Arkansas Hospitals, Summer 2014

SUMMER 2014

www.arkhospitals.org

Annual Statistical Edition Arkansas Legislature Chooses to Make a Difference A M A G A Z I N E F O R A R K A N S A S H E A LT H C ASummer R E 2014 PRO F E S SHospitals I O N A L1 S I Arkansas

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FEATURED SECTIONS

Annual Statistical Edition

is published by

Arkansas Hospital Association 419 Natural Resources Drive • Little Rock, AR 72205 501-224-7878 / FAX 501-224-0519 www.arkhospitals.org Beth H. Ingram, Editor

BOARD OF DIRECTORS

Doug Weeks, Little Rock / Chairman Walter Johnson, Pine Bluff / Chairman-Elect Darren Caldwell, DeWitt / Treasurer Larry Morse, Clarksville / Past-Chairman Ron Peterson, Mountain Home / At-Large Peggy Abbott, Camden Chris Barber, Jonesboro David Berry, Little Rock Tim Bowen, Mena Kristy Estrem, Berryville John Heard, McGehee Ed Lacy, Heber Springs Jim Lambert, Conway James Magee, Piggott Ray Montgomery, Searcy Robert Rupp, Newport Sharon Sly, Siloam Springs Barbara Williams, Conway

EXECUTIVE TEAM Robert “Bo” Ryall / President and CEO W. Paul Cunningham / Executive Vice President Beth H. Ingram / Senior Vice President Tina Creel / Vice President, AHA Services, Inc. Don Adams / Vice President, Rural and Mental Health Services Elisa M. White / Vice President and General Counsel Jodiane Tritt / Vice President, Government Relations Pam Brown / Vice President, Quality and Patient Safety

Statistical Information

NewsSTAT

24 24 25 26 27 28 30 30 31 31 32 33 34 35 35 36 37 38 39 40 40

10 11 12 12 14 15 16 17 17 18 19 20 20 21 42 43

Your Guide to the Arkansas Hospital Community Distribution of Arkansas Licensed Hospitals Key Numbers Behind Important Facts AHA Members by Congressional District A Snapshot of Arkansas Hospitals AHA Member Organizations Hospital Member Institutions Charges by Payer Category Member Organizations: Public Hospitals Member Organizations by Type Arkansas: Comparative Utilization Indicators Community Hospital Summary Financial Data U.S.: Comparative Financial Indicators Distribution of Community Hospitals by County Community Hospitals’ Uncompensated Care Costs Hospital Ownership - Investors Hospital Ownership - Not-for-Profits U.S.: Comparative Utilization Indicators Charges and Lengths of Stay for Top 30 DRGs Impact of Self-Pay Patients Arkansas Hospitals Receiving Local Tax Support

Legislature Chooses to Make a Difference Hospitals Respond Following Tornadoes Framework Improves Resilience of Facilities Hutchinson, Ross Speak to Board of Directors Harrington Receives National Award Northwest Med Center Receives AHA Award Montgomery Recognized for Advocacy Efforts Foundation Receives Gift for Equipment AHEF Earns Awards at ACHE Congress AHA Awards Nominations Open 84th Annual Meeting and Trade Show AHA Services Spotlight Article Don’t Lose Momentum on ICD-10 Preparations Health Matters Initiative Addresses Challenges Private Option Working in Arkansas AHA Accomplishments 2013-2014

Quality/Patient Safety 45 Infection Prevention Can Impact Bottom Line 48 Improving Processes and Breaking Barriers 50 HEN Brings Excitement Back to Healthcare

Medicare/Medicaid 51 54 56 56

DISTRIBUTION

Backfilling the Medicare Sinkhole 5 Cornerstones of a Culture of Compliance AHA Advisory Looks at Assistance Issue Rule Gives Patients Access to Lab Reports

Emergency Preparedness

Arkansas Hospitals is distributed quarterly to hospital executives, managers, and trustees throughout the United States; to physicians, state legislators, the congressional delegation, and other friends of the hospitals of Arkansas.

44 Hospital Responds to Water Outage

Miscellaneous 57 Study Explores Leadership and Gender 59 Choice Can Change Life, Organization, Country

Departments pcipublishing.com Created by Publishing Concepts, Inc. David Brown, President • dbrown@pcipublishing.com For Advertising info contact Michelle Gilbert • 1-800-561-4686 ext.120 mgilbert@pcipublishing.com edition 87

Cover Photo Little Rock Farmer’s Market located in the downtown Little Rock River Market.

Photography courtesy of the Arkansas Department of Parks and Tourism

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From the President Editor’s Note Education Calendar Arkansas Newsmakers and Newcomers All About Arkansas Hospitals Final Thoughts Summer 2014 I Arkansas Hospitals

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P R E S I D E N T

The Arkansas Private Option is Working

Photo courtesy of Jason Burt

Data measures how we’re doing in any situation, and data regarding the Arkansas Private Option (APO) is measuring its positive impact on Arkansas hospitals. Looking at data from the first quarter of the calendar year (the APO went into effect January 1, 2014), Arkansas hospitals can already report a 30% drop in self-pay patients, comparing quarter one of CY 2014 to quarter one of CY 2013. At the same time, the number of self-pay patients presenting to emergency departments for care was down 23%, at a time when overall ED volumes have remained relatively flat. This is huge.

Cuts to Medicare reimbursements and the climbing rate of uncompensated care have been the one-two punch threatening the life of Arkansas hospitals. The latest rounds of Medicare reimbursement cuts that began with the Middle Class Tax Relief and Jobs Creation Act of 2012 and the American Taxpayer Relief Act of 2012, grew under stipulations of the Affordable Care Act and were increased yet again as the results of sequestration continue. They, alone, are stifling.

Add to them the more than approximately $390 million* Arkansas hospitals annually spend providing care for patients without health insurance coverage, and you can see the dilemma. The dual financial burden on hospitals is crushing.

But here’s the good news: the APO is significantly reducing uncompensated care, since many formerly uninsured are now in the ranks of paying patients with healthcare coverage secured through the APO. By reducing hospitals’ uncompensated care (care provided to, but not paid for by, uninsured patients), the APO gives Arkansas hospitals a fighting financial chance to keep their doors open.

The AHA’s work with legislators, helping them understand the APO as Arkansas’s unique approach to helping both patients and hospitals while complying with federal law, has made a difference twice as the required super majority approved the

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Private Option. It was not an easy vote, with only projections to weigh as deliberation occurred.

However, the projections are now being met or exceeded by incoming data, and we expect having facts in hand will make the next APO appropriation easier for legislators to support.

I ask that you talk to your legislators and thank them for their support of the APO. I also ask that you talk with legislative candidates about the success of the APO and see where they stand on the issue. As November’s elections come we must support those candidates who are behind the APO, and remind them of the importance of this healthcare coverage. It is not only good for Arkansans; it is a positive contributor to our state’s economy.

From the hospital perspective, the APO has proven to do exactly what it was designed to do…cover more Arkansans who were formerly without healthcare coverage, and thereby reduce the burden of uncompensated care on our hospitals. The APO cannot reduce Medicare reimbursement cuts to hospitals nor can it wipe out uncompensated care altogether, but it can reduce (and is reducing) the amount of uncompensated care hospitals must absorb.

As we all know, going into 2014 hospitals faced a dire financial situation. The ability of the APO to help was questioned.

Now, with preliminary data in and more positive, measureable results expected as the year progresses, it is clear and becoming clearer that the APO is working…for Arkansans and for Arkansas hospitals.

Bo Ryall President and CEO Arkansas Hospital Association *2012 figure, the last year for which data is available

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Summer 2014 I Arkansas Hospitals

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EDITOR’S NOTE This magazine hasn’t warranted many Editor’s Notes, but thought I’d use this space for two purposes.

First, to reinforce the importance of the statistical information in this annual summer issue. Paul Cunningham, executive vice president of the Arkansas Hospital Association, is responsible for the 18-page pullout section with 2014 data about Arkansas hospitals and healthcare, in general. We urge you to remove this section, which will also appear on the AHA website www.arkhospitals.org, and use it – to reinforce community awareness about your hospital, to assist in speeches for civic and professional organizations, to provide your board with a picture of your hospital in comparison with others in the state, and other uses as you see fit. This is the one source you should need all year to support healthcare decisions about your hospital and your community.

Second, to announce my retirement from the AHA and as editor of Arkansas Hospitals.

In the winter of 1992, then-AHA president Jim Teeter committed to a new quarterly magazine for the Arkansas Hospital Association. He asked me to work on it “with” him.

Four issues later I was named editor of Arkansas Hospitals. And, now,

this 83rd issue will be my last, both as editor and as senior vice president of the AHA. It’s been a great ride just shy of 36 years, more than half of my life. As with any career, there have been good times and bad. I’ll always remember the saddest time, though, working through the preand post-Hurricane Katrina days.

So many Louisiana citizens entering our state and our hospitals, families separated, hospitals flooded beyond repair, mothers searching for babies relocated to Arkansas hospitals...but also one of the proudest times as our hospital employees stepped up (just as they always do in times of tragedy or disaster), caring for the patients rapidly forced to relocate to Arkansas by air, sometimes caring for their families as well because they had nowhere else to go other than the hospital, and those who sent supplies and brought aide to Louisiana to assist those who had lost their homes and ways of life.

It has been an honor to work with four of the five AHA presidents – Roger Busfield, Jim Teeter, Phil Matthews and Bo Ryall – each man with a different personality and leadership style. Our association has grown from six employees when I started as a secretary in 1978 to today’s 18. As

we grew larger, we added new services and opportunities for our membership through education, statistical data, communications, quality and patient safety, legal assistance and products and services through our for-profit subsidiary.

Our membership changed through the years, adding behavioral health, radiation therapy, long-term acute care, rehabilitation, hospice, physician-owned and psychiatric hospitals.

These additional specialties created many exciting new challenges and opportunities for our board and staff.

For me personally, the AHA has provided my second family and some of my closest friends. We’ve been through births and deaths of children and grandchildren, parents and family members; cancer and other illnesses; state and national tragedies – and we’ve done this as a family, always there for each other.

While the decision to retire at this time was a difficult one, I’m excited about the next chapter in my life. I wish the same for the members of the Arkansas Hospital Association.

Beth Ingram

EDUCATION CALENDAR July 18, Little Rock Arkansas Healthcare Human Resources Association Summer Conference July 23, Little Rock ICD-10 Workshop Series, Session VII August 1, Little Rock Arkansas Organization of Nurse Executives Summer Conference August 21-22, Hot Springs Hospital Financial Management Association Summer Conference August 22, Little Rock Arkansas Society for Directors of Volunteer Services Summer Conference

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August 27, Little Rock ICD-10 Workshop Series, Session VIII

October 9, Little Rock Arkansas Society for Directors of Volunteer Services Fall Conference

September 17, Little Rock The Keys to Executive Excellence Workshop

October 22, Little Rock Microsoft Office Training: Tips & Timesavers Workshop

September 18, Little Rock HFMA 2014 Revenue Cycle Seminar

October 29-31, Little Rock Hospital Financial Management Association Fall Conference

September 19, Little Rock Arkansas Association for Healthcare Engineering Golf Tournament October 8-10, Little Rock AHA 84th Annual Meeting and Trade Show October 8-10, Little Rock Arkansas Hospital Auxiliary Association Annual Convention

Program information available at www.arkhospitals.org/events.

Webinar and audio conference information available at www.arkhospitals.org/events.

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Summer 2014 I Arkansas Hospitals

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ARKANSAS

NEWSMAKERS and NEWCOMERS Peter Banko, FACHE, president and CEO of CHI St. Vincent Health System in Little Rock, received UALR’s College of Science 2014 Fribourgh Award at a March 20 reception at the Arkansas Governor’s Mansion. “Peter Banko’s vision, and commitment to partnerships has been critical to the growth of the UALR nursing program and to improving the healthcare within our community,” said UALR College of Science Interim Dean, Dr. Ann Bain. Created in 2010, the award honors not only Dr. James H. Fribourgh’s contributions to UALR and the state’s science community, but also extends that honor and recognition to others who have met the high standards set by Fribourgh’s example. Proceeds from the annual awards program go to the College of Science Leadership Endowed Scholarship to help UALR attract and retain high-achieving full-time students in science, mathematics, and health and wellness.

Scott Barrilleaux, FACHE, has been named CEO of Drew Memorial Hospital in Monticello effective May 1. He succeeds Theta Wilson, chief clinical officer, who has been interim CEO of the hospital while the board searched for a permanent successor. Barrilleaux previously served as CEO of Madison Parish Hospital in Shreveport, Homer (LA) Memorial Hospital, and Neshoba County General Hospital in Philadelphia, MS. Gareth Morgan, MD, PhD, has been named director of the University of Arkansas for Medical Sciences (UAMS) Myeloma Institute for Research and Therapy

(MIRT). Morgan, who is currently a clinician and researcher with the Myeloma UK Research Centre at the Institute of Cancer Research in London, will begin at UAMS on a full-time basis in July. He is a director of Myeloma UK, a respected patient organization, as well as a member of the Scientific Board of the International Myeloma Foundation, Scientific Secretary for the UK Myeloma Forum and founding director of the European Myeloma Network. Morgan succeeds Bart Barlogie, MD, PhD, the institute’s founder who has chosen to step down as director but who will remain to focus on clinical care and research.

Troy Wells, senior vice president of administrative services at Baptist Health, has been named by the organization’s board of trustees as the new president and CEO upon the July 1 retirement of Russell D. Harrington Jr., FACHE. Harrington’s retirement is the culmination of 40 years of service to Baptist Health.

He will continue to serve the organization in the role of president emeritus and senior advisor.

Baptist Health’s board of trustees also announced other promotions to Baptist Health’s executive team following Harrington’s retirement. Doug Weeks, FACHE, chairman of the Arkansas Hospital Association, will move from senior vice president of hospital operations to the position of executive vice president and chief operating officer, and Bob Roberts will add executive vice president to his current title of chief financial officer.

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all about

ARKANSAS HOSPITALS Beginning July 1, Baptist Medical Center – Stuttgart will be the beneficiary of a new 1 percent sales tax collected by businesses in the city. “The tax is very important to the continuance and upgrades to the hospital so that it can truly be the regional hospital we need, said Stuttgart Mayor Marianne Maynard. The sales tax will 8

Summer 2014 I Arkansas Hospitals

bring an estimated $2.2 million annually to the hospital.

Hospital administrator Terry Amstutz, FACHE, said of the new tax, “We appreciate our community. The vote was a very definitive show of support for our hospital.”

He said the funding would be split between equipment and building issues that need to be addressed.

HealthSouth Rehabilitation Hospital in Fayetteville plans to add 20 beds to its current 60-bed capacity by next year. The hospital is a joint venture with Washington Regional Medical Center. The rehab facility is typically 80% full on a daily basis and plans to add a 9,300 square foot building connected by a walkway to the current facility. With the additional beds, each patient will have a private room.

April 1, 2014 marked the transfer of ownership of Mercy Hospital Hot Springs to Catholic Health Initiatives, which owns CHI St. Vincent Health System. Peter Banko, FACHE, SVHS president and CEO, said, “The founding Sisters of Charity of Nazareth and Sisters of Mercy would be proud to see their 126-year ministries strengthened today through the formation of a larger, regional healthcare system serving southwest and central Arkansas.”

The Hot Springs facility has a new name, CHI St. Vincent Hot Springs. Thomas Fitz, LFACHE, has been named interim president of the facility. He previously worked with CHI in Kansas and Morrilton.

White River Medical Center’s Cancer Care Center recently held an open house to show its remodeled Radiation Therapy Suite and the addition on a new Varian TrueBeam Linear Accelerator. The suite has been remodeled to make a more calming, relaxing atmosphere for the patients receiving treatment.

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Fully Invested.

N E W S S T A T

by Paul Cunningham, Executive Vice President, Arkansas Hospital Association

Arkansas Legislature Chooses to Make a Difference Did the Arkansas Legislature make a difference for the good in the lives of thousands – make that tens of thousands – of Arkansans by giving its nod on two occasions for the state’s unique Private Option (APO) plan to expand health insurance? So far, the signs point to “yes.” Three months into the operational phase of the APO, all systems are still on “go.” Everything in play thus far appears to be working as it should, meeting the expectations and even surpassing them.

The success begins with enrollment into the APO plans available for the choosing. According to an April 21 report from the Department of Human Services, more than 155,500 people had applied for and been determined as eligible for APO coverage as of March 31, a full quarter of a year since the program went live. If all of them had not actually selected a plan by that date, then they should have private insurance coverage by the end of April, or be added to the rolls of the traditional Medicaid program, assuming it would serve them better due to their current medical conditions.

Altogether, that’s 70% of the number of potential APO enrollees estimated more than a year ago who would qualify to take the opportunity to obtain health insurance being offered through four private health plans. It exceeds even the most optimistic projections over such a short span. The total doesn’t count another 45,000 people with incomes above 138% of the federal poverty level who have enrolled with subsidized health plans offered via the Insurance Department’s health insurance Marketplace.

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Keep in mind that the bulk of the new APO enrollees hold jobs and go to work every day, managing to eke out a living either at, below or marginally above the official poverty line. Eighty-two percent have incomes less than 100% of the poverty level and are actually too poor to qualify for federal subsidies under the parameters of the Affordable Care Act (ACA), as if that makes any sense. Such low incomes pretty much negate any reasonable idea that they’d be able to afford health insurance on their own after paying for their basic needs like food, clothing and shelter. And, with the APO there should be few concerns about their out-of-pocket cost-sharing, which is very limited.

Another positive is the age breakdown of the APO enrollees. The fact that 43% are in the 19-34 age range will serve to mitigate pricing for all Marketplace plans, including those purchased under the APO umbrella, as well as the subsidized plans. Those “young invincibles” seldom worry about taking care of themselves, yet are generally a healthier lot that the rest of us. Oh, to be young again! Get enough of them enrolled and it brings down the premium price for everyone.

The numbers mean that the APO is delivering on its promises, turning folks’ hope for healthcare coverage into a reality. But, what about healthcare providers, especially the hospitals that need the APO to serve as a pathway to both to a reduction in the growth of uncompensated care and new revenues to offset the painful Medicare payment cuts from the combined clout of the ACA, two tax acts passed in 2012, budget

sequesters and a bevy of CMS rules and regulations piled on them over the past few years? In short, there’s good news on that front, too.

Over the course of only three months, hospitals statewide already are experiencing a marked reduction in the number of self-pay patients. Consistently, reports are that the inpatient self-pay volumes have fallen around 30%, based on 2013 versus 2014 year-to-date comparisons, while the number of self-pay patients presenting to emergency departments for care are down 23% at the same time overall ED volumes have remained relatively flat. So, it does not seem that ERs are being swamped as many feared. It’s still too early to assess the financial impact, but considering that APO enrollees outnumber those with new subsidized plans who are more likely to experience out-of-pocket cost-sharing difficulties by roughly a 3.5:1 ratio, it’s easy to assume noticeable turnarounds are happening.

A few legislators who reluctantly voted in early March to allow the APO another year to prove itself, also emphasized that their support going forward depends on whether it delivers on the promises. For now, things are pointing in that direction.

Others never wavered. They took a risk to make a difference and to help others. From the outset, they were guided, probably unknowingly, by the wisdom of American financier J.P. Morgan, who once said, “The first step towards getting somewhere is to decide that you are not going to stay where you are.” That’s why Arkansas is moving forward toward being a healthier state of mind and body.

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N E W S S T A T

Hospitals Respond Following Devastating Tornadoes Once again, Arkansans faced death and destruction by an EF4 tornado that hit central Arkansas Sunday evening, April 27. Hundreds of homes and businesses were destroyed, hundreds more damaged, and 16 people were killed after a series of five tornadoes hit part of Pulaski and White Counties, and the cities of Vilonia and Mayflower. This was the second time in three years Vilonia was hit hard by a tornado.

In seconds the storm was over.

Neighbors and volunteers immediately began searching for the injured, taking them to Conway Regional Medical Center, the closest hospital to Vilonia and Mayflower, by truck and sport utility vehicles before EMS arrived. Patients were driven in by neighbors, family members and complete strangers, according to Amanda Irby, director of the hospital’s emergency room.

In all, Conway Regional Medical Center treated more than 120 patients, setting up three triage areas to manage the volume. There was a wide variety of injuries from cuts

and scrapes to broken bones, internal injuries, head injuries and several “Code Blue.”

By the third day, area hospitals and ambulance services reported that they had treated more than 150 storm victims since the tornado hit, including several with severe injuries that required hospitalization.

Caring for the injured was a true test of the Arkansas Trauma System.

In addition to the Conway facility, patients were transported to Baptist Health (Little Rock and North Little Rock), UAMS (Little Rock), Arkansas Children’s Hospital (Little Rock), CHI St. Vincent Medical Center (Little Rock and Sherwood), and White County Medical Center (Searcy). Dr. Kristin Lyle, disaster medical director for Arkansas Children’s Hospital, said that because the tornado crossed a major interstate highway, it added a new layer to the injuries. Doctors and nurses treated children who had been thrown around in cars and suffered head trauma, as well as internal injuries.

