Published May 12, 2023, 10:08 p.m. by Courtney
healthcare finance is a complicated and ever-changing field. To help you navigate the ins and outs of healthcare finance, we've enlisted the help of Steve Fabus. Steve is the President and CEO of Pullman Regional Hospital and he's here to give us a crash course in healthcare finance 101.
So, what exactly is healthcare finance? In short, it's the financial management of healthcare organizations and the delivery of healthcare services. healthcare finance includes everything from budgeting and accounting to insurance and billing.
One of the most important aspects of healthcare finance is understanding how to work with third-party payers like insurance companies. In the United States, most people get their health insurance through their employer. However, there are also many people who get their insurance through the government, such as Medicare and Medicaid.
No matter how you get your health insurance, there is always a third-party payer involved. And, as a healthcare provider, it's important to understand how to work with these third-party payers to get the reimbursement you need to cover the cost of your services.
Another important aspect of healthcare finance is understanding the different types of reimbursement methods. The two most common reimbursement methods are fee-for-service and capitation.
Fee-for-service reimbursement is when a healthcare provider is paid for each service that they provide. This is the most common type of reimbursement in the United States.
Capitation reimbursement is when a healthcare provider is paid a set amount for each patient that they see. This type of reimbursement is becoming more common as healthcare organizations move away from fee-for-service reimbursement.
There are many other aspects of healthcare finance, but these are some of the most important things to know. Now that you have a basic understanding of healthcare finance, you can start to dive deeper into the topic and learn more about how to manage the finances of a healthcare organization.
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[Music]
thank you everybody / don't clap yet'
see that friend you may want to take
that back so first before we start you
know I just got to acknowledge dr.
Frakes in the back here al and he was he
was my auditing professor back in the
day when I was at W so I think he's come
to critique or take my diploma back I'm
not sure we'll see how this goes
so a little nervous now no thank you
tell you a little bit just kind of
story so I'm really very young Ruben so
the reason I got this job I had to pay
off my bill and I'm still trying to pay
that off though I relate to everybody's
questions regarding Hospital billing no
not really but I just started the
hospital back in 1988 it's hard to
believe it's been that long great family
to work with I don't know a few or many
know this
in 2002 I tried to escape I resigned
from Pullman Regional Hospital's and CFO
and move to Tucson Arizona I didn't get
too far out of town before Scott asked
if I could stay on and we'd work out
some type of arrangement so I still
reside in Tucson I've been doing that
for 15 years so half of my career has
been living in Tucson and still working
at Pullman Regional Hospital pulmonary
the hospitals near my heart have passed
board members in here tonight and then
they all know once you give Pullman
Regional into your system it's hard to
get it out it becomes a party you
believe in the community believe a lot
of what we're doing I really appreciate
that and especially working with five
people like mr. Adams and mrs. Euler dr.
Caggiano that have really become family
members Shana Patrick who's my
controller here has been with me Shawn
and we've been together 16 17 18 I mean
it's really a long time
and yeah it's amazing you got great
people so let me start with a little bit
one of the nice things about doing it in
this environment is I've always believed
whenever I'm talking with anybody you
have to give them a take away yeah that
are you should you're investing time
here and if I fail to do that I failed
the nice thing is we're feeding us at
least a gateway hole hopefully so at any
point if you want more building free to
get up and go get more and so at least
there's one takeaway so I told you about
that thing let's start with a little bit
here something
[Music]
well where's the wisdom here
so with being an accountant the
pessimistic side of me you know that
really ring true but our our goal
tonight is talk a little bit about
health care in specifically health care
finance 101 in an hour we have about an
hour so an all hope really true to that
which you have a little probably early
but really this is your time if there's
questions you have specifically I will
address those the best I can
if there's something I don't know I will
find out and I will make sure that you
all know by the within a few days but
hopefully you know that you'll find this
very meaningful in terms of a better
understanding so that's our goal to do
that we have to have a baseline
knowledge we have to have a working
platform to communicate effectively
because healthcare like any industry we
have acronyms and I don't know if it's
purposeful so nobody else can come in
its like a club or if it's actually the
fact that we just try to simplify our
lives by having acronyms and we throw
them out as if their everyday speak so
let me talk about a little bit things
just to make sure as we're going through
this as I mentioned something we're on
the common ground okay so first thing
when we talk gross charges this is what
we build a patient the advice isn't what
we get paid but any patient comes in
it's going to be whatever they had done
times or whatever quantity of whatever
they did and that's going to be what
gets built out from there we have
contractuals
or deductions from revenue that consists
of things like bad debt we have patients
that don't pay the bills hard to believe
right we also take care of the indigent
those that can't pay their bills so we
have charity care ways by which that
they can have services as part of our
mission and so they'll come in and if
they qualify parts or all of their bill
can be written out in addition that we
have contracts now we have contracts
with federal government Medicare
Medicaid Services and they tell us what
they're going to pay us you don't get to
negotiate that under that means you get
told what you're going to get paid
however other insurance companies like
Premera
Blue Cross
now now group health molina any of those
we negotiate contracts with we never get
100% back when I started we we had
contracts that were 98 percent of
charges or 90 percent of charges and
today the best commercial contrast we
have was right around seventy three
point five percent of charges and so
things have changed significantly so the
question that was my sign to repeat the
question so is Medicare Medicaid around
33 34 percent charges the write-off is
around forty five percent of charges
fifty percent
we'll get into that a little bit of why
what that means and how that works and
what specifically it means for pulmonary
zone hospital so if you take that gross
charge and you subtract those write-offs
be a bad dad be a contractual that's
really the net revenue that's what the
hospital has to be able to fund it you
know current expenses which would be
salaries wages benefits and future
things like capital etc that ends up
being part of depreciation and then like
from there once you - all of those daily
operational expenses out that's what we
have in terms of our basically operating
income now tell you in health care
margins are small in almost especially
critical access hospitals most of them
don't have an operating bottom line the
only way they have a positive bottom
line and many don't is the fat through
non operating means in our particular
case we have a great community that
supports us we're a public hospital
district and we get tax support which
has been tremendous blessing to us in
addition to that we have some properties
in which we rent we get some rental
income offer that's a non-operating
that's not what we're in the business of
doing and then other things are like
foundation donations which are very
beneficial to us in order to be able to
provide the spectrum in the overall care
that we're able to do here and
any communities can't do so a lot of it
is a support we've had from the
community itself so that ends up being
the net income in our business it's
almost you can't have a profit we're a
non-profit so we can't profits but we
have access we have excess of revenue
over expenses what does that mean its
bottom line you call bottom line call it
net income call it anything you want
it's really your profit now I'll tell
you a story just for a second I'll just
digress for a minute and I'll probably
appreciate this my wife's a pharmacist
and you know she's probably in terms of
knowledge and brightness she outshines
me by far but you know she had to take
her last or senior year she had to take
an online course or one of those that
just to fill a G you are I said I'll
take accounting they'll be simple I'll
tell you - I'll help you I thought we
were gonna get divorced our first year
of marriage because she couldn't
understand well what's this net income
or profit or excess why can't you just
call it the same thing well it is
