Nevada Business Journal hosted CEOs from leading healthcare organizations in the state at a breakfast roundtable meeting on December 11 at the Four Seasons Hotel in Las Vegas. The moderator was Bill Welch, president and CEO of the Nevada Hospital Association. The group engaged in a lively discussion that covered topics ranging from managed care, medical malpractice and recruitment of medical professionals to plans for the 2003 legislative session. Following is a condensed version of their comments.
Most Pressing Concerns
Michael Levy: I am a private practitioner specializing in addiction medicine. I’m told I have the only private practice in Nevada specific for addiction medicine. One of the issues I’m concerned about is parity for patients who have addictive disease and psychiatric illness, as opposed to physical illness. There is a significant lack of resources, as well as limitations to the care we can give to patients suffering from these issues.
Bill Welch: The mental health situation in this state, particularly here in Clark County, is really becoming a crisis situation.
Todd Meek: Being the largest Medicaid plan makes us a lightning rod for issues surrounding Medicaid managed care. Probably the biggest challenge we see is Medicaid reimbursements, combined with medical malpractice. There is also the question of how managed care is perceived by the public.
Mark Howard: Our biggest challenge is recruitment of qualified individuals. Second is the challenge we have of reimbursements coming back to us. Third, lack of space. We’re running at 100 percent occupancy.
Raul Meoz: As a cancer specialist, my greatest challenge is providing affordable cancer care to Nevada. It is difficult to do that. Growing pressures from the pharmaceutical industry, the increasing cost of radiation oncology equipment and decreasing reimbursements make it difficult. We have some challenges in recruiting just like hospitals do, and nurses and radiation therapists are very difficult to find.
Kevin Hooks: Catalyst RX administers the pharmacy benefit for over 1.5 million members nationwide, including 400,000 Nevada-based members. Our clients include mostly large self-funded employer groups, with some HMO members as well. Our challenges include assisting our clients in controlling documented, double-digit increases in pharmacy costs. We have been able accomplish this by putting an aggressive physician, pharmacy and member education program together, which ultimately allows everyone in the process access to the most “care-effective” and cost-effective medications available.
William Hale: Our biggest issue right now is the noninsured population and trying to somehow get the best quality care with no reimbursement.
Don Havins: Our biggest challenges are medical liability insurance availability and affordability. Decreased reimbursements make it more difficult to afford insurance for many of our members. And the increased frequency and severity of medical malpractice suits threatens the availability of quality medical care in Nevada.
Mary Soldo: We are concerned about the bills [in the Legislature] that will affect the managed care industry, which we expect to be numerous. We’re concerned about the medical liability issue. We will be concerned about attempts of any Medicaid managed care repeal. And we will watch the Legislature as it affects all businesses through taxes.
Anthony Marlon: I’m concerned particularly about the increasing number of uninsured. I think it’s a disaster. We need some very radical solutions to address it, and they are going to hurt. And I’d like to go on the record as suggesting that we start to look at providing insurance through employment. We have a mandated program of workers comp insurance. I am beginning to believe that the only way to impact the number of uninsured is to have a mandated program for employee insurance as well. And I will advance that as probably one of the most important things we need to do over the next 10 years.
Knowland: HealthSouth Hospital provides long-term care. I’m also representing our other two rehabs as well. Our biggest challenge is malpractice, and I will echo Dr. Marlin’s concerns on the uninsured as well.
James Kilber: One of our major concerns is recruitment of quality radiologists. First, because there is a national shortage of radiologists, but also because the medical liability issue facing Nevada makes it very difficult to bring physicians in. The second thing is the decreasing reimbursement that we face from Medicare and other agencies.
Greg Griffin: Our biggest challenge is meeting the expectations of our patients in this environment, whether it be reimbursement or staffing. Their expectations versus the realities is what we’re having to deal with.
Greg Boyer: One important thing for hospitals to look at is the cost of new technology. And new drugs are hitting our market that are uncovered by many plans, but the population is demanding them. We have patients walk in asking for a particular procedure they read about, and the equipment costs thousands of dollars. How to pay for that technology is an interesting process.
