Survival

James R. Teeter
President and CEO
Arkansas Hospital Association

As another terrific year draws to a close, it's important to reflect upon our many accomplishments, some of which have been highlighted in Arkansas Hospitals from time to time. It's important, too, to note that without your support and the vibrant leadership of AHA chairman Gary Bebow and the AHA board of directors and you--our faithful readers and friends--these accomplishments would have been impossible. To all of you, we offer our heartfelt thanks.

While we've accomplished much in 1999, the next two years are critical ones. Our hospitals face a host of challenges in an environment of more Medicare payment cutbacks, growing numbers of uninsured, the ever-tightening squeeze of managed care, demands for more patient rights, toughening JCAHO standards, a lowered public perception of hospitals, and the growing threat of unionization of healthcare workers.

The struggles we face bring to mind a group of 28 lost Antarctic explorers who gathered October 29, 1915 on a frozen icepack in the Weddell Sea. Their situation was desperate. For nine months, their ship had been trapped in a huge ice floe, drifting helplessly in a clockwise circle. The sea had finely ground the ice into a tight clamp around their ship, immobilizing it. They were stuck. They had no radios, snowmobiles, helicopters, or other modern equipment. They did have three small lifeboats, some sled dogs, and a substantial supply of food. They also had Sir Ernest Shackleton, the most indomitable polar leader of all times.

Shackleton told them that their only hope for survival was to drag the lifeboats some 350 miles over almost impassable ice to the open sea. From there they must sail more than 800 miles through the roughest seas on the globe to reach civilization. He emphasized that they must travel light. Each man could keep the clothes on his back, two pairs of boots, a sleeping bag, and two pounds of personal gear. To dramatize this, Shackleton took out his Bible given to him by Queen Alexandria, tore out the 23rd Psalm and the flyleaf with her inscription on it, folded them carefully into his pocket, laid the Bible gently in the snow, and walked away.

The next day they started. There would be 13 months more of danger, starvation, thirst, and freezing hardships. But, all 28 men would survive and be rescued (the last of the survivors died in 1978) because of the brave and brilliant leadership of Ernest Shackleton.

The same can be true for our hospitals as they march from their own ice floe into one of the scariest adventure stories of our time. Unlike the group of Antarctic explorers, we do have radios, snowmobiles, helicopters, and other modern equipment. We also have sled dogs, lifeboats, and a substantial supply of food. And, I believe we have more than one leader with the traits of Ernest Shackleton. Are you one of them?

AHA Negotiates New Stretcher Ambulance Agreement
An agreement between the Arkansas Hospital Association, the Arkansas Department of Health (ADH), and the Arkansas Ambulance Association regarding proposed stretcher ambulance rules and regulations has been voided due to some questionable legality issues. The agreement would have excluded medical facilities that are licensed and regulated by the ADH from coverage by Act 60 of 1999.

The act created a new category of ambulance service, stretcher ambulances. It was designed to regulate taxi-like services that allegedly were transporting patients unsafely on stretchers. Had the agreement remained intact, medical facilities would have been allowed to continue providing transport services by obtaining a special purpose license already allowed under current rules and regulations.

The Arkansas Hospital Association and Central Arkansas Radiation Therapy Institute (CARTI) worked together to negotiate a new agreement with the ADH and the ambulance group that will allow hospitals and CARTI to obtain a stretcher ambulance license and continue to operate transport services under the following conditions:

• stretcher ambulance must be equipped with seat belts and mounting brackets to properly secure stretchers;
• stretcher ambulance must be operated by a medical facility licensed by the ADH;
• transport must be from a licensed medical facility for medical treatment or tests and must return to the same facility on the same day;
• transport must not exceed 30 miles one way;
• a physician's order must authorize the transport; and,
• stretcher ambulance drivers must have successfully completed a basic cardiopulmonary resuscitation course.

The proposed rules and regulations are being revised to include the provisions of the most recent agreement. A public hearing will be announced once the revised rules and regulations are distributed. The goal is to have the new revisions ready for the State Board of Health's approval by its October 1999 meeting.