justice depends you know what business
line you're in you know owner's equity
is the same as the you know the net
worth is the same as etc and she just
couldn't get it and I just finally just
said oh okay I think somebody else has
to help you but we got through it we're
still married to spend 30 years so
somehow we made it through that but a
lot of these terms are interchangeable
and we'll talk about some of those all
the throw those out there's your first
opportunity to have a quiz she said I
can't ask her questions but no no this
is for the whole room let me ask you a
question this is your first test
these are reimbursement theories these
are these are different reimbursement
methodologies in healthcare one is
diagnosis related groups DRDs folks may
have remembered they'll scream back in
the early 80s Medicare female with that
said okay we're going to say every
patient that has a X diagnosis of this
will be in this grouping and we're going
to pay Y so they created this in order
to control the cost
the ms-drgs is another mess of
methodologies anybody know what that
means
what's the difference between the drg
and an ms-drg so there's certain things
Medicare don't typically pay for
pregnancies not very many people in the
Medicare population are pregnant Exedra
so commercial payers have an additional
DRGs listed which are the MS side of a
medical surgical side common procedural
terminology CPT's full charges or
percent of charges and also cost so let
me ask the question which of these does
pulmonary General Hospital get paid
under go ahead mayor oh thank you
good answer every single one of those
not confusing whatsoever just go figure
out which one and play the game right
and by the way insurance covers love to
change how what's acceptable not
acceptable what's allowable not
allowable again a little of that but we
get paid under every single one of those
so it's really dependent on the payer if
we had 100% Medicare it's so much easier
to budget we don't we have a you know
variety of various church today our
population in terms of Medicare Medicaid
runs about forty five percent of our
charges
Poland's in a very good position from
the terms of the ability to do what we
do because we have a very good pair mix
due to the fact that we have Washington
State University here and SEL here
not very many communities of our size in
rural America have that luxury most of
them typically you can think of small
farming communities there's a lot of
Medicare Medicaid especially you think
of a fellow I think how heavily Medicaid
their population is it's hard to make
anything we'll go into why that is in a
minute various so we're only again we're
still laying some framework about
hospital finance one-on-one because some
of this is meaningful and how you
approach services you may provide
hospital structures these are really the
three types of structures public which
would be federal state local
ran facilities non-for-profits and
for-profits in our geographical area how
many of these do you think we have think
of the Quad Cities here so we know we
have you may not we have two public
hospital districts in this area in fact
there are three public hospital
districts in this area you have one
Wiesel hospital where public hospital
district number one a of Woodman County
doing business as Bowman respond so and
then you have public hospital district
number three in main name who that is
Whitman can anybody name the other
public hospital district Garfield you
know the hospital in Garfield no they do
in a system living in home health but
that's their district they used to years
and years ago there was a hospital but
they don't have one now so those are you
those are a public hospital
what about not-for-profits in our region
think of any you got grid Minh down the
value have tri-state today you have a
for-profit in or backyard don't you no
matter had before this last year st.
Joe's that will be a new dynamic it very
well could so does it does Garfield's
hospital district include the EMS likely
to support that I'm not good layer on
that but likely they do have some tax
bonds so in our in our population you
can see this is a distribution of this
across the United States many are
not-for-profit as you can imagine
support it in one way or another
not very many for profits in fact CHS
which is community health systems is one
of them there's a you know almost all of
them run out of Tennessee for some
reason if it's a tax Avenger that's what
they all are ATSC which actually runs
tri-c is another one of them but many of
them are divesting so if they aren't
making money they get out I'll tell you
right now for profits typically run
margins
or working towards margins in the double
digits not-for-profits are typically
around one to two percent across the
United States and more really no
different than that you'll have a few
that are higher than that but not very
many you can see how many are in urban
settings versus rural settings so not a
complicated system at all it's very
pretty simple this this is one segment
of that remember under payment
methodologies we just talked about this
is one aspect and this is just the
Affordable Care Act
by the way and by the way you're here
this is you so to get paid this is
really pretty simple you just got to
work through all of these means a lot of
regulatory issues and things so when
people wonder why health care is a
challenge in terms of reimbursement in
making profit there is so much one of
the highest regulated regulated bodies
in the United States as hospitals this
is just to get payment under this new
health system so there's no additional
tax ISM Li stood within this at all it's
pretty seamless and this is changing all
the time so you got to learn you know
how to play for it this down here which
is the Medicare Medicaid Services it's
changed significantly especially under
physicians if you recall and how they
got paid just change this last year and
they are going to now their increases
which was budgeted and under the the sqr
which was the growth that's how they got
additions every year now they've changed
that and it's called Macra and the way
physicians will see increases there'll
be no new money there will be winners
and losers and it's all based on quality
in what you're reporting scores are and
if you do it right then your neighbor
doesn't do it right he loses money and
you give some of his money because it's
budget neutral and that's the payment
increases that physicians will see
moving forward how many physicians like
to be under that model
not nanny how many people could have
felt our struggle even here on a local
level to find a primary care physician
whew
it's been a challenge we have retired
people retiring and if it's hard to
recruit Pullman's very attractive from a
destination but you can imagine some of
these rural communities where it is
really a struggle when we struggle in
fact we were down to in some and some of
our primary care practices and this is
just I say our because it's a community
one thing half the providers they used
to have four years ago and they're
trying to recruit it it's challenging on
the market because why would you want to
do that especially under the old payment
models we'll talk a little bit about
that the revenue cycle so as you think
about healthcare finance 101 how we make
our money is through seeing volume today
there will be a point in time I think
years from now in which the less you see
the more you make because there will be
value-based you'll want to keep people
healthy which should be really our
mission today we keep people healthy
that's not good for our bottom line but
it's the right thing to do and we're
doing those things today we have a whole
care coordination team over here with
social workers and we don't get paid a
dime for that but it's the right thing
to do for our community if I was
strictly a for-profit you know what they
would have that your red stage would be
open from 10:00 to 2:00 it wouldn't be
open 7 to 7 because I would be cutting
every cost I could out of this
organization and putting every block
dollar I could to my stockholders there
would be things that wouldn't run I
would not run 7.2 physicians in my
emergency department 24 not 24/7 I don't
have that many physicians but around the
clock I'd run at bare-bones four point
five FTEs run until the born and fire
and hire another one coming in to two
years burn them out yet another because
I could save hundreds of thousands of
dollars but the quality of care wouldn't
be there they may just burn through
people it's not that their quality is
bad because they still score very well
it's the fact that the experience is
much different I speak from a personal
level on many of this my wife works for
CHF as a pharmacist and I will tell you
it has been a struggle we they have they
opened a brand new facility in 2004
December sound familiar
we open doors in December they have been
burnt through 15 pharmacists they have
three at any one time
and they've burned through 15
pharmacists and since she started today
we've had one retire tell you a little
difference of the culture because it's
not about the people it's about the
bottom line so when you think about
revenue cycle you think think zero to
zero you'll all be experts I mean you
can start consulting businesses after
tonight because not very many people
really understand that there are the
zero how much do you owe when you start