Anthony Pollard: Our biggest challenge is just very simple: maintaining economic viability in the current system.
Leslie Luke: Our main concerns are the nursing shortage and recruitment of physicians, which is becoming more difficult.
Bill Welch: All of those issues are compounded by several factors, as Nevada continues to be the fastest-growing state in the nation. We’re also the fastest-growing state in the nation for elderly population. We’re in the top 10 in increasing uninsured population. We rank the worst in most healthcare lifestyle categories that are measured. And the declining or stagnant economy is making all of those issues we’re talking about today even worse.
Laurie England: Our biggest challenge in managing care for workers comp is dealing with the physicians reimbursement fee schedule. Workers comp costs are on the rise, and our fees are already two, three or four times higher than reimbursements allowed by Medicare. Rising workers comp costs are impacting employers, who are already dealing with rising costs for a whole range of other insurance products. We had to reduce our network to control costs, which angered some physicians, but it had to be done.
Budget Shortfall and the Uninsured Population
Welch: The first issue on the agenda is the Nevada budget shortfall, which certainly is going to have an affect on all of us in the healthcare industry. In 2001, the state Medicaid program ran into a $36 million budget shortfall. They had to transfer out of the second year of the biennium that $36 million to carry them through the 2001/2 year. So we’re starting out in the hole, and we continue to see a 15.7 percent growth in Medicaid population. That’s the issue. I expect, if we’re having the same growth, we’re probably going to see that $36 million, plus another $33 million shortfall through the current year.
MEEK: Certainly the concern from Nevada Care’s perspective is the kneejerk reaction from the state. To simply come in and say a cut is required, we certainly don’t believe is in the best interest of Nevada. Medicaid managed care programs should be expanded to additional risk categories as a means of helping get the state budget under control.
Marlon: It’s important to understand that the majority of the growth is in the category of aged, blind and disabled. And that’s got really nothing to do with managed care, because that is outside the purview of the current managed care program. You have an elderly population, you have more people using nursing homes, and that’s what has to be addressed. It’s not in the babies. But I think Todd is correct. The easy reaction is to cut reimbursements to the population, or cut the program down, cut the eligibility for people delivering babies, and I agree that’s a mistake.
Pollard: I don’t hear anything about where we’re going to get the money, how we’re going to budget this. We can’t rely on the casino industry to continue to fund our deficits. As we expand and grow, you have to pay for that, and where are you going to get the funds? You can cut programs. You can cut eligibility, but the fact of the matter is that funding is fixed. How are you going to implement these types of programs?
Welch: The whole Medicaid issue is driving more and more primary care to our hospital emergency rooms. We need to look at how to get that primary care out of ERs and back into the clinician’s office. As we take care of more and more uninsured Medicaid patients in the ERs, that’s driving our costs up, which creates a greater health insurance cost and more reductions of health insurance benefits for employees, and it just becomes a cyclical problem. So I think Medicaid really is one of the key components that has to be addressed.
Soldo: The question I raised in my discussion [with legislators] is, “When do we begin the discourse that needs to go on in order for the state to address the [problem of the] uninsured?” The interim committee on health didn’t have a lot of discussion about the uninsured. They concentrated on divert. They concentrated on medical liability and other kinds of things. So the discussions that needed to take place this year didn’t really take place. In what will be a volatile legislative session because of some of the issues being faced, the question is whether or not [a discussion] will even get started.
Marlon: On the national level, Ted Kennedy has introduced a bill that would require all employers to provide insurance, not only to the employee, but to his family. That’s a very costly kind of initiative. Forty million people are uninsured. Two-thirds of them are working in small businesses, and half of that group is probably their dependants. So if you had a bill like Ted Kennedy’s, you would immediately cover two-thirds of the uninsured. The other third are the uninsured people who are in between jobs or chronically out of work. It would be a lot more manageable number of about 13 million or so. But the issue becomes whether or not the employers step up and provide that kind of insurance. That’s the only thing that’s going to make a dent in it. You will never get the government here in this state to expand the Medicaid program to a medically indigent program. We just don’t have that kind of funding.
