10 minute read
Leader Profile: Ron Peterson
A Common Cause
By Nancy Robertson
Ron Peterson, President and CEO of Baxter Health in Mountain Home, began his term as Chair of the Arkansas Hospital Association Board of Directors in the fall of 2021. Like Chris Barber of St. Bernards Health before him, his leadership commenced during one of the most trying times AHA members have faced in the organization’s 93-year history.
Now, with a year as Chair under his belt, we caught up with him in mid-December. Our main question: How does one approach leadership during the dual crises of the COVID pandemic and its financial fallout?
“First, I’d like to say that it is an honor to serve as Chair,” Peterson says. “Though I have served on the Board for several years, this is my first time as Chairman. Board members have long realized that the AHA staff does so much for our hospitals, and does so daily, but I think we all see hospital challenges from a different perspective these days, and the staff’s dedication is seen in a new light.”
For at least the last 20 years, hospital and health system leaders have been fighting ever-tougher battles on behalf of their hospitals, staff members, and patients. The challenges escalated during the pandemic and, with the resulting financial repercussions, are now at an all-time high.
“Every hospital leader is doing a balancing act,” he explains. “We’re juggling patient care, finding (and affording) the proper staffing, and managing our budgets. Finances for hospitals across the state were difficult before the pandemic, but today they are dire.”
UNPRECEDENTED CONDITIONS
The AHA collected data from members in all regions of the state earlier this year to see what effect the COVID pandemic has had on their margins. On average, hospitals surveyed saw a total margin decrease of 3.5% between early 2019 and 2022. This downshift left a full 52% of them in the red.
“We used to be concerned that our razor-thin margins of 1-2% left hospitals little room for buying equipment or making improvements,” Peterson says. “These days, our hospitals are lucky if they are not operating in the red.”
The question isn’t whether new projects can be undertaken; instead, it’s “Can we keep our doors open?”
Many hospitals have seen nurses, physicians, and other skilled experts leave the state for more lucrative contracts elsewhere. “People burn out, and others are needed to replace them,” Peterson says. “As more and more hospitals are forced to rely on traveling nurses and physicians, staffing costs (usually about 50% of a hospital’s budget) go up. And inflation is having a real impact on health care. With the cost of medications, equipment, and supplies rising due to shortages of ingredients or parts and the supply chain problem, there isn’t an end to these price hikes in sight.”
An illustration might help. Say “Hospital A” has a mission of and is dedicated to, above all else, providing excellent patient care. Doing this requires hiring qualified and experienced professional staff. But when staff members leave due to burnout, or to accept more lucrative contracts elsewhere, “Hospital A” must fill its staff openings with more expensive contract labor from the pool of traveling nurses and/or physicians. “Hospital A’s” leaders must ask themselves: Can we afford to hire this person at the higher rates at which travelers are paid? Can we afford not to?
Peterson says the AHA Board’s perspective results from real needs in the field and dilemmas like this that every hospital executive is facing.
AHA BOARD SEEKS SOLUTIONS
“Our discussions are necessarily very focused on finances right now,” he says. “The Board provides direction to the AHA staff on what is needed to keep hospitals in operation. The staff is well-versed in state and federal
programming that can assist hospitals, and they connect member hospitals with those funding streams almost as soon as the programs are created.”
He recalls the first monies that were allocated to hospitals through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted in late March of 2020. “The CARES Act set aside both state and federal monies for provider relief, and they were much-needed by hospitals already at that time,” Peterson says. “One thing the AHA does very effectively is advocate for legislation that helps hospitals, and the AHA staff have been on top of this COVID-related advocacy, as well as advocacy in other areas at the federal and state levels, for years now.”
He says that the early days of the pandemic, when the CARES Act was launched, were a time of great support for hospitals and caregivers. “I think people recognized the dedication and determination of hospital workers in those early days,” he says. “People appreciated the sheer exhaustion our caregivers were suffering, and they did all they could to show that appreciation and give support.
“But today, nearly three years on, hospitals and our caregivers feel more of a burden. People in the public have moved on, and some have even begun to question hospital workers’ decisions or motivations. They are frustrated with an unyielding virus that continues to mutate and cause surge after surge. They might not want to wear masks in our facilities. They might be tired of being urged to get vaccinations. Or they might be frustrated by the long waits today’s ‘Tripledemic’ of COVID, flu, and RSV is causing in our ED. We see a rising level of violence
We Asked...
What’s on your music playlist?
Mellow 70’s.
What is the best advice you were ever given?
Surround yourself with people smarter than you.
What do you like to do in your down time?
Golf.
What’s on your desk right now?
The budget.
Where would you travel if you could go anywhere?
Tahiti, and/or any beach.
