Colorado hospitals are working to overcome financial challenges and barriers to supplementing their workforces. Industry leaders discussed those challenges and efforts to address them at the 2023 Colorado State of Reform Health Policy Conference last month.
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Colorado Hospital Association (CHA) CEO Jeff Tieman has been working at the CHA for 15 months, and has spent 21 years working for hospital associations. He said the primary challenge hospitals face is addressing their workforce needs.
“Having visited almost 80 hospitals in Colorado in the last 15 months, a lot of common themes emerged,” Tieman said. “But the main one is clearly workforce. And it’s not just the number of people, recruitment and retention, and keeping people. (There are) also issues around safety. We know there’s too much violence against healthcare workers. I ask every CEO if they’ve heard about an act of violence in their facility, or when the last occurrence of violence in their facility was. And the answer I get 90 percent of the time is within the last two weeks.”
Colorado Department of Health Care Policy and Financing Executive Director Kim Bimefester said hospitals are competing with other industries to attract workers.
“The workforce in behavioral health is completely insufficient,” Bimefester said. “The retail industry is paying more than really difficult jobs in healthcare.”
Hospitals also face financial instability, Tieman said.
“Fifty percent of Colorado hospitals operate with a negative margin. And operating margins in 2023 are 57 percent lower than they were prior to the (COVID-19) pandemic. So you can see some significant deterioration there. How do we invest in those hospitals?”
Colorado Rural Health Center CEO Michelle Mills said 16 of the state’s 43 rural hospitals are operating in the red.
“That is down from last year,” Mills said. “We suspect that with COVID funding ending, that is going to increase even more, making it a lot worse for us. Long-term care is dying. We’ve got to figure out how to keep people in their local areas with access to care. It’s unacceptable to me that somebody would have to drive two hours to receive care. We have many (obstetrics departments) that are closing for similar reasons to long-term care, given that they’re losing money.”
Some hospitals might be able to save money, however, as Tieman said the number of travel/temporary workers are declining in them.
“And the amount hospitals have to pay, those premium amounts that spiked so significantly during the pandemic, are curved,” Tieman said. “So that is at least a positive sign for the near-term, that we’re able to keep the people we have in place and not have to pay such a premium to get temporary workers in.”
Prior to working for CHA, Tieman was a CEO for a hospital association in Vermont. He discussed the state’s fee-for-service model.
“They have a very aggressive pay-for-performance model in Vermont that has some really high points and some pretty low points. But one of the things we’ve learned from it is that if the payment isn’t sufficient, whether it’s a fee-for-service payment or population health-based payment, however you’re doing it, the money has to be a substantial amount to do the job. You have to have sufficient funding.”
The fee-for-service model worked very well in Vermont for its Medicaid population, especially during the pandemic when volume was low, Tieman said.
“Hospitals were able to keep those payments coming in as a sustainability step,” he said. “I think there’s a lot of opportunity for it. I think there’s a lot of complexity. It needs to be done slowly and carefully, and with everyone on board.”
Health Management Associates Managing Principal Gaurav Nagrath asked the panelists about hospital mergers.
“Mergers, acquisitions, and consolidations have been happening forever,” Nagrath said. “But that pace has accelerated exponentially. So what are the short- and long-term implications on market dynamics and, particularly, competition?”
Mills said rural hospitals prefer to remain independent.
“We want to remain independent, that way we are focused on what our community wants,” Mills said.
Tieman said many hospitals that are acquired by bigger companies choose to do so to help themselves.
“In the hospital space, the consolidation I’ve experienced, seen, or heard about is primarily driven by the sustainability of vulnerable hospitals and vulnerable physician practices that are often not targeted by the hospital that’s doing the acquiring,” he said. “They’re asking to be acquired for their own sustainability.”