We checked in this week with Todd Nida, the chief executive of East Adams Rural Healthcare in Ritzville.
A month ago, he held a news conference in Spokane to share that his hospital is starting to emerge from a serious fiscal crisis. Today, Nida says East Adams is still on that path.
This interview with lightly edited for clarity and length.
Todd Nida: Financially, things are starting to look much better. We're starting to turn a corner a little bit. Feel pretty hopeful about our numbers.
DN: Nida says some of the crisis was caused by financial fraud. Two past administrators had withheld information from the hospital’s board about the depth of the fiscal problems. He says the hospital’s lawyers and administrators are working with its creditors to restructure some of its debt. There were also some timely infusions of cash and voters approved two tax measures that will help with operating costs and to fund an ambulance service.
TN: The big news is we're going to keep our clinic open with at least one provider.
DN: One other development. The federal government has agreed to allow East Adams to change its stature from a critical access hospital to a rural emergency hospital. It will no longer serve as in-patient facility. It will focus on emergency care, its clinic and a few other outpatient services, such as radiology. Residents will have to go elsewhere for procedures that require more than a 24-hour hospital stay.
I asked Nida to make a list of bullet points. What are the most significant things that make operating a rural hospital challenging?
TN: Reimbursement reductions, year over year.
DN: That’s the amount of money insurance companies, the state and federal governments pay the hospital to care for patients. Often they don’t cover the full costs.
TN: The other big issues for us, I would say, is small population bases that are aging. That makes it difficult. Higher Medicaid, Medicare percentages. Payers continue to be difficult to negotiate with. We're working through the rural collaborative group, which is 31 hospitals right now that we're a member of, to work on those payer contracts in the future to try to improve our rates with payers because, you know, as a small one-off rural hospital, it's pretty hard to negotiate good rates. But you combine all 31 of us and we'll have much better ability to get a better rate negotiated in the future.
The other tough thing is this continued compliance. What is required to be compliant with quality reporting requires a lot of admin for the quality and metric reporting that we have to do. A lot of rural hospitals are admin heavy and that makes it very difficult when your revenues aren't there. So that's an ongoing challenge that I think rural hospitals nationwide are going to have to start addressing. How do we manage this top heavy administration in small community hospitals? We may have to start looking at neighboring hospitals and say, what can we do together admin wise to share admin to try to reduce some of those costs. The Affordable Care Act kind of drove a lot of that top heavy admin basis and it's just something now that we have to be able to work through and accommodate. That's an ongoing challenge.
DN: Can you help me understand the Medicaid and Medicare reimbursement rate? You’re caring for patients who cannot pay for themselves so the Medicaid and Medicare programs pay for them. But it’s not like you’re getting paid the full rate for the amount of money you throw out there. Can you explain to me what that’s all about?
TN: Yeah, so in critical access hospitals, you get reimbursed for your costs, so it's basically whatever it costs us to provide care for that patient. That's what we get paid, so there's not profit in it for us. It's a very fine line that we walk between running in the red, running in the black because our reimbursement rates are based off of our costs. That's the ongoing challenge.
It's ancillary services that we can provide that can help bolster that. But in a small rural community like Ritzville, 1,700 people, I believe, it makes it very difficult because when you don't have large volumes, you don't have the ability to beef up ancillary services, other forms of clinic services, pain clinic, dermatology, cardiology, those type of things. Those are avenues where you can make better money in reimbursement through your payers and bolster your bottom line.
But on the Medicare, Medicaid, it's a cost basis so makes it very difficult.
DN: It also doesn’t sounds like there’s incentive to be efficient. If you’re getting paid for your costs, what’s the use of lowering your costs? Is that an accurate…?
TN: That's very accurate. Yeah, and that's the challenge, right? Because we are all trying to be very cost conscientious in everything that we do. We're always trying to drive down our supply cost, our contracted cost, our provider costs, everything that we can. But there's not a huge benefit in it, other than volumes. When you can reduce enough staff that can wear enough hats to cover enough positions, that's the only way you stay viable and it puts a lot of stress and strain on your staff, admin included. A lot of us wear multitude of hats to try to keep the wheels on the bus, so to speak.
DN: So what about staffing levels? We hear about not having enough nurses, not having enough doctors. Have you had to go outside to get traveling nurses to come in or traveling doctors to come in because those are more expensive than if you had them on staff?
TN: During COVID, that was an issue. We did have a lot of contracted nurses, traveling nurses. Since then, we have not. We are seeing that shift within rural hospitals. We're able to now employ all of our nurses. We still have a couple contracted nurses, but as their contracts expire, we're actually hiring them back as employed.
We currently only have three contracted clinical staff in the facility currently. However, we did go with contracted providers in our ER for the REH [rural emergency hospital] model, and that was a cost savings for us, actually going with contracted providers. That is also a shift that we're starting to see. Employed ER providers are a higher level of provider and can be very expensive to employ, but you can actually bring in contracted providers at a better rate, because obviously they cover the benefits, the insurance, all of the ancillary costs that are involved. So for us, that works. It was a cost savings for us.
DN: In February you talked about having two rounds of layoffs. You were at 69 employees, hoping to get to 55. What has happened since then?
TN: We were given our REH designation on March 6, so we are officially a rural emergency hospital. With that, our clinical nursing staffing plan changed. The state of Washington has a staffing committee rule where our nurses actually help dictate what our staffing models look like.
With an REH model, we no longer have inpatient and acute care in that wing of our hospital. Therefore, we did not need that extra nurse and NAC to cover that. So we reduced to one nurse, one NAC, and one ancillary support for every shift. So it was a reduction. So through that reduction, we did have some more layoffs. I'm not sure our exact count as of today. I believe we're around 58 currently. So we're about where we need to be. We may have some more changes yet, but may not. Financially, it looks like we might be able to manage where we are.
With the upcoming conversion of our electronic health record system, we have to be cautious about getting too lean. We don't have enough hands to do all the work.
Our payroll has nearly been cut in half since I took this seat in August. So that's a huge benefit for us and I think we're about where we need to be.
DN: You alluded to the fact that you’re now a rural emergency hospital. As I recall, you’re the first in the state. Is that correct? Do you view yourself as a model? Are other rural hospitals calling you and saying, hey, how are you doing this?
TN: Well, yeah. So part of the rural collaborative group that I'm a member of, I did just last week at the CEO board retreat, give a talk about our path and how we got here. While I would not wish on anyone what we've been through over the last year, well, eight months, basically, I do believe there are going to be others within the state that probably take a very hard look at this model. Two, three, four, I don't know and I don't know who they are, but I know that there are some out there that are very much so struggling and this is a workable model.
DN: Nida says, while the hospital is in improved financial shape, it’s not where he can say it’s out of danger.