What is the most valuable lesson COVID has taught you?
Be nimble, be prepared, be humble, and be caring. Thank God for every opportunity and every day he gives you. against hospital workers, and this affects everyone from nurses and doctors to environmental services to food services. Everyone feels the ramifications of this stress. Every worker knows our budgets are stretched past the point of no return. The public’s frustrations and the financial realities in health care today are a cause for alarm at every level.”
Peterson says that not everyone realizes hospitals cannot just flip a switch and raise prices to cover costs. “Health care reimbursements come, in great part, from the government by way of Medicare and Medicaid payments,” he says. “The rest comes from contracts negotiated with commercial insurers or from direct payments by patients. For years, Medicare and Medicaid reimbursements have not paid for the services they’re meant to cover, and hospital margins have been dropping more and more each year. And today, as we know, too many of our hospitals are operating in the red with all reserves spent and no ready remedy on the horizon.”
EVERY VOICE IS NEEDED
That’s why he urges all hospital workers, patients and families in each community, and everyone who utilizes health care, to become knowledgeable about the financial
threats that hospitals in Arkansas, and the entire nation, currently face. “Communication is key, here,” he says. “Right now, each one of us needs to communicate that message, let our community and state elected officials know what’s happening and that their hospitals need help. Every hospital leader needs to communicate their local concerns to the AHA staff and Board, so we can then consolidate these messages and speak together with the same message.
“The AHA staff is great about giving us the right words for explaining hospitals’ difficulties to legislators, and it’s great about working with us to suggest to legislators possible solutions that will meet hospitals’ needs.”
In fact, he says, that’s one reason he enjoys working as a part of the Board: “We lay out the concerns and the challenges hospitals face, and we, along with and advised by the AHA staff, take these concerns to elected officials so that we can help our hospitals survive.”
A MATTER OF SURVIVAL
He sees 2023-24 as a watershed for Arkansas’s hospitals. “The current financial situation is going to get worse quickly when COVID money runs out,” he says. “Hospitals with any reserves left will quickly go through that to keep normal operations running. It’s going to be a time unlike any other our hospitals have experienced in several generations. It’s going to be a time when we’re fighting for our hospitals’ survival. I’m afraid that if legislation to protect hospitals isn’t enacted, a number of hospitals – even here in Arkansas – will be forced
to close. The financial impact on the communities where this happens will be great, and the impact on the hundreds of workers every hospital employs will be even greater.”
Hospitals have felt financial distress before, but Peterson says this time just feels different. “So much is riding on the state’s, the nation’s, ability to solve this financial crisis,” he discloses. “Our very survival is at stake. I have seen an intense involvement of Board members in discussions about the current challenges. We see other administrators coming to us with their concerns and their ideas. And that’s what we need! We need every hospital administrator in Arkansas to be involved, because these financial issues touch people’s lives – and organizations’ viability – every day.
He says there was also a different feeling among colleagues at this year’s AHA Annual Meeting, the first inperson gathering in three years. “Every person had concerns about that same
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Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C | Jeffrey Thomas, Managing Director MitchellWilliamsLaw.com balance I spoke of earlier, the balance between patient care, staffing, and the financials. We are all asking ourselves, ‘How can we manage? What can we do to preserve our state’s hospitals?’”
Peterson recalls past meetings where people concentrated on networking, on sharing best practices, on learning about new innovations. “This year, our full concentration was on staffing and the cost of wages; policies that add cost burdens to hospitals, such as pre-authorization; and the need for payment reform.”
LOOKING AHEAD
He has great hopes for 2023 and legislation that can be enacted. “We definitely need to seek financial reimbursement appropriate to cover the cost of providing care,” he says. “We want to find ways to rejuvenate our staff members, who have given their all surge after surge after surge. We understand why they’re burning out, and we want to find ways to help.”
And he wants to find ways to return the public’s consciousness to seeing our hospital workers as heroes. “They’ve been at the center of caregiving 24/7 for nearly three years with no break,” he emphasizes. “No wonder they’re burning out. It’s up to each of us, as hospital leaders, to remind the public about hospital workers’ sacrifice, and to remind people that it is never right to take their own frustrations out on health care workers.” He hopes that legislation in the coming legislative session might address the rise in health care workplace violence.
“Above all,” Peterson smiles, “I want to thank every health care worker across Arkansas for their resilience, compassion, and their ability to be nimble. There has been tremendous pressure on our caregivers and on the health care system. So, I want to say, ‘Thank you,’ caregivers, administrators, support staff; and let’s make sure we’re still out there taking care of the people of Arkansas!”
Nancy Robertson, MAC, is Senior Editor of Arkansas Hospitals magazine.