Howard: Some of the feedback I am getting from our medical staff is that, because of the lack of reimbursement from Medicaid and also the slowness of the payments, they are declining to take Medicaid patients. That’s putting the patients into our emergency centers, which are already overcrowded, and we are not able to provide care at the best level possible.
Hale: I don’t think people understand the fact that they’re being taxed twice to pay for care for the uninsured. Their insurance premiums go up and also they’re paying through property taxes, etc. For the medically indigent population. And it doesn’t mean that these uninsured are getting the most qualitative or most cost-efficient care, either. I share with Dr. Marlon the concern that this really will become the 21st-century blight on the United States. I agree we need to come up with some revolutionary ideas to resolve this. If we don’t have a revolution, not only on a local level but nationally, it will drag this country down.
Meek: A state that has had a successful program for required healthcare for employees is Hawaii. If you are an employer with two or more employees in Hawaii, you are required to offer healthcare. That pushes that increased cost across all employers, so it does keep the playing field level. It’s got problems, but it’s a program that works.
Meoz: Just a couple of comments on cancer care for the medically indigent. Sometimes people with insurance are medically indigent when it comes to cancer care. For example, an individual who relies only on Medicare has difficulty paying his bills. Cancer care is extremely expensive, and of course everyone demands the best possible care for their disease. A month or two may make the difference between having a curable entity or facing a horrible death, so we have to move swiftly whenever we see a patient with cancer. Unfortunately, the resources are not evenly distributed in Nevada. Dr. Hale gets hit with many patients who have cancer, but have no insurance. One way to help may be for cancer care to be evenly divided by all the healthcare providers in the state. This may be heresy. What it means is that we’re not just getting all of the patients who have no insurance coming to one place to be treated. That place then gets overwhelmed and cannot take care of them. It has repercussions. People are dying of cancer. They have jobs. Those jobs are now being left open, and they can’t take care of their families. It is everybody’s problem.
Pollard: I believe it’s a non-fixable deal, unless you can fix Medicare throughout the United States. The only reason it works in Hawaii is because it’s an isolated state. You’re not going to fly to Hawaii and live there just so you can have healthcare benefits. But if you fix it here, and indigent people in California or Seattle find out, guess where they’re coming? To Nevada. I’m not saying we can’t do something to change, but it’s a system that is very, very difficult to fix unless it’s a universal fix.
Meek: That’s a good point. But I think you could look at that as a potential model.
Welch: We don’t want to become the gathering point for all uninsured people in the country. On the other hand, a significant portion of our population are being driven to the most costly centers for the delivery of their care, and in many cases they are waiting until they’re in the most catastrophic level of their medical condition, which is most costly. And so, while I do agree with the point you made, I think we do need to be looking at strategies on the state level, as well as on a national basis. We need to figure out what our congressional representatives should be supporting nationally.
Howard: Indigent care is not just a UMC problem, but all hospitals are having problems, because once the patient walks in our door, we have to take care of them. We cannot transfer them to other places.
Pollard: I employ 145 people, and there’s not one who is not insured. We as employers and CEOs should take accountability. Employees are the greatest asset you have in your business, so you should take care of them. I do believe that if you employ someone, there should be something in your business plan to budget that expense. The state also has to take accountability. Where does this issue fit on the agenda in the Legislature?
Soldo: In order to start to apply these kinds of pressures, we need to contact our federal delegation, and that’s where it’s going to come from. It’s clear we will not see anything come out of this session that will pay for the uninsured and design a program, because there’s just no money.
Hale: The reason the state has not taken up the issue – and I don’t believe they will in the near future – is because they have mandated the counties to provide indigent care. So as far as the state is concerned, it’s not their issue. The healthcare industry itself is going to have to push the Legislature to resolve the issue.