BBA Impact Online
Hospitals can find out how the Balanced Budget Act's (BBA) outpatient prospective payment system (PPS) revision will affect them by accessing the BBA site on the American Hospital Association's Web site, www.aha.org/bba.

Outpatient PPS is not set to take effect until July 2000, but the impact could be severe. The Health Care Financing Administration's proposed regulation includes a volume expenditure cap that will reduce payment updates if the volume of hospital outpatient services exceeds the agency's expectations. The cap also unfairly penalizes hospitals for adopting new technology and treatments that appropriately shift services to an outpatient setting.

Arkansas Newsmakers and Newcomers
Gary R. Sparks has been named administrator of Cross County Hospital in Wynne, succeeding Harry Baker, who retired in July. Sparks comes to Arkansas after having been associated with Methodist Healthcare in Memphis for twenty-one years, serving in the corporate headquarters and at hospitals in Jackson, Miss., and McKenzie and Dyersburg, Tenn. St. Bernards Regional Medical Center of Jonesboro will operate the Wynne hospital under a newly signed five-year lease.

Doug Weeks, senior vice president, Baptist Medical Center in Little Rock, was recently selected by Arkansas Business as one of its Ò40 Under 40Ó list of young leaders. Also named to the list was Michael Keck, director of corporate relations at St. Vincent Health System in Little Rock.

Among Arkansas Business' 1999 top 100 Women in Arkansas are hospital executives Susan Barrett, CEO and president, Mercy Health System of Northwest Arkansas, Rogers; Jan Burford, CEO and president, Central Arkansas Radiation Therapy Institute, Little Rock; Lucinda DeBruce, CEO, Charter Behavioral Health System of Little Rock; Melissa Fontaine, chief operating officer, UAMS Medical Center, Little Rock; and Diana Hueter, CEO and president, St. Vincent Health System, Little Rock. Other Arkansas healthcare leaders recognized are: Sister Judith Marie Keith, director of strategic planning and development, Trinity Junior High School, Fort Smith, and former CEO, St. Edward Mercy Health System, Fort Smith; Betty Lowe, medical director, Arkansas Children's Hospital, Little Rock; and Nancy Rector, vice chief of staff, Baptist Medical Center, Little Rock.

Ross Hooper, president/CEO of Crittenden Memorial Hospital in West Memphis, has been appointed by Governor Mike Huckabee to serve as a member of the National Regionalism Committee for a term which expires at the will of the governor. The committee's purpose is to study ways in which to best promote the future growth and economic development of not only Northeastern Arkansas, but also the entire mid-south region of the United States.

Randy Cason has been named chief executive officer of Southwest Regional Medical Center in Little Rock, succeeding Mark Cain who resigned last summer. Cason is a former associate executive director and chief operating officer at Riverview Regional Medical Center in Gadsden, Ala.

Brad Morse, former administrator of Randolph County Medical Center in Pocahontas, has returned to Arkansas as administrator of Baptist Memorial Hospital Blytheville, succeeding Al Sypniewski. Morse returned to Arkansas after serving as administrator of Marshall County Medical Center in Holly Springs, Miss. Sypniewski has accepted the position of administrator, Baptist Memorial Hospital-Booneville, Miss.

Bill Curtis, chief operating officer at Wadley Regional Medical Center in Texarkana, has been named interim CEO, handling the responsibilities of former CEO Hugh Hallgren, who resigned in May.

Jim Maddox, long-time administrator of North Logan Mercy Hospital in Paris, has been appointed rural regional administrator overseeing not only the Paris hospital, but also Mercy Hospital/Turner Memorial, Ozark; and Mercy Hospital of Scott County, Waldron. All three facilities are operated by St. Edward Mercy Medical Center in Fort Smith where Michael Morgan serves as chief executive officer.

Tim Hill, CEO at North Arkansas Regional Medical Center in Harrison, has been appointed to the board of directors of Arkansans for Drug Free Youth (ADFY). ADFY is a statewide non-profit drug prevention organization which educates and motivates Arkansas youth, families and communities in the development of healthy drug free youth.

