Data Shows TCMH Patients Receive Healthcare at Much Lower Cost

Texas County Memorial Hospital ranks below state and national averages in healthcare spending per Medicare beneficiary, hospital board members heard at their monthly meeting on Tuesday.

“Hospital ratings have once again been in the local news, and we compare very well with hospitals large and small,” Wes Murray, TCMH chief executive officer said, adding, “But the 2015 data for Medicare spending per beneficiary shows just how well we are spending the funds given to us for a patient’s healthcare in comparison to other hospitals.”

Amanda Turpin, quality management director at TCMH, presented the Medicare spending data from the Center for Medicare Services (CMS) 2015 calendar year compiled into a Missouri Hospital Association (MHA) report.

“This data is available publicly, and the MHA compiled it so Missouri hospitals could see areas where they could improve the cost of the care they provide,” Turpin said, explaining that CMS reimbursement is tied to the cost and efficiency of the care provided to Medicare patients.

The MHA data provides information showing the cost of healthcare for Medicare patients before admission to the hospital, during a hospital admission, and up to 30 days after admission.

Average spending one to three days prior to admission to TCMH is $508. It’s $774 on a state level and $707 on a national level.

Average spending during a hospital inpatient stay at TCMH is $6,222. The state average is $10,973, and it’s an average of $10,888 nationally.

One to 30 days after discharge, the average spent on a TCMH Medicare patient is $5,653. The state average is $8,305, and the national average is $8,902.

“We already know that our readmission rate is higher than the CMS goal for our hospital,” Turpin said, “But what’s really important here is that our spending on our patients is actually much lower than state and national averages.”

Turpin noted that many times Medicare patients at TCMH are facing multiple chronic conditions.

“We take care of a lot of patients that are at the end of their life, and they are so ill, they will be back in the hospital soon,” Turpin said.

Murray explained that the data is not risk-adjusted, so it doesn’t account for the higher acuity level of patients in rural Missouri.

“We are typically taking care of sicker patients, and we’re doing it much more efficiently than our hospital counterparts in Missouri and across the US,” Murray said.

Murray plans to share the data with federal legislators and specifically with 8th District Congressional Representative Jason Smith who is visiting the area later this week.

“We have been asked to provide input regarding reshaping the new healthcare plan, and it’s important that Representative Smith is aware of this information in his district,” Murray said.

“We are doing everything we can to manage our costs, but rural hospitals are at a disadvantage,” Murray said.

Murray explained that TCMH writes off 15 percent of gross revenue annually, while the average hospital in the US writes off only five percent of gross revenue annually.

“Some of our write offs could have been addressed by statewide Medicaid expansion,” Murray said, adding, “The majority of our payors are Medicare and Medicaid, and there’s still a gap in the payment for the coverage those patients receive at TCMH.”

Murray explained that currently the federal government puts a large focus on hospital readmissions without adjusting the data based on overall population health or location and the age of the patient.

“I would like to see the federal government focus on what’s really being spent to care for patients without penalizing us for taking care of more elderly patients,” Murray said.

Board members agreed that the data needed to be shared with federal and state legislators.

“Now is the time to really talk about all of this, while they are planning to make changes,” Omanez Fockler, TCMH board member, said.

On December 6th, TCMH staff met with two cardiologists, a clinical nurse, and a state surveyor to complete the hospital’s review for Department of Health and Senior Services (DHSS) certification as a “Level IV STEMI” hospital for their ability to respond to patients experiencing a ST segment elevation myocardial infarction or STEMI, commonly referred to as a heart attack.

“Our exit interview concluded with zero deficiencies identified, and the review team will submit a letter to the state asking them to give us Level IV STEMI designation,” Doretta Todd-Willis, TCMH chief nursing officer said.

TCMH was one of 58 hospitals in Missouri seeking STEMI designation in the first round of requests. The team reviewing the sites hopes to complete the first round of requests in 2017 and hand out official designations.

