Payer mix and patient volumes have contributed to Astria Regional’s financial troubles | Local


During Tuesday’s hearing in U.S. Bankruptcy Court, nurses, doctors and other staff highlighted the impact the closure of the Astria Regional Medical Center would have on the most poor in the community.

“I worry about what this means for our most vulnerable population,” said Dr Rachel Monick, who was an emergency department physician at Astria Regional. “The first thing I thought of on Wednesday (January 8), when a friend told me on Facebook that it was closing, were our patients. I worried about what they were going to do. »

A significant percentage of Astria Regional’s patients were low-income and older, as shown by 2018 figures from the state Department of Health’s hospital discharge data. The hospital had 214 beds.

Of the 1,405 patients discharged from acute care and rehabilitation wards at Astria Regional Medical Center in 2018, 74% were on Medicare or Medicaid — typically low-income and older patients of limited means.

By comparison, at Virginia Mason Memorial, about 70% of the 14,031 patients discharged from hospital in 2018 were Medicare or Medicaid payers. It was 71% in 2019, Memorial officials said.

“If you start getting more than 55% to 60% Medicaid/Medicare, things get really tough because you don’t have enough commercial carriers to offset that cost,” said Robert Malte, associate clinical professor and resident practitioner for the Master of Health Administration program at the University of Washington. Previously, Malta was CEO of EvergreenHealth in Kirkland for eight years.

Malta said a high rate of Medicare and Medicaid patients does not automatically doom a hospital, but it does make things more difficult.

Medicare or Medicaid insurance payments vary by service, but are generally well below cost. Commercial insurers usually pay more – sometimes above cost.

A quarter of Astria Regional patients discharged in 2018 had private health insurance, compared to 28% of Memorial patients in the same year.

“That’s a big cause for concern and can certainly make things even more difficult for a business that has pretty slim margins,” Malte said.

Malta said most hospitals strive to maintain margins of 1.5% to 2%.

Other factors could contribute to a hospital’s financial problems, such as low patient volume. Patient numbers at Astria Regional have fallen from nearly 5,400 in 2013 (when it was Yakima Regional Medical and Cardiac Center) to just over 1,400 in 2018, a year after its takeover by Astria Health .

Memorial discharged 14,461 patients in 2013, just below its total for 2018. So while a smaller percentage of patients were Medicare and Medicaid payers, the hospital ended up serving more of those patients than Regional in because of its overall volume.

Running a hospital is a fixed cost activity, Malta said. A hospital must maintain the same costs whether it serves 15 or 150 patients.

As hospitals manage to stay open even with a heavy mix of Medicare/Medicaid payers and declining volumes, some find themselves weighing whether they can offer a full range of inpatient services, Malta said.

Astria Regional was beginning to cut services in the months before its bankruptcy in May. The most notable reduction was its 15-bed inpatient rehabilitation unit, which closed in December 2018.

Data shows that in 2018, 60 of the 68 patients discharged from Regional’s rehabilitation unit — 88% — were Medicaid or Medicare patients.

“When the going gets tough, it’s hard to have that full set of services,” Malte said.

Ultimately, however, more hospitals in Washington may be forced to consider closing, Malta said.

“There are probably 10 other rural hospitals in the state that could face the same challenge,” he said.

Editor’s note: This story has been corrected to be more accurate on discharge data and payor composition for both hospitals. The number of Memorial patients with private insurance has also been corrected.

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