Because the National Weather Service had early predictions of severe weather for central Arkansas that Sunday evening, hospitals and EMS ramped up with additional crew, calling upon mutual-aid agencies and other preparations. Understandably, those preparations paid off for treating the many people injured by the storm.

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Summer 2014 I Arkansas Hospitals

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N E W S S T A T

Framework Improves the Resilience of Healthcare Facilities and Services to High-Impact Weather

According to a new study by the American Meteorological Society (AMS) Policy Program, a risk management framework can improve the resilience of healthcare facilities and services to high-impact weather such as tornadoes and hurricanes. The report is based on a recent AMS Policy Program workshop, A Prescription for the 21st Century: Improving Resilience to High-Impact Weather for Healthcare Facilities and Services, held in Washington, DC in October 2013.

The purpose of the study was to explore methods for improving the resilience of the health system. The report outlines a process for reducing the structural and operational risks that healthcare facilities often face. The study presents a systematic strategy for improving resilience through a three-step process that first seeks to understand risks, then addresses the vulnerabilities of health facilities, and finally prepares for the continuity of health services in the event of disruptions.

The AMS Policy Program workshop included many diverse and engaged parties. The insurance sector and healthcare accreditors represented the stakeholders who assess risk. Those who plan and construct hospitals were represented by land developers, building engineers, and urban designers. Discussions on the continuity of healthcare services addressed pharmaceutical supplies, health IT, and clinical services.

“Two of our key findings involve new concepts,” Shalini Mohleji, Policy Fellow at the AMS Policy Program and director of the study, said.

“First, resilience can be increased through successful risk management, and second, redundant systems promote efficacy, not inefficiency.”

Healthcare facilities and services provide a key foundation for a thriving community. Therefore, ensuring their resilience to highimpact weather is critical. Highimpact weather events present a challenge in that they disrupt health facilities and services and decrease the ability to provide healthcare at

a time when a community’s needs increase due to injuries and illness associated with the event. As more communities will emerge in areas vulnerable to high-impact weather, the need will grow for resilient healthcare facilities and services.

“Our health facilities are too vulnerable to weather and climate events. We need to protect them more effectively and a comprehensive framework to assess and manage risk can help do that,” said Paul Higgins, Director of the AMS Policy Program.

The full report is available at the AMS Policy Program website at www.ametsoc.org/hfs.

The AMS Policy Program conducts research, analysis, and studies designed to help ground societal decisions in the best available knowledge and understanding.

These efforts help the nation, and the world, avoid risks and realize opportunities associated with the earth system. To see additional studies, visit www.ametsoc.org/ atmospolicy.

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Hutchinson, Ross Speak to AHA Board of Directors In most of its monthly meetings, the Arkansas Hospital Association Board of Directors invites a guest speaker to attend and discuss important issues with the board.

In February and March, the board 12

Summer 2014 I Arkansas Hospitals

heard from Arkansas gubernatorial candidates Congressman Mike Ross and Congressman Asa Hutchinson.

Both gentlemen gave a brief overview of their service in Arkansas and emphasized their interest in and

the importance of rural healthcare.

The Board discussed the Arkansas Private Option and other programs that affect hospital reimbursement with both Congressman Ross and Congressman Hutchinson.

N E W S S T A T

AHA board member Ray Montgomery of Searcy, looks on as Congressman Asa Hutchinson talks to AHA board of directors.

Congressman Hutchinson stated that he believes that the Arkansas Private Option issue is resolved and that, if elected in 2015, he would evaluate the success of the program and help to shape where it will go in

Congressman Mike Ross talks with AHA board member James Magee of Piggott and AHA vice president Don Adams.

the future. He stated that, if elected Governor, his priorities would be tax reform, education, social program reforms, and economic development.

Congressman Ross said that he is supportive of the Private Option, but

remains steadfastly opposed to many provisions that are included in the Affordable Care Act. He stated that, if he were elected Governor, his priorities would be tax reform, education, jobs, and fiscal responsibility.

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N E W S S T A T

Russ Harrington Receives AHA Board of Trustees Award The American Hospital Association presented Russell D. Harrington, Jr., president and CEO, Baptist Health, Little Rock, with its 2014 Board of Trustees Award during the Association’s annual meeting in Washington, DC May 5. The award is presented to individuals or groups who have made substantial and noteworthy contributions to the work of the AHA. “Russ has been diligent in his efforts to promote better public health and has worked tirelessly on behalf of hospitals,” said AHA president and CEO Rich Umbdenstock.

“His involvement in policy and leadership programs for the American Hospital Association spans more than 25 years and the AHA is honored to recognize Russ’ contributions to the AHA with this award.”

Harrington has demonstrated significant leadership within the AHA, most recently serving on the 2013 Medicare Disproportionate Share Hospital Advisory Group. He also has served on the Task Force on Delivery System Fragmentation, the Section for Health Care Systems Governing Council, the Strategic Planning/Policy Committee and the Institutional Practices Committee, and has been a long-standing delegate to Regional Policy Board 7.

He has served in his role as president and CEO of Baptist Health since 1984. Prior to that time, he served the eight-hospital system in several capacities as associate executive director of Baptist Health, administrator of Baptist Health Medical Center in Little Rock and executive director of Baptist Memorial Hospital in Kansas City, Missouri.

An influential force in promoting better health, Harrington worked on modernizing state tort laws, prohib14

Summer 2014 I Arkansas Hospitals

Luncheon speaker Kenneth Feinberg (left) and American Hospital Association Chairman James H. Hinton (right), present 2014 AHA Board of Trustees Award to Russ Harrington, Jr., president of Baptist Health in Little Rock.

“Russ has been diligent in his efforts to promote better public health and has worked tirelessly on behalf of hospitals.

His involvement in policy and leadership programs for the American Hospital Association spans more than 25 years and the AHA is honored to recognize Russ’ contributions to the AHA with this award.” iting smoking on hospital campuses, ensuring fairness in Medicaid coverage and helping create protection and services to children born with illegal substances in their blood.

Harrington is a Fellow in the American College of Healthcare Executives and a board member of the Baptist Health Foundation.

He chaired the Arkansas Hospital Association board from 1992 to 1993 and received the 2001 A. Allen Weintraub Memorial Award, the association’s highest honor.

Daniel Sisto, former president of the Healthcare Association of New York State also received the 2014 Board of Trustees Award.

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N E W S S T A T

Northwest Medical Center Bentonville Auxiliary Receives AHA Award

From left: Jonathan B. Perlin, MD, PhD, Chair-elect, American Hospital Association Board of Trustees; Cindy Sadler, volunteer coordinator, Northwest Health System; B. J. Johannsen, president, Northwest Medical Center Bentonville Auxiliary; Lynn Smith, AHA Committee on Volunteers; Theda Aud, Legislative Chair, Arkansas Hospital Auxiliary Association; and Bill Newbold, Chair, AHA Committee on Volunteers

The American Hospital Association honored four hospital volunteer programs with its Hospital Awards for Volunteer Excellence (HAVE) at a recognition breakfast meeting May 5, during the AHA Annual Membership Meeting in Washington, DC. The award recipients fall into four categories: community service programs, community outreach and/or collaboration programs, fundraising programs and in-service hospital volunteer programs. Receiving the HAVE award for community outreach and/or collaboration was Northwest Medical Center Bentonville Auxiliary for their “Operation Sock-It-To-Me” program.

Operation “Sock-It-To-Me” is a sock drive for needy children in Benton County, Arkansas. The

hospital walls and touch the community in a tangible way.

Operation “Sock-It-To-Me” volunteers placed a large baby crib in the hospital cafeteria decorated with red, black and white ribbon, which served as the collection point for all socks. Decorated boxes were placed in work areas throughout the hospital to make it easier for each department to participate. Each week, socks from the boxes were placed in the crib. All the employees and visitors watched as the number of sock donations flourished.

The program was advertised in the local newspapers and on the radio, prompting two local Arvest Bank branches and the Christian Women’s Club of Bella Vista to also participate and support the campaign. The goal was to collect 1,000 pairs of socks to donate to five local charities. The volunteers exceeded their goal and collected 1,960 pair.

The success of the program is a great tribute to the hospital employees and the communities in North-

Operation “Sock-It-To-Me” is a sock drive for needy children in Benton County, Arkansas. The impetus for the program was a first-hand experience of one of the hospital auxiliary members who shared how important something as small as a pair of socks can be to a child. impetus for the program was a firsthand experience of one of the hospital auxiliary members who shared how important something as small as a pair of socks can be to a child.

The auxiliary wanted to implement this program to reach beyond the

west Arkansas but most of all to the dedication and hard work of all 120 hospital volunteers.

Accepting the award on behalf of the auxiliary was B. J. Johannsen, president of the Northwest Medical Center-Bentonville Auxiliary.

•

Summer 2014 I Arkansas Hospitals

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N E W S S T A T

Ray Montgomery Recognized for Advocacy Efforts The American Hospital Association (AHA), in partnership with the state hospital associations, presented its Grassroots Champions Award May 6 at a special breakfast during the AHA’s Annual Membership Meeting in Washington DC. Ray Montgomery, President and CEO of White County Medical Center in Searcy, along with 50 other state representatives, was recognized for exceptional leadership in generating grassroots and community activity in support of a hospital’s mission.

The AHA’s Grassroots Champion Award was created to recognize those hospital leaders who most effectively educate elected officials on how major issues affect the hospital’s vital role in the community, who have done an exemplary job in broadening the base of community support for the hospital and who are tireless advocates for hospitals and their patients.

“Mr. Montgomery is the perfect example of a grassroots champion. Not only does he take time to educate his elected officials on hospital operations and the healthcare environment, overall, but he goes above and beyond to educate business leaders and others in his community,” said Jodiane Tritt, the Arkansas Hospital Association’s vice president of government relations.

“Because of his actions, they are all well-informed and appreciate not only what the hospital does to take care of patients and their families, but also what it means to be a major employer and a critical part of his community’s economic stimulus. He ensures that his community recognizes they all have a stake in the well-being of the hospital, thereby empowering others in 16

Summer 2014 I Arkansas Hospitals

From left, Bo Ryall, president, and Jodiane Tritt, vice president, government relations, Arkansas Hospital Association; Ray Montgomery, president, White County Medical Center, Searcy; and Rich Umbdenstock, president, American Hospital Association

his community to serve as hospital advocates, too,” she continued.

Montgomery is a highly respected member and former chairman of the Arkansas Hospital Association board of directors, former chairman of the American Hospital Association’s Regional Policy Board 7 (Arkansas, Louisiana, Oklahoma and Texas), and member of the board of directors of the state’s Quality Improvement Organization.

Representing other organizations as well, he also is a mentor and a friend to many. In 2002, he received the Arkansas Hospital Association’s highest honor awarded a hospital CEO, the A. Allen Weintraub Memorial Award.

In addition, Montgomery was chairman of the American Hospital Association’s Section for Small and Rural Hospitals and is a current member of the Committee on Performance Improvement. He also previously served as vice chairman of the Voluntary Hospitals of America Oklahoma/ Arkansas board of directors.

“We depend upon strong local voices to help tell the story of hospitals as cornerstones of the communities they serve,” said Rich Umbdenstock, AHA president and CEO. “This award is a small token of our appreciation for the hard work and dedication of these individuals to improving health and healthcare in America.

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North Arkansas Medical Foundation Receives Auxiliary Gift for Equipment

The check presentation (left) included Richard McBryde, COO, Vince Leist, CEO, Tucky Zima, Auxiliary President, Pat Alge, Auxiliary Treasurer, April Bunch, Auxiliary Secretary, and Marsha Carter, Marketing/PR Director/ Interim Foundation Executive Director.

North Arkansas Regional Medical Center’s (Harrison) Auxiliary recently presented a check in the amount of $46,902.24 to the North Arkansas Medical Foundation for the purchase of patient care equipment for NARMC.

Equipment approved for purchase includes nine Zoll E Series Cardiac Monitors for Emergency Medical Services. Current monitors were purchased in 2001 and are becoming expensive to maintain. New monitors will transmit to dispatch and

forward information to the hospital so that the Emergency Room is better prepared to deal with incoming patients. Monitors are the most utilized piece of equipment in EMS. “We are honored to receive such tremendous support from the Auxiliary. They are an exceptional group of volunteers who work tirelessly to support our medical center. We are incredibly grateful for their dedication to our hospital, and to the communities we serve,” comments Vince Leist, NARMC President &CEO. The Auxiliary is currently comprised of more than 200 volunteers and operates a Thrift Shop in Harrison, as well as NARMC’s “Nightingale’s” Gift Shop, which is located in the Ben A. Garrison Grand Atrium Lobby of NARMC’s Patient Tower.

The North Arkansas Medical Foundation’s purpose is to provide financial support to NARMC to continue providing the best possible state-of-the-art healthcare facilities, programs and services for the communities served.

•

AHEF Earns Awards at ACHE Congress The Arkansas Health Executives Forum (AHEF), chapter affiliate of the American College of Healthcare Executives, has once again earned the ACHE’s 2014 Award of Chapter Distinction and Award for Sustained Performance.

AHEF participates in ACHE’s Chapter Management and Awards Program, which is designed to ensure the delivery of high-quality services at the local level.

The chapter was recognized

during the March 23-27 ACHE Congress on Healthcare Leadership in Chicago. Brian Barnett, FACHE, executive director, Arkansas Specialty Orthopaedics, Little Rock, is chapter president.

Other officers are: vice president – Michael Givens, FACHE, administrator/COO, St. Bernards Medical Center, Jonesboro; secretary/treasurer – Tim Bowen, CEO, Mena Regional Medical Center; directors – Kristy Estrem, FACHE,

CEO, Mercy Hospital – Berryville; Connie Hill, RN, FACHE, administrator, St. Bernards Heart and Vascular, Jonesboro; Beth Ingram, senior vice president, Arkansas Hospital Association, Little Rock; and ACHE Student Network representative – Hailey Hundley, MHSA Graduate Student, UAMS, Little Rock. Chris Barber, FACHE, president/CEO, St. Bernards Healthcare, Jonesboro, is Arkansas Regent.

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Summer 2014 I Arkansas Hospitals

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N E W S S T A T

AHA Awards Nominations Open Nominations are open for the 2014 Arkansas Hospital Association (AHA) awards program. The A. Allen Weintraub Memorial Award and Distinguished Service Award will be presented during the Arkansas Hospital Association’s 84th Annual Meeting Awards Dinner Thursday, October 9, at the Little Rock Marriott. Arkansas’ C. E. Melville Young Administrator of the Year will be recognized by the Arkansas Health Executives Forum, and the Diamond Awards, cosponsored by the Arkansas Society for Healthcare Marketing and Public Relations, also will be presented at the Awards Dinner. In addition, the ACHE Regent’s Awards will be presented at the ACHE Breakfast meeting that same morning.

Criteria for each award follows: • The A. Allen Weintraub Memorial Award, named for Allen Weintraub, long-time administrator of St. Vincent Infirmary Medical Center in Little Rock, is the highest honor bestowed upon an individual by the AHA. Those nominated for this honor should be hospital chief executive officers who are contributing to their hospitals and communities in much the same manner as did Allen. Those who remember him always mention his care and concern, not only for hospital patients, but also for his employees; his passion for quality healthcare for Arkansans; his recognition of duty to the community; and his visionary influence.

• The AHA’s Distinguished Service Award is presented to individuals who, while not necessarily AHA members, have promoted a cause of the healthcare industry, thereby becoming entitled to special recognition. Examples of 18

Summer 2014 I Arkansas Hospitals

those eligible for this award are physicians, nurses, trustees, auxilians, community leaders and other deserving individuals.

The 2014 recipients of the Weintraub and Distinguished Service Awards will be chosen by the AHA Board of Directors from those nominated.

• The C. E. Melville Young Administrator of the Year Award is named for the late C. E. Melville, administrator of Jefferson Regional Medical Center in Pine Bluff. The award recipient is selected by the Arkansas Health Executives Forum’s Awards Committee. The award recipient must be age 40 or under in 2014, a resident of Arkansas for at least two years, employed by an Arkansas healthcare institution, and meet requirements for active membership in the Arkansas Health Executives Forum.

• The 2014 Diamond Awards honoring excellence in hospital marketing and public relations will be presented in several categories, such as advertising, annual report, Internet Web site, publications, special video production, and writing. Diamond Awards may be presented to hospitals with 0-25 beds (CAH), 26-99 beds, 100-249 beds and

250 or more beds. Entries were accepted through May 16 and judged individually by a panel of judges not affiliated with any Arkansas hospital. Emphasis was placed on the budget for each entry within each division.

• The 2014 ACHE Regent’s Awards will honor outstanding healthcare executive leadership in two areas – early career and senior level.

The two recipients, selected by the Arkansas Health Executives Forum’s Awards Committee, will be presented their awards at the ACHE Breakfast during the AHA Annual Meeting and recognized at the annual Awards Dinner that same evening.

Nominations and entries (with the exception of the Diamond Awards), accompanied by appropriate documentation, must arrive at AHA headquarters no later than July 30, 2014. Informational brochures providing details of all awards have been distributed to each hospital CEO and public relations/marketing officer. They also are available at http://www. arkhospitals.org/events/annualmeeting. Please contact Lyndsey Dumas at 501-224-7878 with questions about the awards or award process.

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Arkansas Hospital Association 84th Annual Meeting and Trade Show October 8-10, 2014

Little Rock Marriott and Statehouse Convention Center, Little Rock Mark your calendar now for these exciting events!

“Crucial Conversations & the New Science of Leading Change” Leadership Workshop, Dave Angel, Master Trainer, VitalSmarts “How Participatory Medicine is Changing What’s Possible in Health and Care” Keynote Address, e-Patient Dave deBronkart, Cancer Survivor and Blogger “Obamacare 2.0: What’s Next” Membership Breakfast on Healthcare Reform Steven Eastaugh, Health, Finance and Economics Researcher “The Science of Culture Change: Lessons Learned from High Reliability Organizations in Creating and Sustaining a Culture of Safety” Patient Safety/Quality Leadership Workshop Steven Harden, CEO, LifeWings Partners, LLC “For the Love of Healthcare Leadership” ACHE/AHEF Breakfast Diana L. Smalley, FACHE, Regional President, Mercy in Oklahoma “Compelling Communication: Creating Engagement, Understanding and Results” ACHE Face to Face Workshop, Craig Deao, Senior Executive Team, Studer Group Executive Leadership Luncheon ACHE Advancement Session And, don’t forget the Annual Trade Show with more than 100 exhibiting companies and fabulous door prizes!

Printed brochures will be mailed August 1. Program and registration information will soon be available online at http://www.arkhospitals.org/events/annual-meeting

Hughes, Welch & Milligan, LTD. Certiied Public Accountants

At Hughes, Welch & Milligan, CPAs, we have made a commitment to providing professional services to the Healthcare Industry. Our experienced professionals work closely with clients and their staff to ensure they are receiving the level of service you should expect out of your CPA firm.

Visit Us Online at www.hwmcpas.com Batesville, Arkansas Bill Couch, CPA, FHFMA 870-793-5231 bcouch@hwmcpas.com

Hughes, Welch & Milligan, CPAs is a full service accounting firm offering a wide range of services to the Healthcare Industry: • Financial Statements and Employee Beneet Plan Audits • Medicare and Medicaid Cost Report Preparation • Reimbursement and Compliance Issues Consulting • Critical Access Hospital Consulting • Strategic Planning for Acquisitions, Sales, Mergers & Expansions • Revenue Cycle Analysis • Feasibility Studies • IRS Form 990 Preparation

Summer 2014 I Arkansas Hospitals

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SPOTLIGHT:

AUDIT Since August 1, 2009, the Recovery Audit Contractor (RAC) program has been a reality in Arkansas.

However, we know that the RACs are not the only audit agency as the number of audits increases year after year!

To help facilities prepare for the operational and financial impact of RAC and all audit types, AHA Services Inc., a subsidiary of the Arkansas Hospital Association, has endorsed the New Jersey Hospital Association’s Audit Trax workflow management system, a powerful and cost-effective Webbased application to put you in control of your RAC process.

Fully certified by the American Hospital Association’s RACTRAC reporting tool, AUDIT Trax latest version 9 was released based on changes to CMS’ Recovery Auditor processes, including Part A/ Part B rebilling.

Audit Trax can: • Centralize the facility RAC response process with work queues and task dashboards for all members of the RAC Team • Manage all audit types whether internal or external • Ensure that your hospital will never miss a deadline: E-mail prompts and color-coding of RAC audit deadlines are provided

• Capture and store scanned medical records, EMR and all RAC correspondence • Provide built-in letter templates to speed up facility appeals • Permit authorized staff or consultants to work remotely on appeals on your facility’s behalf • Customize Outcome Reports for a) wins and losses by denial reason, DRG, coder, physician; b) audit and appeal volume by type of denial; c) facility or system level audit status reporting.

To learn more about Audit Trax and what it can do for your facility, contact Tina Creel, AHA Services Inc., 501-224-7878.

•

Don’t Lose Momentum on ICD-10 Preparations While it is unfortunate that congress voted to delay ICD-10, the Arkansas Hospital Association encourages our members to continue their training. With this delay comes the opportunity to become better prepared for the transition and we don’t want to lose the momentum we currently have in training and education.