you coming into registration or you come
in for a lab before you have that dent
how much do the hospital not you come in
you have that service when you have that
that surgery whatever you go through a
process you hit registration within that
registration process there's things that
should have happened either before or
happen during with authorization does
your insurance authorize you to do this
did you have to have a referral if you
didn't have to have our oh I'm sorry you
have to go back to your primary care
gets a referral then you can come back
we'll have the procedure after that if
not and they didn't require a referral
or we had the referral then we have to
have authorization because we don't have
authorization they won't pay us and if
we miss that step that's what we're out
or we fight insurance companies we write
we write a few letters I'll tell you
this year is much better than before
we've had 6064 denied claims last year
at this time we had 250 denied claims
jumping through insurance companies who
so I'm trying to get paid that's this
process registration insurance
verification points oeufs collection we
don't do a ton of that here because our
people are very good here in Pullman
about paying for their services some
places they'll require you almost pay
your deductible upfront before they'll
ever treat you financial clearance all
the way through til the very back end of
it after we do all of the billing
process insurance pays we go out we
collect the deductible we write
the contractual right off that account
goes to zero zero to zero that's the
revenue cycle all of those things have
to have to flow very fluidly in order to
get there sometimes they work seamlessly
we can get paid 14 days and be done on
average the hospital Pullman Regional
Hospital takes 34 days to collect zero
to zero how's that compare across the
nation across the nation's gotten much
better used to be around 50 days now
it's about 48 days across the nation we
do very well here and we got good
painters and some of them you know you
can get the sale process done and within
a couple weeks sometimes it's not that
easy
we still have camps that we're working
on and almost a year old got denied we
appealed in denial because they didn't
tell us they changed the rule and what
had to be authorized beforehand we had a
physician right that this is a plural
appropriate they are in review they deny
it we go back to it we fight it we
finally get it paid or a patient comes
in and they say I have primeira give you
the card come to find out oh shoot no I
don't we change but you don't get that
until you get the denial from the
surance come you go back through and so
now I have then they give you a
different card you go through that
process and it takes time so this is
just how this segment would work from
zero to zero you schedule you come in
you check eligibility you treat your
code the coding aspect that's your
medical records once it's get coded and
by the way do this right so if you one
thing let's say you had a total hip if a
physician didn't write that he put the
device in and didn't charge that he put
the device in and but you were walking
around evident that you have really had
it to lip we don't get paid because it
wasn't documented so if you need to
document it doesn't kind of matter if
you did you did it or not you didn't do
it so you've got document for everything
you do so a lot of this is making sure
we educate train and then you go through
the whole collection process which is
active collections insurance billing
post collection which if somebody didn't
pay how do you collect that all the way
to legal where you might do wings
many times hopefully goes very clearly
but sometimes it doesn't work as well so
this is just another aspect of that this
is one bill 50% of everything we do is
going to be done on the front end in
most hospitals in the past have
untreated the registration staff as a
key player 50% of the giving this light
happens there if you don't train those
people and and you don't keep good
people you get a 50/50 chance of ever
getting paid we do a very good job much
better 2015 we wrote off almost two
points some million dollars in process
errors and things because front end was
bad now much of that we deny we got of
the denials and stuff we had a fight to
get every penny of it and we do very
well at that but if we fix it on the
front end we'll have to fight it on the
back end and that so we did a tremendous
amount of effort to clean this up on the
front end and today it's basically gone
15% is in the actual medical record so
the coding aspect of this this is when
it goes through our coders inpatient
outpatient they read the documents what
was documented what should that CPP be
making sure they code all that out that
DRG that's their job if they do really
like that we get paid well and then 15%
is on the charger entry now charges so
this said this happens here I've talked
to nurses I've talked to staff many
times saying don't make the decision on
what should be charged to the patient or
not document effectively so that we can
bill appropriately because if you
document what we did then we can bill if
somebody can't pay I have all kinds of
ways to be able to help them charity
care payment terms you know let's paid
over 12 months etc those types of things
I can help patients with but if the
nurse upfront decides of a poor college
student probably only eaten top ramen
let's not build them I won't charge them
for that they don't look like they
should be then I have to raise charges
somewhere else to cover that that's a
loss leader so we aren't pricing
effectively for everybody else
so let's we have means by which to
handle that so let's just build propria
so that's that's part of that charge
entry side that's what they do and then
the building aspect which is your
financial services component to it so a
little bit about Pullman Regional
Hospital get a little more specific
those for some high-level aspects
they've overcome drill down a little
more about who we are what we do in L
works so today most people know Pullman
Regional Hospital right but I don't know
very many people know how many people
know we have pulmonary general hospital
clinic Network we own today three clinic
practices directly which are wholly
owned means pulmonary hospitals 100%
owner there at an LLC but really there
did one time for sent on by the hospital
that includes Pullman PDR police
pediatrics
Pulu psychology and behavioral health in
today Pullman family medicine who just
joined that clinic network as of April
1st so we go back when we talk just a
little bit as to why we might get into
some of these Oh in addition to this we
have joint ventures with with really
three groups today
one is Palouse surgeons the red the
others under Palouse specialties which
is Palouse ENT and Palouse ravallo G
those are owned 40% by Pullman 40% by
grip men and 20% by women three
hospitals came together why do we do
that it's craziness let them do it let
them sink or swim
you're on your own dr. Caggiano would we
have an emergency Armen if we had no
general surgeons there you couldn't even
offer an emergency department without
having a general surgeon you could offer
an urgent care but by a rule and
regulations you couldn't offer an
emergency department you wouldn't be a
hospital without him well we had that
situation facing us we had one general
surgeon on the Palouse tour the 365 days
we're doing three hospitals and said
enough the hospitals didn't jump in we
wouldn't have anybody we said okay what
do you need I will only take call one
week every four all right we got to have
three other general surgeons
that's the standard so the three
hospital scheme the other we have for
general surgeons today
do they make enough money within the
practice to pay for themselves now
because really for this community pride
need three three and a half it's hard to
get a half a doc
these are common holes some reason one
half a case but no they they come in
holes and so there's a subsidy there's a
support but the services they brought in
the hospital offset that that's not
always true within primary care but
without primary care we wouldn't have a
hospital again because they had so many
additional tests that they order but
under that model if we go back and look
and how many people want to be under
that payment models that they were
physicians especially physicians coming
out of training today they want to take
care of patients they don't want to run
their own business they want out of the
insurance world who would want to do
that anyway it's a pain they want to
come in and by the way if they come in
to Pullman and under our model no you
have to be you have to be a partner and
by the way your your pay is going to go
down twenty-five percent next year
compared to this year where do I sign
out that sounds really good to me
I have no security for me and my family
it's not going to happen when you can go
to Spokane and have an income guarantee
that's out of the gate thirty forty
percent higher and you know you're going
to get paid that every year plus
probably a raise you wouldn't come
that's part of the the challenges
Pullman's facing with recruitment so
today that's why physicians coming out
of school they want an employment model
and we have met that we have we have
adjusted our practices to meet those
things because access to care is really
