Hospital considers options to achieve financial health

By Ann McCreary

Three Rivers Hospital in Brewster is considering closing its “Baby Friendly” labor and delivery unit and making other cuts in services as part of ongoing efforts to stabilize the hospital’s financial condition.

“We have to evaluate what we can do to continue to provide services to the community,” said Bud Hufnagel, chief executive officer.

Hufnagel is putting together different scenarios that would restructure hospital services for the hospital’s board of directors to consider at a meeting on Nov. 25.

A health care consultant who lives in Mazama, Hufnagel was hired in 2011to perform a “turnaround” for the financially troubled Okanogan Douglas District Hospital – renamed Three Rivers Hospital in 2011.

“One of the greatest loss leaders is obstetrics,” Hufnagel said in a recent interview. “We have to realistically think about whether we’re going to continue to do obstetrics, and that generates a whole lot of emotion. I don’t have the luxury of looking at that with emotion.”

Three Rivers has been certified as a “Baby Friendly” hospital through an international program that recognizes hospitals that promote breastfeeding and mother/baby bonding.

Hufnagel is developing “different packages of services” designed to keep the hospital doors open and provide necessary services, including emergency care. Those options could include reduction or elimination of services such as a hospital-owned fitness center in Brewster, a medical equipment department that provides walkers and other devices, and a cardiac rehabilitation unit.

“I am starting from the first premise, which is that I have to have an emergency room,” Hufnagel said. “But I don’t necessarily have to have a Level 4 ER, I can be a Level 5 ER.”

Three Rivers is currently rated a Level 4 trauma facility, which means it has an on-call surgeon available within 30 minutes of the hospital at all times. “If we go to a Level 5, we no longer have to have an on-call surgeon,” which would mean considerable savings, Hufnagel said.

 

Doctors needed

A key to improving the hospital’s financial condition is hiring and retaining doctors to practice in the area and refer patients to the hospital, Hufnagel said. An audit of the hospital earlier this year said the decline in revenues over the past two years is “due to continued losses of medical staff in the community.”

Despite teaming with Confluence Health in Wenatchee and hiring a national physician recruiting firm several months ago, efforts to lure doctors to practice in the area have been unsuccessful, Hufnagel said.

Recently a physician affiliated with Three Rivers announced he was leaving the area by the end of the year. “That was the tipping point for us,” Hufnagel said. “From mid-2011 we are down six [physician] positions.”

Hufnagel outlined possible changes at the hospital for staff during a meeting last week. He said plans call for restructuring the hospital in December and operating under a streamlined model by January.

Three Rivers Hospital is certified as a Critical Access Hospital (CAH), a designation for rural hospitals that requires it to offer 24-hour emergency care seven days a week, that it treat patients in the emergency room regardless of their ability to pay, have no more than 25 inpatient beds and maintain average lengths of stay of no more than 96 hours for acute inpatient care.

“Our job is to stabilize and ship [patients], that’s our role as a Critical Access Hospital,” Hufnagel said. “That won’t change at all.”

The limited size and short length of stay promotes a focus on providing care for common conditions and outpatient care, while referring other conditions to larger hospitals, according to information from Health and Human Services.

Certification allows CAHs to receive cost-based reimbursement from Medicare, instead of standard fixed reimbursement rates, to help hospitals financially and reduce hospital closures.

 

What’s necessary?

State auditors this year advised the hospital to cut services and departments that aren’t necessary to comply with the hospital’s designation as a CAH.

The hospital district includes the Methow Valley from Mazama to Pateros, as well as the communities of Brewster, Bridgeport and Mansfield. It is supported in part through property taxes levied as a special taxing district.

The hospital has struggled financially for many years, hit hard by a high volume of charity and unpaid care, as well as a decline in admissions. It has kept afloat by borrowing money from Okanogan County to pay for operations. Interest charged on the borrowed money results in additional expense to the hospital district. As of this week, the hospital had $2 million in outstanding warrants from the county.

The possibility that Three Rivers Hospital might end labor and delivery services alarmed Mazama resident and midwife Blue Bradley, who chooses that facility when she needs to deliver babies in a hospital.

In an email, Bradley noted that she prefers Three Rivers because it has attained “Baby Friendly” certification.

Bradley said if obstetrical care is eliminated, she and physicians who deliver babies won’t be able to practice there, and related services such as laboratory and radiology services will be impacted.

The hospital board of directors will consider options presented by Hufnagel at its meeting at noon on Nov. 25 in the hospital’s administrative office building.