Kansas First District Congressman Tim Huelskamp stopped at St. Luke Hospital in Marion Wednesday to hear from and talk about the $700 billion over the next 10 years in Medicare cuts.
Jeremy Armstrong, hospital administrator and chief executive officer, along with other providers and board members, talked about Medicare, Medicaid, ObamaCare and the overall economic situation in Washington, D.C. as it impacts rural hospitals.
Armstrong said he wanted to make sure when Huelskamp returned to Washington, D.C., he remember “a face” at SLH in light of the billions and trillions of dollars being cut and how those cuts will impact Medicare beneficiaries here.
“Maybe we need to have a frank conversation,” Armstrong said to Huelskamp.
“We can’t, out of one side, say it’s not going to impact care when we are cutting a lot of these programs because it will impact what we can and can’t do for those (Medicare) beneficiaries.”
Huelskamp agreed with Armstrong adding that fiscal instability in Washington is “creating tremendous uncertainty for health care providers.”
What to say to colleagues
Huelskamp asked Armstrong and others at the meeting to tell him what he needs to know.
“It is so critical in rural Kansas keeping hospitals alive, functioning and well and that is going to be much more difficult as we move forward,” Huelskamp said.
In answer to part of that question, Armstrong talked about the history of SLH from its early days until now.
The Kiwanis Club, he said, approached the bishop of the Wichita Catholic dioceses in 1942, about establishing a new hospital in Marion that would be operated by the Sisters Adorers of the Most Precious Blood. The Sisters Adorers agreed to the proposal and gave 25 percent for construction.
The Sisters took over management of the hospital after its completion, naming the facility Saint Luke Hospital. An open house was Oct. 18, 1952.
“In 1967, the Hospital District was formed, meaning it was essentially owned by taxpayers and eastern part of (Marion) county,” Armstrong said.
The operation of the hospital was turned over to the district in 1968 and was no longer part of the religious side, he said.
“In 1969, the west wing was converted to a nursing home.”
Huelskamp said he thought that was early for a nursing home.
Over the next several years, Armstrong talked about building an on-site clinic and other renovations and expansion projects.
“In 2011, we renovated almost the entire existing hospital facility and added on 10,000 square feet at a cost of $6.2 million,” he said. “We are a 10-bed critical access hospital. We used to be 22-bed critical access, but part of the renovation was to make sure we used space as efficiently as possible.”
Other changes in 2011
The major expansion/renovation project in 2011 not only included the drop to 10 beds for inpatient services, but a 32-bed long term care facility, home care agency and two rural health clinics on-site were also added.
“We serve 7,500 lives and are seeing some from the western half of Marion County, but our primary is the western part,” he said.
“I know I am biased when it comes to St. Luke Hospital’s services,” he said. “but we offer a lot compared to many of the other critical access hospitals around the state.”
When talking with community members, he said, people don’t seem to understand how many service are offered locally.
“Getting that message out to the community is part of what we are really trying to do,” Armstrong said.
The hospital has 111 employees and at the end of 2011 had a $3.2 million payroll with an estimated economic impact of $16 million in Marion and surrounding communities.
This was a good year
When figuring if the hospital is in the red or black, Armstrong said they first wrap up all the services at SLH to include inpatient/outpatient, nursing home and home health.
In simplifying the financial-side, Armstrong said if they charge $1, collect 65 cents and, after paying all expenses, what was left in 2011 was 6 cents.
“This was a good year,” he said. “Last year was 2.5 cents.”
In explaining where the money comes from to operate the facilities, he said, SLH is a district hospital and doesn’t come from patient revenue services rendered.
“Eight percent is from the taxing district,” Armstrong said. “That’s about $700,000 in the eastern half of Marion.”
Patient care services makes up 56 percent of the revenue, he said, with 13 percent revenue from inpatient services.
Fifteen to 20 years ago, inpatient services would be closer to 30 percent or higher.
“The swing is huge toward the outpatient side,” he said.
The piece of the pie Armstrong said he is most concerned about is the Medicare piece.
“Medicaid is 11 percent, Blue Cross Blue Shield 18 percent, commercial insurance, 16, and 12 percent is private pay,” he said.
With 43 percent of the revenue coming from Medicare, it is a concern.
Armstrong said they are also struggling to get the home care agency to break even.
“I am concerned about what it will look like in three, four or five years down the road because these cuts will increase each year,” he said.
“We are also the only home care provider in Marion County and I am concerned about where those folks are going to get home care that is needed or will they stay in the home and get sicker?”
The result of staying home would mean admission into the hospital and that would cost even more money, he said.
“It is very frustrating for a lot of us in health care when we hear our elected officials talk to Medicare beneficiaries about their benefits and how they are not going to change,” Armstrong said.
The beneficiaries are told the benefits won’t change, they will stay the same and Washington will find savings elsewhere.
“Then those of us working in hospitals, physician clinics—we see information like this and it becomes extremely challenging for us,” he said.
Armstrong questioned how the hospital is going to provide services needed in the community, especially for the Medicare beneficiaries that they have been promised and they see cuts coming out.
“Our expenses are not going down,” he said. “My nurses expect raises every year. They may not necessarily get it, but that is what they expect.”
Following a question and answer period, Huelskamp toured the facility with Armstrong, Janet Herzet, director Home Care, board members and other health care providers at the hospital.
“Fiscal instability in Washington is creating tremendous uncertainty for health care providers,” Huelskamp said after his visit. “Beyond the unpredictability of payments so many health care providers do not know what to expect in terms of new regulations related to ObamaCare.”
Huelskamp also said that sometime in the spring, the President will appoint 15 members to the Independent Payment Advisory Board.
“Those folks will make final decisions on the $700 billion overall cuts in Medicare,” he said, adding that it’s difficult trying to get a sense of what those cuts will be.
As for IPAB, Huelskamp said he believes it is unconstitutional abandonment of authority and, even though it did pass, it could come undone.
Regarding SLH, Huelskamp said: “You are much better situated than a lot of people with similarly-sized hospitals.”
Although Huelskamp said he has general thoughts about Medicare, he doesn’t have many of the answers.
“I will take what you tell me and share that with others and provide a little common sense, too,” he said.