All across America, the healthcare industry is facing some of the toughest challenges in its history. Overcrowded emergency rooms, a lack of affordable healthcare, the high cost of technology and an influx of uninsured patients have many healthcare providers walking the tight rope of meeting ethical obligations while still making a profit.
Here in Nevada, the challenges are just as daunting, if not more so. The state has witnessed an unprecedented population growth – in the Las Vegas Valley alone, the population has doubled in the last decade – forcing hospitals to cope with a crisis in a demand for services. In recent interviews with Nevada Business Journal, some of the state’s most respected healthcare professionals talked about what is on the horizon for Nevada’s hospitals and medical service providers.
Overcrowded Emergency Rooms
Without a doubt, the problem of overcrowded emergency rooms is an immensely serious issue for hospitals throughout the state. According to hospital administrators, the reasons for overcrowding are many, ranging from the mentally ill taking up hospital beds, to the growing senior population, to the uninsured not having anywhere else to go.
One area of concern, health professionals said, is patients using emergency rooms more and more as their source of primary care instead of seeking out a primary-care physician. “The stream of new residents coming into town and their primary demographic – young, often single – indicates that finding a family physician is not a priority,” said Michael Tymczyn, spokesman for the Valley Health System, which includes Desert Springs, Spring Valley, Summerlin and Valley hospitals in Southern Nevada.
Lawrence O’Brien, president and CEO of Saint Mary’s Health Network in Reno, said there just aren’t enough primary-care physicians to go around. “There just is no place for patients to go to get care,” O’Brien said. “The growth explosion has been far swifter than anybody would have projected,” agreed Lacy Thomas, CEO of University Medical Center in Las Vegas.
The U.S. Department of Health and Human Service’s most recent figures report Nevada had 55 active primary-care physicians per 100,000 people in 2000, much lower than the national average of 69 per 100,000 people.
Many hospitals are trying to find alternatives to relieve some of the pressure on emergency rooms. For example, University Medical Center operates Quick Care centers throughout Southern Nevada. Valley Hospital has a Rapid Treatment Center to treat primary-care patients. In July, a community clinic to serve the indigent and uninsured is scheduled to open in Elko that should ease some of the overcrowding in Northeastern Nevada Regional Hospital’s emergency department. Saint Mary’s Health Network also operates two clinics that serve the underprivileged: Saint Mary’s Nell J. Redfield Health Center at Neil Road and Saint Mary’s Nell J. Redfield Health Center at Sun Valley.
Emergency response systems are also doing their part to help increase efficiency and make it a faster process to serve patients in emergency rooms. American Medical Response ambulance company, which responds to emergencies in Las Vegas and two-thirds of Clark County, recently implemented an electronic patient-care reporting system. Previously, patient reports were handwritten by paramedics, said Derek Cox, the company’s clinical and educational services manager. The technology could save them up to 15 minutes per patient. “We are working with the Nevada Hospital Association and specific hospitals in making it a seamless transfer of [patient data] once we arrive,” Cox said.
The Mental Health Crisis
Emergency rooms in Southern Nevada hospitals are being inundated with mental health patients every day. By law, hospitals are required to conduct medical screenings on them before they are transported to a psychiatric facility. However, with a shortage of psychiatric beds in Clark County, patients often end up spending days in emergency rooms, occupying much-needed space.
One of the factors causing the crisis was the loss of 133 psychiatric beds in the private sector, said Carlos Brandenburg, division administrator for the Nevada Division of Mental Health and Developmental Services. “A lot of folks were basically getting out of the adult psychiatric business because the Medicaid reimbursement wasn’t very high,” Brandenburg said.
However, the state is hoping to see some relief when its new psychiatric hospital opens in Las Vegas in May 2006 with 150 beds. Another phase will add 40 more beds in December 2006. Brandenburg said he plans to keep the existing state facility licensed as a hospital in case he needs more beds.
The Legislature recently provided an additional $91 million in funding for mental health, which translates into a 47 percent increase. Brandenburg said about 80 percent of that funding will be used in Clark County to help alleviate the crisis.
But despite the promising outlook, a debate is occurring between the hospitals and the state over where the required medical screenings should take place. “We believe there’s no real reason to bring psychiatric patients to the emergency room,” said Thomas. “The state facility should be able to do a lot of the screening, medical and otherwise.”
