Medical industry feeling some economic pain

The slumping economy has had mixed effects on the medical industry. Some medical providers are thriving while others are experiencing dropping patient numbers and losing money treating uninsured patients.

The local medical industry has not been immune from the impact of the national economic downturn. With an unstable labor market, providers across the board are beginning to see greater numbers of uninsured people seeking treatment, a trend many in the industry believe will only become more pronounced as the recession continues.

Here’s a closer look at the  challenges facing local medical and health centers:

Bothwell Regional Health Center

Bothwell Regional Health Center is working to rein in expenditures in response to a drop in patient census and an increase in uncompensated care that has lowered the hospital’s overall revenue. When administrative or support positions come open, the hospital now carefully evaluates whether to fill the position, hospital spokeswoman Lisa Church said.

“We are holding the line on capital expenditures that do not affect patient care. We are just watching our budgets very carefully,” Church said.

Church said the medical industry is insulated from some of the economic trends facing other industries because the service provided is essential.

“We are insulated from (the economic slump), but we are not totally immune from the impact,” said Church. “Even in poor economic times, people need health care.”

The number of patients coming to the hospital was down by about 400 in the last quarter of its fiscal year, and most of that drop came in the last couple of months, Church said. The hospital also is seeing more people delaying certain procedures and foregoing treatments they consider elective. The reduction is a “crisis that just about every hospital around the country is experiencing,” especially those in urban centers, she said.

“With less people in the hospital, you generate less revenue, but we are probably more fortunate than the metro hospitals,” Church said.

Local employment instability has affected the hospital’s revenue. People losing their jobs and employers cutting back on increasingly expensive health care benefits caused the number of uninsured patients receiving uncompensated care to jump 10 percent in the past two years, Church said. That compares with the 20 percent to 25 percent increase in uncompensated care across the country during the same period.

“While that sounds good, that 10 percent increase translates to about $1 million loss for the hospital,” Church said.

Katy Trail Community Health

Meanwhile, Katy Trail Community Health has seen a significant increase in both patient visits and cases of uncompensated care. The federally qualified health center offers a sliding fee program for services for people without health insurance.

Executive Director Chris Stewart said the center experienced a 30 percent increase in patients from 2007 to 2008. In both years, uninsured visits totaled about 40 percent of the center’s business. Accounting for the increase in overall visits, the center treated about 800 more uninsured patients from 2007 to 2008. Stewart said the challenge for the center is encouraging people to take advantage of preventive services the facility offers.

“In the last two months, the thing we have really been seeing is an increase in the number of folks who have always had insurance, and are trying to navigate the waters after losing their jobs and benefits,” Stewart said.

An influx of patients does not result in more simple management for the center because it operates largely off of grants it receives from the federal government for providing treatment to uninsured patients.

“We have the same federal grant and more uninsured patients,” Stewart said.

It costs the center an average of $525 annually for each uninsured patient treated. In 2007, the federal grant covered $450 per patient, but that dropped to $350 in 2008.

“We are still looking at a very challenging budget this year,” Stewart said. “It forces us to figure out other, creative ways to raise dollars.”

Nursing homes

Nursing homes face other challenges in the slumping economy. Richard Shillcutt, administrator of Four Seasons Living Center, said the patient census at the long-term care facility “is as good as it has ever been.” Instead, his focus has been on making sure all the residents are able to afford their medications and the facility is fully staffed.

“The key is people continue to get sick, continue to age and continue to have some problems whether they have a job or not,” Shillcutt said.

Shillcutt is concerned about possible cuts to state funding as lawmakers work to reconcile state budget shortfalls. He said some of the residents at Four Seasons have switched to generic prescription drugs in response to recent cuts to Medicaid, but he is hopeful Gov. Jay Nixon will stick to his promise to restore the cuts.

Lack of staffing across the board

An unusual problem facing Four Seasons, Bothwell and most medical providers around the country is a lack of staffing. Church said Bothwell’s ongoing hunt for nurses, pharmacists and physicians has picked up in the past month, and Shillcutt said Four Seasons is always looking to hire candidates to be trained as nursing aides.

“If a good person comes in, I will find you a job,” Shillcutt said.

“In an economy like this, you have to be really creative,” Stewart said. “But it is in everybody’s best interest that folks receive the care they need.”