Hospitals Are Still Struggling
Severe staff shortages, rising costs and efforts to become more efficient are keeping administrators awake at nights.
THERE ARE SOME 3,900 BEDS among the 27 or so general hospitals (those not operated by the federal government) in New Mexico. A number of them are empty-and it’s not necessarily because the population is so healthy that the beds aren’t needed. They’re empty because there aren’t enough skilled employees to care for the people who might otherwise occupy many of them.
The Severe staff shortage, which is by no means a New Mexico phenomenon, is just one of the items-high on the list, to be sure-that are keeping beleaguered hospital administrators up at night. Other insomnia-causing problems:
* Hospitals are drowning in paperwork over which they have little control. For example, in the case of Medicare, the seemingly simple task of reimbursing providers for services rendered now covers more than 130,000 papers of federal laws. An American Hospitals Assn. study that half or more of the work output in a typical hospital is dealing with paperwork, much of it regulatory.
* Costs are rising faster than revenues and federal Medicare reimbursements to New Mexico are relatively less than those to most other states, essentially because previous efficiencies placed reimbursements at a lower level; as costs continue to rise, the level doesn’t.
* Hospitals have only recently discovered that they are also businesses, regardless of their emotional ties to patients and communities, and must take expensive steps to automate their work flow.
This may suggest that the job of a hospital administrator is no bed of roses, and yet in an informal survey of chief executives, we found that virtually all of them like their jobs and remain optimistic. “I love my work,” says John Lucas, M.D., head of St. Vincent’s Hospital in Santa Fe. “I really do. I can turn the hospital into a public health enterprise and bring a lot of value to people. I can make a difference. But the bottom line is still the bottom line.”
Ron Shafer is chief executive of Eastern New Mexico Medical Center, a 162-bed hospital in Roswell, and chairman-elect of the New Mexico Hospital and Health Systems Assn. He says the biggest challenge right now is obtaining qualified health care professionals, particularly lab technicians, pharmacists, billing clerks (the people who prepare those reimbursement forms), radiographic technicians and, most acutely, nurses. Statewide, the nursing vacancy rate is 21 percent and the average age of a nurse is 49, which means many will be retiring over the next several years and the pipeline isn’t by any means full.
There is also, especially in the rural areas, a physician shortage in certain specialties. “Recruiting into places like Roswell has always been difficult,” Shafer says, “but it’s more difficult now than it has been before. Fewer specialists are available, and they have more options. Yes, New Mexico is a great place to live, but so are Arizona and Colorado.
“Basically, New Mexico doesn’t have a good name for recruitment, primarily due to money issues and the gross receipts tax. I recently interviewed an orthopedic surgeon and his first question was, ‘How much will I get paid?’ and I had to explain the gross receipts tax. That’s a problem.”
In urban areas, attracting and keeping docs seems to be less of a problem. Jim Hinton, president of Presbyterian Health Systems in Albuquerque, says that the data indicate that the number of physicians remains roughly constant, with doctors leaving through retirement or relocation being replaced by new arrivals. MaryAnn Aelmans-Digman, president of Memorial Medical Center, the 286-bed hospital in Las Cruces, generally agrees. In the last three years, she says, Memorial has had about as many doctors come as go, although “in some departments we have fewer positions that are regarded as acceptable.
“We do have a neurosurgeon, however, and we have most of the specialties covered. But we are still recruiting and we have been successful, but it’s labor-intensive and costly.” Aelmans-Digman says there’s s substantial vacancy rate in primary care providers, a circumstance shared in Santa Fe, according to St. Vincent’s Lucas. At Lovelace Health Systems, which operates a 235-bed hospital in Albuquerque, the doctor turnover “is about the lowest we’ve ever had,” says Martin Hickey, M.D., the chief executive. “That’s excellent.”
