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Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

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Page 1: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

Critical Access Hospitals: Protecting an Essential Community Resource

Page 2: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

Critical Access Hospital Overview

Page 3: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

Legislative History• Federal law: 1997• State law: 2001• Goal: Assure essential health care services

in rural areas• Must meet certain criteria, including:

– No more than 25 inpatient beds– 24 hour emergency services– Defined distance from other hospitals

(10-25+ miles)– Short stays (4 days or less)

Page 4: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

Washington State Locations

Page 5: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

• 38 Critical Access Hospitals• 40% of hospitals in state• Serve over 60% of state area• The only health resource for miles• Often center of care network with primary

care, long term care, emergency medicine

Washington Characteristics

Page 6: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

Medicaid is a Significant Payer

Medicare; 37.0%

Medicaid; 17.5%

Other; 45.5%

Note: Wide range of Medicaid, from 2% – 43%“Other”’ includes uninsured, underinsured, and people who do not pay for care

Page 7: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

State CAH Spending as a Percent of State Medicaid Budget

Very Little of Total Medicaid Budget Spent on CAH

Page 8: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

Proposed CAH Reductions Cut Amount of

ReductionMedicaid Fee-for-Service $27 million

Medicaid managed care $15.5 million

Federal match $42.5 million

TOTAL $85 million

Page 9: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

Total CAH Medicaid Payments Proposed Cut is Almost 50% of Payments

Dollars in millions

Page 10: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

Impact of the Reductions

Page 11: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

Individual Hospital Margins Before the Cut

Each bar represents an individual hospital

Page 12: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

Individual Hospital Margins After the Cut

Each bar represents an individual hospital

Page 13: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

8th Legislative District ImpactHospital

Total Operating Revenue

CAH Total Cut

Medicaid Payment

Reduction Percentage

Current Operating

Margin

Operating Margin after

CAH Cut

Change to Operating

Margin

PMH Medical Center 28,502,890 2,304,465 43.90% -9.1% -16.5% -7.3%

Page 14: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

•Loss of local services•Increased travel time to care•Inability to travel for care increases risk of prolonged illness, disability, even death

Impact on Patients

Page 15: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

• Some CAHs will close—in a few cases, fast• Others will eliminate important services• Adversely impact access to care• In some communities, lives will be lost

Loss of Services

Page 16: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

• Compromises entire health care system• Increases costs by…

– Delaying/avoiding care– Requiring long distance transports– Contributing to fragmentation of services

• Not simply a “rural” problem

Effect on System

Page 17: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

Economic Impact

• Largest/one of the largest employers in town;• Significant payroll; excellent family wage jobs• Vital for attracting and keeping businesses in

the rural community• Layoffs and service closures will happen if the

cut is enacted• Significant ripple effect

Page 18: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

What We Need

• Legislators to stand strongly against this cut• Oppose any budget that includes it

Page 19: Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association

Questions and Comments