Bill Willis of Lake Charles, Louisiana, has been named interim CEO at DeQueen Regional Medical Center. Willis succeeds Chuck Long, who recently announced his resignation. Long, who holds a private pilot license as well as a degree in nursing, plans to pursue a degree in aircraft maintenance technology and avionics, then work toward a master's degree in aviation management.

Arkansas Medicaid Reduces Inpatient Copay
Ray Hanley, director of the Arkansas Medicaid program, mailed an official notice June 8 to hospitals stating that effective for dates of service on or after July 1, 1999, the Medicaid recipient coinsurance for inpatient hospital services will be 22% of the hospital's Medicaid per diem rate, applied on the first Medicaid covered day. Two years ago, Medicaid increased the inpatient coinsurance from 20% of the Medicaid per diem for the first day of a hospital stay to 45% (the rate was later reduced to 41%).

The Arkansas Hospital Association (AHA) board of directors had previously approved the move, which was based on recommendations of a special AHA committee, as the most preferable way to help the Medicaid program maintain certain savings originally realized via hospital contracts for obstetrical services that expired in April 1997.

The AHA lent its support to the increased copayment rates with the understanding that Medicaid would roll them back at the beginning of state fiscal year 2000. Medicaid officials weren't able to fully return the coinsurance to the 20% level, but by reducing the copay to 22%, Medicaid is restoring about $10 million to hospital inpatient payments for the next biennium.

St. Bernards Leases Cross County Hospital
St. Bernards Regional Medical Center in Jonesboro signed a July 1 agreement for a five-year lease of the Cross County Hospital in Wynne. Under the arrangement, St. Bernards took over operations of the Wynne facility.

The current Cross County Hospital board was replaced by a business decision-making board with an advisory board of local citizens. Final approval was required by both the Cross County Hospital board of directors and the Cross County Quorum Court.

St. Bernards Regional Medical Center currently holds a management contract with Lawrence Memorial Hospital in Walnut Ridge. It provides consultation services for Piggott Community Hospital and is affiliated with Paragould's Arkansas Methodist Hospital via programs of the Voluntary Hospitals of America.

Arkansas BBA Impact Worsens
A new study conducted for the American Hospital Association by The Lewin Group, a national healthcare consulting firm, gives hospitals in Arkansas and across the country more cause for alarm about the overall impact of the Balanced Budget Act of 1997. Data for Arkansas included in the study shows that the state's hospitals are likely to see their Medicare revenues drop between $667 million and $672 million during the five-year span covered by the law.

The estimate is about 11.5% more than previous estimates by the Arkansas Hospital Association that the BBA would cost Arkansas hospitals around $600 million as a result of lower Medicare payments for hospital inpatient and outpatient services, hospital-based home health services, and services provided through rehabilitation and psychiatric distinct-part hospitals and units.

The study also shows Medicare revenue margins for Arkansas hospitals could fall from 5.18% in 1998 to -1.4% in 2002, depending on how fast hospital Medicare costs rise over the period.

Nationally, the BBA is expected to cut $71 billion from Medicare payments to hospitals--$18 billion more than was originally projected--and lead to negative Medicare margins for 70% of U.S. hospitals. The study also found:

• Total Medicare margins are expected to register between -4.4% and -7.8% in 2002.
• Medicare margins for rural hospitals may plummet to -10.4%.
• Margins for hospital-based home health services, which are already reeling from the home health provisions of the BBA, are predicted to fall from -4% in 2000 to -11.6% in 2001.

Arkansas Medicaid Requires Updated Licenses
Arkansas Medicaid officials have notified the Arkansas Hospital Association of the program's intent to begin terminating providers for their continued failure to comply with requirements in the Arkansas Medicaid Provider Manual to update their licenses or certifications.

The Arkansas Hospital Association negotiated an agreement with the Arkansas Department Health (ADH) and the Department of Human Services (DHS) that would allow the ADH to send a copy of a hospital's licensure renewal to DHS at the same time it is sent to the hospital. This would allow hospitals to comply with Medicaid's requirement without adding another burdensome administrative step.