important on the Palouse
so we have here about almost 150
employees of which 274 of our full-time
174 or a part-time we have a great
volunteer in auxilary team that helps
support our services at Pullman some are
here tonight now really appreciate that
and then we have a very active medical
staff the nice thing is we've been
fairly successful on recruiting which is
good it continues to be the case so I'm
happy to say that folks haven't heard we
have successfully recruited our fourth
orthopedic surgeon to the Palouse who
will be joining the inland orthopedic
group that's awesome those guys will be
thrilled because that will make their
quality of life that much better on an
annual basis if you go back to our
knowledge base we gross build this is
one we've collected I love it if we did
my life would be so much easier for me
but we build out 116 almost 170 million
dollars pulmonary the hospital isn't a
small business pretty substantial
footprint out of that you know how much
we have at the end of the day last year
to work with to pay future bills like
new equipment technology a million
dollars not a very high margin in
healthcare not a lot to work with and
that is after we had donations from the
foundations etc but those are the things
that are really you know we've got to
then reinvested in the future and that's
the way to do it is by having some type
of bottom line
almost
yeah so the question was and the comment
was in terms of robotics and many may or
may not know we have at da Vinci
Surgical assisted device NRO are used
primarily for single site incisions
laparoscopic procedures when their
recovery so much better because you
don't have the open incision and you
don't have all of the the after recovery
time it's pretty seamless long word for
an encounter is that it seemed to fit so
it is seamless
pretty much a stitch and they're done
but it's amazing what they can do within
that that machine alone was over a
million dollars and we had a lot of
people in the community saying man why
would you buy such a thing we were
successful the main reason to do it
wasn't because we'd have an edge in a
market and drive a lot of business it
was recruitment folks coming out of
urology school today are trained on a
DaVinci are they going to come to a
market that has none and that's the only
thing they've known now so we were
successful in that in and dr. Kaiser has
a partner now dr. Smith and that was a
great value dr. Smith by the way the two
of them combined today are doing twice
the volume the volume was there we
didn't get it all so great and no Moscow
also value from that but the whole
community value from that and so it's
really important as a part of our
services that we offer so in terms of
we're going to switch gears a little bit
here and that's a lot of this if you
want more you know come to board
meetings to defin we it's a ever
evolving thing and it will be different
next year this presentation would be
different than it is this year because
it's changing every day but how does
pullman regional hospital develop its
prices because that's that's important
question do we price higher than our
competitors do we price differently than
our competitors how do we do it I will
tell you when I first took over and
1995 I struggled with how hospitals
especially the ones I was involved with
because I came out of trying to combine
Pullman regional and grip Minh Medical
Center in ran the corridor for three
years in a joint venture as assistant
CFL and grandma did exactly the same way
we did it and what you do and what we
did you know ashamed of it back then is
you develop the new service you went out
and figured out what the pricing was on
many of those let's say it's x-ray and
you wanted to do your Mars what's the
average price where are other people
charging for this service that's how you
develop your prices what does CMS gonna
pay its well CMS pays this and you two
times that and just for both left that's
what you do and then every year you go
and the budget I think I'll raise it at
5% sounds good and you do that for 20
years and what are your prices reflect
nothing they're meaningless so we said
that's not what we want to do in our
pricing and we want to be fair and
adequate so we go through a structure in
which we evaluate what our cost is we
got to have our cost if we don't cover
our cost we're here right pretty obvious
let's are required profit oh man that
nasty weakness a four-letter word it's
actually more for sick so five I can
know yeah I can count it's a six letter
word profit we got to have that sense
right so if we need to reinvest back
into the facility we have to buy
equipment we need technology if not
you're going to be obsolete in a little
while and then really your prices are
only matter if I 100 percent Medicare
yeah I'll charge you nothing because I
can't pay cost under a Medicare program
no matter what I cost no matter what I
charge because they're going to tell me
what they're gonna pay so why do i do
anyway but that's not true across the
board
it does matter so prices have to reflect
your pair mix what are the insurance
companies we go through that process and
then we evaluate on every single price
down to the cpt level which is by
procedure
what's our cost compared to the market
what's the market if our costs are too
high is if
therefore me to raise my prices 5%
probably not I should I control the cost
right if my costs are within reason then
is it okay to raise 5% well maybe but if
I have 45 million dollars in the bank or
150 million dollars and I want to charge
10% Marcus as a CFO I'd like to have a
high degree you know that's probably not
fair either cuz I have too much cushion
now I'm gal G so we look at that as well
we want to be fair and equitable and I
don't want to charge more than a market
and in our market we look at six
hospitals we have to do a blended
because it would be collusion if I was
the called tri-state say what do you pay
when you charge you know that wouldn't
be my nigella I don't look good in
orange so whether we do a compilation of
six hospitals and we have an external
group do this and we say what is the
price on an average in the market now in
some areas I will tell you specifically
an mr we were too high two years ago I
had the orthopods come and say you know
we can be they're getting a lot cheaper
and people are starting to shop because
the fact of high deductible plans where
they have fifteen hundred dollars
out-of-pocket they're shopping huh we
need to look at our market a little
tighter than broader when you befall
Spokane hospitals and Tri City hospitals
in quite abroad so we've narrowed that
market and said what should we charge
for that service and that's how we
establish our prices so now getting into
just reimbursement and how we attain
Medicare Medicaid under people remember
in 1997 the court or not the Clinton
administration balanced the budget and
as a result of that there were two
hospitals and rural communities closing
every week and people not having access
to care anymore the bad thing so they
came out with this determination called
critical access hospital it's critical
for our weakest population in terms of
Medicaid people that can't pay in our
elders to be able to access care
in these communities we need to do
something about it because of a got paid
we sell gramma not paying them enough to
stay in existence basically they're not
covering their cost there's not enough
volume and it can't survive so that came
out so Medicare pays us today our cost
plus one percent now I'll tell you what
it's not plus one because we still we
have remember a few years ago
sequestration every thought that went
away it's still not we get cost minus
one so we lose money on every Medicare
Medicaid patient doesn't mean you
shouldn't take care of home we should
care for them but we will never make
more oh by the way forgot to tell you
something it's not truly cost it's
allowable cost but you know who
determines allowable the federal
government so you know the same for the
additions I told you about in the
emergency department because physicians
can bill a professional fee in addition
we build a technical field which is the
nursing staff and that on board the way
Medicare looks at it then that
professional fee covers that physician
cost if there are additional costs like
you want them 24/7 but there's not a
patient there that's your problem
that's not our cost so that's not
allowable so it's not one hundred
percent of it cause it's what Medicare
says will be one hundred percent of your
cost and our commercial players have to
make up the difference this is the rub
this is what commercials are fighting
back because we have employers are
saying we need I can't have double-digit
increases you're in and you're out on
our premiums we say the same thing
we provide health care and we don't like
it either when our insurance for our
employees goes up by ten or twelve
percent so we start on ok how we do it
differently but we're paying ourselves
sounds not horrible
jeez can we do this differently so
commercials have really pushed back on
what they used to pay that's why I don't
get 95 percent of charges anymore and
now I get seventy three point five
percent of charges by some contracts
because they trying to drive that place
down
so are those to cost the same yes they
are so it's your total cost to provide
that service let's go there let's talk