Two major concerns we face with the implementation of ICD-10 include decrease in productivity and having adequate documentation to support the increased needs for specificity. There is much work to be 20

Summer 2014 I Arkansas Hospitals

done in these two areas. The AHA will continue its 8-part workshop series providing basic training on coding in the new system. Studies have shown that productivity rates after implementing ICD10 has dropped by 50%, which has the potential of severely impacting cash flow. Continuing this training will allow for greater understanding of the issues needed to be addressed including identifying key areas needing documentation improvement.

The remaining workshops in the series are:

• July 23 – Session VII: Digestive, Genitourinary • August 27 – Session VIII: Signs and symptoms, Injury and Poisonings, External Causes, Factors influencing health status The AHA is providing this training at a very affordable rate to allow our members to move forward with continued progression toward the goal of being ready for this important transition. Workshop details and registration information is available at www.arkhospitals.org/events.

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N E W S S T A T

Clinton Health Matters Initiative Addresses Health Challenges The United States has among the highest healthcare costs of any country at our income level, yet we consistently rank between 25th and 33rd among all nations in our health outcomes. Driving these high costs and poor results are a number of factors, including but not limited to clinical care. In fact, in the nationallyaccepted and evidenced-based County Health Rankings model, access to quality care only makes up 20 percent of the health equation. Other determinants are environmental (10 percent), behavioral (30 percent), and socio-economic (40 percent).

Established in 2012 to help address our nation’s growing health challenges, the Clinton Health Matters Initiative (CHMI) brings together leaders from government, corporations, non-governmental organizations, and communities to develop and scale lasting solutions.

Ultimately, they aim to eliminate health disparities, reduce the prevalence of preventable diseases, and lower healthcare costs.

To achieve their goals, CHMI employs three main strategies: building national strategic partnerships, leveraging technology and digital platforms for innovation, and developing community health transformation blueprints in four markets.

Central Arkansas is one of the four.

According to the United Health Foundation’s 2013 America’s Health Rankings, Arkansas comes in at 49 in overall health. This, despite doubling healthcare costs over the past decade. The State’s high prevalence of obesity, diabetes, and smoking are among contributing factors. A closer look reveals health disparities and an uneven distribution of resources that enable good health. These challenges are not unique to Arkansas. All across the country, an individual’s

location, income status, or ethnicity too often influences his or her health.

The good news is a lot can be done to improve the situation. But, given the nation’s vast health inequities, approaches have to be targeted and population-based if they’re going to get the results we need. It’s with this in mind, and with an understanding of the power of partnerships, that the Clinton Health Matters Initiative has been helping Arkansans take high-impact steps toward improved health. In May of 2013, CHMI convened more than 175 community leaders from Central Arkansas to develop a blueprint that outlines specific and measurable actions that can be taken to address local health issues. Over the next four years, the group will tackle prescription drug misuse; increase healthy food options and physical activity opportunities for all residents; provide ageappropriate sexual health education programming to more young people in the region; and much more.

As mentioned earlier, developing community health transformation blueprints is just one of three ways that CHMI advances their goals;

another way is through strategic partnerships. Since CHMI’s inception in 2012, their strategic partners have already invested a total of $200 million nationwide into efforts that will improve the health and well-being of more than 75 million people across the country.

In Arkansas, one of the strategic partnership investments is a $32 million grant awarded by the United States Department of Education to the University of Arkansas College of Education and Health Professions and to the Arkansas Department of Education. This grant will fund a research project that will help advance career and education outcomes for low-income teenagers living with disabilities in the State. Not only will this effort improve the quality of life for individuals, but it will also decrease Medicaid and Supplemental Security Income healthcare costs.

Another great strategic partnership is the work being done with Verizon Wireless and Baptist Health. Baptist Health will utilize Verizon’s LTE network in their 150 clinics across Arkansas. Many of these clinics are in rural continued on page 22 Summer 2014 I Arkansas Hospitals

21

N E W S S T A T areas where connectivity is limited, so this technology will enhance their productivity and efficiency, enabling them to see more patients throughout the day. On a larger scale, it will improve coordination, chronic disease management, and health and wellness services among clinics across Central Arkansas.

What these two examples demonstrate is that health challenges and solutions are not isolated to the healthcare industry. Government, the private sector, and other institutions are all key players in the health arena. They are showing that working together is the best way to move the needle on some of our

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most entrenched health disparities.

It’s going to be exciting to see the continuing results of these forwardthinking, multi-sector partnerships.

Last, but certainly not least is CHMI’s digital innovation work.

According to a Pew Internet Project study, more than half of all U.S. adults own a smartphone, and more than 63 percent get health information online. Digital platforms are increasingly becoming powerful and farreaching tools; and CHMI is finding creative ways to leverage them for greater health. One way is through their Codeathon series that organizes events where programmers and designers are challenged to develop health-related applications.

Winners of the competition get CHMI’s assistance in bringing their application to market. To date, they’ve held four Codeathons covering sleep, nutrition, stress, and physical activity.

Across all of CHMI’s efforts, their overarching goal is to open source the “how of health.” Together with their partners, they’re identifying, sharing, and scaling best practices. And we’re incredibly grateful that Central Arkansas is helping to pioneer this critically important work. As our history demonstrates, Arkansans have the spirit and drive it takes to be leaders in the nation.

We hope that others will join in the effort to build a brighter and healthier future for everyone here in Arkansas and beyond. For more information about the Clinton Health Matters Initiative and potential ways to get involved, please contact Tionna Jenkins, Regional Director at tjenkins@clintonfoundation.org.

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Summer 2014 I Arkansas Hospitals

2014 Arkansas Hospital Association Statistical Information

COMPILED BY:

Paul Cunningham, Executive Vice President SOURCES:

AHA Statistics 2014, American Hospital Association Hospital Discharge Database 2012, Arkansas Department of Health, Arkansas Hospital Association Membership The enclosed information is intended as a useful resource and communication guide as you talk about hospital issues with your community, patients, governing board, management company, civic groups and with your local, state and federal elected officials. We invite you to remove this section from the summer issue of Arkansas Hospitals and use it to tell your hospital’s story during these tough economic times.

Summer 2014 I Arkansas Hospitals

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STATISTICS

Your Guide to the Arkansas Hospital Community, 2014 Rex Stout, the American mystery writer and creator of the fictional detective, Nero Wolfe, wrote in Death of a Doxy, “There are two kinds of statistics, the kind you look up and the kind you make up.”

To keep you from having to make up any statistics about the Arkansas hospital community, we hope you will, instead, look them up in this, our Arkansas Hospitals statistical issue. This compendium of charts, tables, graphs and general information can serve as a convenient resource, guide and communication tool for and about Arkansas’ hospital community all rolled into one! The information provided in this issue is important to all who participate or have interest in the healthcare field. Please use it as you communicate with your communities about your hospital and its place in your area’s economy, social structure, and care giving network.

When you read through the information provided on the following pages, you’ll get a sense of how hospitals across the state, the region and

the country are faring in the areas of finances and utilization. You also get a sense of how legislation and regulation are vastly changing hospitals’ ability to stay solvent.

Why provide this information?

We want you to have vital communication tools at your fingertips.

The comparative statistics offered here give you the background and resources you need to discuss the “health of healthcare” as you visit with people in your communities. In speaking engagements before civic clubs and organizations, in discussions with your trustees, or just

visiting with friends and neighbors at a backyard barbeque or the grocery store – these statistics are the most up-to-date resources available, and offer you the background you need to knowledgeably discuss current healthcare trends and dilemmas faced in Arkansas today.

Perhaps you will be explaining your hospital’s financial situation to some who just don’t understand today’s challenges. Or, maybe you will be entering into discussions to defend the launch of new services or the purchase of new equipment.

Whenever you find yourself in need of communicating the facts about healthcare in today’s marketplace, you can rely on this information as your most trusted and valued resource. Paul Cunningham, Arkansas Hospital Association executive vice president, compiled the information available from a variety of sources to provide you with this valuable communication tool. Please use it, and let us know how it helps you communicate the “healthcare message.”

Distribution of Arkansas Licensed Hospitals By Type, Size and Control, 2014 Bed Size

Community Hospitals Number

0-49* 50-99 100-199 200-299 300-399 400+

33 10 15 5 2 7

Licensed Beds 906 739 2,212 1,212 1,030 3,399

Hospital Control Not-for-Profit Investor-Owned Governmental Total

43 18 11 72

6,696 1,817 985 9,498

Psychiatric Hospitals Number

Rehabilitation Hospitals

0 7 1 0 1 0

Licensed Beds 0 380 227 0 345 0

1 7 1 9

60 547 345 952

Number 1 5 1 0 0 0

Licensed Beds 40 302 120 0 0 0

3 4 0 7

232 230 0 462

Source: Arkansas Hospital Association *Includes 29 Critical Access Hospitals ** Includes Pediatric, Cardiac, Women’s, Surgical and VA Facilities

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Specialty Hospitals** Number 1 3 1 1 0 1

Licensed Beds 21 215 110 280 0 538

1 4 2 7

280 274 610 1,164

LTAC Hospitals Number

All Hospitals

9 0 0 0 0 0

Licensed Beds 256 0 0 0 0 0

4 5 0 9

99 157 0 256

Number 44 25 18 6 3 8

Licensed Beds 1,223 1,636 2,669 1,492 1,375 3,937

52 38 14 104

7,367 3,025 1,940 12,332

STATISTICS

ARKANSAS HOSPITALS:

Key Numbers Behind Important Facts 104

Hospitals of all types are located in cities, towns and communities throughout Arkansas. That group is composed of 72 general acute care community hospitals (including 29 Critical Access Hospitals); nine long term acute care hospitals; nine psychiatric hospitals; seven rehabilitation hospitals; two hospitals that specialize in specialized surgical procedures; two Veterans Affairs hospitals; as well as a pediatric hospital, a cardiac hospital and a women’s hospital.

98

Hospitals and other healthcare organizations belong to the Arkansas Hospital Association. They include 93 Arkansas hospitals; two out-of-state, border city hospitals (Memphis and Texarkana); an outpatient cancer treatment facility; an inpatient hospice facility; and a U.S. Air Force facility.

46

Arkansas counties are served by a single hospital.

44

Arkansas community hospitals have fewer than 100 beds. Twenty-nine of them are designated by the federal government as Critical Access Hospitals, having no more than 25 acute care beds.

21

Arkansas counties – almost 30% of all counties in the state – do not have a local hospital (however, two hospitals are located in Bowie County, Texas, which borders Miller County, Arkansas). Those counties are: Calhoun Cleveland Grant

4

Lafayette Lee Lincoln

Lonoke Madison Marion

Miller Nevada Monroe Newton Montgomery Perry

Pike Prairie Poinsett

Searcy Sharp Woodruff

Arkansas community hospitals have closed their doors since January 2004.

54%

Of AHA member hospitals are charitable, not-for-profit organizations, while 36% of the hospitals are owned and operated by private, for-profit companies, and 10% are public hospitals owned and operated by a city, county, state or federal government.

15,008

Arkansans sought inpatient or outpatient care from Arkansas’ hospitals each day in 2012 for illnesses, injuries and other conditions requiring medical attention.

35,421

Newborns were delivered in Arkansas hospitals in 2012. The Arkansas Medicaid program covered more than 65% of them.

42,300

Arkansans are employed in full- and part-time capacity by hospitals across the state, which have a combined annual payroll of $2.6 billion that helps to support about 7.7% of all non-farm jobs in the state through direct and indirect purchases of goods and services.

32,700

The number of other jobs in local communities across Arkansas supported through hospital employees’ personal purchases of groceries, clothing, cars, appliances, housing and many other goods and services.

$389 Million

The amount Arkansas hospitals spent in 2012 providing uncompensated care for patients who could not afford to pay for the cost of their services.

$10.3 Billion

The estimated overall annual economic impact in that Arkansas hospitals provided for the state, based on direct spending on goods and services, their impact on other businesses throughout the economy, jobs, and employees’ spending.

Summer 2014 I Arkansas Hospitals

25

STATISTICS AHA-Member Organizations by Congressional District 1st Congressional District Arkansas Methodist Medical Center Baptist Health Medical Center – Heber Springs Baptist Health Medical Center – Stuttgart Baxter Regional Medical Center Chicot Memorial Medical Center Community Medical Center of Izard Co. Crittenden Regional Hospital CrossRidge Community Hospital DeWitt Hospital Delta Memorial Hospital Five Rivers Medical Center Forrest City Medical Center Fulton County Hospital Great River Medical Center Harris Hospital Helena Regional Medical Center Lawrence Memorial Hospital McGehee Hospital NEA Baptist Memorial Hospital Piggott Community Hospital SMC Regional Medical Center St. Bernards Medical Center Stone County Medical Center White River Health System TOTAL = 24 2nd Congressional District 19th Medical Group, LRAFB Advanced Care Hospital of White County Arkansas Children’s Hospital Arkansas Heart Hospital Arkansas Hospice* Arkansas State Hospital Baptist Health Medical Center – Little Rock Baptist Health Medical Center – North Little Rock Baptist Health Extended Care Hospital Baptist Health Rehabilitation Institute The BridgeWay CARTI* Central Arkansas Veterans Healthcare System CHI St. Vincent Morrilton CHI St. Vincent Infirmary Medical Center CHI St. Vincent North Conway Regional Health System Conway Regional Rehabilitation Hospital Methodist Behavioral Hospital Ozark Health Medical Center Pinnacle Pointe Behavioral Healthcare System Rivendell Behavioral Health Services River Valley Medical Center Saline Memorial Hospital 26

Summer 2013 2014 I Arkansas Hospitals

St. Vincent Rehabilitation Hospital UAMS Medical Center White County Medical Center TOTAL = 27 *Non-hospital member

3rd Congressional District Advance Care Hospital of Fort Smith Eureka Springs Hospital HEALTHSOUTH Rehabilitation Hospital of Fayetteville Mercy Hospital Berryville Mercy Hospital Fort Smith Mercy Hospital Northwest Arkansas North Arkansas Regional Medical Center Northwest Medical Center Bentonville Northwest Medical Center Springdale Ozarks Community Hospital Physicians’ Specialty Hospital Saint Mary’s Regional Medical Center Siloam Springs Memorial Hospital Sparks Health System Springwoods Behavioral Health Hospital Summit Medical Center Valley Behavioral Health System Vantage Point of NWA Veterans Healthcare System of the Ozarks Washington Regional Medical System Willow Creek Women’s Hospital TOTAL = 21

4th Congressional District Advance Care Hospital of Hot Springs Ashley County Medical Center Baptist Health Medical Center – Arkadelphia Baptist Health Medical Center – Hot Springs County Bradley County Medical Center Chambers Memorial Hospital CHI St. Vincent Hot Springs Dallas County Medical Center Drew Memorial Hospital Howard Memorial Hospital Jefferson Regional Medical Center Johnson Regional Medical Center Levi Hospital Little River Memorial Hospital Magnolia Regional Medical Center Medical Center of South Arkansas Mena Regional Health System Mercy Hospital Booneville Mercy Hospital Ozark Mercy Hospital Paris Mercy Hospital Waldron National Park Medical Center Ouachita County Medical Center Riverview Behavioral Health TOTAL = 24

STATISTICS A Snapshot of Arkansas Hospital Association Members (2014) Number of Arkansas-licensed AHA-Member Hospitals

93

Community Hospitals............................... 42 Urban......................................... 22 Rural.......................................... 20 Critical Access......................................... 28 Number of Arkansas-based non-hospital AHA-member organizations

Psychiatric................................................ 9 Long-Term Care....................................... 4 Rehabilitation............................................ 4 Special Focus*......................................... 6

3

Arkansas-based AHA-member organizations

96

Number of AHA member organizations per Congressional District 1st............................................................. 24 2nd............................................................ 27 3rd............................................................. 21 4th............................................................. 24 Number of out-of-state border city AHA-member hospitals

Total AHA member organizations

2 98

Other Arkansas-licensed hospitals 11 (non-AHA members) General Med-Surg.................................... 1 Critical Access......................................... 1 Rehabilitation Hospitals............................ 3 Special Purpose....................................... 1 Long Term Care Hospitals........................ 5 Total Arkansas licensed hospitals (excludes non-hospital and out-of-state)

104 Basic Utilization and Financial Indicators, Arkansas Community Hospitals, 2012 Admissions............................................................................. 352,752 Inpatient Days..................................................................... 1,845,443 Outpatient Visits...................................................................5,125,435 Births....................................................................................... 35,421 Total Employees.......................................................................45,295 Payroll............................................................................... $2,657,349 Billed Charges........................................................... $18,639,475,018 Total Amount Collected.............................................. $5,819,244,204 Operating Costs..........................................................$5,759,240,612 Cost of Charity Care Provided ��������������������������������������� $114,821,204 Patient Service Margin �������������������������������������������������������������1.03% Other Operating Revenues............................................ $256,162,838 Total Operating Margin ���������������������������������������������������������������5.2% Source: American Hospital Association, AHA Statistics 2014 *Cardiac, Pediatric, Women’s, VA (2)

Summer 2013 2014 I Arkansas Hospitals

27

STATISTICS AHA MEMBER ORGANIZATIONS 2014 : City

28

Hospital

Control

Type of Hospital

Medicare Pmt. Status

Licensed Bed

Arkadelphia Ashdown Barling Batesville Benton Benton Bentonville Berryville Blytheville Booneville Calico Rock Camden

Baptist Health Medical Center – Arkadelphia Little River Memorial Hospital Valley Behavioral Health System White River Medical Center Rivendell Behavioral Health Services Saline Memorial Hospital Northwest Medical Center – Bentonville Mercy Hospital Berryville Great River Medical Center Mercy Hospital Booneville Community Medical Center of Izard County Ouachita County Medical Center

PNP County Corporate PNP Corporate PNP Corporate PNP County City PNP PNP

Medical-Surgical Medical-Surgical Psychiatric Medical-Surgical Psychiatric Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical

CAH CAH IP Psych RRC/SCH IP Psych Urban Urban CAH Rural CAH CAH Rural/SCH

25 25 75 198 77 167 128 25 168 25 25 98

Clarksville

Johnson Regional Medical Center

PNP

Medical-Surgical

Rural/MDH

80

Clinton Conway Conway Crossett Danville Dardanelle DeWitt Dumas El Dorado Eureka Springs Fayetteville Fayetteville Fayetteville Fayetteville Fayetteville Fayetteville Fordyce Forrest City Fort Smith Fort Smith Fort Smith Gravette Harrison Heber Springs Helena Hot Springs Hot Springs Hot Springs Hot Springs Johnson Jonesboro Jonesboro Lake Village Little Rock Little Rock Little Rock Little Rock

Ozark Health Medical Center Conway Regional Medical Center Conway Regional Rehabilitation Hospital Ashley County Medical Center Chambers Memorial Hospital River Valley Medical Center DeWitt Hospital Delta Memorial Hospital Medical Center of South Arkansas Eureka Springs Hospital HEALTHSOUTH Rehab. Hospital of Fayetteville Physicians' Specialty Hospital Springwoods Behavioral Health Washington Regional Medical Center Veterans Healthcare System of the Ozarks Vantage Point of NWA Dallas County Medical Center Forrest City Medical Center Advance Care Hospital of Fort Smith Sparks Regional Medical Center Mercy Hospital Fort Smith Ozarks Community Hospital North Arkansas Regional Medical Center Baptist Health Medical Center-Heber Springs Helena Regional Medical Center Advance Care Hospital of Hot Springs CHI St. Vincent Hot Springs Levi Hospital National Park Medical Center Willow Creek Women's Hospital NEA Medical Center St. Bernards Medical Center Chicot Memorial Medical Center Arkansas Children's Hospital Arkansas Heart Hospital Arkansas State Hospital Baptist Health Extended Care Hospital

PNP PNP PNP PNP PNP Corporate PNP PNP Corporate Corporate Corporate Corporate Corporate PNP Federal Corporate County Corporate PNP Corporate PNP Corporate PNP PNP Corporate PNP PNP PNP Corporate Corporate PNP PNP PNP PNP Corporate State PNP

Medical-Surgical Medical-Surgical Rehabilitation Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Rehabilitation Medical-Surgical Psychiatric Medical-Surgical Veterans Admin.

