THE FUTURE OF HEALTHCARE IN EADS AND KIOWA COUNTY
Thank you for inviting me to comment on the health care challenges facing the Eads community. For those of you who do not know me, I am a physician who practices at Keefe Memorial Hospital in Cheyenne Wells, Colorado – where my wife Karen and I have owned a home for about three years.
Over the last few months, I have had several conversations with various members of the Eads community concerning the future of your hospital. During these conversations I have learned about some of the solutions your Weisbrod board is considering.
There are two important points I want to make. First, I will explain why I believe a small rural hospital like Weisbrod does NOT need an affiliation with a large healthcare company like Centura to survive. Second, I will briefly describe how Weisbrod can thrive financially as a small rural hospital.
WHY WEISBROD DOES NOT NEED CENTURA TO SURVIVE
As a certified Critical Access Hospital (CAH) there is one primary reason Weisbrod absolutely does not need an affiliation with Centura–or any other company. The primary reason is simple. As a certified CAH, Weisbrod is already “affiliated” with a much larger and richer entity than any company like Centura could possibly imagine. This existing “affiliation” is with the government of the United States of America.
Think about it. Because Weisbrod has CAH status, the largest and richest nation the world has ever known has agreed to reimburse all legitimate costs necessary to treat your Medicare and Medicaid patients. The US government’s method of doing so is known as “cost-based reimbursement” (CBR) and is the essential financial benefit of being certified as a Critical Access Hospital. In practical terms, because the majority of Weisbrod patients are in these two categories (Medicare and Medicaid) this means the majority of your hospital’s costs are 100% reimbursed by the US government.
Your remaining Weisbrod patients (probably about 30-40%) can be divided into three groups:
- Insured patients
- Cash paying patients
- Bad debt
Fortunately, there is usually enough income from insured and cash paying patients to offset any bad debt. Thus, due to CBR and your certified CAH status, Weisbrod can at least break even–or even make a little money in a good year. Even better, as most of you are aware, Weisbrod is fortunate enough to have both a tax base and money in the bank. To be clear, these two benefits are in addition to your CAH status.
Therefore, everyone in Kiowa county should ask why anyone would want to “affiliate” with a company like Centura–and you should diligently question anyone who encourages you to do so. This is because you are essentially giving control of Weisbrod’s own “piggy bank” to a much larger and richer company based outside of your county and your community.
Let’s face facts. Companies like Centura are not charities. They are for profit businesses and–by design–they MUST make a profit. Despite soothing words that may try to persuade you otherwise, Centura’s primary goal is to make money. And at Weisbrod that means funneling the procedural revenue earned from Weisbrod patients “down range” to their own Centura “piggy bank”. A CEO I know who came to profoundly regret his affiliation with a larger healthcare company once said to me “All they did was turn our hospital into a free-standing ER & urgent care with a helipad attached–and then they flew all our revenue to their home base”!
HOW WEISBROD CAN THRIVE
In summary, in addition to your tax base and CAH status (and the ability to use CBR accounting) there are five key steps listed below that I believe are needed for Weisbrod to thrive:
- Develop a strong reference lab
- Strengthen your 340 B pharmacy program
- Develop an outpatient procedures program
- Strengthen your rehab swing bed program
- Strengthen your physical therapy program
Everyone knows you need millions of dollars of equipment to run a hospital lab–but at the same time you cannot be a certified CAH without a functioning lab. However, anyone that has spent time at a rural hospital knows that most of the day the lab equipment sits around not doing much of anything to earn a return on investment (ROI)–even though a VERY expensive investment was required.
Many folks do not know that fifty years ago almost all small hospitals have what these days we call “reference labs”. The term “reference lab” simply means the lab provides reference lab services to businesses, government entities, law enforcement, doctors offices, etc . . . For example, this might include drug screening for employers, blood alcohol levels for law enforcement, blood draws for health care offices, Covid testing, life insurance policy labs, and so on.
These days two companies control almost all of the reference lab market–LabCorp and Quest. These two companies are enormous and have become like the Walmart and Target of reference labs. And, just like Walmart and Target, these two companies have slowly put many small hospital “mom and pop” labs out of the reference lab business. But the good news is Weisbrod can reclaim your right to earn income using your lab–while earning an excellent ROI on your hospital’s previous investment in state-of-the art lab equipment.