about that so what I'm going to get
there so yes and yes it is a variable
but understanding I'm in are who we are
from we being at a rural hospital it's
semi variable that only certain level
can you go down before you hit a floor
we have to by certain amount if we're
going to offer 24/7 emergency care and I
can't have nobody in there when you show
up somebody has to be there with the
lights on to care for you that's the
floor so it's a semi variable but so
there is some fluctuations in those
costs based on volume but it's really
hard and I'll share a little bit about
Pullman's approach to that on how you
control those variable cause I will tell
you from a Productivity standpoint
what's the number one expense you have
in healthcare what's your highest cost
people or service industry
sixty percent of our cause relate to
people what's the number one thing that
you try to control people because I mean
I can cut a lot at trying to chisel down
utilities but I can't turn off enough
life that if I was one staff member less
to cover that cost to turn off all the
lights every day when somebody walked
out the room so there is some
variability now one of the challenges
there is how predictable are our
services can anybody tell me how many
people are gonna come into the emergency
department between 7:00 to 9:00 9:00
tonight
is there a football game probably higher
predictability that I want to have more
admissions in my emergency department
that I have when
exactly you can have some of that but
it's still variable and it doesn't
always come when we had the Apple Cup
here we staffed a whole unit just in
case because the year before we were
inundated and we didn't have that many
that's the challenge we run we can run
on an inpatient unit Med surg unit to
inpatients to 12 inpatients and that can
be a difference in ours and it can be a
difference in days so we have 25 beds
across the board OB ICU and Med surg and
we can have an average I mean we can
have census from 2 to 25 and that can be
within the week and then back to 5 and
then attendant and it's really hard to
get that predictability how do some
hospitals deal with that I'll tell you a
lot of your full process this header
will say ok staff I hired you full time
you have a family and kids that's all
right come on in we're going to pay you
full time I'm sorry I don't have enough
patients they going without me I do that
to your 3 or 4 times this month guess
what you're going to the hospital down
the street that doesn't do that to you
we don't we don't go census a lot of its
local census and we don't do a lot of
that here because your your actual
turnover rate increases significantly
it's better retaining those employees
than is that be training new employees
all the time that's part of the
challenges we have here and that's why
Medicare decided we'll pay you at least
your cost because when you have enough
volume you can cover those lost leaders
every now and then because you have
enough volume in your variabilities a
lot greater here it's not so that's why
Medicare so came in and said we'll pay
your cost problem in with that is it
doesn't there's no incentive to control
your time I'll give you an example a lot
of our total hips total joints our
Medicare population no surprise right
you had one now - all right so
of course does it help Pullman Regional
Hospital to negotiate with Smith &
Nephew in de PUE on those devices in
saved money
does it help our bottom line for
especially the Medicare population thank
you not one bit I get paid my costs
where's my incentive to control the cost
however we did go and we do I negotiated
with de PUE and Smith and nephews a year
and a half ago we saved a million two in
our device costs most of that goes to
the federal government it's the right
thing to do because that will save
visually if every hospital worked hard
at doing those things that saves
critical access also freedom on the
chopping block if I lost critical access
Hospital reimbursement today you ran
that million dollars I told you we had
last year
take five million off of that we would
have lost 4 million dollars we wouldn't
last
you would be amputating major services
there just be things you would not do in
this market it just would not be there
no I see you you wouldn't have a
hospital around this area that had nice
of you behavior health forget it most
people are on their long good luck I'm
managing your drugs and your problems
because you can afford it positive
margin areas these are where we make
money especially on a commercial side
imaging surgery pharmacy women's health
lab pathology and we don't have actually
have a pathologist that is part of the
hospital they're actually a group out of
Spokane that reside here but those are
your moneymakers today your negative
things medical groups physician
practices oftentimes for every every
employed physician across the nation in
primary care cost $110,000 that's net
net that's the bottom line that's the
loss you cover
we're close to that not quite I'm pretty
close transitional care units your home
healthier I see use your emergency
department there's so much fixed cost in
those now my physicians would say they
make money but they do in essence
because they ordered tests people end up
going to the surgery it's important to
have all of them you can't have one
without the other
so how much did that cost you go to a
store and you look and say okay what's
that TV going to cost me you can see
exactly what you want
no one patient comes through the
emergency department with the same thing
they're the exactly the same you come in
I do your hip your hip isn't the same as
your hip your hip how long it takes that
surgeon because you had a complication
with in there can be significantly
different than the person that had no
complication the resources and intensity
of services are much different just so
Mary is you're going to get paid more
because that DRG will reflect that but
not always because the way Medicare pays
you they pay off a DRG now they're two
different DRG is one with complications
one without but you might have been the
same surgery without a complication but
you might have been in the loire because
when that surgeon was in there took a
lot more time
it took in 45 minutes or the other
patient took 20 minutes
the resources are much different but the
amount that we're going to get paid is
safe for that particular insurance but
if you go back to those methodologies
remember those cost fixed percent of
charges DRG MSD ms-drg those all have
influences within this for those are all
different depending on that we're just
talking about you by the way or talk
about orthopedic surgeries
now now you specifically just talk
prices welcome finally so again some
reimbursement methodologies we talk to
under the hospital you have percent of
charges we have per diems case rates you
know a mix of the DRG ms-drg components
to it a PDR ap G's which is an
outpatient payment scheme we have none
of those here
they do have them and they are
significant across the nation we're just
fortunate some insurance companies want
me to go to their primera wants us to go
to that however in order to do that the
system behind that to capture all that
would cost us fifty thousand so I asked
premier to pay for that they didn't want
to so they keep 80 percent of charges
but there's a big investment we're
moving towards VBS which is value-based
purchasing bundled anybody heard of
bundled payments especially the joint
replacement program that CMS has done
across the nation
that's a movement what that's doing is
saying we're going to give you this pot
of money between your physician hospital
nursing home and everything else in
between PT etc you divvy it out you've
got to deal with only that component of
it problem with that is that if you're
not on the same team you guys winners
and losers so I'll tell you right now in
our bundle payment we're going to work
really closely with physicians
I'm sorry nursing home you're out
because I don't want that patient
withheld nursing home because then I
have to give them some of that money so
we're going to try to do everything we
can to keep them within this little
group that's why you need to work
collectively together because it usually
there's winners and losers in those
things but that's where it's moving this
value-based things are evolving
significantly eventually a lot of our
payments will be based on keeping people
out of the system which ultimately
should be what we're doing that's in the
business where ours is taking care of
those in need and try and keep people
healthy but you can't make people be
healthy so these are the basic overviews
and we've talked a little bit that
within that so you've got products or
critical access hospitals other systems
outside of that PPS hospital progressive
Kamath systems
those are your typical urban they're
going to get this DRG fixed rate and the
more they see then the more they're
going to make because they can cover
their overhead critical access hospitals
were not able to do that so that's why
they came up with this methodology
all right now I covered down we will
move off an anti I covered that all
right
so hospitals converted in these cause
since cost reimbursement was and is
greater than the reimbursement we would
have received under PPS so that's why it
was important to me there's requirements
to say that back in or Obama he had