Psychiatric Medical-Surgical Medical-Surgical Long Term Care Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Long Term Care Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Med-Surg (OB) Medical-Surgical Medical-Surgical Med-Surg (Ped) Med-Surg (Cardiac) Psychiatric Long Term Care

CAH Urban IRF CAH Rural CAH CAH CAH RRC/SCH CAH IRF Urban IP Psych Urban

25 146 26 25 41 25 25 25 166 22 60 21 80 366 73 92 25 118 25 492 352 25 174 25 155 27 282 81 166 64 181 438 25 280 112 345 37

Summer 2014 I Arkansas Hospitals

IP Psych CAH Rural/SCH LTCH Urban Urban CAH RRC/SCH CAH Rural LTCH Urban Urban RRC Urban RRC/MDH RRC CAH Children's Urban IP Psych LTCH

Additional DPUs/ Services Offered SB/HH SB/HH/IMF SNF/Psych/Rehab Psych/Rehab/HH HH SB SB/HH SB/HH SB/SNF/Psych/ Rehab/HH SB/SNF/Psych/ Rehab/HH SB/HH/ICF Psych/Rehab/HH SB/Psych/HH SB/HH SB/Psych/HH SB/HH/ICF HH Rehab SB/HH

HH Psych SB/HH Psych/HH HH SNF/Rehab/HH HH/Psych/DPU SB/HH SB/Rehab/HH Psych/Rehab/HH Psych/Rehab SNF/Rehab

Psych/HH SB/HH Rehab

STATISTICS Location, Medicare Classification, Facilities and Services City

Hospital

Control

Type of Hospital

Little Rock Little Rock Little Rock Little Rock Little Rock Little Rock Little Rock Magnolia Malvern Maumelle McGehee Memphis, TN Mena Monticello Morrilton Mountain Home Mountain View Nashville Newport North Little Rock North Little Rock North Little Rock Osceola Ozark Paragould Paris Piggott Pine Bluff

Baptist Health Medical Center-Little Rock Baptist Health Rehabilitation Institute CARTI Central Arkansas Veterans Healthcare System CHI St. Vincent Infirmary Medical Center Pinnacle Pointe Hospital UAMS Medical Center Magnolia Regional Medical Center Baptist Health Medical Center – Hot Springs County Methodist Behavioral Hospital McGehee Hospital Regional Medical Center at Memphis Mena Regional Health System Drew Memorial Hospital CHI St. Vincent Morrilton Baxter Regional Medical Center Stone County Medical Center Howard Memorial Hospital Harris Hospital Arkansas Hospice Baptist Health Medical Center – NLR The BridgeWay SMC Regional Medical Center Mercy Hospital/Turner Memorial Arkansas Methodist Medical Center Mercy Hospital Paris Piggott Community Hospital Jefferson Regional Medical Center

PNP PNP PNP Federal PNP Corporate State City PNP PNP PNP PNP City County PNP PNP PNP PNP Corporate PNP PNP Corporate County PNP PNP PNP City PNP

Medical-Surgical Rehabilitation OP Cancer Center Veterans Affairs Medical-Surgical Psychiatric Medical-Surgical Medical-Surgical Medical-Surgical Psychiatric Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Inpatient Hospice Medical-Surgical Psychiatric Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical

Pocahontas Rogers Russellville Salem Searcy Searcy Sherwood Sherwood Siloam Springs Springdale Stuttgart Texarkana Texarkana, TX Van Buren Waldron Walnut Ridge Warren West Memphis Wynne

Five Rivers Medical Center Mercy Health System of Northwest Arkansas Saint Mary's Regional Medical Center Fulton County Hospital Advanced Care Hospital of White County White County Medical Center CHI St. Vincent Medical Center North St. Vincent Rehabilitation Hospital Siloam Springs Memorial Hospital Northwest Medical Center, Springdale Baptist Health Medical Center-Stuttgart Riverview Behavioral Health CHRISTUS St. Michael Health System Summit Medical Center Mercy Hospital Waldron Lawrence Memorial Hospital Bradley County Medical Center Crittenden Regional Hospital CrossRidge Community Hospital

PNP PNP Corporate County PNP PNP PNP Corporate Corporate Corporate PNP Corporate PNP Corporate PNP County PNP PNP PNP

Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Long Term Care Medical-Surgical Medical-Surgical Rehabilitation Medical-Surgical Medical-Surgical Medical-Surgical Psychiatric Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical Medical-Surgical

Medicare Pmt. Status

Licensed Bed

Additional DPUs/ Services Offered SNF/Psych/HH

Urban IP Psych CAH CAH RRC CAH CAH Urban/SCH

827 120 0 635 615 124 430 49 72 60 25 620 65 49 25 268 25 20 133 40 220 103 25 25 129 16 25 471

Rural/SCH Urban RRC CAH LTCH RRC/SCH Urban IRF Urban Urban Rural/MDH IP Psych Urban (TX) Urban CAH CAH CAH Urban CAH

50 220 170 25 27 438 69 93 73 222 49 62 312 103 24 25 33 152 25

Urban IRF

Urban IP Psych Urban Rural/SCH Rural/MDH IP Psych CAH Urban (TN) Rural/SCH Rural/SCH CAH RRC/SCH CAH CAH Rural

Psych/Rehab Psych/HH Outpt. Psych SB/HH Psych/HH SB/HH SB/Psych/Rehab SB/HH SB/HH Psych/Rehab/HH SB SB/HH SB/Psych Rehab/HH SB/Psych SB SB/Rehab/HH SB SB/HH SNF/Psych/Rehab/ HH Psych/HH Psych/HH Psych/Rehab SB Psych/Rehab/HH

SB Psych/Rehab/HH SB

SB SB/ICF+G38 SB/Psych/HH Rehab/HH SB/HH

PNP=Private Non-Profit; CAH=Critical Access Hospital; RRC=Rural Referral Center; SCH=Sole Community Hospital; MDH=Medicare Dependent Hospital; SB=Swing Beds; DPU=Distinct Part Unit; HH=Home Health; ICF=Intermediate Care Facility; IRF=Independent Rehabilitation Facility

Summer 2014 I Arkansas Hospitals

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STATISTICS

CHARGES BY PAYER CATEGORY, 2012 DISCHARGES AND BILLED CHARGES BY PAYER GROUP, 2012

Payer Categories

# Discharges % Discharges

1 - Medicare

% Total Charges

Avg. Length of Stay

Avg. Charges per Day

176,880

43.7%

$5,478,722,155

$30,978

51.9%

6.06

$5,112

2 - HMO/Comm. Ins.

97,038

23.9%

2,434,763,865

25,091

23.1%

4.63

5,419

3 - Medicaid

83,996

20.7%

1,500,000,908

17,858

14.2%

4.67

3,824

4 - Self Pay/No Charge

27,241

6.7%

610,361,353

22,406

5.8%

5.23

4,284

5 - Other Gov. Programs

4,818

1.2%

101,151,174

20,994

9.6%

6.09

3,447

16,541

4.1%

438,362,108

26,502

4.2%

4.65

5,699

406,494

100%

$10,563,361,564

$25,987

100.0%

5.32

$4,885

6 - Other/Unknown ALL CATEGORIES

Source: Arkansas Department of Health, Hospital Discharge Program

30

Total Charges

Average Charges per Stay

Summer 2014 I Arkansas Hospitals

STATISTICS AHA-Member Organizations: Public Hospitals Hospital

Governmental Entity

Hospital

Governmental Entity

Arkansas State Hospital Dallas County Medical Center Drew Memorial Hospital Fulton County Hospital Lawrence Memorial Hospital

State of Arkansas Dallas County Drew County Fulton County Lawrence County

Little River Memorial Hospital Magnolia Regional Medical Center Mena Regional Health System Piggott Community Hospital UAMS Medical Center

Little River County City of Magnolia City of Mena City of Piggott State of Arkansas

Arkansas Hospital Association Member Organizations by Type General Acute Care Hospitals (42) Arkansas Methodist Medical Center Baptist Health Medical Center – Hot Springs County Baptist Health Medical Center – Little Rock Baptist Health Medical Center – NLR Baptist Health Medical Center – Stuttgart Baxter Regional Medical Center Chambers Memorial Hospital CHI St. Vincent Hot Springs CHI St. Vincent Infirmary Medical Center CHI St. Vincent North Conway Regional Medical Center Crittenden Regional Hospital Drew Memorial Hospital Five Rivers Medical Center Forrest City Medical Center Great River Medical Center Harris Hospital Helena Regional Medical Center Jefferson Regional Medical Center Johnson Regional Medical Center Levi Hospital Magnolia Regional Medical Center Medical Center of South Arkansas Mena Regional Health System Mercy Health System of Northwest Arkansas Mercy Hospital Fort Smith National Park Medical Center NEA Medical Center North Arkansas Regional Medical Center Northwest Medical Center, Bentonville Northwest Medical Center, Springdale Ouachita County Medical Center Saint Mary’s Regional Medical Center Saline Memorial Hospital Siloam Springs Memorial Hospital Sparks Regional Medical Center St. Bernards Medical Center Summit Medical Center

UAMS Medical Center Washington Regional Medical Center White County Medical Center White River Medical Center Inpatient Psych Hospitals (9) Arkansas State Hospital The BridgeWay Methodist Behavioral Hospital Pinnacle Pointe Hospital Rivendell Behavioral Health Services Riverview Behavioral Health Springwoods Behavioral Health Valley Behavioral Health System Vantage Point of NWA Inpatient Rehab Hospitals (4) Baptist Health Rehabilitation Institute CHI St. Vincent Rehabilitation Hospital Conway Regional Rehabilitation Hospital HEALTHSOUTH Rehab. Hospital of Fayetteville Critical Access Hospitals (28) Ashley County Medical Center Baptist Health Medical Center – Arkadelphia Baptist Health Medical Center – Heber Springs Bradley County Medical Center CHI St. Vincent Morrilton Chicot Memorial Medical Center Community Medical Center of Izard County CrossRidge Community Hospital Dallas County Medical Center Delta Memorial Hospital DeWitt Hospital Eureka Springs Hospital Fulton County Hospital Howard Memorial Hospital Lawrence Memorial Hospital

Little River Memorial Hospital McGehee Hospital Mercy Hospital Berryville Mercy Hospital Booneville Mercy Hospital Ozark Mercy Hospital Paris Mercy Hospital Waldron Ozark Health Medical Center Ozarks Community Hospital Piggott Community Hospital River Valley Medical Center SMC Regional Medical Center Stone County Medical Center Veterans Affairs Hospitals (2) Central Arkansas Veterans Healthcare System Veterans Healthcare System of the Ozarks Non-Hospital Facilities (3) 19th Medical Group, LRAFB Arkansas Hospice CARTI Long Term Care Hospitals (4) Advance Care Hospital of Fort Smith Advance Care Hospital of Hot Springs Advanced Care Hospital of White County Baptist Health Extended Care Hospital Special Focus Med-Surg Hospitals (4) Arkansas Children’s Hospital Arkansas Heart Hospital Physicians’ Specialty Hospital Willow Creek Women’s Hospital Out-of-State Border State Hospitals (2) CHRISTUS St. Michael Health System (Texas) Regional Medical Center at Memphis (Tennessee) Summer 2014 I Arkansas Hospitals

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32

Summer 2014 I Arkansas Hospitals % CHANGE 2006 2007 2008 2009 2010 2011 2012 2006-2012 9,309 9,502 9,686 9,565 9,451 9,425 9,417 1.16% 373,067 366,452 376,158 380,478 370,401 363,516 352,752 -5.45% 1,943,363 1,908,909 1,989,969 1,957,556 1,908,843 1,882,912 1,845,443 -5.04% 5.21 5.21 5.29 5.14 5.15 5.18 5.23 0.43% 3,818,276 3,942,397 3,671,422 3,692,949 3,645,562 3,419,087 3,743,252 -1.96% 5,085,474 5,236,516 4,972,752 5,047,981 5,022,211 4,810,624 5,125,435 0.79% 75.1% 75.3% 73.8% 73.2% 72.6% 71.1% 73.0% -2.73% 3,174,935 3,153,839 3,332,945 3,385,902 3,376,921 3,414,948 3,448,184 8.61% 57.2% 55.0% 56.3% 56.1% 55.3% 54.7% 53.7% -6.13% 108,651 116,019 102,681 101,681 104,912 102,964 101,156 -6.90% 144,619 147,222 136,565 143,094 155,784 160,223 174,095 20.38% 253,270 263,241 239,246 244,775 260,696 263,187 275,251 8.68% 57.10% 55.93% 57.08% 58.46% 59.76% 60.88% 63.25% 10.77% 4.27% 43,074 42,540 43,727 43,933 44,300 44,681 44,912 4.95 4.92 4.79 4.74 4.79 4.78 4.75 -4.00% $7,346,539,305 $7,750,748,662 $8,250,771,568 $8,800,185,973 $9,211,448,957 $9,587,181,461 $9,975,710,168 35.79% $4,655,737,561 $5,054,791,861 $5,568,220,057 $6,421,124,915 $7,084,460,315 $7,800,635,792 $8,663,764,850 86.09% $12,002,276,866 $12,805,540,523 $13,818,991,625 $15,221,310,888 $16,295,909,272 $17,387,817,253 $18,639,475,018 55.30% $596,842,333 $628,063,918 $694,032,836 $753,238,417 $836,094,643 $919,704,107 $986,382,655 65.27% $309,914,742 $326,126,835 $359,231,835 $386,548,005 $430,034,656 $494,539,854 $532,039,579 71.67% $7,572,665,742 $8,220,632,392 $9,011,385,599 $10,164,398,525 $11,007,346,255 $12,106,848,283 $12,820,230,814 69.30% $6,665,908,667 $7,266,441,639 $7,958,120,928 $9,024,612,103 $9,741,216,956 $10,692,604,322 $11,301,808,580 69.55% $4,429,611,124 $4,584,908,131 $4,807,606,026 $5,056,912,363 $5,288,563,017 $5,280,968,970 $5,819,244,204 31.37% $154,744,439 $162,135,731 $169,341,834 $193,955,665 $221,189,649 $220,871,438 $256,162,838 65.54% $74,174,385 $56,666,788 $31,674,701 $73,678,302 $69,605,801 $52,395,249 $85,908,563 15.82% $4,658,529,948 $4,803,710,650 $5,008,622,561 $5,324,546,330 $5,579,358,467 $5,554,235,657 $6,161,315,605 32.26% $1,688,987,123 $1,825,435,512 $1,956,438,729 $2,051,043,227 $2,086,427,649 $2,207,878,125 $2,457,349,493 45.49% $4,437,596,804 $4,585,732,810 $4,921,858,438 $5,161,176,256 $5,246,234,974 $5,236,539,234 $5,759,240,612 29.78% 1.03% -0.18% -0.02% -2.38% -2.06% 0.80% 0.84% 4.74% 4.54% 1.73% 3.07% 5.97% 5.72% 6.53% $3,780.32 $4,060.30 $4,146.18 $4,495.50 $4,825.67 $5,091.68 $5,405.59 42.99% $1,395.18 $1,453.75 $1,442.45 $1,493.52 $1,566.09 $1,546.43 $1,687.63 20.96% $1,397.70 $1,454.02 $1,476.73 $1,524.31 $1,553.56 $1,533.42 $1,670.22 19.50% $531.98 $578.80 $587.00 $605.76 $617.85 $646.53 $712.65 33.96% 38.1% 39.8% 39.8% 39.7% 39.8% 42.2% 42.7% 12.10% 7.6% 7.5% 7.6% 7.5% 7.8% 8.1% 8.1% 7.83% 63.1% 64.2% 65.2% 66.8% 67.5% 69.6% 68.8% 9.01% 38.8% 39.5% 40.3% 42.2% 43.5% 44.9% 46.5% 19.83% 40.1 38.6 38.8 39.8 39.2 38.6 37.5 -6.53% 691.3 679.1 697.0 677.6 656.0 640.9 625.8 -9.48% 132.7 130.4 131.8 131.7 127.3 123.7 119.6 -9.87% 2,811 2,811 2,855 2,889 2,910 2,938 2,949 4.91%

Source: American Hospital Association, Hospital Statistics, 2014

INDICATOR BEDS AVAILABLE ADMISSIONS PATIENT DAYS AVG. LENGTH OF STAY NON-EMERGENCY OP VISITS OUTPATIENT VISITS NON-EMERGENCY AS A % OF TOTAL OP VISITS ADJUSTED PATIENT DAYS OCCUPANCY RATE INPATIENT SURGERIES OUTPATIENT SURGERIES TOTAL SURGERIES OUTPATIENT AS % OF TOTAL SURGERIES TOTAL FTE EMPLOYEES FTEs PER ADJUSTED OCCUPIED BED GROSS REVENUE, INPATIENT GROSS REVENUE, OUTPATIENT GROSS PATIENT REVENUE BAD DEBTS CHARITY TOTAL DEDUCTIONS MEDICARE, MEDICAID & OTHER PAYER WRITEOFFS NET PATIENT REVENUE OTHER OPERATING REVENUE NONOPERATING REVENUE TOTAL NET REVENUE PAYROLL EXPENSE TOTAL EXPENSE PATIENT REVENUE MARGIN TOTAL MARGIN CHARGE PER ADJUSTED INPATIENT DAY RECEIPTS PER ADJUSTED INPATIENT DAY EXPENSE PER ADJUSTED INPATIENT DAY PAYROLL PER ADJUSTED INPATIENT DAY PAYROLL AS % OF TOTAL EXPENSE BAD DEBT AND CHARITY AS % OF TOTAL CHARGE TOTAL DEDUCTIONS AS % OF TOTAL CHARGE OUTPT. REVENUE AS % TOTAL PATIENT REVENUE ADMISSIONS PER BED PATIENT DAYS PER 1,000 POPULATION ADMISSIONS PER 1,000 POPULATION POPULATION (000's)

Community Hospital Financial And Utilization Indicators, 2006-2012

ARKANSAS HOSPITALS:

STATISTICS

5,760,121

$256,162,838 $316,166,430

In addition, hospitals also received revenues from other operating sources, such as cafeteria and gift shop sales, adding this much to their revenues:

Which raised total operating income to:

Source: American Hospital Association, Hospital Statistics 2014

6.53%

$402,074,993

That resulted in total funds available to reinvest in new equipment, update facilities, expand programs and repay debt equalling:

For a return on investment totaling:

$85,908,563

Hospitals also collected other types of revenue from sources including contributions, tax appropriations, investments and the rental of office space.

Those amounted to:

5.20%

1.03%

Yielding a “patient service” margin of:

As a result, the “operating margin” rose to:

$17.40

5.10%

$545,532,928

$118,810,348

4.04%

$426,722,580

$650,768,859

-2.26%

($38.90)

($224,046,279)

3,448,184 $60,003,592

10,146,975,702

9,922,929,423

5,759,240,612

In other words, hospitals made (or lost) this much on each of the equivalent days of care they provided to inpatients and outpatients:

So, the revenue excess (loss) was:

At the same time, hospitals spent this much providing patient care services… …to patients needing care for this many adjusted patient days while being served.

5,819,244,204

7.84%

$594,079,634

$124,396,684

6.30%

$469,682,950

$336,578,667

1.87%

$28.03

$133,104,283

4,748,414

6,982,689,683

7,115,793,966

17,485,118,401

As a result, actual payments to hospitals were:

24,308,385,152

12,820,230,814

But, patients and payer groups didn’t pay the full amount of billed charges for various reasons. Government programs like Medicare and Medicaid, workers’ comp programs and others never pay the full hospital bill. Managed care plans and other insurers typically pay discounted amounts only and individual patients often can’t afford to pay some or any of the out-of-pocket costs related to their hospital bills. For those reasons, hospitals had to forfeit this much of their billed charges:

Mississippi

$18,639,475,018 $34,231,314,575 $24,600,912,367

Louisiana

Hospitals charged this amount for the inpatient and outpatient care they provided in 2012:

Arkansas

Oklahoma

14.32%

$2,844,306,546

$794,602,472

10.75%

$2,049,704,074

$1,281,736,177

4.32%

$95.11

$767,967,897

8,074,933

17,024,103,374

17,792,071,271

35,362,416,605

8.63%

$704,981,900

$27,381,522

8.32%

$677,600,378

$264,973,762

5.24%

$100.36

$412,626,616

4,111,379

7,462,798,181

7,875,424,797

18,251,141,886

$53,154,487,876 $26,126,566,683

Missouri

Texas

United States

7.37%

$1,169,733,350

$108,447,768

6.73%

$1,061,285,582

$546,985,739

3.38%

$62.25

$514,299,843

8,262,361

14,708,134,735

15,222,434,578

37,978,697,915

12.19%

$7,101,242,793

$842,027,514

10.90%

$6,259,215,279

$5,301,391,230

1.84%

$42.30

$957,824,049

22,643,466

51,154,019,956

52,111,844,005

144,431,424,185

7.84%

$64,417,879,514

$11,599,107,141

6.52%

$52,818,772,373

$47,528,382,573

0.69%

$15.91

$5,290,389,800

332,524,163

756,916,756,696

762,207,146,496

1,669,437,831,803

$53,201,132,493 $196,543,268,190 $2,431,644,978,299

Tennessee

Community Hospital Summary Financial Data Arkansas and Surrounding States, 2012

STATISTICS

Summer 2014 I Arkansas Hospitals

33

STATISTICS Comparative Financial Indicators, 2014 U.S. COMMUNITY HOSPITALS Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53

Average Charge Per Hospital Stay California $58,928 New Jersey 55,799 Colorado 50,094 District of Columbia 49,162 Pennsylvania 49,098 Nevada 47,147 Alaska 46,832 Texas 44,852 Florida 43,187 Washington 43,072 U.S. 42,081 Arizona 40,914 WSC Region 40,224 South Carolina 39,536 Connecticut 37,895 New York 37,392 Ohio 37,190 Hawaii 36,639 Illinois 36,411 Indiana 35,702 New Hampshire 35,582 Virginia 35,463 Tennessee 35,178 Kansas 35,093 Georgia 34,219 Utah 34,183 New Mexico 34,141 Missouri 33,935 Mississippi 33,802 Alabama 33,694 Oklahoma 33,603 Minnesota 33,431 Rhode Island 33,416 Nebraska 32,185 Louisiana 32,024 Massachusetts 31,425 North Carolina 31,409 South Dakota 30,104 Delaware 29,556 Wisconsin 29,420 Kentucky 29,321 Oregon 29,001 Michigan 28,962 North Dakota 28,927 Idaho 28,623 Arkansas 28,280 Maine 26,336 Wyoming 25,569 Iowa 24,969 Montana 24,396 West Virginia 22,717 Vermont 22,282 Maryland 17,206