But the real challenge is the nursing shortage, which is not expected to turn around anytime soon. Because it’s a national problem, competition for nurses is keen. Shafer at Eastern says that large hospitals in Phoenix and Dallas “have actually had recruiting fairs in Roswell and have offered phenomenal salaries. And we simply can’t compete.” In Las Cruces, Memorial Medical Center is obliged to compete with hospitals in nearby El Paso, and does.
“We have had to use as our wage determiner the salary range in El Paso,” Aelmans-Digman says, “and so our wages have been fairly high in relationship to the rest of the state. Our percentage of vacant positions is less than eight percent.”
Fortunately, there’s a nursing school at New Mexico State University and Dona Ana Community College, and that helps.
Dr. Lucas at St. Vincent Hospital says that fewer people are interested in health careers, which is probably because other business opportunities are made available in an expanding economy. “Let’s face it,” he says, “a health care professional has had to look at his or her career as more of a vocation. It’s hard work. There’s not much opportunity for advancement. There is no equity return. The working hours are problematic.
“The task at hand is to figure out how to get people interested in health careers. We have to adjust the work environment to provide more flexibility and especially for women, who may also be raising children. We have to provide better pay. This is going to require a significant revolution in the way we relate to employees. It’s very much a seller’s market.”
Lucas observes that there was also a nursing shortage in the late 1980s, but this time it’s different. “Our population is getting dramatically sicker,” he says, “because of aging. At the same time, of course, our nurses are also getting older; about half of them are planning to retire over the next five to eight years. That’s a negative synergism.”
That’s why a number of hospitals are taking major steps to promote health care careers. Presbyterian, for example, is working with the University of New Mexico and the Albuquerque Technical Vocational Institute.
“Here is where the healthcare systems can collaborate to improve the position of health care as a career,” Jim Hinton says. It really is a great career. We simply can’t continue to be a net exporter of talent and survive. We’ve got 85 open nursing positions at Pres. We need to buy our talent and grow our talent.”
In Roswell, Eastern New Mexico Medical Center is actively working on a program to get young people interested in health care as a career. It is collaborating with Eastern New Mexico University to provide scholarships for employees to get their degrees.
Shafer makes plain the common complaint that New Mexico is being punished precisely because it has a lower-cost health system that had been developed over the years. The state was among the first to embrace managed care, primarily as a cost-reduction measure.
“Our past efficiency has caught up with us,” he says. “Medicare bases reimbursement on historical costs, which has meant we receive less money from the federal government than those states who weren’t as efficient as we were. Their inefficiency is being rewarded. But now costs have skyrocketed and our reimbursement isn’t covering them.” The hospitals administrators have been talking with Senators Pete Domenici and Jeff Bingaman in an effort to develop more equity in the reimbursement system.
“Maybe the Bush administration’s decision to reform Medicare will make a difference,” he says.
Given a reduction of federal Medicare reimbursements, hospitals are obliged to become even more efficient and to operate more like businesses. Although most of the hospitals in the state are not-for-profit and thus do not have the same motivation as for-profit businesses, they can’t operate at a deficit, either, and expect to survive.
Says Presbyterian’s Hinton:
“Since we are so dependent upon people who make decisions over which we have no control, we must focus on the health of Presbyterian. Over the past 18 months, we’ve emerged as a different organization. We are much more disciplined in capital allocation, revenue management, customer service and monitoring. We’re just doing a better job.”
Dr. Lucas says that at St. Vincent there have been underpayments or denied payments from third party payers, “but we are reengineering our system to get this money We need 98 cents on every dollar owed, so we are becoming more astute about our business systems.
“But what industry hasn’t gone through this? We are dealing with cold business realities and we’re not used to that. We have had a social contract with our communities which made us think we weren’t expected to perform to standard business norms, That’s changed. We have to be good at what we do. Success can come. Fully 20 percent of hospitals are more successful today than they have ever been. I hope the number gets higher over time. And we want to be in that number.”
Despite the turmoil, administrators generally believe that New Mexico’s health care infrastructure is good.
