UNION COUNTY — A state program that pays 100 percent of charity care at rural hospitals and a federal program that funds health clinics are among the options being explored by the Union Hospital District to move its finances into the black.
In recent years, the district, which is composed of Wallace Thomson Hospital, Ellen Sagar Nursing Home, Union County EMS, and Carolinas Health Associates, has lost approximately $2 million to $3 million a year. The losses are due to, first providing care to a growing number of patients who don’t have insurance. In the four months between September and January, the percentage of patients who don’t have insurance grew from 12 percent to more than 16 percent. Another factor in the losses has been the reduction in reimbursements by Medicare, Medicaid, and commercial insurance companies.
The hospital district’s fiscal year begins October 1 and for the first four months of the current fiscal year, the district had a net operating revenue of $17,229,797 and total operating expenses of $18,084,599 leaving a deficit of $854,802. At this time last year, the district’s net revenue was $16,101,701 and its operating expenses $17,254,033 for a deficit of $1,152,332.
During a joint meeting of the Union Hospital District Board and Union County Council Thursday evening, district Chief Financial Officer Paul Newhouse presented the district’s plans to, first, get its finances back to break even, and then to move them into the black. To break even, Newhouse said the district is working to implement approximately $3 million in spending reductions by renegotiating contracts to lower costs for outside services; handling more services in-house instead of contracting them out; and through greater efficiency. He said the district has already implemented $700,000 worth of these reductions and hopes to have the rest of them in place within the next 90 days.
To move beyond breaking even to getting its finances in the black, Newhouse said the district is exploring all options including participation in a state program that pays 100 percent of of the cost of charity care at rural hospitals. Announced by Gov. Nikki Haley during her State-of-the-State address, the program allocates $20 million from South Carolina’s Medicaid disproportionate share hospital program to cover 100 percent of any uncompensated or charity care at 19 Medicaid-designated rural hospitals.
Newhouse said that even though Wallace Thomson is clearly a rural hospital, it did not qualify because it has too many beds.
“The only criteria we did not meet was the number of licensed beds,” Newhouse said. “Only hospitals with 90 licensed beds qualify and we are licensed for 143.”
Wallace Thomson’s beds are licensed as short-term acute care hospital beds and Newhouse said the district is looking at possible options for reducing the number of those beds in order to meet the criteria for the state program. Those options include changing the designations of the extra beds to long-term acute care, rehabilitation or nursing home beds.
Newhouse pointed out that while the hospital has 143 licensed beds, it uses less than a third of them on a daily basis and has done so for more than a decade. In 2000, Newhouse said there were an average of 40 patients a day occupying hospital beds, a number that he said now stands at between 35 to 40 a day. He said the decline in the number of patients occupying hospital beds is due to many more procedures being performed on an outpatient basis.
With this reduction in the number of patients occupying its beds on a daily basis, Newhouse said the hospital could reduce the number of beds licensed for short-term acute care without reducing its ability to meet the needs of the community while increasing its chance of qualifying for the state program.
Another option the district is exploring is the Federal Qualified Health Centers program which is funded by the U.S. Department of Health and Human Services through its Health and Resources Administration. FQHCs are non-profit community-directed health care organizations serving low-income and medically under served communities.
“We’d apply for a grant for what is basically a physicians’ office,” Newhouse said. “It would be a non-profit community organization which we’d staff with physicians interested in working there. It would be a separate organization with its own community board. You would be getting money directly from the federal government.”
Newhouse said he has been to an FQHC in Georgia and found it to be no different from any other physicians’ office in terms of treatment and care. What is different, however, is that it is has a sliding fee schedule for care based on a patient’s income level. He said the lower a patient’s income level the less they would pay, adding that persons who are unemployed would pay nothing, especially if they have children.
The district’s interest in these options is driven by the desire to continue to provide as wide a range of health care services to the community as possible while moving its finances out of the red and into the black.
“We’ve got to move into the black,” Newhouse said. “We really need to be able to fund needed equipment and repairs. We’re looking at everything that is out there that could benefit us.”
For more about the hospital district’s efforts to deal with financial and other issues see future editions of The Union Daily Times and online at www.uniondailytimes.com.
Editor Charles Warner can be reached at 864-427-1234, ext. 14, or by email at cwarner@civitasmedia.com.
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