Average Operating Cost Per Hospital Stay District of Columbia $18,464 Alaska 16,047 California 16,047 New York 15,089 Washington 15,008 Massachusetts 14,168 Oregon 14,026 Hawaii 13,902 Minnesota 13,645 Delaware 13,624 New Hampshire 13,539 Colorado 13,493 Connecticut 13,337 Maine 13,215 U.S. 13,099 North Dakota 12,638 Rhode Island 12,622 Nebraska 12,574 Pennsylvania 12,336 Montana 12,320 New Jersey 12,306 Wyoming 12,302 Ohio 12,226 Wisconsin 12,191 Indiana 12,170 Maryland 12,145 Idaho 11,822 South Dakota 11,804 Texas 11,674 Utah 11,481 Michigan 11,476 New Mexico 11,217 Kansas 11,182 North Carolina 11,152 Illinois 11,054 Virginia 10,884 WSC Region 10,879 Missouri 10,869 South Carolina 10,818 Arizona 10,665 Vermont 10,518 Iowa 10,366 Nevada 10,268 Georgia 10,143 Florida 9,942 Tennessee 9,725 Oklahoma 9,598 Mississippi 9,594 Louisiana 9,493 West Virginia 9,263 Kentucky 9,102 Arkansas 8,738 Alabama 7,522

West South Central (WSC) Region: Arkansas, Louisiana, New Mexico, Oklahoma, Texas Source: American Hospital Association, Hospital Statistics, 2014

34

Summer 2014 I Arkansas Hospitals

Average Payment Per Hospital Stay Alaska $18,342 District of Columbia 18,022 California 15,979 Washington 15,174 Colorado 14,677 New Hampshire 14,089 New York 14,088 Minnesota 13,903 Delaware 13,880 Oregon 13,675 Utah 13,468 Nebraska 13,363 Connecticut 13,360 Idaho 13,287 U.S. 13,190 Indiana 13,097 Wyoming 12,966 Maine 12,954 Hawaii 12,925 South Dakota 12,836 Massachusetts 12,751 North Dakota 12,736 Wisconsin 12,651 Pennsylvania 12,538 Montana 12,378 Ohio 12,169 New Jersey 12,146 Maryland 12,091 Texas 11,892 Virginia 11,665 Rhode Island 11,570 New Mexico 11,557 South Carolina 11,467 Kansas 11,461 Missouri 11,359 Michigan 11,328 North Carolina 11,243 WSC Region 11,055 Illinois 11,040 Arizona 10,927 Georgia 10,511 Vermont 10,446 Nevada 10,433 Florida 10,236 10,129 Oklahoma Iowa 10,078 Tennessee 10,066 Mississippi 9,777 Kentucky 9,452 West Virginia 9,427 Louisiana 9,283 Arkansas 8,829 Alabama 7,938

Margin on Patient Care Services Utah 14.75% Alaska 12.51% Idaho 11.02% Colorado 8.07% South Dakota 8.04% Indiana 7.07% Virginia 6.70% Nebraska 5.91% South Carolina 5.66% Oklahoma 5.24% Alabama 5.23% Wyoming 5.12% Missouri 4.32% New Hampshire 3.91% 3.71% Kentucky Wisconsin 3.64% Georgia 3.50% Tennessee 3.38% New Mexico 2.94% Florida 2.87% Kansas 2.44% Arizona 2.39% Mississippi 1.87% Minnesota 1.86% Delaware 1.84% Texas 1.84% West Virginia 1.74% Pennsylvania 1.61% WSC Region 1.59% Nevada 1.58% Washington 1.09% Arkansas 1.03% North Carolina 0.81% North Dakota 0.76% U.S. 0.69% Montana 0.47% Connecticut 0.17% Illinois -0.12% California -0.42% Maryland -0.44% Ohio -0.47% Vermont -0.69% Michigan -1.30% New Jersey -1.32% Maine -2.01% Louisiana -2.26% District of Columbia -2.45% Oregon -2.57% Iowa -2.86% New York -7.10 % Hawaii -7.56% Rhode Island -9.10% Massachusetts -11.11%

STATISTICS DISTRIBUTION OF Distribution of Arkansas Community Hospitals County ARKANSAS by COMMUNITY

Calhoun Cleveland Grant Lafayette Lee Lincoln Lonoke

Madison Marion Miller Monroe Montgomery Nevada Newton

HOSPITALS BY COUNTY

DISTRIBUTION OF

Arkansas Counties with No Hospital (21) Perry Pike Prairie Poinsett Searcy Sharp Woodruff

ARKANSAS COMMUNITY HOSPITALSCOMMUNITY

BY COUNTY ARKANSAS DISTRIBUTION OF

HOSPITALS BY COUNTY

Arkansas Counties with a Single Critical Access Hospital (19) Ashley Bradley Chicot Clark Clay Cleburne Conway

Cross Dallas Franklin Fulton Howard Izard Lawrence

Little River Scott Sevier Stone Van Buren

Arkansas Counties with Single Non-CAH Hospital (23) Baxter Boone Columbia Crawford Crittenden Drew Faulkner Greene

Hempstead Hot Spring Independence Jackson Jefferson Johnson Ouachita Phillips

Polk Pope Randolph Saline St. Francis Union White

arkhospi

ARKANSAS COUNTIES WITH NO HOSPITAL

Arkansas Counties with Multiple Hospitals (12) Arkansas (CAH-1) Benton (CAH-1) Carroll (CAH-2) Craighead Desha (CAH-2) Garland

arkhospitals.org

Logan (CAH-2) Mississippi (CAH-1) Pulaski Sebastian Washington Yell (CAH-1)

ARKANSAS COUNTIES WITH arkhospitals.org A SINGLE CRITICAL ACCESS HOSPITAL arkhospitals.org ARKANSAS COUNTIES WITH SINGLE NON-CAH HOSPITAL

ARKANSAS COUNTIES WITH NO HOSPITAL

ARKANSAS COUNTIES WITH

NO HOSPITAL ARKANSAS COUNTIES WITH A SINGLE CRITICAL ACCESS HOSPITAL

ARKANSAS COUNTIES WITH MULTIPLE HOSPITALS

ARKANSAS COUNTIES WITH

ARKANSAS COUNTIES A SINGLE CRITICAL ACCESS HOSPITAL WITH SINGLE NON-CAH HOSPITAL

ARKANSAS HOSPITALS Uncompensated Care Costs, 2001-2012

ARKANSAS COUNTIES ARKANSAS COUNTIES WITH SINGLE NON-CAH HOSPITAL WITH MULTIPLE HOSPITALS ARKANSAS COUNTIES WITH MULTIPLE HOSPITALS

Year 2001 2002 2003

Total Billed Charges 7,445,452,895 8,623,946,905 9,708,583,330

Net Charges Collected 3,300,453,542 3,703,886,971 3,917,980,687

Other Operating Total Operating Revenue Revenue Operating Costs 103,461,117 7,548,914,012 3,249,943,830 134,677,549 8,758,624,454 3,612,279,530 127,642,206 9,836,225,536 3,947,107,676

Cost/ Charge Ratio 37.24% 35.74% 34.73%

Total Uncollected Bills 4,144,999,443 4,920,059,934 5,790,602,643

Bad Debt 438,812,612 481,582,688 531,161,829

Uncompensated Charity Care Charges 140,217,960 579,030,572 193,429,493 675,012,181 206,995,046 738,156,875

UncomPercent pensated of Total Care Costs Costs 215,624,514 6.63% 241,277,442 6.68% 256,348,729 6.49%

2004

10,375,189,439

4,014,406,025

134,780,857

10,509,970,296

4,015,475,758

32.83%

2005 2006 2007 2008 2009 2010 2011 2012 Increase

11,200,616,473 12,002,276,866 12,805,540,523 13,818,991,625 15,221,310,888 16,295,909,272 17,387,817,253 18,369,475,018 146.72%

4,255,599,395 4,429,611,124 4,584,908,131 4,807,626,026 5,056,912,363 5,288,563,017 5,280,968,970 5,819,244,204 76.32%

153,253,789 154,744,439 162,165,731 169,341,834 193,995,665 221,189,649 220,871,438 256,162,838 147.59%

11,353,870,262 12,157,021,305 12,967,706,254 13,988,333,459 15,415,306,553 16,517,098,921 17,608,688,691 18,625,637,856 146.73%

4,225,289,800 4,437,596,804 4,585,732,810 4,921,858,438 5,161,176,256 5,246,234,974 5,236,539,234 5,759,240,612 77.21%

32.23% 31.59% 30.52% 30.22% 28.53% 26.70% 24.52% 25.63%

6,360,783,014

565,220,366

239,575,478

804,795,844

264,201,622

6.58%

6,945,017,078 7,572,665,742 8,220,632,392 9,011,385,599 10,164,398,525 11,007,346,255 12,106,848,283 12,820,230,814 209.29%

566,192,497 596,842,333 628,063,918 694,032,836 763,238,417 836,094,643 919,704,107 986,382,655 124.78%

293,504,471 309,914,742 326,126,835 359,231,835 376,548,005 430,034,656 494,539,854 532,039,579 279.44%

859,696,968 906,757,075 954,190,753 1,053,264,671 1,139,786,422 1,266,129,299 1,414,243,961 1,518,422,234 162.24%

277,061,018 286,470,773 291,213,495 318,338,089 325,177,434 338,062,266 346,707,135 389,098,816 80.45%

6.56% 6.46% 6.35% 6.47% 6.30% 6.44% 6.62% 6.76%

Source: American Hospital Association, Hospital Statistics 2014

Summer 2014 I Arkansas Hospitals

35

STATISTICS ARKANSAS HOSPITALS:

Arkansas Investor Owned, Operated and/or Managed Hospitals, 2014 Investor Owner/Manager

Hospital

City

Acadia Healthcare

Valley Behavioral Health System Vantage Point of NWA Riverview Behavioral Health

Barling Fayetteville Texarkana

Allegiance Health Management

Allegiance Behavioral Hospital Eureka Springs Hospital North Metro Medical Center River Valley Medical Center

Jacksonville Eureka Springs Jacksonville Dardanelle

AR-MED, LLC

Arkansas Heart Hospital

Little Rock

Arkansas Surgical Hospital, LLC

Arkansas Surgical Hospital #

North Little Rock

Capella Healthcare

National Park Medical Center Saint Mary’s Regional Medical Center

Hot Springs Russellville

Community Health Systems Inc.

Forrest City Medical Center Harris Hospital Helena Regional Medical Center Medical Center of South Arkansas Northwest Medical Center Bentonville Northwest Medical Center Springdale Siloam Springs Memorial Hospital Sparks Regional Medical Center Summit Medical Center Willow Creek Women’s Hospital

Forrest City Newport Helena El Dorado Bentonville Springdale Siloam Springs Fort Smith Van Buren Johnson

HealthSouth Corporation

HealthSouth Rehab. Hospital of Fort Smith # HealthSouth Rehab. Hospital of Jonesboro # HealthSouth Rehab. Hospital of Fayetteville** St. Vincent Rehabilitation Hospital*

Fort Smith Jonesboro Fayetteville Sherwood

JCE Healthcare Group

DeQueen Regional Medical Center, Inc.

DeQueen

Physicians’ Specialty Hospital, LLC

Physicians’ Specialty Hospital

Fayetteville

Regency Hospital Company

Regency Hospital of Northwest Arkansas # Regency Hospital of Springdale #

Fayetteville Springdale

Select Medical Corporation

Select Specialty Hospital-Fort Smith # Select Specialty Hospital-Little Rock #

Fort Smith Little Rock

Universal Health Services

The Bridgeway Pinnacle Pointe Hospital Rivendell Behavioral Health Services Springwoods Behavioral Health

North Little Rock Little Rock Benton Fayetteville

# Not an AHA-member hospital

36

* Partnership with CHI St. Vincent Health System

Summer 2014 I Arkansas Hospitals

** Partnership with Washington Regional Medical System

STATISTICS ARKANSAS HOSPITALS:

Members/Affiliates of Not-For-Profit Multi-Hospital Systems, 2014 Not-for-Profit System

Hospital

City

Baptist Health

Baptist Health Extended Care Hospital Baptist Health Medical Center-Arkadelphia Baptist Health Medical Center-Heber Springs Baptist Health Medical Center-Hot Spring County Baptist Health Medical Center-Little Rock Baptist Health Medical Center-North Little Rock Baptist Health Medical Center-Stuttgart Baptist Health Rehabilitation Institute

Little Rock Arkadelphia Heber Springs Malvern Little Rock North Little Rock Stuttgart Little Rock

Baptist Memorial Healthcare Corp.

NEA Baptist Memorial Hospital

Jonesboro

Catholic Health Initiatives

CHI St. Vincent Hot Springs CHI St. Vincent Infirmary Medical Center CHI St. Vincent Morrilton CHI St. Vincent North St. Vincent Rehabilitation Hospital*

Hot Springs Little Rock Morrilton Sherwood Sherwood

Conway Regional Health System

Conway Regional Medical Center Conway Regional Rehabilitation Hospital

Conway Conway

CHRISTUS Dubuis Health System

Advance Care Hospital of Fort Smith Advance Care Hospital of Hot Springs

Fort Smith Hot Springs

Olivetan Benedictine Sisters

CrossRidge Community Hospital Lawrence Memorial Hospital St. Bernards Medical Center

Wynne Walnut Ridge Jonesboro

Sisters of Mercy Health System

Mercy Hospital Berryville Mercy Hospital Booneville Mercy Hospital Fort Smith Mercy Hospital Northwest Arkansas Mercy Hospital Ozark Mercy Hospital Paris Mercy Hospital Waldron

Berryville Booneville Fort Smith Rogers Ozark Paris Waldron

Wadley Health System

Wadley Regional Medical Center-Hope#

Hope

White County Medical Center

Advanced Care Hospital of White County White County Medical Center

Searcy Searcy

White River Health System

Stone County Medical Center White River Medical Center

Mountain View Batesville

* A joint venture between CHI St. Vincent Health System and HealthSouth

#Not an AHA-member hospital

Summer 2014 I Arkansas Hospitals

37

STATISTICS Comparative Utilization Indicators Per 1,000 Population U.S. COMMUNITY HOSPITALS, 2012 Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53

Hospital Beds District of Columbia South Dakota North Dakota Mississippi West Virginia Nebraska Montana Kansas Wyoming Louisiana Iowa Kentucky Arkansas Missouri Tennessee Alabama Pennsylvania Oklahoma New York Ohio Florida Minnesota Indiana South Carolina Maine WSC Region U.S. Michigan Illinois Georgia Massachusetts New Jersey Texas Rhode Island North Carolina Wisconsin Connecticut Virginia Delaware New Hampshire Alaska Maryland Idaho Arizona Hawaii Nevada Colorado Vermont New Mexico California Utah Washington Oregon

5.7 5.0 4.6 4.3 3.9 3.8 3.7 3.5 3.3 3.3 3.2 3.2 3.2 3.2 3.1 3.1 3.1 3.0 2.9 2.9 2.8 2.8 2.7 2.7 2.7 2.6 2.6 2.5 2.5 2.5 2.4 2.4 2.4 2.3 2.3 2.3 2.3 2.2 2.2 2.1 2.1 2.1 2.1 2.1 2.0 2.0 2.0 2.0 2.0 1.9 1.8 1.8 1.7

Admissions District of Columbia West Virginia Alabama North Dakota Missouri Pennsylvania Kentucky Ohio South Dakota Mississippi Florida Tennessee Louisiana New York Massachusetts Michigan Arkansas New Jersey Illinois Delaware Maryland Indiana Rhode Island Oklahoma Nebraska Iowa Minnesota South Carolina Maine North Carolina Connecticut WSC Region Arizona Kansas U.S. Wisconsin Texas Virginia Georgia Nevada Montana New Hampshire California Washington Oregon Colorado New Mexico Utah Hawaii Vermont Idaho Alaska Wyoming

209.7 148.8 134.8 132.8 132.7 132.6 130.7 130.0 130.0 128.7 128.0 127.6 126.6 124.9 120.7 119.7 119.6 118.2 115.3 114.3 112.0 111.8 111.5 111.1 110.5 109.6 108.4 107.1 107.0 105.4 105.3 104.4 103.0 102.7 102.6 101.0 9 7. 8 97. 2 96.2 94.5 93.0 90.7 86.9 86.6 86.3 85.7 85.2 84.6 78.5 78.1 7 7.6 76.8 76.7

West South Central (WSC) Region: Arkansas, Louisiana, New Mexico, Oklahoma, Texas Source: American Hospital Association, Hospital Statistics, 2012

38

Summer 2014 I Arkansas Hospitals

Inpatient Days District of Columbia 1,476.50 South Dakota 1,153.20 North Dakota 1,039.80 Iowa 983.30 New York 857.60 West Virginia 855.70 Mississippi 839.50 Montana 805.20 Nebraska 760.60 Pennsylvania 727.60 Tennessee 697.10 Missouri 684.20 Louisiana 682.00 Alabama 671.00 Kentucky 664.00 Kansas 663.80 Wyoming 651.10 Minnesota 646.80 Florida 640.50 Ohio 638.20 Arkansas 625.80 Massachusetts 621.40 Michigan 610.90 New Jersey 605.80 South Carolina 605.70 Georgia 601.90 U.S. 590.70 Maine 589.80 Oklahoma 587.70 North Carolina 587.20 Delaware 574.20 Connecticut 572.00 Indiana 572.00 Illinois 558.50 Rhode Island 552.60 Virginia 551.70 Maryland 548.90 WSC Region 545.00 Hawaii 535.90 Texas 505.40 Wisconsin 498.70 Nevada 493.40 Vermont 490.70 New Hampshire 475.20 467.80 Alaska Arizona 454.40 California 444.80 Colorado 434.40 New Mexico 407.70 Washington 396.00 Idaho 383.30 Oregon 366.50 Utah 347.50

Outpatient Visits Vermont 4,860.10 Maine 4,648.20 North Dakota 4,266.50 District of Columbia 3,892.80 New Hampshire 3,772.20 West Virginia 3,671.30 Montana 3,567.20 Missouri 3,498.20 Iowa 3,453.40 Massachusetts 3,387.70 Michigan 3,320.80 Ohio 3,201.30 Pennsylvania 3,057.90 New York 2,894.40 Wisconsin 2,816.80 Nebraska 2,816.60 Indiana 2,741.10 Idaho 2,725.90 South Dakota 2,715.80 Illinois 2,572.20 Kansas 2,527.00 Oregon 2,514.70 Connecticut 2,503.10 Kentucky 2,413.50 Delaware 2,280.60 Utah 2,225.50 U.S. 2,150.20 Minnesota 2,125.00 Wyoming 2,094.70 Rhode Island 2,079.80 Louisiana 2,075.50 North Carolina 2,023.30 New Mexico 1,992.10 Alaska 1,986.60 Virginia 1,900.00 Washington 1,880.00 Tennessee 1,824.80 Oklahoma 1,775.70 New Jersey 1,758.30 Arkansas 1,738.00 Colorado 1,726.80 Mississippi 1,704.80 Alabama 1,687.40 Maryland 1,664.60 WSC Region 1,661.00 Texas 1,562.20 Georgia 1,515.50 Hawaii 1,461.70 South Carolina 1,386.50 California 1,372.90 Arizona 1,333.30 Florida 1,216.20 Nevada 1,055.00

DIAGNOSIS-RELATED GROUP

Source: Arkansas Department of Health, Hospital Discharge Program

795 - NORMAL NEWBORN 885 - PSYCHOSES 775 - VAGINAL DELIVERY W/O COMPLICATING DIAGNOSES 945 - REHABILITATION W CC/MCC 470 - MAJ JOINT REPLACEMENT OR REATTACHMENT OF LOWER EXTREMITY W/O MCC 766 - CESAREAN SECTION W/O CC/MCC 392 - ESOPHAGITIS, GASTROENT & MISC DIGEST DISORDERS W/O MCC 794 - NEONATE W OTHER SIGNIFICANT PROBLEMS 871 - SEPTICEMIA W/O MV 96+ HOURS W MCC 194 - SIMPLE PNEUMONIA & PLEURISY W CC 690 - KIDNEY & URINARY TRACT INFECTIONS W/O MCC 603 - CELLULITIS W/O MCC 247 - PERC CARDIOVASC PROC W DRUG-ELUTING STENT W/O MCC 287 - CIRCULATORY DISORDERS EXCEPT AMI, W CARD CATH W/O MCC 195 - SIMPLE PNEUMONIA & PLEURISY W/O CC/MCC 641 - MISC DISORDERS OF NUTRI,METABOLISM,FLUIDS/ELECTROLYTES W/O MCC 765 - CESAREAN SECTION W CC/MCC 292 - HEART FAILURE & SHOCK W CC 881 - DEPRESSIVE NEUROSES 192 - CHRONIC OBSTRUCTIVE PULMONARY DISEASE W/O CC/MCC 683 - RENAL FAILURE W CC 190 - CHRONIC OBSTRUCTIVE PULMONARY DISEASE W MCC 946 - REHABILITATION W/O CC/MCC 313 - CHEST PAIN 310 - CARDIAC ARRHYTHMIA & CONDUCTION DISORDERS W/O CC/MCC 193 - SIMPLE PNEUMONIA & PLEURISY W MCC 872 - SEPTICEMIA W/O MV 96+ HOURS W/O MCC 191 - CHRONIC OBSTRUCTIVE PULMONARY DISEASE W CC 291 - HEART FAILURE & SHOCK W MCC 743 - UTERINE & ADNEXA PROC FOR NON-MALIGNANCY W/O CC/MCC ALL 30 DRG'S