“I am concerned,” Hinton says, “that people have lost confidence in the health care system. There has been so much negative stuff written about it. I want to make sure that people know what a great health care system we actually have. We have world class programs and physicians, but we’re still struggling. We’ve got to improve our image. The public has never really understood the competition that exists in metropolitan areas, at least, but we nevertheless have to build collaborative approaches among providers and consumers. It’s a challenge, but I have decided that I am going to be optimistic. There are some positive things in the current system and more positive things on the horizon. We have to decide what attitude we are going to choose about health care in New Mexico. We can either be victims or collaborators in solutions.”
Ron Shafer is also optimistic. “The nice thing about New Mexico is that it is a fairly cohesive state and most hospitals work well together. We’re small enough so that an individual can make a difference. We can get something done.”
BOB COCHNAR IS EDITOR OF THE NEW MEXICO BUSINESS JOURNAL.
The Hospitals of New Mexico
Members of the New Mexico Hospitals and Health Systems Association
HOSPITAL TYPE BEDS HEAD
Carlsbad Medical Center FP 138 Fred Woody
Cibola General Hospital NP 43 J. F. Rimel, Jr.
Desert Hills Hospital FP-S 36 Carol Bickelman
Eastern New Mexico NP 162 Ron Shafer
Espanola Hospital NP 80 Marcella Romero
Ft. Bayard Medical Center G-S 250 Don Miller
Gerald Champion Regional NP 91 Carl Mantey
Gila Regional Medical Center G 68 Margie Ford
HealthSouth Rehabilitation FP-S 60 Darby Brockette
Heart Hospital of New Mexico NP-S 55 Trudy Land
Holy Cross Hospital NP 42 W. Keen Spellman
Lea Regional Medical Center FP 250 Larry Bozeman
Lincoln County Medical Center FP 42 Jim Gibson
Los Alamos Medical Center NP 47 Ray Vara
Lovelace Health Systems FP 235 Martin Hickey, M.D.
Memorial Medical Center NFP 286 M. Aelmans-Digman
Memorial Psychiatric Hospital FP-S 58 Debra Forrester
Mesilla Valley Hospital FP-S 117 Ron Mays
Mimbres Memorial Hospital FP 49 Carol Schmoyer
Miners’ Colfax Medical Center G 33 Chuck Bouis
Nor-Lea General Hospital G 28 David Shaw
Northeastern Regional Hospital FP 62 Jay Hodges
Plains Regional Medical Center NP 106 Dick Smith
Presbyterian Hospital NP 453 Jim Jeppson
Presbyterian Kaseman Hospital NP 196 Robert Garcia
Rehobeth McKinley Christian NP 113 David Baltzer
San Juan Regional Medical NP 145 Steve Altmiller
Sierra Vista Hospital NP 34 D. Rush
Socorro General Hospital NP 38 Jeff Dye
St. Joseph Medical Center NP 275
St. Joseph Northeast Heights NP 114
St. Joseph Rehab Hospital NP-S 62
St. Vincent Hospital NP 244 John Lucas, M.D.
