Healthcare a tax issue?

The Healthcare Sustainability Project Subcommittee (HSPS) met Wednesday, Feb. 13 at the Platte Valley Community Center to discuss progress on healthcare in the Platte Valley and take questions on the shape that would continue to take.

HSPS welcomed Joe Watt and Eric Lopata from Kansas City accounting firm BKD to speak at the meeting.

After introducing the guest speakers and giving a brief overview of what HSPS expects from a feasibility study to be done by BKD, subcommittee chairman Will Faust turned the meeting over to Mark Pesognelli and Karl Rude for an update on Health Management Services' operations in the Valley.

Credentialing Update

Administrator for the Saratoga Care Center and Platte Valley Clinic, Mark Pesognelli, began by saying further credentialing was moving forward. Though the clinic has been Centers for Medicare and Medicaid Services (CMS) certified, Pesognelli explained that further credentialing, including getting individuals working at the clinic credentialed along with getting credentialed with payers (insurance companies, etc.). Pesognelli said this process would take between 30 and 60 days.

Pesognelli said Nurse Practitioner Ruby Ayers was still on track to join the clinic March 1 and that Dr. W. Michael Comly was being credentialed currently. Dr. Emma Bjore is also to be in town the weekend of Feb. 23 to begin seeing patients at the clinic one day a month. Bjore is also the medical director at the Saratoga Care Center.

VA Interest

Pesognelli also invited veterans to come to an open house at the clinic from 1 to 6 p.m. on Feb. 26 as the Veterans Administration is planning on sending a team to discuss healthcare enrollment, veteran's benefits, caregiver support, home health, chaplain services, mental health services, transition care management and veteran directed care.

Another topic to be discussed at the open house is how the new telemedicine equipment the clinic recently purchased can be used with the VA telehealth program.

Pesognelli added there was mutual interest in getting the clinic certified with the VA.

Building a Financial Model

HMS President Karl Rude then took the microphone and said he had been working with BKD and visiting architect Mike Burke to build a financial model that BKD can use in their feasibility studies.

Rude noted that the Memorial Hospital of Carbon County CEO had been on the radio saying the Saratoga project would cost too much and divide the county. In answering that comment Rude said, "It was sad to hear him be an immediate naysayer that the hospital is too expensive-especially when we don't know what the cost is.

"Additionally, Rude continued the allegation that this is a plan to divide the county. We all know, who live here and do business here, that this county is not divided by its plan, by its people or by its intent-it is divided by a mountain range and icy roads on I-80. The reality of our healthcare system in this community is that it needs to be autonomous and needs to stand alone because on a day like today (when the highway was closed) we do stand alone. If tonight you have a health care emergency and I-80 is closed, you are on your own."

Rude added that there was no idea of competition with Rawlins, just that effective emergency healthcare is dependent on the quickest possible attention.

Of the upcoming financial model and feasibility studies Rude said, "We are very excited about the plan that we have and the steps we are taking and the path we are following. We are going to bring you projections, numbers and ideas you can sit down and consider."

Recruitment Conundrum

Rude said he had had a conversation with a recruitment organization recently and the text reply he had gotten from them was, "That would be one of the more difficult places to try to find someone to recruit." Rude added he had not even gotten to salary amounts in that discussion about the clinic.

Rude went on that it would be easier to recruit doctors once a CAH was set up saying, "Part of what we are looking at in the Critical Access Hospital model is the ability to fund a doctor because of the way the money comes in from the Federal government when we set up the financial systems that are a Critical Access Hospital."

Defining the problem further, Rude said, "We have enjoyed a healthcare system that has had a full time doctor for a long time. But as you go out and look at the rural communities that have clinics of our size and nature, those clinics do not exist in a capacity that have physicians any more. If they have a Critical Access Hospital, they have doctors. If they have rural health clinics, they have mid-levels. If that is something you want, you need to make that distinction."

BKD

Rude then turned the microphone over to Joe Watt, partner and CPA with BKD.

Watt explained the scope of his organization, saying his company did accounting, auditing and healthcare consulting services in all 50 states.

Watt added his company had experience in everything from academic medical centers all the way down to rural Critical Access Hospitals, federally qualified health centers, rural health clinics, physicians, home health agencies and hospice providers. Saying that, Watt added, "We've got a pretty good perspective on healthcare throughout the United States as well as rural communities."

Watt said BKD was contracted by the Corbett Medical Foundation to do consulting in order to forecast financial statements to see what hospital options are available for the Valley.

Watt said his firm works with about 10 percent of the country's CAHs, which works out to around 150 facilities and that his firm's job would be to do market assessment and to evaluate where local patients go and what type of services they demand.

Once the market assessment, facility planning and scoping is distilled, Watt said the determination would be made as far as square footage, costs and building design that would be put into the financial model explaining what kind of facility would be sustainable for the Valley.

BKD Director Eric Lopata then told what other factors would also go into financial model. Some of those factors, included what services are to be provided, size of the facility, staff costs, building costs and projected cash flow.

Taxes and The

Difference

When the Saratoga Sun asked if BKD had ever done an assessment and found that a CAH was not financially feasible, Lopata answered "Yeah, we have come to the conclusion that there is a delta (difference) between what the hospital can produce in revenues and the expenses it takes to provide that service."

Lopata continued, "If there is a difference between revenues and expenses and expenses are higher than the revenues that the hospital would produce-so the question then becomes 'what is the size of that difference and are there any other ways to pay for that difference?' That could be community contributions, fundraising, foundations-you currently have a foundation that is part of this group here that has supported healthcare in the community ... In other situations, they go to the community members and say, 'Hey, here's the difference between revenue and expenses, can we come up with those dollars?'"

