEb.SWB <43%c.Supplies % Net Rev <10%d.Bad Debt % Net Revenue <8-10%e.CAH >30% Net Revenue Commercial-Self Pay <12% Net Revenuef.PPS >33% Net Revenue Commercial – Self Pay <12% Net Revenueg.Baby deliveries must exceed 350 annually otherwise drop due to Medicaid pull along loss
i.46,000 population required or if out migration can be controlled population required can drop to about 30,000 but not likely
HomeTown Health - Ga Health Care Fall Industry Update 2010
•Adhering strictly to proven operations benchmarks4 C’s of survival for Georgia’s Rural Hospitals
1)Control – operations benchmarks2)Capture Out Migration – with docs3)Consolidate to achieve 40,000 demographic or mothership4)Close
HomeTown Health - Ga Health Care Fall Industry Update 2010