The trend of declining inpatient stays in hospitals has had a particularly devastating impact on rural hospitals. Rural hospitals, unlike their urban counterparts, do not have certain economies of scale. Many of the ancillary and support services in urban hospitals are operated with minimum fixed staffing levels; therefore, when in-patient volume declines, a corresponding reduction in costs may be feasible. In a rural hospital, the nature of labor costs is often more fixed than variable. Unable to reduce costs, rural hospitals must find avenues to generate additional volume.
Rural hospitals across Mississippi are discovering new sources of volume.Newton Regional Hospital in Newton, Mississippi, is one of those hospitals.Just two years ago, the 49-bed acute care facility was experiencing an average daily census of only 12 acute patients.Currently the hospital is averaging on a daily basis:14 acute care patients, 10 distinct part skilled nursing patients, seven distinct part gero-psychiatric patients, and five hospice inpatients.In addition, the hospital has recently received approval on a certificate-of-need request for 10 swing beds.Dark corridors with empty rooms have changed into well-lit hallways with the hustle-bustle of two-way traffic.How is Newton Regional Hospital and other rural hospitals throughout the state of Mississippi reversing a trend of decline and financial despair to one of growth and prosperity?
Mississippi rural hospitals are beginning to think “outside of the box.”Historically, rural hospitals have clung to their licensed acute care beds with the thought being, “If you give up the beds, you will not be able to get them back.”Over time, they’ve realized that an excess quantity of licensed acute care beds is operationally meaningless.Therefore, hospitals are now converting their acute care beds into alternative care beds for skilled nursing, gero-psychiatric, hospice, personal care, etc.Hospital beds that have been empty for years are now occupied.Rural hospitals are getting back into the business of caring for patients.
One of the more popular alternative care uses for hospital beds is distinct part gero-psychiatric units (commonly called GPU’s).These units are typically designated for Medicare patients primarily with major depression, behavioral dyscontrol with dementia, or psychosis NOS.Attractive features of the units include a waiver on certificate-of-need requirements, Medicare cost-based reimbursement within established capitation limits, and periodic interim payment options.The hospital will have to transition into a new role of caring for patients with behavioral illnesses.The major areas of this transition consist of patient activity, group therapy, and higher levels of patient security and safety.These units also require constant and extensive marketing resources in order to maintain adequate levels of volume. Finally, keep a vigilance on monitoring costs in order to maximize reimbursement.
Another alternative use of excess hospital beds is distinct part skilled nursing units (commonly called SNF’s).These are basically Medicare units for post acute care patients requiring additional rehabilitative care.Attractive features of these units include a waiver on certificate-of-need requirements, cost-basis reimbursement of ancillary services, and periodic interim payment options. The hospital will need to expand ancillary services to include physical therapy, occupational therapy, and speech therapy.These units also require extensive patient activities and social services.A drawback to the unit includes the minimum data set (MDS) reporting requirements.
Other alternatives for excess hospital beds include swing beds, hospice, and personal care programs.Swing beds are similar to SNF’s in that they provide post acute care for patients with rehabilitative needs.However, swing bed units require a certificate of need, aren’t distinct part, don’t require MDS reporting, and may be used for Medicaid patients also.Hospice contracts for inpatient services with hospice providers can also be a good source of patients for empty beds.
In summary, rural hospitals throughout Mississippi are emerging to meet a changing environment.Excess beds and resources due to declining trends in acute care volume are being shifted to alternative uses.Does your hospital have more empty beds than filled ones?If so, you might want to begin to think “outside the box.”
Timothy W. Thomas is employed by Ameris Health Systems, a Nashville-based health care management services company. He serves as administrator of Newton Regional Hospital, a not-for-profit facility in Newton. He holds a BBA from Ohio University and an MBA from Mississippi College.