Lopata went on that, "In other parts of the country, there are rural areas in which the community places a tax on community members. So whether that be a sales tax, a property tax-some type of tax that supports healthcare in the community."

Lopata added, "It is very prevalent in Kansas, Missouri and Nebraska and Idaho where they have community members that voted on a sales tax because they want healthcare in their community."

Rude asked Lopata if there were communities this size with healthcare systems that did not need community support.

"No. There's not," Lopata replied, "Unfortunately there's a lot of challenges out there in rural healthcare. You know them. You may not know all of them. Volume of services, availability of services, getting professional medical people to come to rural areas to provide that care-those are our challenges. In order to meet those challenges, communities have to make a decision, 'because healthcare is so important to our community, can we help support getting it here?'"

County Cooperation?

When asked if HMS could cooperate with Memorial Hospital, Rude responded "There's been quite a bit of change at MHCC (Memorial Hospital of Carbon County), and starting to initiate conversations while they are going through bid cycles for new management and CEOs-it just really isn't the time. They have a lot that they are working on to make sure their house is in order. They are doing a very good job at that, watching from a distance."

County Commissioner Sue Jones echoed those sentiments later in the meeting.

Timelines

Saratoga Mayor John Zeiger asked what the timeline was for the feasibility study.

Lopato replied, "This initial part will take probably 60 to 90 days. Then, once we have the results of that, if we need to go to an examined forecast it'll take longer than that. That also incorporates any applications or anything like that with like USDA or some other organization that can help finance it."

Zeiger then asked Rude, "When this first started, your goal was three years. Are we still at the three goal?"

"Yes, Rude replied, I have a calendar we are using as an internal document ... and that calendar has an end date of September of 2021-an occupancy of build by 2021."

Underserved and

Uninsured

Nancy Jansa asked if the underserved and uninsured would affect the CAH forecast, especially given that Wyoming has, thus far, not expanded Medicare. Lopato's reply was, "Yeah, definitely uninsured individuals would have impact on services being provided at the Critical Access Hospital. Definitely not expanding Medicaid to help get some of those individuals on those rolls is a concern. This is another area in which many communities look at their uninsured population and go back to the community and say 'how willing are we to take care of those uninsured population-and does that fall into outside contributions, does that fall into sales tax revenue, county tax appropriations-those types of thing."

Emailed Questions

Faust brought up some emailed questions with the first being about the expected revenue split between Medicare, Medicaid and private pay.

Lopato answered, "Typically in a rural community Medicare pays for somewhere between 50 to 60 percent. Typically, Medicare is the primary payer of that service. After that, it's kind of a mix of either commercial payers like Aetna, or Cigna or Blue Cross ... some individuals that have health insurance and then they go get that care, they give them their insurance card and then that commercial insurance company pays. After that, it is usually Medicaid is the next payer. After that, it is private pay-and, as you just mentioned, uninsured falls into that private pay bucket."

The next question asked if the feasibility study would include a cash flow model on preconstruction operating costs. Lopato replied that those costs would be included in the model and that that statement would show where any cash comes from and where it will be used.

Services

Faust asked what services would be available in a CAH in a community our size. Rude answered.

"To get the designation at the core of the requirement (to be a CAH) you have to have an emergency part of it, and that really is where the funding model came from at its heart. The idea is that we're so good as a country in our healthcare system at preventing heart attacks from being fatal and strokes from having lasting permanent responses that if we could only put these systems into the communities we can prevent that. Bang, Critical Access Hospital.

So, you have to have an emergency department that is staffed with mid-levels and physicians. In order to stop those heart attacks, you have to have labs to analyze that that is actually what you have going on and you have to have imaging and radiology equipment to analyze anything further beyond that.

So, the core of Critical Access Hospital is its emergency department, its imaging, its laboratory equipment and then a few patient beds where people can stay long-term."

Rude added there were other possible additions to the facility including a visiting specialist room where specialists could see patients on a rotating basis.

24-Hour Services

When the Saratoga Sun asked if there was a requirement for a certain number of doctors, Rude replied, "We have to provide 24-hour services in the emergency department. There is a little latitude in how we cover that. A physician would be medical director as kind of its lowest level coverage ... you could have more physicians on top of that if your model justifies it or you could have NPs, NPAs to support those services as well. But the ED requirement is 24-hour coverage."

Mental Health Needs

Carbon County Prevention Specialist Sally Patton, again, stood to say there was an astronomical mental health care need. Pesognelli said that the clinic was already looking into addressing that problem and that he was trying to set something up to bring people into the clinic when they had those needs.

One Roof?

When asked if there would end up being two separate medical facilities, with a hospital along with the current clinic, Rude said while it was tempting to hold on to a facility that generally meets the needs of the community, the question of recreating staff at two or more facilities makes a "one-roof" philosophy more sustainable.

When asked if everything was under one roof and one part failed, would that not cause the entire facility to fail, Rude said that it all almost failed last year. He continued that if it had not been for the Corbett Medical Foundation and private donors, both the clinic and the care center would have failed individually.

Further discussion highlighted that, though building a bigger initial structure would be a higher up front brick and mortar cost, the salaries of receptionists, nurses and staff at separate facilities outweighed that initial cost.

Next Meeting

The next HSPS meeting is scheduled for 5:30 p.m. Wednesday, Mar. 13 at the Platte Valley Community Center.