within his proposed budget plan you can
be a critical access hospitals within 10
miles of another facility or you would
lose your critical access designation
you know how far we are from Griffin
nine point two miles
why didn't we build it's just up the
hill another but the issue was who cares
if it's can why not fifteen why was it
can because it was a budgetary number
they look to see how much could they
capture all that helps our budget
fortunately enough Congress did not pass
that they didn't even entertain that we
only had to go few times did you see to
fight that but that was the discussion
what what what's the what's the mileage
you know what I would have done mayor
coming you say please close down Bishop
Boulevard make us go around that's no
longer a let us go half a mile yeah
exactly something we get these appoint
eighth of a mile please figure something
out
so al part of your question cost
typically in hospital variable cost
includes your supply your implants your
staffing your food your dietary pharmacy
fixed costs CEO course staffing
utilities that you know your debt
service and then your physician
compensation because many of them have a
fixed payment not all of them some are
very productivity based and so is the
more you see the more you make but
that's changing in their environment so
really more some of these really truly
are semi variable there's only certain
level level that we can go down to so
this is supposed to be a true/false I'm
just going to give you the answers here
generally in many are not sensitive to
volume if we saw 15,000 emergency
department
a visit or 5,000 emergency department
visits I'm sure hoping the hospital
still keeps one CFL humming Qi so I'm
hopefully not volume dependent but at
some point like even our human resources
at some point we need additional support
when we have like a few years ago on we
had 300 employees now we have 450 the
amount of paperwork and processing the
payroll etc is more intensive so we
either have to find system applications
to do that technology or we have add
resources and staffing to be able to
help support those so cause volume
increase what happens to your fixed cost
per unit of service so volume goes up
and I have a fixed cost me let's say we
have 100 patients and we allocate the
cost of administrator over those hundred
patients now I have 200 what happens to
that cost per unit it goes down same
thing if we have 200 and it goes down
100 that cost per unit goes up same the
variable cost units are service equals
patient days for room and board revenue
and charges for ancillary services okay
reimbursement under PPS hospitals you
decrease your volume what happens to
your reimbursement it goes down unless
you see the less you make right that's
traditional every we all know that
you're Walmart they sell a thousand TVs
they sold on TV they sell tooth health
and they need more right the more they
sell them more they may
guess what critical access hospitals
that's counterintuitive it's not true if
I see less patients was my reimbursement
for Medicare going to be higher katja
why because they pay me my cost
my cost per unit went up so the less I
see the more I made them more I see the
less I make because I'm only ever going
to get paid my cost it's
counterintuitive and so that's always
confusing it doesn't matter if you're
sitting on the board or not yet serve a
comparative language or you I mean they
have observation beds which you get paid
less for versus a regular thing so
they're defining your cost is going to
be that observation page because
everyone want to reimburse you and those
kind of things so the question really is
under Medicare reimbursement how do they
define how they'll pay you do they drive
business I'm kind of prison do the
driving to nursing work trying to write
so are they driving businesses to
certain things like observation like
inpatient care is it better to have a
Medicare patient in an inpatient bed or
a novice bed observation sorry
abbreviation which one's better for
Medicare honestly having them in an
observation bed is better because then
Medicare constituents or customers have
to pay twenty percent of charge if
they're in an inpatient bed they have a
straight deductible one's done and if
they met that earlier is that so the
Medicare population has to pay for that
twenty percent so having them in an
outpatient setting makes a lot more
sense for Medicare they have
requirements so now they have it used to
be based on certain criteria base driven
now it's based on how many Midnight's
are in are you into if you're into it in
your knobs if you're in more than two
then you're in then it's based on that
so they took we by the way we asked for
that and we all hate it now we said we
don't like the way you're doing this
you've got to simplify and then they
simple and we didn't like it so some of
the things that are influencing health
care and wife's getting challenging we
had a major change in our in our
classification icd-10 which is your
diagnosis in related classifications
this change from icd-9 to 10 and 2014
2:15 and it really substantially changed
a coding aspect one from like 8,000
codes to 80,000 and so it's got a lot
more specific it's really hard to run
today to get any comparables is almost
impossible especially on inpatient care
or surgeries and stuff because the fact
that icd-10 is so specific like they
have they live and I have some if you
hit by a car in a rural road then you
code it to this but if you're hit by a
dog it's different I mean there are
really I could throw some up and you'd
be like really that's a code and there
they are that specific it's really
strange some of them are hilarious I
don't know how they keep up with them
but they are a bit by a shark while
scuba diving you know did they live
inpatient quality reporting the Macra
which i talked about early on position
reporting this is significant you could
have upwards upwards of 9% fo physicians
you know that can be a huge swing and
their pay in any one year yet on the
other side if you do well you might gain
readmission rates we got to monitor that
all of these things are reporting
requirements that we have to do we don't
get any as additional money but if you
don't do them then you make less money
so one of the things in that in summary
as we can start to wrap this up why does
our foundation help us there are many
non cost based programs psych and rehab
don't make money so by providing certain
services in continuing to support those
across continued and have the foundation
helping us within that so that we can be
self-sustaining and self-determining in
our future it's really important skilled
nursing facility sniffs home health
agencies non reimbursable cost centers
just certain things that we don't get
any payment for but we want to continue
to provide those services because it's
important to our community that's where
the foundation that's where being a
public hospital district really help
other other things within caution versus
cost the overhead that our non
services things like today our care
coordination I mentioned earlier that's
the right thing to do
honestly it costs us money to do it we
look to Grants and that's part of the
Foundation's efforts to bring in those
type of things to help offset that it
doesn't dollar-for-dollar
but it's caring for patients and getting
them in the right place so that their
care is better so that they don't end up
in your emergency department with a
major problem down the road those are
really important things to do
nobody's paying for you at today some of
the things that foundation has really
helped us with an annual giving the the
whole hydro works pool therapy and
underwater treadmill we would not have
had that the system we had had failed
and would not be obsolete it'd basically
be a probably a mosquito pond now it
would be gone and that helped us
tremendously the 3d mammography unit
that we have been blessed with happened
in 2014 the 2015 various areas a lot of
different areas of services in 2016 the
o.r project and then now one of their
major efforts is 2017 on the expansion
and as we look to that why we needed
that in 2004 when we opened this we
thought we'd plenty of space forever now
we're out of space with volume have
increasing as much as they have as much
as 25-30 percent we need more space and
that will be the case for a while then
there's the if I get this out of order
but the surgery project which is well
underway and should be done by August in
the Baugus then come online by September
which will be perfect
so summary healthcare finances this
complicated I mean we we can't do it
justice in an hour I hope that you got a
little bit of paste of the complexity of
what it means within our institution on
how we manage that but each input is
unique
therefore care delivery must be flexible
it can't be stagnant everybody want to
treat you the same we'll put you on the
conveyor belt we'll run you through
because you're all the same and
I can then control all my cost that way
and we can't do that in health care
physician orders dry physicians still
drive everything we do without
physicians in our community we would not
have a hospital they still drive
everything that care today so orders
drive provisions of care adding to the
variability payment is also variable
depending on who's the insurance payer
what coverage do you have does your