Welch: You have some large employers in this state – and I won’t mention any of their names –who have the dominant portion of their employees working part-time. They’ll hire two people for one position so they don’t have to pay for these benefits. Those are some of the things from the legislative standpoint that we might be able to change to solve the problem of the uninsured.
Medical Malpractice
Welch: We’ve seen up to 400 percent increases in malpractice premiums. We saw a special legislative session to try to deal with it. I believe we’re still in the midst of the crisis and I don’t see any simple solutions.
Hale: Many of the doctors who left UMC in the midst of the heated battle still have not come back. We’re still seeing the exodus of our paying patients, especially in our elective surgery billings, because physicians now are reluctant to bring their patients to UMC. This makes us unable to shift the cost of providing indigent care to other payer sources. You get to a point where you simply can’t do that anymore, and that’s where we’re at now.
Boyer: The legislators feel they have resolved this issue and they don’t want to see it come back. Although there may be some fine-tuning to the bill, the feedback I had is, “We’ve got a bill passed. We’ve solved tort reform. Let’s let time pass and see what the experience factors look like.” But 142 malpractice cases were filed in this quarter versus 42 last year, and I am not sure that’s solving the malpractice issue.
Boyer: The first wave of physicians left because they couldn’t afford to pay their malpractice premiums. Others refinanced their house to pay their premiums. They can only do that one time. And when the policy is up for renewal next year, they don’t have a house to mortgage. I don’t believe rates are going to drop substantially within a one-year timeframe, because there is still no track history of tort reform.
Kilber: It will probably be three to five years before we see any changes. And a continual difficulty will be recruiting, due to the medical liability issue. What have the hospitals done as far as a strategic plan? We’re building three or four more hospitals in the Las Vegas market and we already have a nursing shortage and a physician shortage. What are we going to do?
Howard: As an industry, we have to start working more with the young people coming in. I think most of the hospitals here have special scholarship programs. We have to educate the young people and others interested in nursing care because it is the next new profession. If we, at this time, were not planning for future growth, shame on us.
Howard: I think we have to sell Las Vegas on its merits. We were just announced as one of the 10 best places in the United States to live. We’ve got to get out to the medical schools. We should be sitting down right now and looking at the graduating students in our high schools and start working with them. The solution may not come for eight more years, but you have to build some type of pipeline.
Welch: A substantial portion of the Hospital Association’s time has been spent on recruitment. The hospital community, as Mark suggested, has put a million dollars a year into various relationships with the education system, predominantly nursing, but also in some of the other categories. Legislation that’s will be considered in 2003 that will require the doubling of the enrollment of nursing students in this state, if we’re successful. And we’ve built a lot of support for that. Through the Association I have found various companies that could help recruit physicians, so we’ve identified some resources there if it becomes necessary. I’ve stepped forward to help physicians in developing their self-funded medical malpractice insurance to make sure they had a viable, reasonably affordable plan available to them. So the hospital community is trying to step forward to help the situation, but they can’t do it by themselves. And I know physicians are trying to do things, but I think the whole community has to come together – the healthcare industry, as well as the state of Nevada. There is legislation that’s being proposed by individual legislators as well as the healthcare committee to underwrite [the cost of malpractice insurance for] certain physicians. The emphasis has been on ob/gyn, but I understand there will be initiatives to add other physician components. What is this group’s thought on that?
Marlon: I think that’s a very bad idea, a slippery slope.
Howard: A Pandora’s box.
Marlon: I think we have a short-term problem. We need to suck it up and deal with it and make sure it doesn’t happen again. I think we’re on that track.
Welch: The Nevada Hospital Association has been trying to work with several other organizations on legislative agendas, and I’m going to be going back to my leadership and asking them for the authority to go forward in trying to build a stronger and broader cooperation. We see 2003 as one of the most challenging sessions we have addressed in the last 20-plus years, so I hope we can all work closely together. I think it’s going to take that to be successful.
