Financial challenges, such as rising labor costs and bad debt, again ranked as the top concern for hospital chief executive officers, according to a yearly survey by the American College of Healthcare Executives.
Providing care to uninsured patientswhich CEOs have listed among the top three challenges for the past three yearsplaced second, followed by hospitals relationships with physicians, according to the survey results, scheduled for release Jan. 7.
Those three challenges are really the same challenge, in many ways, said Frank Byrne, president of St. Marys Hospital, a 307-bed hospital in Madison, Wis., owned by SSM Health Care. Really, these three concerns are all related and theyre just further evidence that the shelf life of the nations healthcare financing is reaching its expiration date, he said. The current method of healthcare financing has been stretched to its limit and beyond.
Care for the uninsured and poor payment from safety net programs such as Medicaid strain hospitals, Byrne said. Hospitals seek to recoup some of those losses from private insurers, but its an unsustainable solution, he said.
St. Marys loses roughly 36 cents for every dollar it bills Medicaid, according to the hospital.
Medicaid tied with rising costs for staff and supplies as the top issue contributing to executives financial anxiety among the hospital CEOs polled by the Chicago-based ACHE. The mail and fax poll, conducted in the fall of 2007, asked its 390 respondents to identify specific concerns for each of the key issues hospitals face. Bad debt, or unpaid bills, ranked second among the issues underlying hospitals financial challenges. The survey was sent to 1,080 randomly selected ACHE members, with a response rate of 36%.
Society is turning hospitals into a safety net, said Thomas Dolan, the ACHEs president and CEO. Hospital executives anxiety reflects declining private coverage and uncertainty over how the federal deficit could affect tax-financed insurers Medicare and Medicaid, he said. Dolan noted hospitals already struggle with losses from lower-than-cost payments from the public programs.
The American Hospital Association reported hospitals lost $18.6 billion on Medicare and $11.3 billion on Medicaid in 2006.
Dolan dismissed the notion that care for the uninsured climbed in this years ranking as a result of presidential candidates focus on healthcare reform. Hospital executives are far more aware than the candidates of the challenges created by the nations uninsured. They see the uninsured every day, he said.
Meanwhile, tension between doctors and hospitals has grown as the nation has sought to curb payments in an effort to blunt rising healthcare spending, said Byrne, who is also a physician.
That tension can put hospitals and physician at odds as they vie over market share or services, though in some markets it has fueled joint ventures, as at St. Marys and SSM, which have two such arrangements for a clinic and health plan with Madison-based Dean Health System, he said.
The business complexity of practicing medicine has increased exponentially since I graduated from medical school, Byrne said. Dolan cited physician-hospital relations drop in the rankings to No. 3 in 2007 from No. 2 a year earlier as a sign of improvement.
Also slipping in the rankings was personnel shortages, which dropped to fifth from third in 2005. Dolan said an aging workforce and rising demand for care from baby boomers means labor will continue to be a pressing issue in healthcare. Any relief were seeing is short-lived, he said. Its going to come back in a big way.
For Byrne, patient safety and pressing local issues topped his list of concerns. The new year brought the opening of St. Marys $180 million expansion. And in coming months, it will adopt an electronic medical record after significant preparation and investment. To overstate the obvious, its more than just throwing the switch on the computer, he said.