Trigg Memorial Hospital NP 37 Hoyt Skabelund
Union County General Hospital NP 30 Steve Campbell
University Hospital G 375 Stephen McKernan
VA Medical Center G 250 Patrician McKlem
Vencor Hospital FP-S 61 Jeanne Koester
Zuni Community Health Center G 37 Jean Othole
Carlsbad Medical Center 2430 W. Pierce, Carlsbad 88220
Cibola General Hospital 1016 Roosevelt, Grants 87020
Desert Hills Hospital 5310 Sequoia Way NW,
Eastern New Mexico 404 W. Country Club Rd.,
Medical Center Roswell 88201
Espanola Hospital 1010 Spruce St.,
Ft. Bayard medical Center 100 Calle El Centro,
Ft. Bayard 88036
Gerald Champion Regional 2669 N. Scenic Dr.,
Med Center Alamogordo 88310
Gila Regional Medical Center 1313 E. 32nd St.,
Silver City 88061
HealthSouth Rehabilitation 7000 Jefferson NE,
Center Albuquerque 87109
Heart Hospital of New Mexico 504 Elm NE, Albuquerque 87102
Holy Cross Hospital 1397 Weimer Rd., Taos 87571
Lea Regional Medical Center 5419 Lovington Hwy.,
Lincoln County Medical Center 211 Sudderth, Ruidoso 88355
Los Alamos Medical Center 3917 West Rd.,
Los Alamos 87544
Lovelace Health Systems 5400 Gibson SE,
Memorial Medical Center 2450 S. Telshor Blvd.,
Las Cruces 88011
Memorial Psychiatric Hospital 806 Central SE,
Mesilla Valley Hospital 3751 Del Rey Blvd.,
Las Cruces 88012
Mimbres Memorial Hospital P.O. Box 710, Deming 88031
Miners’ Colfax Medical Center 200 Hospital Drive,
Nor-Lea General Hospital 1600 North Main,
Northeastern Regional Hospital 1235 8th St., Las Vegas 97701
Plains Regional Medical Center 2100 N. Thomas, Clovis 88101
Presbyterian Hospital 1110 Central SE,
Presbyterian Kaseman Hospital 8300 Constitution NE,
Rehobeth McKinley Christian 1901 Red Rock Drive,
Hospital Gallup 87301
San Juan Regional Medical 801 W. Maple St.,
Center Farmington 87401
Sierra Vista Hospital 800 E. Ninth Ave.,
Truth or Consequences 87901
Socorro General Hospital 1202 W. Highway 80,
St. Joseph Medical Center P.O. Box 2555,
St. Joseph Northeast Heights P.O. Box 2555,
Hospital Albuquerque 87125
St. Joseph Rehab Hospital P.O. Box 2555,
St. Vincent Hospital 455 St. Michaels Drive,
Santa Fe 87504
Trigg Memorial Hospital 301 E. Miel de Luna,
Union County General Hospital 301 Harding, Clayton 88415
University Hospital 2211 Lomas Blvd. NE,
VA Medical Center 1501 San Pedro Dr. SE.
Vencor Hospital 700 High St. NE,
Zuni Community Health Center P.O. Box 467, Zuni 87327
Carlsbad Medical Center 887-4100
Cibola General Hospital 287-5300
Desert Hills Hospital 836-7330
Eastern New Mexico 622-8170
Espanola Hospital 753-7111
Ft. Bayard medical Center 537-3302
Gerald Champion Regional 443-7836
Gila Regional Medical Center 538-4000
HealthSouth Rehabilitation 344-9478
Heart Hospital of New Mexico 724-2000
Holy Cross Hospital 758-9993
Lea Regional Medical Center 492-5000
Lincoln County Medical Center 257-7381
Los Alamos Medical Center 662-4201
Lovelace Health Systems 262-7000
Memorial Medical Center 522-8641
Memorial Psychiatric Hospital 247-0220
Mesilla Valley Hospital 382-3500
Mimbres Memorial Hospital 546-2761
Miners’ Colfax Medical Center 445-3661
Nor-Lea General Hospital 396-3729
Northeastern Regional Hospital 425-6751
Plains Regional Medical Center 769-2141
Presbyterian Hospital 841-1443
Presbyterian Kaseman Hospital 291-2114
Rehobeth McKinley Christian 863-7000
San Juan Regional Medical 325-5011
Sierra Vista Hospital 894-2111
Socorro General Hospital 835-1140
St. Joseph Medical Center 727-7805
St. Joseph Northeast Heights 727-7888
St. Joseph Rehab Hospital 727-2001
St. Vincent Hospital 820-5202
Trigg Memorial Hospital 461-0141
Union County General Hospital 374-8146
University Hospital 272-2121
VA Medical Center 265-1711
Vencor Hospital 242-4444
Zuni Community Health Center 782-4431
TYPE KEY: FP–FOR PROFIT.
COPYRIGHT 2001 The New Mexico Business Journal
COPYRIGHT 2008 Gale, Cengage Learning