Value-based payment poses challenge to rural hospitals
Marty Fattig has been CEO of Nemaha County Hospital,
a 20-bed, county-owned criticalaccess hospital in Auburn, Neb., since 2002. His facility, which reported 2014 net operating income of $748,336 on total operating revenue of $12.3 million, this year became the first Nebraska hospital and the second CAH in the country to receive ISO 9001 certification for its quality management system. Nemaha also was named to the 2015 list of HealthCare’s Most Wired facilities compiled by the American Hospital Association’s Health Forum and the College of Healthcare Information Management Executives. Fattig serves on the Critical Access Hospital Advisory Board on Quality and the federal health information technology coordinator’s Health IT Policy Committee’s Meaningful Use Workgroup. Modern Healthcare reporter Shannon Muchmore recently spoke with Fattig about rural hospitals’ challenges in recruiting staff, the problems created by Nebraska’s refusal so far to expand Medicaid to low-income adults, and how he motivates his employees. This is an edited transcript.
Modern Healthcare: What are the biggest challenges facing rural hospitals right now?
Marty Fattig: The challenges facing rural hospitals today are many. First of all, we have problems recruiting and maintaining staff of all kinds. It may seem strange, but we have a more difficult time recruiting entry-level staff than technical staff. The hardest positions for us to fill are in environmental services and dietary. The unemployment rate in Nebraska is among the lowest in the nation, so just about everyone who wants a job already has one.
Another problem facing rural hospitals is the declining population in most rural communities. It is next to impossible to have any level of growth when we are serving a smaller population every year. Many of the residents left in rural communities are elderly, which creates another set of problems. And as the healthcare industry changes to one driven by value rather than volume, rural hospitals and rural providers are challenged to determine how they fit in with the new paradigm.
MH: How would the situation be different if Nebraska expanded Medicaid?
Fattig: Nebraska has a population of people that are in a unique position. They have too much income to qualify for existing Medicaid and too little income to qualify for the premium subsidies on the insurance exchange. These patients fall into the group that are between 100% and 138% of poverty. The majority of the people who would benefit from Medicaid expansion in Nebraska are the working poor. These are the people that I would like to help. Medicaid expansion would move many of the patients we serve from having no way to pay for their healthcare to having some sort of coverage. They would benefit from this and so would our hospital.
MH: Has the hospital considered joining a larger system?
Fattig: All small rural hospitals have considered or will consider joining a larger system. The question I always ask when presented with this option is, what is the compelling reason for us to join? So far, as a hospital that does not employ any physicians, I have found no reason. We installed our electronic health-record system in 2004, so we have no needs there. We have strong financial reserves and a stable medical staff, so we have no needs there. We do well with our quality programs and our score on the Hospital Consumer Assessment of Healthcare Providers and Systems Survey, so there is no problem there. We are the first and only hospital in Nebraska to be ISO 9001certified for that quality management system. We are always evaluating our current state. But right now, we have no need to join a system.
MH: How do you recruit quality providers to practice at your hospital?
Fattig: We are in a good geographic location, being 65 miles from both Lincoln and Omaha and about two hours from Kansas City, which makes recruiting providers much easier than when I lived in western Nebraska and the nearest metropolitan area was four hours away.
Another thing we have done is, six years ago we entered an agreement with the family practice clinic in our community to have a physician assistant in our facility 24/7. They provide
“Employees of a good rural hospital know they are making a difference in the lives of the patients they serve.”
coverage for the emergency department and also serve as a hospitalist. This means that the physicians are never on primary call. A physician is always available to back up the PA should they need some help. But about 80% of the time the PA can deal with the situation. This has improved our physician satisfaction considerably. I also think it will help when it comes time to recruit new physicians.
Our outstanding performance in the areas of health IT and quality also make this a great place to practice, according to the physicians who practice here.
MH: Why have you stayed at a small rural hospital, and how do you motivate and manage employees there?
Fattig: I have stayed at a small rural hospital because I am passionate about rural healthcare. I grew up in a rural community and I believe that rural residents have a right to have highquality healthcare available to them locally. I also happen to believe that most of the time, as long as we keep patients who are within our scope of practice, we can provide care that is as good if not better than they would receive in a larger facility.
We motivate employees by keeping them engaged. Employees of a good rural hospital know they are making a difference in the lives of the patients they serve. We provide our employees with good salaries and rich benefit plans, but we also provide them with good equipment and engage them in the work we do. It was the engagement of the employees that allowed us to achieve our ISO 9001 certification. We are a site-- visit hospital for our IT software vendor. So other hospitals are coming to us to find out how to use our computer system either before they purchase the software or to find out how to use the software more efficiently. Our staff are recognized as power users of the system, and they take a great deal of pride in this.
MH: Since 2000, the hospital has been remodeled to have private patient rooms and facilities for outpatient procedures. Has this been a positive and necessary change?
Fattig: The remodel that we completed in 2000 as well as the one that we completed in 2012 were very necessary, and they have contributed to our success. We had private rooms in our old hospital, which opened in 1963, but we had no bathrooms in those rooms. We built new patient rooms with bathrooms and converted the old rooms to meet other needs.
In the remodel that we completed in 2012, we started out wanting to make our front entrance friendlier to people with mobility issues. We wanted to have an entrance with no steps or ramps and we wanted it to be covered. By the time we finished with the design, we ended up expanding the cafeteria, building a classroom for staff education, and designing space to help us be more efficient in several other areas. This last remodel ended up being a $7 million project. I am proud to announce that we completed that project without incurring any debt.
You see, I stay at a rural hospital because I am very proud of what we have been able to accomplish and because our future looks bright.