Tim Putnam DHA FACHE CEO Margaret Mary Community Hospital Batesville Indiana Economic Impact of Indianas Community Hospitals Rushville 230 Direct Jobs 370 Jobs total 20 Million in payroll Direct and Indirect ID: 653500
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Slide1
Economics and Rural Healthcare
Tim Putnam, DHA, FACHE
CEO Margaret Mary Community Hospital,
Batesville, IndianaSlide2
Economic Impact of Indiana’s Community Hospitals
Rushville
230 Direct Jobs 370 Jobs total
$20 Million in payroll (Direct and Indirect)
$7 Million in other/non-payroll spending
Total
Annual
Economic Impact from the Hospital (all direct and indirect impact)
$33,192,217Slide3
Impact on Rural Communities
Community
Total Jobs Impact of Jobs
Salem 334 $25 Million
Winchester 316 $22 Million
Linton 354 $23 Million
Winamac 278 $18 Million
Tell City 387 $24 Million
Greencastle 405 $29 Million
Wabash 449 $33 Million
Angola 486 $31 Million
Rochester
556
$34 Million
Crawfordsville 541 $47 MillionSlide4
Larger Communities
Community Jobs Job Impact
New Castle 800 $58 Million
Washington 509 $41 Million
Logansport 815 $58 Million
Franklin 926 $68 Million
Madison 1,294 $103Million
Marion 1,314 $101 Million
Jasper 1,770 $123 Million
Vincennes 2,194 $149 Million
Valparaiso 2,301 $154 Million
Richmond 2,746 $168 MillionSlide5
Healthcare Economics
Cost Shifting Issues
Medicare Patients (4 – 20%)
loss
40
– 50% of Patients
Medicaid
35+%
loss,
8
%-15% of Patients
Charity and Bad Debt
100% loss,
5
– 10% of Patients
Remainder are Commercially Insured Slide6
Small Community
Hospital
with
$
10 million in
Operating Expenses
Cost
Revenue
Charity/Bad
Debt (8
% of Patients)
$ 800,000
0
Medicaid (15%)
$ 1,500,000
$ 900,000
Medicare (55%)
$ 5,500,000
$ 5,225,000
Commercial (22%)
$ 2,200,000
$ 3,520,000
Total
$ 10,000,000
$ 9,645,000
Loss
$
(355,000)Slide7
Rural Specific Economics
Programs like Cardiac Surgery and Angioplasty are profitable (rarely performed in small community hospitals)
Generally older patient population with a greater percentage of Medicare (per capita income is $7,417 lower than urban)
Urban hospitals are paid at a higher rate by Medicare due to “Market Basket Adjustment”
Must care for whole population
(No institution to care for uninsured and Medicaid)Slide8
Rural Healthcare
Rural residents:
Use tobacco, alcohol more frequently
Have higher rates of Hypertension and Cardiovascular Disease
Have higher rates of Suicide
Higher death rates due to Trauma
More frequently on Medicare and MedicaidSlide9
Physician Shortage
20 - 25% of Population is rural
10 % of Physicians practice in rural areas
Less than 7% of Physicians completing residency training practice in a rural area
Physicians are trained primarily in Academic Medical Centers
Inadequate programs to incentivize physicians to work in rural areasSlide10
Community Hospital Closures
1980s & 1990s
35 to 40 Hospitals closed each year
Closure left a void that is virtually impossible to fillSlide11
Critical Access Hospitals (CAH)
Balanced Budget Acts 1997 and 1999
CAH program has over 1,300 hospitals to date
Since 1999 very few of these rural hospitals have closed
Exceptions are Oakland City and Huntingburg
Paid based on cost for MedicareSlide12
Accountable Care Act
Will Accountable Care Organizations inhibit collaboration and care coordination between institutions?
Expansion of Medicaid
Impact of Health Insurance ExchangesSlide13
Future of Rural Healthcare
17+% of GNP
Healthcare is too expensive
Urban Centers have the political clout and financial strength
CAH Program and other Rural provisions in jeopardy
Federally Qualified Health Center (FQHC)
Rural Health Clinics