However, in order for the process to work, hospitals and/or their parent corporations must complete and return their licensure renewal applications to the ADH in the requested timeframe. According to ADH officials, some hospitals have been negligent in filing their applications in a timely manner.

Y2K Update: Have You Considered...?
Members of Governor Mike Huckabee's staff and Arkansas Department of Health officials coordinated a June meeting to discuss Y2K preparedness with healthcare experts and others knowledgeable about Y2K issues. After a series of Y2K updates by groups attending the meeting, participants discussed issues and problems which healthcare entities may face and identified gaps in the system and how all organizations can collectively resolve these issues.

Beth Ingram, AHA vice president, represented the Arkansas Hospital Association and shared results of a Y2K readiness survey. Additional presenters included representatives of St. Vincent Health System, UAMS Kidney Center, American Red Cross and American Red Cross Blood Services, Arkansas Department of Health, Office of Long Term Care, Mental Health Council of Arkansas, Arkansas Public Service Commission, Arkansas Electric Cooperatives, and Office of Emergency Services.

As a result of this meeting, the Arkansas Department of Health coordinated, through their area managers, a series of late summer and early fall regional meetings to allow representatives of all healthcare provider groups and community infrastructure organizations (water, gas, electricity, telephone, etc.) to coordinate plans to ensure that Y2K problems are kept to a minimum when January 1, 2000 arrives.

The AHA's Metropolitan District has held monthly meetings during the past year to coordinate citywide preparations for suspected Y2K problems. During those meetings, the following questions and/or comments arose, and are offered here for all the state's hospitals to consider:

1

December 31/January 1 is on a weekend at the end of a holiday season, which typically has a higher ER usage, departments may not be fully operational, and staffing may be lower. You would normally expect problems at a time such as this.

• Is your hospital prepared for extra problems associated with Y2K issues?
• Have you considered canceling employee vacation time during this period, thereby increasing your staffing?
• Have you determined critical departments and services that should be fully operational, and made the decision to close down those that are not so critical?

2

December 31, 1999 is the end of a century. There has been much media hype about the date, which will only increase as the year comes to an end. Some cities are preparing for major riots, bomb threats, unprecedented crowds at public events, etc.

• Is your city and/or hospital's security force capable of handling extra problems that evening?
• Is your city or town's police force preparing for such events?

3

It is expected that hospitals will see a rise in psychiatric patients during the end of this year.

• Does your hospital have appropriate access to mental health counseling?
• Security will be a factor here, also.

4

Entergy, Southwestern Bell, Arkla, and Arkansas Electric Cooperatives report that they have tested their equipment and anticipate no or minimal Y2K problems.

• Have you had similar discussions with your local utility companies? Have you requested evidence of their testing?
• Have you inquired about your water company's treatment facility? You may receive water, but will it be appropriately treated?

5

Have you met with local retirement and long-term care facilities, home health agencies, DME providers to assess their preparedness? Have you considered how their unpreparedness will affect your hospital?

6

Another way to prepare for Y2K problems is to establish a Y2K command center in each hospital or each district to coordinate activities during the peak period for Y2K problems (December 31-January 2). Hospitals should share with others in their district the following information about the command center:

• Person (and title) empowered to make decisions
• Telephone number and emergency numbers (mobile numbers, pagers, etc.)
• Back-up communication methods
• A list of items your hospital could share in an emergent situation (staff, supplies, pharmaceuticals, food, equipment, technical assistance, power supply, vehicles)
• Census information (in case you need to accept patients from an unprepared facility)
• Operational changes for that period

7

Metropolitan Little Rock ham radio clubs have expressed an interest in working with local hospitals to assist with communications needs, should other avenues fail on or around January 1. You might consider contacting your local clubs and seeking their help in a similar manner.

8

Have you communicated your hospital's preparedness with your community? In the AHA Y2K Communications Kit mailed to you earlier this year, sample press releases and radio announcements were included for this purpose.