Brandenburg said they have looked into the issue, but it is a matter of cost. “For the state to do medical clearance in our facility, I would have to staff it 24 hours a day with physicians and nurses,” Brandenburg said. “Why do we want to spend millions of dollars in a whole new emergency room at our facility when those dollars could actually be used for additional housing, medication and other desperately needed services?”
Keeping up with Rising Costs
When it comes to operating for a profit, hospitals in Nevada find themselves in a constant struggle. Part of the problem is the rapidly increasing number of patients without insurance benefits, meaning they can’t afford to pay their medical bills.
“Right now, we have about 44 million uninsured people – both working and unemployed – in the United States, and the number is growing,” said Paul Cohen, executive director of Comprehensive Cancer Centers of Nevada. “We as physicians and healthcare practitioners outside the hospital can say, ‘If you don’t have any insurance, we don’t have to take you.’ Hospitals don’t have that luxury.” Federal regulations require Nevada hospitals to evaluate any patient in the emergency room, whether they are insured or not.
According to Bill Welch, president and CEO of the Nevada Hospital Association, during the late 1980s and early 1990s, the average profit margin for Nevada hospitals was 6.6 percent. “The most current data shows the hospital industry’s profit margin has fallen to 1.8 percent,” Welch said. “You can almost make more money investing in a passport savings account. That’s pretty sad.”
Jim Miller, president and CEO of Washoe Medical Center, said anytime a hospital patient does not pay for treatment, those costs have to be absorbed by someone else. “If there’s a government program that assists, that program might pay something,” Miller said. “But all in all, hospitals across the U.S. are funding people who don’t pay by charging more to those who do. No hospital wants to exactly admit that. What we generally say is, ‘Costs in hospitals across the United States are higher because some people can’t pay.’”
Nevada remains above the national average in uninsured persons, with 16.6 percent of the population lacking healthcare benefits, according to a study by the Great Basin Primary Care Association.
As of April, Welch said he hoped to see some positive changes for the future enacted during the 2005 legislative session, which would provide more assistance for the uninsured. One bill, if passed, would establish a fund for individuals diagnosed with a chronic illness, who can’t afford insurance and yet, don’t qualify for county or state indigent programs.
The Nevada Hospital Association is also pushing for better funding of the Medicaid program, Welch said. “We don’t fund adequately, we don’t reimburse at a reasonable rate, and our benefits are in the lower percentile (nationally). Furthermore, we haven’t budgeted enough to even fund what it is we do have in our state health plan for Medicaid,” Welch said. “If the budget were to go through as it is today, many of us in the healthcare community believe there will be a $100 million to $140 million shortfall in the next biennium.”
Dr. Mary Ann Shannon, an orthopedic surgeon and partner of Las Vegas Neurosurgery, Orthopaedics and Rehabilitation, agreed changes need to be made in the Medicaid system. “Medicaid has it written into the law that if we don’t see a Medicaid patient within 15 minutes of the time they sign in, we are in violation and can be hit with thousands of dollars in penalties,” Shannon said. “The regular patients, who actually pay better, are put behind because of federal legislation.”
Darren Sivertsen, vice president and COO of the managed-care division for Sierra Health Services, which offers health plans and provides a physicians’ network for its members, raised the issue of the rising costs of pharmaceuticals and technology. “The way we cope with it is by trying to make sure medical necessity is really there,” Sivertsen said. “We have to figure out the best method for determining who should really have these services, and then the cost of these things gets spread to everybody. That’s what insurance is, a way of spreading high-risk events over a large number of people.”
Another area of concern for community hospitals is the proliferation of specialty hospitals. Miller said doctors across the country are finding ways to do more expensive procedures in outpatient facilities, which would normally be done in a hospital. He said this type of practice, which is being reviewed by the federal government, “leaves hospitals with the stuff that doesn’t pay for itself.” Miller said specialty hospitals and outpatient surgery centers generally only take paying patients and only provide services that produce high profit margins.
Recruiting Healthcare Professionals
It’s no secret that Nevada hospitals have an uphill journey when trying to recruit enough nurses to fill positions, especially as new hospitals sprout up and existing ones expand their facilities to serve the growing population.