$74,268,451.74 345,496,435.75 185,733,342.02 360,858,863.27 381,924,607.27 128,434,585.46 123,288,398.08 30,229,802.68 199,734,414.08 104,149,756.89 71,345,109.66 168,394,752.07 235,228,744.65 125,912,862.87 53,344,710.88 52,661,509.60 74,183,990.29 71,567,320.89 42,607,163.07 43,381,576.29 58,522,066.18 67,806,419.75 71,401,259.10 37,194,698.97 31,113,117.68 85,587,989.34 54,937,443.42 49,913,727.61 80,258,218.13 56,472,187.23 $3,465,953,524.92

9,995 8,978 8,459 6,447 5,827 5,805 5,257 5,041 5,039 4,889 4,500 4,447 4,288 4,176 3,762 3,461 3,255 3,197 3,103 3,035 3,027 2,990 2,960 2,942 2,870 2,841 199,101

Total Charges

25,109 22,017 19,569 11,815

# Discharges

BILLINGS

38,211.57 14,305.48 14,574.82 4,688.97 34,277.40 17,941.39 13,571.45 33,405.03 46,681.63 25,754.32 11,854.38 11,842.03 17,300.37 17,137.77 11,325.67 12,534.41 17,979.13 21,209.39 23,010.40 12,255.26 10,278.53 28,624.75 18,559.95 16,965.92 27,964.54 19,877.57 $17,408.02

$2,957.84 15,692.26 9,491.20 30,542.43

Mean Charges per Discharge

3.91 2.64 3.27 2.31 6.61 4.51 3.74 3.93 2.2 2.59 3.29 3.34 3.43 4.31 8.2 3.71 4.47 4.8 10.59 1.84 2.52 6.29 6.34 3.96 6.29 2.05 4.93

1.78 12.13 1.85 12.35

Mean Stay Days per Discharge

Charges & Lengths of Stay for Top 30 DRGs - 2012

9,772.78 5,418.74 4,457.13 2,029.86 5,185.69 3,978.14 3,628.73 8,500.01 21,218.92 9,943.75 3,603.16 3,545.52 5,043.84 3,976.28 1,381.18 3,378.55 4,022.18 4,418.62 2,172.84 6,660.47 4,078.78 4,550.83 2,927.44 4,284.32 4,445.87 9,696.38 $3,531.04

$1,661.71 1,293.67 5,130.38 2,473.07

Mean Daily Rate

STATISTICS

Summer 2014 I Arkansas Hospitals

39

STATISTICS

Impact of Self-Pay (Uninsured) Inpatients On Arkansas Hospitals, 2002-2012 INDICATOR Number Self-Pay/No Charge Patients Admitted Self-Pay/No Charge as Percent of All Patients Admitted Total Uncovered Charges ($ Millions) Total Uncovered Costs ($ Millions)*

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

28,899

30,063

29,364

27,638

27,963

30,296

30,121

30,199

28,142

28,676

27,241

7.30%

7.01%

6.82%

6.44%

6.50%

7.08%

7.08%

7.23%

6.82%

6.99%

6.70%

$307

$354

$398

$419

$439

$485

$518

$593

$583

$618

$610

$129

$144

$154

$158

$162

$174

$185

$201

$188

$199

$196

Source: Arkansas Department of Health, Hospital Discharge Data Program 2012 * Estimate based on statewide cost-to-charge ratio

Arkansas Hospitals Receiving Local Tax Support, 2012 Tax

Rate

Millage

Rate

Year Approved

Annual Amount Raised

1

Ashley County Medical Center

Yes

0.50%

2009

$600,000

2

Baptist Health Medical Center, Hot Spring Co.

Yes

0.5%

2009

$1,200,000

3

Baptist Health Medical Center, Stuttgart

Yes

1.00%

4 Bradley County Medical Center 5 Chicot Memorial Hospital ** 6 Crittenden Regional Hospital, West Memphis

Yes Yes Yes

1.00% 1.00% 1.00%

2014

$2,200,000

2009 2003 2014

$1,200,000 $1,100,000 $6,000,000

7

CrossRidge Community Hospital

Yes

8

Dallas County Medical Center

Yes

1.00%

2000

$2,100,000

1.00%

2005

$840,000

9

$360,000

Yes Yes

4/10 mill 1/2 mill

Delta Memorial Hospital *

Yes

2.00%

2004

10

DeWitt Hospital

Yes

1.50%

2003

$750,000

11

Five Rivers Medical Center

Yes

1.00%

2007

$700,000

12

Fulton County Hospital

Yes

0.50%

2007

$288,000

13

Johnson Regional Medical Center

No

1977

$65,000

14

Lawrence Memorial Hospital

Yes

0.50%

1995

$780,000

15

Magnolia Hospital (A)

Yes

1.13%

2007

$2,600,000

Magnolia Hospital (B)

Yes

3/10 mill

0.25%

2004

$540,000

16

Mercy Hospital Booneville

Yes

1.00%

2003

$360,000

17

Mercy Hospital Ozark

Yes

1.00%

2001

$350,000

18

McGehee Hospital

Yes

1.00%

19

Mississippi County Hospital System

20

Piggott Community Hospital

Yes

1.00%

21

CHI St. Vincent Morrilton

Yes

0.25%

1999

$600,000

Yes

1 mill

1952

$532,000

2010

$360,000

Yes

1/4 mill

2008

$1,000,000

*A 2% sales tax was approved in 2004/2005 to build the hospital building. Due to refinancing, a portion of that 2% now goes to support other city bulidings. Another refinancing in 2013 allowed some savings to be allocated to maintenance and equipment for the hospital for a 5-year period. That is expected to generate about $360,000 annually. **Annually receives approximately $1.1 mil on a bond issue that was used to build the new building; Â plus $1.1 mil received from a sales and use tax; plus $264,000 from a 1/2 millage property tax.

40

Summer 2014 I Arkansas Hospitals

29,000 LET’S ENSURE YOUR PATIENTS AVOID UNNECESSARY RADIATION. The Arkansas Foundation for Medical Care and the Arkansas Department of Human Services are working to help reduce unnecessary CT imaging tests.

Overuse of radiation from computed tomography (CT) is projected to contribute to 29,000 future cases of cancer in the United States.1

Visit afmc.org/CT for more information.

1: Berrington de Gonzalez, A., et al., Projected cancer risks from computed tomographic scans performed in the United States in 2007. Arch Intern Med. 2009. 169(22): p. 2071-7.

THIS MATERIAL WAS PREPARED BY THE ARKANSAS FOUNDATION FOR MEDICAL CARE INC. (AFMC) UNDER CONTRACT WITH THE ARKANSAS DEPARTMENT OF HUMAN SERVICES, DIVISION OF MEDICAL SERVICES. THE CONTENTS PRESENTED DO NOT NECESSARILY REFLECT ARKANSAS DHS POLICY. THE ARKANSAS DEPARTMENT OF HUMAN SERVICES IS IN COMPLIANCE WITH TITLES VI AND VII OF THE CIVIL RIGHTS ACT. MP2-AMS.CTED.AD,2-6/14

THE PRIVATE OPTION IS THE PRIVATE OPTION IS WORKING I N ARKANSAS WORKING I N ARKANSAS

by Bo Ryall, President & CEO of the Arkansas Hospital Association

by Bo Ryall, President & CEO of the Arkansas Hospital Association

42

The Private Option is working for Arkansas laws and regulations; what they can, and patients, for Arkansas communities did, do at the state level is offer hospitals The Private Option is working for Arkansas palegislators canpaid do nothing to services change the severe cuts The Private Option is working for Arkansas laws and they can, and and for Arkansas’s economy. Crafted by a way toregulations; be forwhat the they tients, patients, for Arkansas communities and for Arkansas’s did, to Medicare reimbursements hospitals are suffering for Arkansas communities do at the state level is offer hospitals legislators who knew they had to comply previously provided without being paid. economy.

Crafted by legislators who knew they by had aunder federal laws for and the regulations; what they can, and Arkansas’s economy.

Crafted way though to be paid services they withfor new federal healthcare laws but keep Even Private Option coverage has to comply with new federal healthcare laws but keep and did, do at the state level is offer hospitals a way legislators had to comply provided beingthe paid.

Arkansas who true knew to its they independent spirit, previously been in place for only without a few months, data Arkansas true to its independent spirit, the Private to be paid for the services they previously provided with new federal healthcare laws but keep Even though Private Option coverage has Private the means from hospitals shows an initial decline Option the provides theOption means provides for Arkansans with for in- without being paid.

Even though30% Private Option covArkansas true to its independent spirit, been in place forpatients only a few months, the data Arkansans with incomes at or below 138% in uninsured which will lead to comes at or below 138% of the federal poverty level erage has been in place for only a few months, the the Private Option provides the means for from hospitals shows an initial 30% decline of the federal poverty level ($32,913 annual significant reductions in uncompensated ($32,913 annual income for a family of four; $16,105 data from hospitals shows an initial 30% decline in Arkansans with incomes at health or below 138% uninsured patients which will lead to income forto a access family of four; $16,105 for an in care.

These payments will not of fset for an individual) private insurance uninsured patients which will lead to significant reof the federal poverty level ($32,913 annual significant reductions in uncompensated rather than joining the traductions in uncompensated individual) to access private health insurance Medicare cuts to hospitals at the federal for rolls. a joining family of four; $16,105 for an care. These payments will not of fset will not ditionalincome Medicaid Since care.

These payments rather than the level, but they definitely individual) to access private health insurance Medicare cuts to hospitals at the federal the firsttraditional day of enrollment Ocoffset Medicare cuts to hospiMedicaid help keep Arkansas MORE PEOPLE tober 1rather of lastSince year, the more than tals atthey the definitely federal level, but than joining the level, but rolls. first day hospitals open to serve 150,000 previously uninsured they definitely help keep Artraditional Medicaid help keep Arkansas INSURED of enrollment October 1 their communities.

MORE PEOPLE Arkansans who would have kansasopen hospitals open to serve rolls.

Since the first day hospitals to serve of last year, more than qualified for Medicaid under1 their communities.

INSURED of enrollment October their 150,000 previously The communities.

Private Option is ALLOWING ARKANSAS federal law have instead been of last year, more than uninsured Arkansans already working to approved for participation in The Private Option is already 150,000 previously The Private Option is TO DO IT OUR WAY whoOption. would have qualified give Arkansans access ALLOWING ARKANSAS the Private working to give Arkansans uninsured Arkansans already working to for Medicaid under federal to access quality tohealthcare. quality healthcare.

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Summer 2014 I Arkansas Hospitals chance to keep their doors open. Arkansas gives Arkansas hospitals a fighting financial legislators can do nothing to change the

N E W S S T A T

Arkansas Hospital Association Accomplishments 2013-2014 Advocacy

• Succeeded, against odds, in securing needed votes in the Arkansas House and Senate for reauthorizing the expenditure of federal funds for the Arkansas Private Option plan to expand insurance coverage to low income residents of the state.

• Served as a forum to ease communications among hospitals between private payers and Medicaid about the state’s Medicaid waiver related to the Payment Improvement Initiative.

• Advocated for hospitals and their affiliated providers in establishing the Arkansas Federal Partnership Health Insurance Marketplace through which the state purchased private option plans for over 150,000 individuals whose incomes are between 0% and 138% FPL, and approximately 40,000 individuals whose incomes exceed 138% FPL purchased their own insurance.

• Monitored the State Health Insurance Marketplace Board, which was created by the legislature in 2013 to explore Arkansas’ transition from a federal partnership to a state operated exchange.

• Collected and provided essential data to hospitals regarding enrollment in private option and other marketplace plans.

• Diverted an effort by state Medicaid officials to dramatically reduce hospital payments by changing the current policy on Medicaid coverage of co-pays and deductibles due from Medicare beneficiaries who also are Qualified Medicaid Beneficiaries.

• Worked with Medicaid to develop an approach for an Alternative Benefit Plan that would eliminate the program’s 24-day limit on inpatient hospital coverage.

• Resolved issues and facilitated better communications among hospitals and Novitas Solutions, Inc., the state’s new Medicare Administrative Contractor.

• Maintained a positive relationship with members of Arkansas’ delegation to Congress by meeting and communicating with those offices regularly on issues related to Medicare, CMS rules and regulations, rural hospital needs and federal review programs.

• Worked to mitigate the effects of proposed new rules for Level 3 Trauma Centers as proposed by the state’s Trauma Advisory Council.

• Worked with the Arkansas Department of Corrections and the Department of Community Corrections to ensure that hospitals are aware that state inmates are now eligible for coverage of outpatient services under the Arkansas Private Option.

• Continued working with hospital representatives and the Arkansas Department of Health to revise hospital regulations for the first time in seven years.

Education

• Secured notices from the Arkansas Nurses Association and the American College of Healthcare Executives to continue as approved providers of continuing education credits for hospital employees throughout the state.

In addition, offered continuing education credit for coders, compliance, quality, legal, human resources, risk management, engineering, medical staff services, pharmacy and long-term care administrators.

• Established for the first time a successful educational leadership program aimed at bringing

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together hospital Chief Medical Officers on a regular basis.

Provided in-state education for more than 4,300 hospital employees through workshops and webbased instruction on subjects including regulatory updates, compliance, crisis response, care transitions, CPT, ICD-9 and ICD-10 coding, leadership skills, HIPAA and EMTALA updates, reimbursement, quality and patient safety, legal issues, emergency readiness, governance issues, and Medicare/ Medicaid updates.

Educated hospitals about their role as Certified Applications Counselors in getting more Arkansans to enroll in health plans through the Insurance Department’s Marketplace or those available to individuals qualifying for Arkansas Private Option plans.

Offered 12 hours of Face to Face education per American College of Healthcare Executives policies.

Planned, produced and coordinated programs and activities related to the AHA’s Annual Meeting and its Hospital Executive Leadership Conference.

Conducted a governance needs assessment to determine if the Association was meeting educational needs of hospital trustees.

Contracted with the Arkansas Department of Health to offer conferences on hospital emergency preparedness and crisis response team training, as well as two planning conferences for the state’s 21 hospital preparedness regional leaders and secretaries.

Provided up to $1,000 to help cover the costs for any hospital CEO who attended the American Hospital Association’s 2014 Annual Membership Meeting. continued on page 44 Summer 2014 I Arkansas Hospitals

43

N E W S S T A T • Provided staff assistance to 12 affiliated organizations to produce workshops, newsletters, trade shows and other information of benefit to their members.

Quality and Patient Safety

• Worked with the Arkansas Foundation for Medical Care on the state’s quality measures for Medicaid’s Inpatient Quality Initiative.

Over the IQI’s six-year history, Medicaid has distributed more than $25 million in quality-related bonus payments to hospitals.

• Subcontracted for the third year with the Hospital Education and Research Trust of the American Hospital Association to serve as the Hospital Engagement Network for Arkansas as part of the Partnership for Patients, designed to improve care and eliminate patient injuries and preventable hospital readmissions. This contract has resulted in a marked improvement in the quality of hospitals throughout Arkansas.

• Made continual in-person visits to hospitals throughout the state in regard to quality improvement projects aimed at catheter associated urinary tract infections, central line associated blood stream infections, early elective deliveries and adverse drug events.

• Partnered with the National Patient Safety Foundation on a project designed to assist member hospitals in obtaining patient safety certifications for their in-house quality improvement professionals.

• Partnered with the research and consulting firm Econometrica on a proposal to become the new Quality Improvement Network for Arkansas.

Data and Research

• Offered a series of specialized workshops to get hospital coders prepared for the transition to ICD-10 code sets.

• Coordinated survey and data collection efforts to gather information on hospital utilization, 44

Summer 2014 I Arkansas Hospitals

finances and workplace salaries.

• Published an annual statistical issue of Arkansas Hospitals quarterly magazine in hard copy and online through the AHA’s website.

• Conducted a comprehensive wage and salary survey covering more than 115 jobs/positions typically found in hospitals and made the report available at no charge as a member service to participating hospitals.

Communication

• Hosted gubernatorial candidates Mike Ross and Asa Hutchinson to present their ideas and positions about how they would be able to support hospitals if elected to succeed Gov. Mike Beebe.

• Communicated on an ongoing basis with the AHA membership, trustees, state legislators and government leaders, and the Arkansas congressional delegation on issues impacting the state’s hospitals and healthcare systems through the weekly newsletter, The Notebook, the quarterly Arkansas Hospitals magazine, the quarterly newsletter The Arkansas Trustee, and Facts and Features provided by AHA Services Inc. During the legislative session, the AHA communicated with the membership through the weekly Legislative Update.

• Conducted a series of seven district meetings in April to educate hospital CEOs about the Arkansas Private Option and new state and federal regulations.

• Coordinated with the Arkansas Department of Health and the Arkansas Trauma Advisory Council to minimize problems being experienced by hospitals seeking trauma center designation.

• Conducted a successful biennial survey to determine membership needs and expectations.

• Began development of a strategic plan for the Association.

AHA Services, Inc

• Returned $500,000 in unused workers’ compensation insurance

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premiums for fund years 2004, 2008 and 2009 by AHA Workers Compensation Self-Insured Trust (AHAWCSIT). Percentages of the Trust’s incomes returned have averaged 23-27% since 2003 while maintaining a healthy fund balance to meet all workers’ compensation obligations and continuing to grow the membership of the trust. Met with each AHAWCSIT member to review the program and operations of the trust.

Implemented through AHA Services Inc. new programs to members, through CompData, a national compensation consulting firm for healthcare organizations needing effective compensation and total rewards solutions.

Implemented CareSkills a competency and performance management solution in several AHA member hospitals Continued to offer a group plan for providing cost effective “on- thejob” accident coverage for hospital volunteers and student nurses.

Negotiated and offered group purchasing through Provista, allowing AHA members to save money on healthcare purchasing needs and realize significant savings through a comprehensive portfolio of contracts and services covering more than 90 percent of a hospital supply chain’s spend.

Provided an enrollment solution where AHA members could offer patients, their families and their community an easy way to enroll with licensed insurance professionals in the new Insurance Marketplace.

Began offering Advisory Services through iVantage providing services to help hospitals with payor negotiations, contract pricing targets and strategies.

Initiated new programs through eAudit Solutions, a 340B replenishment system that is a scalable, Internet based tool designed to help pharmacies take better advantage of 340B contract opportunities.

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Q U A L I T Y / P A T I E N T

S A F E T Y

by Arkansas Foundation for Medical Care

Infection Prevention Can Impact Your Bottom Line New Demands, Greater Challenges Patients admitted to Arkansas hospitals can benefit from some of the latest technological advances in life-saving care. But this access can come at the cost of acquiring a healthcare-associated infection (HAI). HAIs are the most common complication of hospital care and are one of the top-10 leading causes of death in the U.S. According to a study by the Agency for Healthcare Research, there are 1.7 million infections and nearly 100,000 deaths from HAIs each year.

The good news is, most HAIs can be prevented. In order to provide the high quality healthcare that your

“The biggest thing everyone wants is the data and we understand that is an important part of quality improvement. To have the most impact, [IPs] need to be in front of staff, working with them to help facilitate prevention events.” community deserves and expects, it is crucial to aggressively and comprehensively address the problem of HAIs. Supporting infection prevention staff, making HAIs a priority for your hospital and joining colleagues across the state to work collaboratively on preventing HAIs can

also improve your hospital’s bottom line. As quality data are increasingly tied to reimbursements and penalties, and because the measures are now publicly reported, HAIs can no longer be relegated to a behind-thescenes aspect of patient safety. continued on page 46

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Summer 2014 I Arkansas Hospitals

Arkansas hospitals: better and worse than nation To determine how well Arkansas hospitals are doing in reducing HAIs, we reviewed The Centers for Disease Control and Prevention’s (CDC) National and State Healthcare Associated Infections Progress Report, just released in March 2014. The CDC’s National Healthcare Safety Network (NHSN), the nation’s healthcare-associated infection tracking system, is critical to this work. More than 12,500 hospitals and other healthcare facilities provide data to NHSN. It is important to collect HAI data because they give hospital administrators and infection prevention staff the information they need to design, implement and evaluate HAI prevention efforts.

Arkansas hospitals are better than the nation in some areas but still have improvement to make in others. The HAI Progress Report includes data from hospital wards, intensive care units (ICU) and neonatal intensive care units (NICU). The report indicates 49 Arkansas hospitals are reporting central line associated blood stream infections, 51 reporting catheter associated urinary tract infections, 40 reporting colon surgical site infections and 39 reporting abdominal hysterectomy surgical site infections. Acute care hospitals are also required to report Clostridium difficule (CDI), MRSA bacteremia and healthcare worker vaccination status.

