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Hospital use decline part of national trend

Full rebound to previous patient numbers not likely

Posted: March 20, 2012 - 11:03pm

Bartlett Regional Hospital’s Finance Committee learned on Tuesday night that probably the biggest reason why admissions have declined is because of a national trend where more people are accessing fewer health care resources.

Bill Henning, regional vice president with Quorum Health Resources, said they are seeing a strong shift from inpatient services to outpatient business.

“Even the inpatients that are being admitted are staying for a shorter time,” he said.

That shift also isn’t fully translating to just outpatient services, Henning said. What he’s found is that more people are facing higher deductibles and higher personal costs for health care, so people are utilizing health care services less and less.

Henning said in talks with Medicare representatives that they have seen the lowest increase in beneficiary use in the past 25 years.

“They also see people trying to utilize things less,” he said. “There’s apparently an impact — the wallet impact. With the increase in deductibles, things like that, we’re seeing the same trend elsewhere. That’s even going into the ER (Emergency Room).”

Henning believes this trend will continue for several years, and that numbers of people seeking treatment will never reach what it once was. Henning also thought there would be somewhat of a turnaround as the economy improves.

“If people are being denied coverage, they’re not paying for it themselves,” he said.

Interim Chief Executive Officer John Vowell said Bartlett won’t see a full turnaround, and department directors are expecting to remain flat with the volumes they are seeing this year.

“We’re basing them on, we’re going to stay at the levels we are and even some decreases in some of the services,” Vowell said.

Interim Chief Financial Officer Dennis Stillman reviewed the February financial reports with the committee and the downtrend in admissions remains consistent with the last year-end projections — which put the hospital at breaking even for the year instead of a $4 million to $5 million fund balance.

Stillman said inpatient revenue for February was 8 percent under budget — or 8 percent under where they had projected to be for the month. Outpatient revenue was 9.6 percent under budget. Total expenses were down 6.1 percent.

“We had a positive bottom line for the month,” Stillman said. “We’re still about $4.5 million behind where we planned to be for the budget for the year. If the volumes stay where they are now, we still look to be on track to break even by the end of the year.”

The committee also took a look at draft policies for charity care and self pay collections.

Bartlett is working on fine-tuning some of its policies for how it collects funds — or doesn’t. In the past few years the hospital has seen growing bad debt or charity care amounts.

Stillman said the hospital hasn’t had a policy — more of just a general way of doing business — regarding payment plans for patients. This leads to people paying typically $50 a month on an outstanding bill indefinitely. On accounts that have more than $20,000 in remaining debt owed by the patient, that typically means the patient won’t ever pay it off.

“This policy is for those people who can’t pay off their bills when they first come due,” Stillman said.

The draft policy states that “the general expectation is that self pay balances will be paid in full within 30 days of the initial patient billing statement.”

However, it also recognizes that there are many instances where this is not possible. The proposed policy is to have a more formal procedure with patients about different payment options, but the plan is to have all paying patients pay off their bills within 24 months or less. The time allowed is proposed to be in correlation with the amount due with eight tiers planned. For example, on balances of $100 to $1,250 the patient is expected to pay within three months. The eighth tier will have balances of $8,751 and higher due within 24 months.

The second draft policy, on charity care, expands the system in place for those who need health care services but don’t have the means to pay.

“Last year we had $12 million between charity care and bad debts,” Stillman said.

The financial services department looked at reasons why bad debt accounts failed to meet the requirements for charity care and reflected that in the draft proposal. They said charity care will be available to more people and more services, which will more accurately reflect expenses in accounting.

“In neither case are we going to get paid anything,” Stillman said. “The incentive is to say, this is community service.”

The hospital will use the Census Bureau definition of family income and use federal poverty guidelines for Alaska for determining how much to allocate to charity care.

“We could probably move about 2/3 to ¼ of these accounts in bad debt to charity care,” Stillman said. “We want to make sure that we’re trying to collect everything we’re owed when people have the means to pay. When people don’t have the means to pay we want to make sure and account that as charity care instead of bad debt.”

This only applies to services that are deemed medically necessary.

• Contact reporter Sarah Day at 523-2279 or at sarah.day@juneauempire.com.

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