Out of the 30 hospitals in Wyoming, only five are generating a profit. Multiple actions taken at the state and federal levels are hurting the already fragile financial system of these health care providers. This includes what has been at the heart of the federal government shutdown: the healthcare Marketplace's enhanced premium tax credits.
To help us understand how and what is impacting hospitals, Wyoming Public Radio’s Kamila Kudelska joined us.
Editor’s Note: This interview was lightly edited for clarity and brevity.
Nicky Ouellet: I understand there are a lot of things at play right now: changes to the Affordable Care Act Marketplace, property tax cuts and a rise in the amount of care hospitals are giving without getting paid for. Let’s start with the Marketplace changes.
KK: Marketplace is where you go for health insurance if you don’t get it through work. For years, there’s been enhanced premium tax credits that’ve helped up to 20,000 Wyomingites get a better price. But those tax credits are not getting renewed at the end of this year unless Congress acts. That means up to 20,000 Wyomingites could lose health insurance since they may not be able to afford the monthly cost.
NO: How would this impact hospitals?
KK: Think of hospital budgets like a seesaw. On one side is income, the other is expenses. Providing for care is on the expenses side, and getting paid for that care is the biggest drop in the income bucket.
Yvonne Wigington: So, by and large, it is the revenue we receive from caring for our patients.
KK: That’s Yvonne Wigington. She’s the chief financial officer of the Cheyenne Regional Medical Center. She says the end of those tax credits means the number of uninsured people in the state could increase by 27%, meaning hospitals will more likely not get paid for care they give – tipping the seesaw off balance.
YW: We could anticipate certainly an increase in our uncompensated care, anywhere from 1 to 3%. That could mean an increase of $9 million to our uncompensated care.
NO: So an income generator will become an expense. Am I understanding that correctly?
KK: Exactly. But it turns out that this isn’t the only impact that hospitals are seeing. Wyoming lawmakers passed a [25%] property tax cut this year. Eighteen hospitals in the state depend on property taxes for some income. That’s because they are in hospital special districts. St. John’s Health in Jackson is one of them. Mitch Watson is its chief financial officer.
Mitch Watson: We took a $2.3 million hit because of that reduction.
KK: St. John’s is like Cheyenne, in that people aren’t always able to pay for care. So on top of losing over $2 million to property tax cuts, Watson says they saw a 17% increase in uncompensated care in the last year. That’s going to increase even more next year if those Marketplace tax credits expire.
NO: Those are big numbers, between federal and state cuts. Are there other impacts on hospitals’ income?
KK: Yes. Medicare. Over 20 percent of the state’s population is over 65 and eligible. Watson explains.
MW: As people shift into Medicare, you're going from a plan that covers our cost, to a plan that doesn't cover our cost. Medicare covers 83 cents on the dollar. So that means that for every dollar of cost, we basically lose 17 cents on that service if you look at our entire Medicare population.
NO: And that aging population is only growing, so again, tipping more toward the expense end of the seesaw than the income side. Talk to me about what else is dropping into that expense budget.
KK: Wigington says expenses are rising, too.
YW: Healthcare is a very labor dominant industry, and so salaries and benefits are our top expenses.
KK: Watson says that’s an issue for St. John's, in addition to housing.
MW: One of the things that we try to do, and we are doing, is providing employee housing to a certain percentage of our employees so that they can afford to be here and live here, and work here
NO: I can only imagine that this means hospitals are going to have to make some changes to re-right the seesaw.
KK: That’s right. St. John's is looking at a number of things to try to tighten their purse strings. They are looking at non-care trims, like getting rid of phone lines, but also cutting care. They already announced that they are closing two community clinics they operated in Grand Teton National Park and in Lander.
MW: It's unfortunate that we had to make some decisions to cut some of these outlying clinics. But they continued to bleed and lose money, and we can't threaten some of the core services that we have here by doing some of this.
KK: And they are starting to have to look at other potential cuts if this continues.
MW: There's a couple different service offerings that we're kind of looking, that are ancillary to our core services, that we're looking at.
KK: He wouldn’t share any specifics. Wigington says Cheyenne is doing the same.
YW: We are constantly assessing how we might be able to maximize our services, create efficiencies.
NO: Yikes. It doesn’t sound good. Are there any silver linings?
KK: One thing that came out of the Republican spending bill was the Rural Health Transformation Program. It will allocate $50 billion to all 50 states in the next five years.
Wyoming will get $500 million for sure. There’s another $25 billion up for grabs that will be more competitive. Stefan Johansson with Wyoming’s Department of Health is confident this will help hospitals and health care in the state.
Stephan Johannson: I think Wyoming could see a lot of upside from this opportunity to address some more systemic challenges that our executive branch and our legislature have been grappling with.
KK: The department has been going around the state asking the public what this money should go to.
SJ: Members of those communities are saying we need a viable hospital here that provides emergency care. A lot of feedback around OB and maternity care, labor and delivery services.
KK: Other issues include recruiting and retaining workers, EMS and behavioral health services. That’s just to name a few. The department is also talking with hospitals and healthcare associations directly. But they can’t address all of them in the application.
SJ: The federal government and this application guidance is pushing us very hard to prioritize. They really wanna see us neck down to those really, really top line priorities.
KK: They still aren't sure what those priorities are, but they'll need to figure that out by Nov. 5 when the application is due. Both Watson and Wigington say they are hopeful that these funds will help. But it's definitely a wait-and-see game to see how the seesaw will balance out.