Here’s how Arkansas hospitals compare to the national baseline:

• Central line-associated bloodstream infections (CLABSIs) were 44 percent lower than the national baseline. In ICUs, CLABSIs were 45 percent lower; 62 percent lower in NICUs; and wards were 30 percent lower.

• Surgical site infections (SSI) with abdominal hysterectomy were 19 percent lower, compared to the national baseline; SSIs with colon surgery were two percent lower.

• However, Arkansas’ record on catheter-associated urinary tract infections (CAUTIs) is higher. CAUTIs were 11 percent higher overall, compared to the national baseline. While they were only one percent higher in wards, CAUTIs were 14 percent higher in ICUs.

HAIs are a growing priority Quality professionals have long been responsible for reporting core measures to Medicare and Medicaid for various hospital incentive and payment programs.

However, infection preventionists (IPs), whose role in the hospital has typically been to identify, prevent and control outbreaks of infection, are now seeing their role expand significantly, as hospitals struggle to implement and report HAI measures to the Hospital Inpatient Quality Reporting Program, a payfor-reporting program. Under this program, if a hospital fails to report its quarterly HAI data, it could risk receiving its full Medicare annual payment update of two percent.

Also, HAIs have been newly added to the Centers for Medicare & Medicaid Services’ (CMS) payfor-performance program, known as the Value Based Purchasing (VBP) program.

CLABSI performance began for the fiscal year (FY) 2015 program and continues to be included in FY 2016 with the addition of CAUTI and SSI measures. The performance period for FY 2016 started January 2014. Hospitals have the

opportunity to earn back the 1.75 reduction from their base operating DRG payment. HAIs are included as outcome measures and carry a 40 percent weight in the overall total performance score for VBP. CDI and MRSA bacteremia are expected to be added for the FY 2017 program.

Medicare will also begin the hospital-acquired condition (HAC) reduction program in FY 2015. This could penalize Inpatient Prospective Payment hospitals by one percent of their Medicare reimbursement if they rank among the worst-performing 25 percent with regard to HACs, which include HAIs carrying 65 percent of the score.

A business case for infection prevention Infection preventionists (IPs) are committed to best practices in infection prevention and improved patient care in hospitals, where they serve as educators, investigators, consultants, and researchers.

However, many IPs in Arkansas hospitals spend a disproportionate amount of time responding to ever increasing reporting demands in an effort to comply with state and federal infection requirements.

The value of IPs is demonstrated to their organizations through a reduction of patient harm. Reduction in patient harm can translate into a positive return by decreasing preventable HAIs, decreasing patients’ hospital length of stay and decreasing avoidable readmissions. In hospitals with only one IP, it is often a battle to pull away from the computer and be accessible to staff on the wards or in the units. The interaction with staff, and to some extent interaction with patients and families, is where the components of a successful infection prevention program come together. Being accessible to staff provides multiple opportunities to get evidence-based infection prevention information to frontline staff where it is most effective.

Arkansas IPs are working hard to stay educated with the CDC’s complex NHSN definitions for determining HAIs, as these reported measures are also being validated by CMS. It is critical that IPs have support to obtain adequate training and continuing education, not only for prevention efforts, but also for reporting requirements and NHSN definitions.

Gina Atkins, IP at Magnolia Regional Medical Center (MRMC) and a nurse for 30 years, assumed the IP role several years ago. She is also the hospital’s employee health nurse. “Being new to IP, it has been challenging to learn all the reporting requirements and NHSN definitions. I’m working hard to ensure we meet all the reporting requirements and continue interacting with staff for prevention and training.

We are a small hospital and sometimes this is overwhelming for one person,” Atkins adds.

“The workload has tripled, but the staff has not increased at all for most facilities across the state,” according to Patricia Gould, RN, an IP at CHI St. Vincent Hot Springs and 2013 president of the Arkansas chapter of the Association for Professionals in Infection Control and Epidemiology.

“The biggest thing everyone wants is the data and we understand that is an important part of quality improvement. To have the most impact, [IPs] need to be in front of staff, working with them to help facilitate prevention events. Hospitals need leadership support to ensure this is happening so infection prevention becomes everyone’s job,” Gould says.

“More people die from HACs than from plane crashes,” Gould says.

“The FAA is not going to let people fly if they think the plane is going to crash. Hospitals need to be the same way. Many have made great strides in this direction, but more work is still needed across the state.”

For more information about Value Based Purchasing and the HAC reduction program, worksheets and other tools, visit the AFMC website at qio.afmc.org.

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Summer 2014 I Arkansas Hospitals

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Q U A L I T Y / P A T I E N T

S A F E T Y

by Nancy Robertson Cook, Director, Communications and Quality Services, Arkansas Hospital Association

Howard Memorial: Improving Processes and Breaking Barriers Getting a picture of what hospitals are doing nationwide to improve quality is one big advantage to being involved in the American Hospital Association/ Health Research and Educational Trust Hospital Engagement Network (AHA/HRET HEN), say the Quality Improvement leaders at Howard Memorial Hospital in Nashville, Arkansas.

“Everything we learn from other hospitals and our HEN coaches gives us guidance, and shows us what changing our normal perspective can mean to more positive patient outcomes,” says Gayla Beaird, director of respiratory therapy and infection control at Howard Memorial Hospital.

Howard Memorial is a 20-bed Critical Access Hospital serving Howard County and the surrounding area. Founded more than 60 years ago, Howard Memorial was named a Top 100 Critical Access Hospital in 2013, and has as its mission “Quality Care Close to Home.”

Being involved in the AHA/ HRET HEN through the Arkansas Hospital Association (AHA) helps CAHs like Howard Memorial readily connect with other hospitals across the state and nation, sharing ideas and best practices both visually, through webinars and topiccentered listservs, and verbally,

The Howard Memorial Hospital HEN Team, left to right: Chris Stuard, Director Patient Care Unit; Gayla Beaird, Director Respiratory Therapy/IC Nurse; Alesha Collins, CNO ; Beth Walker, Director Performance Improvement; Britni Fannin, Director Case Management; Debra Wright, CEO; Steven May, Director Emergency Department. Not Pictured: Linda Turner, Director Lab; Jill Crump, Director Surgical Services; Kristi Whisenhunt, Director Pharmacy.

through conference calls and oneon-one coaching events.

Onsite visits from the AHA’s Quality Team, led by Pamela Brown (vice president for quality and patient safety at the AHA) and Nancy Godsey (director of quality and patient safety) are a valuable HEN resource, helping hospital teams interpret their improvement data and see where opportunities for improvement lie.

“We have shown much improvement through our CAUTI (CatheterAssociated Urinary Tract Infection)

project,” Beaird says. “Our Foley (catheter) days have dropped significantly, from 82 fluctuating to as high as 138 in January 2012 to 14 in March 2014! This improvement has helped our hospital keep a zero CAUTI rate.” [Howard Memorial has sustained a Zero CAUTI Rate since February, 2013.]

“Being a part of the HEN has had a major impact on patient outcomes,” says Beth Walker, Howard Memorial’s director of performance improvement. “So has our emphasis on patient and family engage-

“Being a part of the HEN has helped us work together, not only as a hospital but also with our community partners on many areas including readmissions and CAUTI. We have learned and continue to learn from our data, the HEN resources and through national collaboration. This project helps us meet our mission of Quality Care Close to Home. Patient care has improved as a result of our participation in the HEN. It’s not a question of a hospital’s size…it’s how we work with each other and within our community that helps us improve.”

Debra Wright, CEO, Howard Memorial Hospital 48

Summer 2014 I Arkansas Hospitals

ment. For example, with CAUTI, we are learning to place patient and family education emphasis on why the patient may be better off without a Foley catheter. Understanding why we won’t insert a Foley catheter unless it’s absolutely necessary (we don’t want you/your family member to get a urinary tract infection) has improved acceptance by both our patients and our staff. We commend our front line nursing staff members, who have taken our Foley catheter education and data and made these improvements happen.”

Encouragement of the breaking down of traditional barriers between departments, barriers that occur even in smaller hospitals, has also been a benefit of HEN involvement, the team says. “Working on projects in the HEN brings together staff members who would not, most likely, have worked together,” Beaird says. “Breaking down walls, opening up more positive communication and offering staff education helps boost staff morale. When our staff members understand the ‘why,’ this reflects back to our patients and families.”

“We appreciate being engaged with other hospitals for the exchange of ideas,” Walker says, “and particularly appreciate the bonding we have experienced with other Arkansas hospitals and within our own walls. Being a part of the HEN really does promote teamwork. When new projects are explained, our entire team pulls together and has documented excellent improvement results. It’s amazing what you can do when you decide you can!”

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Summer 2014 I Arkansas Hospitals

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Q U A L I T Y / P A T I E N T

S A F E T Y

by Nancy Robertson Cook, Director, Communications and Quality Services, Arkansas Hospital Association

HEN Brings Excitement Back to Healthcare “What’s the benefit to Saline Memorial Hospital’s participation in the HEN? The HEN has brought excitement back to healthcare,’” say Sherry Jensen, quality and risk director, and Debbie Burrow, CNO. “The HEN has pulled our staff together around one single focus, the patient,” Burrow adds.

Saline Memorial Hospital is in its third year of participation in the American Hospital Association/ Health Research and Educational Trust Hospital Engagement Network (AHA/HRET HEN). Jensen is one of a small group chosen to be in the HEN’s Improvement Leader Fellowship. She’s a Senior Fellow this year, and says participation in the HEN is the highlight of her career as a nurse.

“As a HEN Fellow, I have learned so much about small tests of change, the PDSA model (Plan, Do, Study, Act) and rapid cycles of improvement.

It’s my responsibility to bring these ideas back to our staff, encouraging ways to work together hospital-wide rather than as separate units or departments,” Jensen says. “Participation in the HEN has transformed our way of thinking. We don’t tackle quality improvement alone anymore. We seek out and learn from others in healthcare from around the state and the country, instead of reinventing the wheel every time we meet a challenge.”

Data is at the core of the current Partnership for Patients movement in the U.S., and data collection is at the heart of every hospital’s improvement efforts. “Early on, data collection seemed like just another thing we had to do,” Jensen says. “Now, we want

Multidisciplinary Safety Huddles are part of the team approach to quality improvement at Saline Memorial Hospital. From left to right: Valerie Hobbs RN – Charge Nurse; Kendra Wilson RN; Vicki Cowart LPN; Olivia Bradshaw RN; Chad Krebs – Pharmacist; Brandon Faulkner – Hospitalist Group RN, APN Student; and Laurie Stickel – Occupational Therapist.

that data, we want to collect and analyze it. The data tells us how we’re doing in our patient safety improvement efforts. Data is the evidence of positive trends in reducing patient harms. If the data shows a backward trend, we immediately want to know what happened, and why.”

It wasn’t until Saline Memorial joined the HEN and networked with colleagues all over the country that we saw an amazing difference in our patient safety and quality initiatives, Jensen says. “Our commitment to the HEN has transformed us into one team. HEN leaders make clear the rationale for why we do things, and provide tools to make improvements.

We used to teach our staff what to do, not why we were doing it. Now, each of us knows how a project will impact patient safety, what our role is, why we’re implementing change, and what we hope will happen. There is buy-in from the beginning. We

realize that every person’s voice can make a difference, and every idea can bring positive change.”

Jensen says the nursing staff at Saline Memorial is thrilled by the evolution of the care it’s providing. “We have learned to implement change in small bites, instead of the old way of dumping process change on people all at once, at great expense, without buy-in.”

With national healthcare improvement mandated, hospital quality leaders have been overwhelmed with demands for change. “We used to think – how do we as quality/ risk managers keep up with all of this? Our participation in the HEN has given Saline Memorial the tools and resources to help our employees unite with one focus. It has taught me how to be a better leader. It has changed the way we think, and has made us all excited about hospital quality again.”

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“By being involved in the HEN projects, we are continuing to build on the clinical progress we’ve already made,” said Bob Trautman, SMH CEO. “Through education and sharing of best practices, we’ve been able to apply real improvements that have already proven to enhance outcomes for our patients.”

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Summer 2014 I Arkansas Hospitals

M E D I C A R E / M E D I C A I D

by Paul Cunningham, Executive Vice President, Arkansas Hospital Association

Backfilling the Medicare Sinkhole Arkansas’ efforts to approve and keep a plan for expanding health insurance to its low income citizens have garnered headlines for the better part of two years. What started as an attempt to increase healthcare coverage exclusively through the Medicaid program, eventually transformed into the state’s Private Option plan to use federal dollars to provide low cost private health insurance for those folks who meet the income criteria. Still, opposition rooted in suspicion and distrust of the federal Patient Protection and Affordable Care Act – and worse, Obamacare – persist.

Contrary to claims that the Private Option could not work, would not work and should not be allowed to work, more than four months into its operational phase, the APO is working as it should, meeting the expectations and even surpassing them.

There’s no question it is working to bring tens of thousands of hard working, low income Arkansans into the ranks of those who have health insurance. More than 155,500 people had applied for and been determined as eligible for APO coverage as of March 31. It is also working to keep premium prices reasonable for everyone buying health plans through the Insurance Department’s Marketplace exchange. Roughly 43 percent of Private Option enrollees are in the 19-34 age range, which will serve to mitigate pricing for all Marketplace plans. Those “young invincibles” who seldom worry about taking care of themselves are generally a healthier lot that the rest of us.

If enough of them enroll, insurer’s “risk pools” become shallower.

And, as predicted, it is working to keep hospitals’ uncompensated care volumes and losses more manageable. Hospitals report that inpatient

self-pay volumes have fallen around 30%, based on 2013 versus 2014 year-to-date comparisons, while the number of self-pay patients presenting to emergency departments for care are down 23% at the same time that overall ED volumes have remained relatively flat.

The road to get us to this point has been anything but easy. In fact, to anyone who knows the Inside Baseball version of the journey, the thing that comes to mind is not so much a road as it is a scene from the 1957 movie classic The Bridge on the River Kwai in which the characters, the American soldier

and former prisoner of war, Shears and British Major Warden, hack their way with machetes through the thick Burmese jungle to achieve their goal, destroying the bridge to impede the Japanese war machine.

Failure would make the allied forces’ campaign against Japan in Southeast Asia even more difficult.

Like Shears and Warden, hospitals have been relentless and unwavering in their goal of gathering support for the APO. Failure would make their survival of the multiple Medicare cuts coming their way even more difficult than it is. continued on page 52

Summer 2014 I Arkansas Hospitals

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Summer 2014 I Arkansas Hospitals

Some try to blame hospitals for their predicament, saying they’d have been much better off had they not agreed to massive Medicare payment cuts under the APA in the first place. But they are wrong.

Almost five years ago, in mid-summer 2009, representatives from the American Hospital Association (AHA), Catholic Hospital Association (CHA) and Federation of American Hospitals (FAH) announced an agreement for funding a sizeable portion of what was then the nation’s top domestic policy agenda item, healthcare reform. Hospitals would contribute up to $155 billion over ten years, but no more, to offset the cost of expanding health coverage to up to 95% of the nation’s uninsured population.

The sum left many a hospital leader dizzy and gasping for air, but eventually it became clear to most that the agreement, which would limit hospitals’ exposure to significantly greater payment reductions, wasn’t such a bad deal. You see, the President and Congress at the time were leaning toward hospital cuts ranging between $224 billion and $254 billion, regardless of any movement on health reform.

The carrot in the agreement was a quid-pro-quo.

Expectations were that up to 95% of the nation’s 45 million uninsured people would gain access to affordable health insurance under healthcare reform. Beyond the societal benefit of that goal of near-universal health coverage, hospitals had reasonable expectations of long term revenue increases, as practically everyone would

M E D I C A R E / M E D I C A I D

obtain health insurance. Estimates were that it would produce an estimated $171 billion in hospital revenues nationwide over a ten year period. Some sources, including the Bank of America, thought those coverage-related revenues could grow to as much as $236 billion.

Things likely won’t turn out that good. Nationwide, the uptake on new insurance has been less than expected and, while hospitals have lived up to their end of the bargain, the Medicare cuts have been much worse.

The ink of the President’s signature on the ACA had barely dried when Congress passed the Budget Control Act of 2011, which set in place the Medicare sequester that will cost hospitals $61.4 billion over ten years. In 2012, Congress passed the Middle Class Tax Relief and Job Creation Act and the American Taxpayer Relief Act, which, combined, take away another $130 billion in Medicare revenues over ten years. Add in

assorted cuts related to federal Medicare policy changes in recent years, and the total is back up to the levels being discussed in 2009.

The result has created not just a hole in hospitals’ finances, but a sinkhole; more to the point, a bottomless pit.

With those Medicare cuts as the backdrop, the Arkansas APO and the revenues associated patients having new APO healthcare coverage becomes essential for hospitals to survive. It is the only hope for backfilling just a part of the $2.56 billion in Medicare payment reductions they are expected to absorb through 2022 – about 10% of the payments they would receive otherwise. The going gets especially tough when neither Congress nor CMS seem to have any limit on their expectations for hospitals to do it all when it comes to making sacrifices for Medicare.

So far, our hospitals have been able to do everything that they’ve been asked to do, to a point where

they likely empathize more each year with actress/dancer Ginger Rogers, who “did everything Fred Astaire did, but backwards and in high heels.” But there could be more to come. Every proposal for the 2015 federal budget now lining up at the start gate includes talk of billions of dollars more in hospital spending reductions. Every new cut makes continued public and legislative support of the APO that much more important.

The implications for hospitals, if the cuts continue, can be best summed up in a homespun remark by the late Darrell Royal, the former head football coach for the University of Texas Longhorns.

Asked once about the depth of his team after a series of injuries, Royal responded, “All the white meat is gone. There’s nothin’ but necks on the platter.”

In a nutshell, that’s why Arkansas hospitals are so vocal in their support of the Private Option. Their necks are on the platter.

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M E D I C A R E / M E D I C A I D

by Molly Gamble for Becker’s Hospital Review

5 Cornerstones of a Culture of Compliance for Hospitals The fight against healthcare fraud is a top priority for the government today, as evidenced by harsher federal sentencing guidelines for healthcare fraud, an increase in the number of Medicare Fraud Strike Force teams and federal fraud prevention programs such as the Medicare and Medicaid Recovery Audit Contractor (RAC) programs.

The dollar amounts of Medicare RAC recoveries have escalated throughout the past few years. In the first quarter of fiscal year 2012, RACs took back $397.8 million in overpayments. That is roughly half the amount RACs collected in all of fiscal year 2011 ($797.4 million) and more than 10 times the recoveries collected in FY 2010 ($75.4 million).

Enhanced efforts and increased federal funding for fraud prevention have led to significant returns for the government. For instance, in fiscal year 2011, the government recovered approximately $2.4 billion through civil healthcare fraud cases brought under the False Claims Act. The government has also reached other milestones in fraud prevention, such as the takedown of a $452 million Medicare fraud scheme in May. “As a general statement, government enforcement is becoming more rigorous as time progresses. The government enforcement budget has climbed dramatically in the past several years, with a substantial increase of tens of millions of dollars going toward healthcare fraud enforcement,” says David Pivnick, JD, a lawyer with McGuireWoods in Chicago.

The rise of RACs The Medicare Recovery Audit Contractor program went into effect 54

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with the Tax Relief and Health Care Act of 2006. RACs identify overpayments and underpayments to providers in all 50 states, and contractors are paid on a contingency fee basis, receiving a percentage of the improper overpayments they recoup. RACs may conduct medical reviews and examine claims from the past three years for hospital inpatient and outpatient services, as well as physician, nursing facility, ambulance, laboratory and durable medical equipment services.

The breadth of the audits expanded this year, as well. CMS took many of its key findings from the Medicare RAC program to create and implement the Medicaid Recovery Audit Contractor program, which was included in the Patient Protection and Affordable Care Act. States were required to establish programs by the beginning of 2011, in which they contracted with one or more RACs to review claims submitted to state Medicaid plans. The government expects Medicaid RACs to save $2.1 billion over five years.

Most hospitals have experienced Medicare RAC audits. In the first quarter of FY 2012, about 87 percent of hospitals experienced RAC activity, according to the American Hospital Association’s RACTrac Survey. Additionally, the scope of RAC audits seems to be expanding: Hospitals reported 447,523 medical record requests from RACs through the first quarter of 2012 compared with 306,349 in the third quarter of 2011.

Attorneys with McGuireWoods say hospitals should be prepared for RAC activity. “Larger systems should anticipate a RAC audit in the

same way they anticipate an accreditation survey,” says Holly Carnell, JD, lawyer with McGuireWoods.

Cornerstones to developing a culture of compliance The government’s stringent focus on fraud, abuse and waste — and the increasing role of RACs — has implications for hospitals and their traditional understanding of compliance.

“Having a compliance plan sitting on the bookshelf gathering dust is simply not enough,” says Ms. Carnell. “Every individual who is involved in operating a hospital and health system has to be fully committed to compliance.”

Hospitals that promote and adopt an active culture of compliance rather than a passive compliance plan may be able to more effectively protect themselves against fraud and abuse. Here are five key steps to creating a culture of compliance at a hospital.

1. Conduct internal billing and coding audits.

Internal billing and coding audits should generally be performed twice per year and periodically with outside auditors to ensure compliance with requirements for Medicare, Medicaid and third party payors, according to Scott Becker, JD, CPA, a partner with McGuireWoods.

