LAKEPORT –Sutter Lakeside Hospital board members are considering applying for a Critical Assess Hospitals (CAH) designation that would allow the rural facility to get more federal funds, but also require the hospital to downsize to 25 beds?the maximum number of beds CAH permits.
Hospital board members and CEO Kelly Mather have been researching CAH designation for three months as a possible solution to financial burdens the hospital shoulders due to the high numbers of Medicare patients it serves.
Medicare pays only 50 percent of patient care, meaning one high-cost case could potentially wipe out a hospital financially. The program was designed to counteract the widespread closures of such rural hospitals across the nation. As of August, there are 1,283 CAH hospitals in the U.S.
“We are looking at ways to make the hospital more financially sound, because of reduction in Medicare payments and because of the high quantity of patients who have Medicare, we are not covering our costs,” said Mark Buehnerkemper, acting chairman of the Sutter Wellness Foundation.
According to the CAH Web site, the purpose of CAH designation is to “improve rural health care access and reduce hospital closures.” Along with having 25 or fewer beds, criteria to obtain the status include being a public or non-profit facility located in a state with an existing Medicare Rural Hospital Flexibility program. It also must have a 24-hour emergency service, a location of 35 miles from any other hospital or certification by the state as a “necessary provider” of health care.
Buehnerkemper said along with researching the CAH program, the hospital is looking into other options to maintain most of their 69 beds under the program by limiting their inpatient beds to 25 but adding beds to a skilled nursing facility and observation beds to the emergency room.
“We have not made a decision yet,” Buehnerkemper said of whether or not Sutter would choose CAH designation. “We”ve researched for three months and this looks like a feasible option? Redbud did this recently, and it stabilized their financial situation.”
Adventist Health Redbud Community Hospital converted to a CAH facility April 12, 2005. Director of communications Mary Nielson says the move has helped the hospital survive when 70 percent of the hospital”s patients are on Medicare.
“As a result of CAH, we get paid actual costs for caring for that 70 percent. It”s financial survival. It doubled our outpatient revenue for Medicare, but it does not affect Medi-Cal outpatient costs. We only receive 30 percent of what it costs us for Medi-Cal outpatient care at the hospital,” Neilson said.
Hospitals are paid by Medicare based on number of cases. Neilson said a larger hospital is able to spread the risk of a high-cost case because they are paid for a larger number of cases, whereas a smaller hospital that has a limited number of cases cannot absorb the risk. “A high-cost case can wipe out a small hospital and force them to close. CAH was established for rural hospitals to be paid for actual costs of care rather than by case,” Neilson said.
She said changing to a CAH has only allowed the hospital to improve its services with the added funding, and the hospital has not turned away patients due to the bed reduction. Redbud went from 32 beds to 25 beds when they switched to CAH. “Our census before and our census after was 16-17 inpatients per day,” Neilson said.
Father Ted Oswald heard about the potential CAH designation at Sutter and spoke about it at his Saturday mass at Lakeport”s St. Mary”s Catholic church.
“The bed reduction sounds bad at first, but after mass I had a great 45 minute conversation with a member of the board. As a small community hospital, they could go broke and close. This way at least they can break even?I think they”re really putting their heads together to come up with a solution,” Father Ted said.
Contact Elizabeth Wilson at ewilson@record-bee.com