Miller said the nursing shortage really is a national issue. “But for growing communities, it just intensifies,” he said. As a result of the shortage, Miller said the Washoe Health System often employs nurses from temporary agencies to fill spots in its hospitals, something commonly done to keep up with demand. But the problem with that, he said, is you are just taking them out of other communities. Nurses trained for highly specialized areas, such as intensive care, emergency rooms and operating rooms are the most difficult to attain.
However, the industry is facing more than a nursing shortage. Many types of healthcare workers are in short supply. The U.S. Department of Health and Human Services ranks Nevada the lowest among the states in per capita health services employment. “We have a severe shortage of nurses, respiratory technicians, lab technicians and radiology technicians,” Thomas said. “We have a statewide problem and we are aggressively trying to recruit from out of state, as well as supporting training programs in Nevada.”
Tymczyn said the shortages are exacerbated by the competition for acute-care personnel, particularly in Southern Nevada. Hospitals, outpatient surgery centers and physicians’ practices are all seeking the services of the same highly specialized labor pool. To help alleviate the crisis, Nevada has stepped up its education programs to increase its healthcare workforce.
Nevada’s smaller, rural communities struggle with the same recruitment challenges as its larger cities, but their dilemma is compounded by several other factors, said Kerry Aguirre, director of community relations and business development for Northeastern Nevada Regional Hospital in Elko. First, there’s the challenge of finding people who want to move to a small town.
And second, “If you recruit a nurse (for example), she or he is likely to have a spouse who wants to work as well,” Aguirre said. “If you can’t find that spouse a job, then you can’t get either one of them into the community.” Typically, small towns are limited by a lack of diverse employment opportunities. Elko relies on mining as its economic base, but that is changing, Aguirre said.
“We are experiencing good growth and our community’s business base is becoming more diverse,” she said. Aguirre said major retailers are expanding existing locations or moving into the area. Wal-Mart is converting its facility to a super-store and Home Depot is entering the market, as well as numerous restaurants. The housing market is seeing an increase, as well, meaning more construction-related jobs.
Another plus for Elko, is its local college recently implemented a four-year nursing program. “We work very hard to retain all our medical professionals, because we know we need them,” Aguirre said. “We want them to be loyal to us and not move out of the area.”
A Promising Outlook
While there are no short-term remedies for Nevada’s healthcare concerns, many in the industry are stepping forward to promote change. For example, Comprehensive Cancer Centers of Nevada is banding together with a network of oncology centers across the nation to form a drug distribution center for cancer patients that should be available next year. “The network will have access to pharmaceuticals at a lower cost, which we can then pass on to patients,” said Cohen.
Saint Mary’s Health Network recently opened a medically-based fitness center aimed at promoting preventive healthcare. “We are trying to create a long-term model that makes people aware of the positive impact of fitness on their health,” said O’Brien. “I’m concerned that in the long term, particularly with the Medicare population, there just aren’t going to be enough dollars. You have to have people beginning to think about getting healthy and staying healthy, living longer, more productive lives. I call it personal accountability.”
Sivertsen agreed preventive medicine and consumer awareness are vital to improving healthcare. Sierra Health Services offers health-and-wellness programs for those battling such conditions as obesity, smoking, diabetes and asthma. “The challenge we face in Clark County is the lifestyle is not always the best,” Sivertsen said. “We have a lot of smokers, a lot of drinking, so that’s a challenge. We are probably behind the curve relative to the rest of the country in this respect. We also have demographic issues because of our aging population. All of these folks put a lot of stress on the healthcare system; however, we view it all as opportunity.”
Dr. Thomas Vater, a Las Vegas spine surgeon and chief of University Medical Center’s Orthopedic Department, said he believes Southern Nevada’s medical community is misunderstood. “There has always been a little bit of public opinion that Las Vegas does not have quality healthcare providers and that people need to leave town to get good care,” Vater said. “The fact is that physicians practicing in Nevada come from excellent schools in California, the Midwest and the East Coast, and they are extremely well trained. I’ll challenge anybody in any major city to compare the medical care we offer here.”
Added Miller from Washoe Health System, “I don’t think we are second to anybody.”