Specifically, internal audits may focus on areas in which there is high concentration of procedures or outlier Medicare payments to determine if the claims are necessary and services were rendered.

The latter can be determined by examining the hospital’s internal clinical documentation.

M E D I C A R E / M E D I C A I D

U.S. Attorney Jerry E. Martin said Maury Regional Medical Center in Columbia, Tenn., should be commended for the manner in which it disclosed billing issues once they came to light through the hospital’s compliance program.

An internal audit identified improper claims for ambulance services from 2004 through 2009.

Claims in question included those for ambulances that were not medically necessary, for which a physician certification statement was not obtained or that were billed with incorrect mileage units. The hospital recently reached a $3.6 million False Claims settlement with the government after voluntarily reporting the billing discrepancies.

2. Train and educate employees.

Hospital management should conduct periodic educational sessions for employees on compliance. This information should not be reserved for a one-time training session with new hires.

Rather, hospital staff and physicians should be refreshed on the cornerstones of compliance and how they should report potential billing errors or fraud. Frequent education and discussions on legal compliance is one of the major differentiators between an

active culture of compliance and a passive compliance plan.

3. Designate a compliance officer.

This high-level official should be extensively involved in all matters of the hospital’s compliance discussions and initiatives. The compliance officer should have direct lines of communication to the hospital CEO and governing body. Depending on the size of the hospital, the compliance officer may be a fulltime job in itself, or the responsibilities may be added to an existing management position.

It’s a bad sign when the organization’s compliance officer isn’t visible to staff, or isn’t an active participant in the hospital’s legal discussions, according to Mr. Becker. “You need to be sure you’re being open and honest with your compliance officer and generally include them in compliance discussions.”

4. Respond to detected offenses appropriately.

When a hospital employee reports potential misconduct, noncompliance or fraudulent activity, hospital management needs to respond promptly and appropriately. “The appropriate response is to thank the individual and let them know you’ll investigate their claim,” says Ms. Carnell.

Hospitals do not necessarily owe the reporting employee further information in terms of investigation or audit findings, but hospitals should keep in mind that the first people to report misconduct may very well be the government’s first witness for a federal investigation.

A hospital’s approach in handling compliance concerns today can affect how employees report misconduct in the future. Employees who are dissatisfied with their employer’s response may be more likely to file whistleblower suits with the government.

“People bring claims to the government for a variety of reasons. Some of them just feel that they are not being heard when they raise complaints internally,” says Mr. Pivnick. “Making sure you conduct a detailed investigation and making sure you take complaints seriously can be helpful in avoiding future claims.”

5. Maintain open communication.

Internal investigations conducted by legal counsel can breed mistrust and defensive behavior among hospital executives and employees, but open communication is crucial for employees to come forward with complaints or speak up if something seems wrong.

“Some people are very defensive. They feel their job is on the line. During an internal investigation, certain executives feel it’s their job to defend the organization and make sure no wrongful behavior is uncovered, even though we’re on their side,” says Ms. Carnell. “Being able to foster an environment of trust in any internal investigation is key to getting all the facts and working toward a resolution.”

This article originally appeared on the Becker’s Hospital Review website, www.BeckersHospitalReview.com, and is used with permission.

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M E D I C A R E / M E D I C A I D

AHA Advisory Looks at Premium Assistance Issue In a March 19, 2014 interim final rule, the Centers for Medicare & Medicaid Services (CMS) required issuers of qualified health plans (QHPs) “to accept premium and cost-sharing payments made on behalf of enrollees by the Ryan White HIV/AIDS Program, other federal and state government programs that provide premium and cost-sharing support for specific individuals, and Indian tribes, tribal organizations, and urban Indian organizations.” Although the rule stopped short of preventing QHPs from having “contractual provisions” prohibiting the acceptance of premiums and cost-sharing from third-party payers other than those specified in the regulation, CMS seems to be pushing them in that direction.

Despite its own guidance issued February 7, 2014 stating that it did not discourage the use of charitable foundations to provide premium and cost-sharing payments, CMS clearly doesn’t support the idea that such third-party payments can be made by hospitals, other healthcare providers and commercial entities.

In fact, absent in the March 19 rule

The American Hospital Association (AHA) is pressing for the Department of Health and Human Services to issue an official statement that doesn’t discourage hospital-affiliated and other charitable foundations from subsidizing premiums or cost sharing. was any attempt to reiterate the February 7 guidance.

Meanwhile, the American Hospital Association (AHA) is pressing for the Department of Health and Human Services to issue an official statement that doesn’t discourage hospital-affiliated and other charitable foundations from subsidizing premiums or cost sharing. The AHA has also issued a Legal Advisory to its members noting that the IRS regulations implementing the federal premium tax subsidy actually foresee that, in many cases, another person or organization might pay the premium for an individual to enroll in a QHP. The Advisory also points out that a

policy discouraging the premium subsidy practice would undermine one of the core objectives of the Affordable Care Act – making more affordable insurance coverage available to the uninsured – and worse, would do so for those poor and sick individuals most in need of health insurance.

As for any tax exemption implications, the AHA Advisory states that the IRS has given no indication that providing premium subsidies for individuals in need of financial assistance would cause any concern, much less jeopardize a hospital’s tax-exempt status. For more information, check for the April 8, 2014 Legal Advisory at www.aha.org.

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Final Rule Gives Patients Direct Access to Lab Reports Under a final rule jointly issued February 6, 2014 by the Centers for Medicare & Medicaid Services, the Centers for Disease Control and Prevention, and the Department of Health and Human Services’ Office for Civil Rights, patients may now gain direct access to laboratory test reports, upon their request.

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To accomplish this, the final rule amends both the Clinical Laboratory Improvement Amendments of 1988 regulation and the Health Insurance Portability and Accountability Act of 1996 Privacy Rule and makes other conforming changes.

The final rule was effective April 7, 2014. However, HIPAA-covered

entities must comply with the privacy rule changes by October 6, 2014. This requires HIPAA-covered entities to make revisions to their notices of privacy practices. American Hospital Association member hospitals received a Regulatory Advisory with more information on the final rule’s provisions.

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E M E R G E N C Y

P R E P A R E D N E S S

by Beth Ingram, Senior Vice President, Arkansas Hospital Association

West Memphis Hospital Responds to Water Outage During one of Arkansas’ many cold, cold periods this past winter when the temperature was in the single digits, the city of West Memphis was without water. Pipes and pumps had frozen and water tanks were empty.

Thanks to their disaster planning, Crittenden Regional Hospital immediately put their emergency plan into effect.

Heating would still be possible, because boilers depended on water from an underground well, but heat conservation was employed just in case. Portable suction devices were distributed to nursing units, with biomedical engineering on call to assist and service. Red biohazard bags and cat litter were distributed to all units for toileting with infection control monitoring sanitation and handwashing. The use of hand sanitizer and bottled water for handwashing was increased and environmental services workers rounded to remove the red bags.

Elective surgeries were cancelled and postponed; kidney patients were dialyzed at a local clinic.

The Dietary Department switched to disposable cooking utensils; ice was purchased from a local vendor through a prior partnership.

Crittenden Regional Hospital’s command center at work during the winter city water outage.

Though the city tried a temporary fix for the frozen pipes, it failed. For a period of three days, water problems persisted – water pressure up and down, some toilets flushed where others didn’t, boil water warnings issued, etc.

All hospital departments worked closely together during this emergency situation period, the hospital command center stayed open during the three days and a SWOT was completed following a debriefing. Crittenden Regional Hospital discovered their many strengths (communication, providing alter-

native solutions to problems, vendor support, and water procurement), as well as their weaknesses (petty cash needed for emergency purchases, outside communication was difficult, need for more emergency radios and portable suction equipment, and the need for a Public Information Officer).

Crittenden Regional Hospital’s successful response to a three-day city water shortage is yet another example of how emergency and disaster planning benefits hospitals.

How would your hospital react to a similar situation?

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New Research Study Explores Healthcare Leadership and Gender Diversified Search, an executive search firm, partnered with researchers from the Women’s Leadership Center through the Coles College of Business at Kennesaw State University in Georgia to release a new

research study: Healthcare Leadership and Gender. The study identifies specific factors and trends that differ by gender and impact the process of recruiting, developing and retaining healthcare talent.

Participants included female and male leaders working for healthcare systems, hospitals, medical centers and other types of facilities in a broad range of sizes throughout the U.S. continued on page 58 Summer 2014 I Arkansas Hospitals

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LITTLE ROCK St. Vincent Infirmary Medical Center SHERWOOD St. Vincent Medical Center North BENTON Saline Memorial Hospital CAMDEN Ouachita County Medical Center CONWAY Conway Regional Medical Center Conway Regional Outpatient Imaging Center Conway Regional Women’s Center CLINTON Ozark Health Medical Center EUREKA SPRINGS Eureka Springs Hospital FAYETTEVILLE Physicians Surgical Hospital JOHNSON Willow Creek Women’s Hospital Northwest Breast Imaging Center at WIllow Creek MORRILTON St. Vincent Morrilton SEARCY Searcy Breast Center White County Medical Center SILOAM SPRINGS Siloam Springs Regional Hospital SPRINGDALE Northwest Medical Center WARREN Bradley County Medical Center

The survey found striking differences between women and men in healthcare leadership positions in several areas: career paths, earnings, responsibilities, perceptions about family life balance, and views on barriers to career advancement. Some of the major findings included: • A significantly greater number of women than men were promoted from within their organizations, while men were more likely to be hired from outside.

• Work histories differed with 66% of the males reporting a background in medicine, finance or general administration, while 44% of the women have nursing backgrounds.

• Compensation for women was considerably lower, by an average of 35%, than for men in similar positions.

• Women derive significantly more satisfaction than men do from a sense of meaningful work/contributing to society.

• More women than men cited the following factors as helpful to their careers: access to flexible work practices, support from family members, networking within their organizations, leadership abilities, involvement in professional/community groups, and having sponsors to endorse them.

• Significantly more women reported the following as barriers to their careers: lack of supportive supervisors, exclusion from informal networks, lack of senior role models, inhospitable culture/ biased attitudes and failure of senior leadership to help in advancement.

For additional information about the survey, contact Joy Hill at 404-942-6308 or joy. hill@divsearch.com.

•

by Joe Tye, CEO and Head Coach of Values Coach

One Choice That Can Change Your Life, Your Organization, and Our Country Every organization that studies employee engagement comes up with pretty much the same findings: in the typical organization about 25% of employees are engaged – they think like partners and not just hired hands, take pride in their organizations and their professions, and bring their A-game to work every day. We call those people Spark Plugs.

About 60% of employees are not engaged. That doesn’t necessarily mean that they’re doing a bad job necessarily, but that’s all it is – a job.

We call those people Zombies. And in the typical organization, about 15% of employees are actively disengaged; they are the Vampires that suck the life out of an organization and the people around them (you can always tell who the Vampires are because they’re always in the break room – hanging from the ceiling).

There is, of course, a huge range between different organizations.

Great culture organizations like Southwest Airlines, Zappos, and DaVita have a very high proportion of Spark Plugs and a workplace climate that is intolerant of Vampires. On the other hand, we’ve all shopped at, flown with, or been cared for at organizations where it seems that being disengaged is part of the basic job description.

Making your life better In an article he wrote for Harvard Business Review (December 2010) psychiatrist Edward Hallowell said that being disengaged from one’s work is a leading cause of not achieving personal goals and of depression. If you think about where you work, you have no doubt seen this yourself – the people who are most negative and disen-

gaged are probably also the people whose finances are out of control, whose relationships aren’t working, and who are most unhappy.

Hallowell says (and Gallup polling data shows) that many people have cause-and-effect reversed in their minds: they blame their unhappiness with the job for their failures and depression in life, when in fact they are unsuccessful and unhappy in life because they are not engaged in their work.

Mihaly Csikszentmihalyi is the leading authority on flow, the experience of optimal performance. Flow is, he says, the most powerfully motivating and rewarding emotional state. In his studies he shows that being engaged in your work is the prerequisite to achieving flow.

It follows that choosing to be more engaged in your work could well be the most important commitment you can possibly make to being happier and more successful in every other dimension of your life: personal, career, financial, and even spiritual.

Making your organization better Costco and Walmart are in the same retail space, but the experience of shopping with, or working for, the two companies could not be any more different. People pay to shop at Costco by purchasing a membership. As one comedian put it, people shop at Walmart because they don’t have to dress up like they do for the Dollar Store. Walmart consistently makes lists of worst places to work for; Business Week magazine recently ran a cover story that talked about the “ecstatic employees” at Costco.

Gabe Zichermann and Joselin Linder wrote in their new book The

Gamification Revolution: “Without employee and customer engagement, the best laid strategies and tactics are doomed to fail.” The #1 driver of long-term business success is customer loyalty and the #1 driver of a great customer experience is engaged employees.

Making our country better In his book The Coming Jobs War, Gallup CEO Jim Clifton wrote that doubling the number of engaged workers in this country (or any country) would do more than every government stimulus program put together to spark a vibrant and growing economy. And keep in mind, that’s only increasing the proportion of Spark Plug people from 25% to 50% of the total employee base.

I believe he’s right, but would take it one step farther. The impact would not be limited to galvanizing economic growth. People who are engaged in their work are better parents (partly because they teach their children essential lessons about what it takes to build a successful and rewarding career) and tend to be better citizens by being more engaged in their communities.

Seven actions you can take to be more engaged in your work Turn pro: This is the ultimate secret of a productive life and career described by Steven Pressfield in his indispensable book The War of Art. In the context of being engaged, that simply means that you show up every day committed to being a Spark Plug, to thinking like a partner and giving that day’s work your very best. No excuses. continued on page 60 Summer 2014 I Arkansas Hospitals

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Be curious: Highly engaged people ask good questions; they read and study and make the commitment to their own continuing education.

Think entrepreneurially: When Art Fry worked at 3M, he had an idea for a special glue that would keep page markers from falling out of his hymnal. But he didn’t stop there – thanks to his entrepreneurial thinking, we all now have Post-it notes.

Be observant: When you go shopping, or go on vacation, put the number one problem facing your organization, or your part of the organization, on your mental backburner and watch for solutions outside of work. Would a Costcolike membership program work for you? What could you learn from Disney’s approach to line management that would help you with customer wait time issues.

Focus on solutions: Disengaged people focus on problems – which is another way of saying that they love

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to complain. Engaged people recognize problems, but then focus their attention on solutions. Internalize The Pickle Pledge, which says “I will turn every complaint into a blessing or a constructive suggestion.” To make the point to coworkers, for a buck you can get a Pickle Pledge door hangar at sparkstore.com.

Wear a Teflon raincoat: Once you make a commitment to being more engaged on the job, you are likely to be criticized by coworkers who don’t want to be engaged themselves; you’ll be called names like “overachiever” and “quota-buster.” I once had someone tell me that making the commitment to stop being a Vampire and start being a Spark Plug made it clear to her the people who were true friends and those who were merely “bitch buddies.”

Have a Proceed Until Apprehended mindset: “Proceed Until Apprehended” are the most important three words in my book The Florence

Prescription: From Accountability to Ownership. Engaged people don’t give in to imaginary obstacles and learned helplessness, and they don’t assume “no” before they’ve even asked. They are committed to finding solutions, building support, and getting things done.

Joe Tye is CEO and Head Coach of Values Coach, which provides consulting, training and coaching on values-based leadership and cultural transformation for hospital, corporate and association clients. Joe is the author or coauthor of twelve books on values and culture. Prior to founding Values Coach in 1994, he was chief operating officer for a large community teaching hospital. He was founding president of the Association of Air Medical Services, and a leading activist fighting against unethical tobacco industry marketing practices. Contact Joe by email at joe@joetye.com or by phone at 800-644-3889.

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by Paul Cunningham, Executive Vice President, Arkansas Hospital Association

FINAL THOUGHTS Fans of CBS’ Late Show with David Letterman had to be a little saddened recently when the dean of late night TV announced plans to retire in 2015. Not that his replacement, Stephen Colbert, won’t be able to hold his own with the competition, but there’ll be no more of the familiar recurring spots like Letterman’s Top Ten List, Stupid Pet Tricks or Hello Deli Games that have entertained studio and at-home audiences for the past two decades.

In one of his funnier bits, Great Moments in Presidential Speeches, Letterman contrasts some more memorable quotes from past presidents (JFK’s “Ask not what your country can do for you; ask what you can do for your country,” or Ronald Reagan’s “Mr. Gorbachev, tear down this wall”) with not-soflattering remarks by current office holders at the time, such as, “I can press when there needs to be pressed; I can hold hands when there needs to be – hold hands” (George Bush) and, “I’ve now been in 57 states – I think one left to go.” (Barack Obama).

On a more serious note, there may be no better way to make a quick study of U.S. history than to read through an assortment of presidential quotes, many of which enrich monuments, memorials and museums in Washington, D.C., where the American Hospital Association held its Annual Meeting in May. The sayings are part of the American experience, bookmarking the times.

Some of the best of the quotes are more obscure. For instance, John Adams once wrote Thomas Jefferson, “No man who ever held the office of president would congratulate a friend on obtaining it.” Both knew the weight of that office. Abraham Lincoln is credited

with many unforgettable quotes as he wrestled with ways to save the Union. His frustration is evident in a quip about the Union’s newfound military leader. Lincoln said, “I wish some of you would tell me the brand of whiskey that Grant drinks.

I would like to send a barrel of it to my other generals.”

At a time when America was on the verge of becoming a world power, Teddy Roosevelt advised a foreign policy based on caution and non-aggression, backed up by the ability to resort to force: There is a homely adage which runs, speak softly and carry a big stick. Woodrow Wilson decided to bring out the big stick in 1917, noting “The world must be made safe for democracy” when declaring the country would join the fight against Germany in the war to end all wars.

Teddy’s distant cousin, Franklin Delano Roosevelt (FDR), left us a wealth of quotes. Leading the country out of the Great Depression and through WWII, FDR used memorable phrasing like “The only thing we have to fear is fear itself,” and “This generation of Americans has a rendezvous with destiny.” His most unforgettable quote is, “Yesterday, December 7, 1941 – a date which will live in infamy – the United States of America was suddenly and deliberately attacked by naval and air forces of the Empire of Japan.” Less than three years later a future president, General Dwight Eisenhower, christened the beginning of the end of that war by telling his troops on D-Day, at the onset of the invasion of Europe, “Soldiers, sailors and airmen of the Allied Expeditionary Force! You are about to embark upon a great crusade.”

A lesser known FDR quote, though every bit as powerful, can

be found at his memorial in D.C. The stretched-out, uncovered, maze-like structure, filled with numerous statues and quotes tells the story of Roosevelt’s presidency in a series of four “rooms” representing his four elected terms.

A display called “Breadline” highlights the second room. It is comprised of five life-size statues standing in line, ready to enter a doorway. The worried looks on the statues’ troubled faces reflect the pressures borne by citizens everywhere during the Great Depression.

Accompanying the display is the quote, “The test of our progress is not whether we add to the abundance of those who have much. It is whether we provide enough to those who have little.” Love FDR or hate him, the man had some compassion in his heart.

One wonders whether the country would meet FDR’s test of progress today. Probably not everywhere, but it’s a safe bet that Arkansas, where legislators voted twice in the past two years to set aside biases and ideologies to keep the state’s Private Option health insurance expansion alive, does. While some legislators might rather downplay the compassion part in favor of practicality, it shines through, nevertheless. Thanks to them, 160,000 Arkansans who previously had too little hope of affording it now have enough healthcare coverage to make a difference and the keys to avoiding serious health and financial consequences associated with being uninsured.

Since I wasn’t around in the 1930’s, I’m not sure that FDR’s ideas accurately portrayed who we were as a country at the time, and I seriously doubt that they reflect who we are now. But, perhaps it paints a clear picture of who we ought to be.

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bmarshall@mitchellblackstock.com

Bill’s first job after graduating college in 1974 was at the corporate headquarters of Hospital Corporation of America (HCA) in Nashville, Tennessee. Bill has a BSBA in Accounting, an MBA, and a Juris Doctorate from the University of Arkansas. He is also a CPA (Inactive). After leaving HCA in 1981, Bill has practiced law in Little Rock, Arkansas, representing hospitals and other healthcare providers.

Bill has extensive experience in complex issues inherent in healthcare laws which affect hospitals. He provides representation related to transactions such as the purchase or sale of healthcare facilities and also the purchase of physician practices and the formation of physician hospital joint ventures. Bill also provides representation related to resolution of Medicare and Medicaid reimbursement disputes, development of hospital compliance policies, development of HIPAA compliance policies, compliance with the Stark and Anti–Kickback statutes, tax-exempt matters for nonprofit hospitals, development of PHO’s, Clinically Integrated Networks and ACO’s, and compliance with other laws which regulate hospitals. Bill Marshall has represented hospitals for 40 years.

Summer 2014 I Arkansas Hospitals

63

Arkansas Hospital Association 419 Natural Resources Drive Little Rock, AR 72205

Presorted Standard

U.S. Postage Paid Little Rock, AR Permit No. 2437

Experience Integrity Quality Service Value

64

Summer 2014 I Arkansas Hospitals