insurance cover to cover that today not
tomorrow by the way one of those things
that you know we want an example of this
what do I mean
primeira decided and I'll say this wrong
and please correct me those that know
but propofol is that the right word the
administration of the drug with St sure
drug fishy colonoscopies dr. Jones likes
that it works very well he wants the
CRNA in the room oh man loved it I had
that done it was awesome I remember
nothing but you know I got to tell you
when I came out if I had it done here so
I didn't do it at home and I had John
O'Brien my materials manner come in and
make sure I got to where you did go
after we were done it and I told I told
I told him hey come on like tell her I
died cuz I thought it'd be funny I don't
remember actually saying that I'm glad
he didn't call her because I thought it
would be funny I guess fairly but I
somebody's probably what you tell people
under that stuff it was awesome but
premier decided we're not paying for
that it's an additional cost
even though physician preference is that
they're just not gonna pay for so we
help subsidize them for the CRNAs
because it's really important a
physician for that aspect of care that's
what insurance companies do so that
insurance companies a big or that
negotiating those Ray's pair makes
regulations have a big influence of how
and what we do here we're going through
part of that it within the next few
months we'll have a review by an outside
agency that will come in and evaluate
how we're doing are we meeting the
Medicare standards technology changes
rapidly how do we reinvest in that so we
need a profit in order to Reba or the
foundation has stepped in in many gaps
where we didn't have
that to be able to offset that and help
us continue to offer high quality
technology and keep our prices
reasonable and then many different
players in health care all right yes sir
he'll hear from insurance companies
setting the standard here what is the
limitation and you may want to go to so
the question is is that it truly
negotiated rate or you just told
Medicare Medicaid they're the big while
you're told you don't negotiate
other commercial payers you do have the
opportunity to negotiate your
negotiating power is limited by even
within our community wall by who's
negotiating what the more players and as
we talk about our fully integrated
health systems where you have physicians
and hospital and all that working
collectively you have more negotiating
power so then you do have the ability to
go and see you now at some point you
gotta prove outcomes if you're improving
this is what we're doing and we're
working on that part of the center of
excellence with it with the orthopedic
surgeons is in developing that at some
point we will develop a bundle payment
that we can take to a Premera
or to a uniform and say why would you
want to send your patients to the west
side to have this done hemmed in here
here's our outcomes by the way our
prices are half half of what they are
over there so I wouldn't want to have it
done here
keep them local but if you can prove
that you've got to have statistics to do
that you've got better negotiating power
typically two to three years so right
now I'm working on the premiere contract
hospital loan it's really hard because
grandma just saw him last year so I'm
not going to get any better than that if
I had an isolated market I could so I
would take the same contract that Tri
State can get with primeira but they
have one eight and
number of covered lives in their arena
so they can get 90 plus percent of
charges they just don't have the same
volume we do we're here they can drive a
lot of that but it's getting more and
more challenging have people heard of
what narrow markets are okay so we have
one in our arena it's a catalyst group
they went directly to the Blue Cross of
Idaho to a very isolated market and they
said we'll take care of those patients
if that patient goes outside and so
these are self purchased insurance plans
if if that patient goes outside of the
market they have a fifty thousand dollar
deductible so they can go to Grima and
they can't come to Pullman because
that's how narrow they Maryland they did
the market they kept it in Idaho those
are happening the van properity
population how are we competing on
supply and demand yes absolutely
not in all areas so a lot of that is
contingent on providers and can you get
a provider within those specialties one
of the things were actively trying to
recruit to and we are have been
successful here just recently is in
non-invasive cardiology the other areas
in pulmonology and sleep the demand
there we have to outsource that today so
an outside group does all of that all of
those funds go outside of our market to
be able to do that because we may do the
study here but the providers aren't here
so there's no reinvestment back into the
community for those like services so in
some areas it's a real challenge because
it's specific on that in other areas and
we're keeping up and that's one of the
reasons we're looking at building the
fourth of our or adding the same day
services expansion it's because the
demand has been there we are at capacity
and we have just no more room
in order to get that now I say that
almost tongue-in-cheek because there's a
lot to do with physician preferences and
if you're if you're a physician and dr.
King said could speak to this you don't
want to start surgery at 6:00 at night
and that's just emergency you prefer to
get in and get out so you get back to
your clinical care for patients and so
most physicians have block schedules
because then they can control their life
they don't want just well what do you
have today
okay well Gowell calls even get them in
today that doesn't work very well in
there right so you have to have that
capacity but in order to do that
sometimes you have those downside
because nobody wants to start two three
four in the afternoon if we could around
24/7 in those areas and people Roland do
it you could control the cost much
better but you can today there's a lot
of us based off proposal you might yeah
well what what you have in this market
is of all I can go I can go 9.2 miles
and I can start a seven so I'll take it
there well no way it was stopped with
one here we don't want you to do that so
some of that predictability and stuff is
very challenging and our market is based
on providing healthcare so I don't know
if that totally answered it adequately
or not we can talk more if it didn't
other questions I have a good together
here is only top of the game but even a
surgeon knows that they're really good
for so many hours of solid surgery
before you know they get a little
question on do a little thing so you
they know about you you can commit a
surgery unit for how long of course
that's that if that's your front yeah
yeah well yeah and that's that's really
dependent we've you're exactly right the
quality of care of your providers be it
your nursing staff to your physicians
diminishes really if you don't give them
enough rest time and so one of the one
of the key importances of recruitment is
to provide especially physicians break
in between so they are
call all of the time here we'll burn
them out and in short order same goes
for your nursing support staff if they
don't have respiratory shifts and we
used to do this so you'd be done and you
had to go late because the case went
late and you were on call and you got
called back and then you had to come
back in at 7 in the morning to start it
all over again quality goes down now
what we do is we have we have a call
shift and then they when they're not
called a nerd-off
so they don't come in the next day
that's a different group so you have to
have staffing which add some cost but it
provides a better quality of care plus
rest between shift we guarantee a
certain amount of rest between shift so
they aren't only getting a that again 10
so they get a full night's sleep baby
staff there's a difference in cost to
have your own staff or subscribers now
occasionally sex all over Swedish yeah
yeah 2.5 times the cost for traveling
compared to what you you can keep here
you're typically doing that in areas
most of time here in our market now not
when you were on the board we had a
problem at the end of just you know
turnover because you were doing a lot of
low senses etc today if we have at
relations do we generally do to somebody
that's on maternity leave
it's a planned event you know they're
going to be out for 12 weeks it makes
sense you're going to pay a little more
but you wouldn't want to hire because we
you made a commitment to employ them
forever so you do short-term stuff like
that we don't have nearly the travellish
we used to yeah
it's typically that
do you think the value-based system will
survive with the Affordable Care Act one
way in the affordable care act so will
the value-based payment system continue
to exist if the Affordable Care Act
changes the affordable care act will
change
I mean inevitably it will change somehow
who know it doesn't matter what
administration it will change i I do
health care if the radio was going is
non-sustainable it has to change you
can't continue to have escalating
payments and expect anybody to be
willing to do and be able to pay for it
so it does have to change how we deliver
health care needs to change
we're reactionary but you know America
has done that to himself we've done to