TCMH anticipates that the state will begin requiring emergency services personnel to take patients with heart attack-like symptoms to the closest STEMI designated hospital in late 2017.

“We are pleased to be in the first round of reviews for state STEMI designation, and our team has been working on receiving this designation since 2015,” Todd-Willis said.

Murray noted that an official from the state described the TCMH review as one that “set the bar for Level IV STEMI certification”.

“I can’t say enough about our team and the job they did to prepare for the site review,” Murray said.

TCMH received designation as a Level III Stroke Center from DHSS in March 2015. The Level IV STEMI designation is the second state designation sought by the hospital in the past few years.

Also at the December meeting, approval was given by the board members for the hospital’s 2017 capital and operating budgets.

Linda Pamperien, TCMH chief financial officer, presented the budget data for the upcoming year.

The $957,203 capital budget is a 32.3 percent increase from the 2016 capital budget. Since 2013, the capital budget has been in the $700,000 to $758,000 range, and this year’s capital budget has several large ticket items.

CMS has mandated wireless computed radiography in 2017, and TCMH will spend $158,000 for the hardware and software to fulfill that requirement. An additional $166,000 is budgeted for computer hardware and software upgrades in various departments in the hospital, upgrading electronic medical records in the clinic, and upgrading the hospital’s system-wide computer system.

Other larger items in the 2016 capital budget are a new ambulance for $120,500; a new chiller for the surgery/obstetrics/intensive care wing of the hospital for $80,000; one new intensive care unit bed totaling $25,000, and a new gastroscope for $36,480.

TCMH is using a variety of funding sources to complete the interior of the planned surgery department, and $110,000 is included in the 2016 capital budget to go toward the infill.

Board members also approved the 2016 operating budget of $31,666,160 that projects excess revenue over expenses of $170,427.

“We have had additional, unanticipated expenses with the addition of new physicians this year,” Pamperien said, referring to the addition of Juan Mella, MD and Jennifer Groner, DO to the TCMH Medical Staff.

“There are always some additional costs when a new physician is getting started, but we’re going into 2017 knowing that we have these new physicians contributing to our bottom line,” Pamperien said.

The 2017 operating budget anticipates a 7.1 percent increase in inpatient revenue, a 10.7 percent increase in outpatient revenue, an 8.3 percent increase in emergency department revenue and a five percent increase in swing bed revenue.
Pamperien explained that a hospital employed primary care physician usually generates about $4.5 million in gross revenue annually for the hospital through hospital inpatient and outpatient services.

“In 2016 we met and exceeded our budgeted outpatient and emergency department revenues, but our inpatient revenue numbers were lower than anticipated,” Pamperien explained.

Pamperien does not anticipate the “contractual adjustment”—the difference between the hospital charge and the portion of the charge covered by insurance—to change greatly in 2017. The contractual adjustment for 2017 is anticipated to be 61.9 in the operating budget.

Two full-time positions are budgeted additions to two departments in 2017. The budget also includes operating the Sleep Studies Laboratory seven days a week, up from five days a week; continuing operations of the chronic condition home care program, and operating the pulmonary rehabilitation clinic all year long.

“Again, we are budgeting to ‘break even’ in 2017,” Pamperien said, adding “But we are more fortunate than many other facilities. Our accounts receivable and cash flow are very good.”
In the monthly financial report Pamperien reported a negative bottom line in November of $188,289.98 for a negative year-to-date balance of $1,221,035.41.

Present at the meeting were Murray; Turpin; Todd-Willis; Pamperien; Joleen Senter Durham, director of public relations; Dr. Jonathan Beers, chief of staff, and board members, Fockler; Janet Wiseman, and Mark Hampton.

Board members, Dr. Jim Perry, DO and Russell Gaither were not present at the meeting.

The next meeting of the TCMH board of trustees is Tue., Jan. 24th at 12 p.m. in the hospital board room.