Does North Shore Hospital have a responsibility to continue operating a care center because it is the only care center in the county? How much of an annual operating loss from the care center is sustainable? These were questions pondered by the hospital board at a special meeting on November 30.
According to statistical projections, by 2020, Minnesota will have more people age 65 or older than people between the ages of 5 and 17. Minnesota’s population of people age 65 or older is expected to increase through the 2020s and then start to decrease in the 2030s. The 2010 census found that 20 percent of Cook County’s population was age 65 or older. “You see the impact of the baby boom,” Hospital Administrator Kimber Wraalstad told the board.
Many of today’s workers will need care down the road, and finding enough workers in the workforce to replace them could be a challenge. “Your kids and grandkids will have to work really hard to take care of us,” said Wraalstad.
Trends in care for the elderly include an increase in home-based services, more coordination among hospitals, clinics, and doctors to avoid readmissions after people are hospitalized, “blended worker” models in which workers provide a combination of nursing, housekeeping, activity, and dietary services, and reimbursement being based on measurable outcomes and value to the patient.
Care center beds have been dropping in Minnesota through facility downsizing and closures, Wraalstad said. Fifty-nine care centers around the state have closed since 2000, including facilities in Two Harbors, Hibbing, and Duluth. People don’t stay in care centers as long as they used to. Many people get better and go home. Others don’t enter a care center until they are much closer to the end of their lives.
Because of the way funding is allocated, critical access hospitals with attached care centers such as North Shore Hospital and Care Center have the lowest operating margins. Facilities that are surviving are delivering services in new ways, giving patients more choices and a more home-like atmosphere, collaborating with other service providers, making themselves more attractive as employers, and gearing up for changes coming with national health care reform.
Ironically, closing the care center would change the way funds are allocated. “Unfortunately, given the health care financing model, you can’t just remove the $1.8 million loss from last year, subtract our facility loss and say we have a profit,” Administrator Wraalstad told the News-Herald. “Some costs would be re-allocated to the hospital side; for example, dietary square footage. It is actually possible, even probable, that hospital rates would increase. …Ultimately, no longer having the Nursing Home would probably address the overall facility loss. But yes, rates would change and could result in hospital patients having higher costs.”
Wraalstad told the hospital board that after Ely- Bloomenson Hospital in Ely separated itself from its care center, the hospital’s financial situation improved but the care center is having trouble staying afloat financially even though they received some financial help from the hospital to get started.
Stand-alone nursing homes need to have 80-100 beds to be financially solid, Wraalstad said, explaining that certain positions such as a nursing director, administrator, and social worker must be in place no matter how small the facility. In addition, hospitals could end up competing with the care centers they separated from for swing bed patients.
John Strange, president of St. Luke’s Hospital, North Shore Hospital’s administrative partner, said they can’t assume the hospital will continue to be able to subsidize the care center. He recommended prioritizing the services the hospital offers and then deciding how to fund them.
Board member Tom Spence suggested that they make keeping the hospital open their first priority but continue to operate the care center as long as they can.
Strange pointed out that the emergency room and doctor services are used by tourists and by a much greater percentage of the population than the care center. Board member Howard Abrahamson pointed out that the care center helps families as well as individuals.
Abrahamson suggested that they look at the impact of funding options, including property taxes, along with the benefits the care center provides and the impact that losing it would have on the community. He said he would have a hard time thinking about discontinuing any of the health care services provided in the community.
The current design of the hospital and care center does not allow the hospital to make the most efficient use of its staff, Wraalstad said. Strange said the facility has aged to the point where capital improvements will soon be necessary.
Wraalstad recommended that they discontinue obstetrical (OB) services. The hospital now sends its staff to OB trainings although they only deliver about 10 babies a year. Spence said he has heard that babies tend to grow up and stay where they’ve been born and has heard recommendations that hospitals not get rid of their OB services. St. Luke’s vice-president Sandra Barclay said a hospital’s liability increases when it is not credentialed for cesarean deliveries (C-sections).
If you build enough additional efficiency into a remodeling project, Strange said, it can pay for the remodeling.
The board plans to continue discussing the future of the care center as it considers updating the facility through remodeling.
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