ourselves we don't want anybody telling
us what to do we just want you to make
it better when we didn't do it because
that's a lot how we live fix me now I
didn't take care of myself but fix me
now so some of that needs to change that
getting in front of that and changing
our culture and how we respond to that
needs to change so yeah I do believe it
in some sense it will there's
demonstrations that are showing it how
it will be I don't know what it will
take but today part of the part of the
problem is the fragmentation in health
care in the lack of communication
between even us and our providers and
you know you think you're all in same
page but you're really not in all sense
so streamlining that integrating a lot
of that will have a lot of impact on end
I do believe that it will take such a
foothold it started out a 20%
demonstration analytic expecting two
years value-based purchasing will
represent 80% of the payments in two
years they originally thought it would
be five but that's how quickly it has
broadcasted out so it's here to stay and
we got to learn how to deal with it
the problem will be is we're under this
payment MA
which the more we do the more we make in
some sense I discount addicted something
else like this but that's that the
health care system today fee-for-service
tomorrow when we finally get there I
don't know what it will look like when
it's value-based and you're providing
value you're keeping people healthy how
do you bridge that gap that'll do the
challenge and hopefully you have enough
to survive they have periods of time and
so it's really important now we utilize
again I promoting Ruben and his staff
but that's what we've determined as part
of that pathway there to survive those
those those time periods so that we
aren't falling behind in technology and
other things so that when you get there
you can't provide it because you're too
far behind the curve anyway I don't need
to have another MRI just because I had
one here for the specialist and
insurance companies can say you already
have Lyme RI for that particular injury
so officially nothing about is driving
remainder goes so the question is when
will that happen when will that occur
meaning will insurance companies dictate
the fact that somebody else ordered a
secondary test that has already been
done is that fair
doing this for her just told me I got to
repeat you so and I didn't get paid
tonight no I can't even with its cost
you pay cost so the the question is is
when will heaven it's happened it
happens today insurance comes if you had
an M R they are going to approve that's
part of that whole pre-authorization if
they see you had this test died they're
not approving one for another one
they'll deny it so you won't get it what
happens today
it's now's when it
exactly so some of that's happening now
is there duplication of services yes
that still happens in some sense but
more and more that's changing so one of
the things that is is when you start
looking at an integrated model and you
start looking about coordination it's
when you're all on the same team you
know dr. Joe is much better at this than
I am I'm going to send my patient there
except I know that patient will come
back and we're not competing against
each other that will be important to
control cost because today we compete
against each other for the same patient
for many different services all right we
have a few more machine that case oh the
question is is what are the advantages
of acquiring other medical practices be
it physician practices or anything and
we'll we look to acquire more in the
future I will tell you this palma
regional hospital has not addressed with
we ever gone out and tried to buy any we
have reaction airily responded to
requests so Palouse pediatrics as an
example 2009 remember out doctor frosted
and mike when al decided he was going to
retire mike realize i'm going to be the
basically the only pediatrician on the
blues i don't want it and I don't want
this headache and by the way I can make
more money by being a locum in traveling
and getting out of here and and making a
lot more money so they realized that in
order to have pediatric which I'll had
established on the Palouse and continued
to be here they needed something
different they came to the hospital said
would you be willing to look at this and
for the sake of the community we
responded and say yeah we'll look at
that so most of our everything we've
done has been in response to so many
providers today when they look at the
model of reimbursement trying to recruit
into it are facing challenges and saying
people don't want to come in that model
they will come the hospital say can we
look at something different
we'll always look and say what does that
look like so there's no future plans
right now to continue but we would
respond and being the theme some have
decided to stay independent the
advantages that we're starting to see
that are coming I talked about care
coordination I mentioned a couple
different times there are new
reimbursement models that will pay you a
per member per month to do that most all
that resides in primary care we had no
access because we had no primary care
under our clinic network provider that
to get to the new revenue streams that
are emerging under these value-based
models that's one of the advantages of
coordination and integration so that's
coming and we're getting ahead of some
of that contract negotiation because
you're all going to the same person and
not divide and conquer you're going
jointly we'll also have some Vantage's
there correct so well I'm not sure I
understand totally through supper
no we all hospital recruits a general
physician and that person okay
so that's a I see your question now so
the question is is today Poland family
medicine may have an opening how do they
recruit is that is that how the hospital
involvement of that compared to like
Palouse no today we're working closely
with Pullman family medicine identifying
what the needs are the community what
type of provider should be there we work
with them jointly plus medical group
because they're independent or out doing
their thing
they're trying to recruit in there still
and there's still a competitive model
there although the nice thing is in on
market I'll tell you today we work
closely with them and have a lot of
communication so thankfully you're not
it is a you know evil one can and
you know what it's you know whatever I
do for me is just my thing and it's that
tragedy of the Commons which we're all
going to fish out of the same pond the
more fish I make or catch the better off
I am until we're all out of fish that
doesn't happen today we do coordinate so
there is some communication which is
nice in our market it's not a stream
line though because we don't have that
involvement yes sir
when you talk about coordination you see
changes in the hospital's example with
all of the hospitals in this area if
some of might end up for these a great
question so the question is in this area
well all hospitals exist a long term
will some in danger of closing or is
there better models you know I would not
I couldn't professionally tell you that
all will exist it should exist there's a
lot of duplication of services and end I
lived the corridor on for three years it
doesn't make sense to have 3 Rd MRIs in
a basically 20 mile radius when they're
almost 2 million dollars each now you
may need to because of volume but it
should be volume driven I do eventually
believe for this area where there has to
be coordination of that you could have a
very effective and inpatient care unit
and they focus on that and they do it
very well
instill in community so you know I'm
pointing outside because I think Pullman
ought to be central because they are
they're the middle and then outside that
you could have outpatient surgery
centers or support or urgent care
centers etc but you you work
collectively I believe long-term that's
where it will get to I think until
reimbursement dictates that it won't
change and under a critical access model
because we get paid or cost advantages
is there to do that so today we have a
fake glass-bottom you know the there's
not a lot of centers of control
cause there's some there's not a lot but
if that model went away problem is this
could you react quick enough I think
that it's some of that's happening I
mean we are partners in general surgeon
practices the specialty practices
medication oncology coming on board that
will be collective more and more that
communications happening I think that
will evolve long term how long I have no
idea I realize at some point if that
happens and I think that ultimately it
needs to I don't know if you need this
kind one they had if you are alive and
it Griffin wanted one there was a
committee gem tournament whether you
ought to have will have because the
population in the side yep and everyone
away yep I think eventually to come back
to some of that I do believe that some
of those remember little bit school
would also have scale occasion yeah that
was mine that was my love of working for
two facilities that was awesome by the
way it is a little after 7 I do want to
be respectful of your time I have
nowhere to go I will stick around if
there are other questions but I
appreciate the fabulous amount thank you
yeah thank you very much
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