CEO: DCMH is 'vulnerable,' but not at risk of closing
By Pat Sunderland
Published Thursday, March 9, 2017 10:30 am
Recent media reports have placed Delta County Memorial Hospital on the "critical condition" list, but CEO Jason Cleckler says the hospital is in no danger of closing.
In January, Steven Summer, president and CEO of the Colorado Hospital Association, was quoted in the Denver Post, saying as many as eight Colorado hospitals "could have sustainability problems" if the Affordable Care Act is repealed without a similar replacement.
While the Republicans released their plan for redefining the Affordable Care Act this week, legislators at the state level wrangle over the hospital provider fee.
Cleckler is watching all the state and federal developments very closely.
"The Colorado Hospital Association has come out and said eight hospitals are vulnerable to potential closure this year," he said. "The reason is finances, but I will tell you DCMH is not one of those."
Several of those eight hospitals are extremely small, he said, with 50 or fewer admissions a year; DCMH can see 50 admissions in three to four days. Those hospitals also lack the reserves DCMH has been able to build up over the years.
"I will admit we are vulnerable, but DCMH is not at risk of closing in the coming year," Cleckler said.
That being said, rural hospitals across the state are facing some serious challenges, from the expansion of Medicaid to the uncertainty surrounding the legislation to replace the Affordable Care Act.
But one of the biggest factors affecting DCMH is the hospital provider fee, which is administered by the state and which has become highly politicized.
Cleckler explains all hospitals in the state of Colorado pay a fee to the state. The state draws a dollar-for-dollar federal match that is used to cover the uninsured by expanding eligibility for Medicaid and CHP+. The provider fee also increases the amount that providers are reimbursed for treating patients enrolled in Medicaid or the Colorado Indigent Care Program.
These funds provide a "safety net" for rural hospitals like DCMH, helping maintain care in the community, providing assurances for potential health care providers, and covering the cost of providing care for the uninsured. Urban hospitals like Denver Health, which cares for a large population of uninsured, also rely on the hospital provider fee.
But because of TABOR restrictions, the state has had to look at cutting income, and the hospital provider fee has been an easy target. DCMH once received close to $2 million a year; now it's looking at $700,000 to $800,000.
"Yet we're still paying into the hospital provider fee," Cleckler said. The hospital is still on the plus side of the equation, but barely, Cleckler said. While DCMH has "taken a wise path to create reserves," the diminishing hospital provider fee is creating a challenge, and if the cuts continue beyond a year, "each year will just become increasingly more difficult for us."
Rural hospitals are not only critical to the health and well-being of their residents, they're also anchor institutions within the community. With 625 employees and a $31 million payroll, DCMH is the largest employer in Delta County. Access to quality health care is a top priority for families, retirees and businesses looking to relocate to an area.
The Affordable Care Act has brought some stability to DCMH, and Cleckler is concerned that potential cuts to Medicaid could drive up the number of uninsured. One of the positive aspects of the Affordable Care Act, he said, is that more people are insured. At DCMH, the number of self-pays and those without insurance has dropped from 10 to 11 percent down to 2.25 percent.
"That's pretty significant to us," Cleckler said. "A lot of those individuals have Medicaid, but Medicaid is better than no insurance. A big increase in uninsured could be detrimental."
As Cleckler reflects on the time, the energy and the money that have gone into implementation of the Affordable Care Act, he says it will be virtually impossible to turn back the clock. Yes, the ACA needs to be tweaked but to throw it out and start over? "That's so risky," he said.
"You can't go back, but can you improve on it? Absolutely.
"Legislators have to take a thoughtful approach -- to look at what is working and what isn't working. Most people agree pieces need to be updated and changed, but it's going to take some time to implement those changes. Health care is a very big ship and it doesn't turn on a dime."
He said it's unlikely the hospital will be impacted by any "real changes" in the Affordable Care Act until 2018, and most likely 2019.
"To say what those changes will mean to us financially, we just don't know."Triple click and type.