By simply partnering with a company that offers this reference lab service and expertise, Weisbrod can develop your own private lab market and eventually get your reference lab machines humming 24 hours a day, 7 days a week, 365 days a year. And by doing so Weisbrod can generate up to $2 million extra dollars a year for your small rural hospital!
340 B PHARMACY PROGRAM
One way to think about this program is Big Pharma profits are redirected to both your hospital and your pharmacy. The 340 B program also directly benefits your Kiowa county patients by guaranteeing lower prices. The prices are lower because the 340 B program authorizes Kiowa county patients to choose medicines from the federal government’s most deeply discounted price list. These discounted prices approach the level of generic price in many cases – even name brands!
The 340 B program means Big Pharma companies are not earning as much profit in rural settings. But don’t worry, they can afford it because they are still making billions and billions of dollars a year in urban settings. But the best part is all you have to do is ask to participate and you can do so. Fortunately, with the excellent leadership of Tom Davis, Weisbrod is already participating in a 340 B program and eventually Weisbrod may earn as much as $50,000 extra dollars a month simply by maximal participation in this 340 B pharmacy program.
OUTPATIENT PROCEDURES PROGRAM
In essence, this refers to same-day surgery and same day outpatient endoscopy procedures. This includes laparoscopic surgeries, cardiac procedures and so forth and these procedures can generate a tremendous amount of revenue for Weisbrod–as well as offering the convenience of local high-quality specialty medical care to your community.
However, to develop your outpatient procedure program Weisbrod will need high-quality physicians who can recruit specialists within their own networks to bring these needed specialists to your community. Again, this cannot happen without strong, high-quality physician leadership. But that said, it is very doable if you have such physician leadership.
SWING BED PROGRAM
After someone has a hip replacement (or other similar surgery) the person typically needs to be rehabilitated physically. This usually involves regular physical therapy in a controlled setting to safely develop strength and flexibility while minimizing the risk of falls. The swing bed program is a way for such persons (particularly if they are elderly) to rehabilitate near their home with quality physical therapy in a setting with which they are familiar. These services pay very well and can be a steady source of regular income for Weisbrod as well as a great service for the community.
PHYSICAL THERAPY PROGRAM
In a similar way physical therapy (PT) is a lucrative source of income for Weisbrod. PT also provides a great service to the community. Elderly patients gain a particular benefit from a PT service but younger persons, people participating in sports (and recovering from sports injuries), and arthritic patients will benefit as well.
PRACTICAL POINTS FOR YOUR COMMUNITY TO CONSIDER
To accomplish these goals above you will need a strong administrative team and especially excellent CEO leadership. You will also need high-quality doctors with proven ability, proven risk management skills, proven customer service skills, and a proven history of strong physician leadership.
Many of you have friends and family in the Cheyenne Wells area. Therefore, you probably are aware that Cheyenne Wells and Keefe Memorial Hospital (KMH) are doing almost all of the above at this very moment–and with Pathway Designs Group’s (PDGs) guidance they are doing it very well.
But the best part my friends is that your community in Eads and Kiowa county CAN do the same thing KMH and the community of Cheyenne Wells are doing. More importantly, by retaining control of your hospital you keep YOUR money in YOUR community and you retain financial control of your own healthcare system. Finally, by choosing your own doctors you are guiding your community’s short-term and long-term healthcare needs. Perhaps equally important, you will have the satisfaction of feeling justly proud of retaining the income your hospital has earned rather than allowing another company based far away to benefit from your community’s hard work.
In closing, keep in mind that committing to an unwise “affiliation” is like entering a bad marriage. Once Weisbrod becomes affiliated – then like it or not–you are permanently affiliated. Despite promises that may assure you otherwise, in the real world the only way to get out at that point is likely through a very painful and financially messy “divorce”.
To avoid such a costly mistake, keep in mind that you can always choose to get “affiliated“ at some point in the future if you find Weisbrod is truly failing as a hospital. But Weisbrod is not failing. Weisbrod may be struggling but Weisbrod is most definitely NOT failing.
I encourage you to retain control of Weisbrod’s healthcare system while you still can. It is your community’s hospital and was built for your community. You won’t regret doing so.
My very best wishes for your community,
Mark Bolton MD
Cheyenne Wells, Colorado
Note from Editor: Dr. Bolton has been invited to attend a Q & A session organized by interested community members and concerning rural healthcare issues to be held on Wednesday, February 2 at 6:00 pm at the Eads Senior Center on Maine Street in Eads. The Independent encourages community members to attend the session to learn more about how we can maintain control of our own healthcare industry and personal care options.