1 00:00:16,340 --> 00:00:18,600 >> Thank you, everybody, 2 00:00:18,600 --> 00:00:21,420 for [APPLAUSE]. 3 00:00:21,420 --> 00:00:22,800 Don't clap yet. 4 00:00:22,800 --> 00:00:25,840 See that for. You may want to take that back. 5 00:00:25,840 --> 00:00:27,760 So first, before we start I just got to 6 00:00:27,760 --> 00:00:30,415 acknowledge Dr. Frakes in the back here. 7 00:00:30,415 --> 00:00:33,230 He was my auditing professor 8 00:00:33,230 --> 00:00:34,780 back in the day when I was at WHU 9 00:00:34,780 --> 00:00:36,750 so I think he's come to critique or 10 00:00:36,750 --> 00:00:39,240 take my diploma back, 11 00:00:39,240 --> 00:00:40,950 I'm not sure. We'll see how this goes. 12 00:00:40,950 --> 00:00:43,470 So a little nervous now. 13 00:00:43,470 --> 00:00:45,570 Thank you. Tell you a little 14 00:00:45,570 --> 00:00:47,610 bit, just horror story. 15 00:00:47,610 --> 00:00:49,650 So I'm really very young, 16 00:00:49,650 --> 00:00:51,030 Ruben so the reason 17 00:00:51,030 --> 00:00:52,630 I got this job, I had to pay off my bill, 18 00:00:52,630 --> 00:00:53,870 and I'm still trying to pay that off, 19 00:00:53,870 --> 00:00:56,650 so I relate to everybody's questions 20 00:00:56,650 --> 00:00:58,370 regarding hospital billing. 21 00:00:58,370 --> 00:00:59,410 No, not really. 22 00:00:59,410 --> 00:01:02,530 But I did start the hospital back in 1988. 23 00:01:02,530 --> 00:01:05,310 It's hard to believe it's been that long. 24 00:01:05,310 --> 00:01:07,530 Great family to work with. 25 00:01:07,530 --> 00:01:09,170 I don't know if you or many 26 00:01:09,170 --> 00:01:12,110 know this in 2002, 27 00:01:12,110 --> 00:01:13,715 I tried to escape. 28 00:01:13,715 --> 00:01:16,210 I resigned from Pullman Regional Hospital as 29 00:01:16,210 --> 00:01:19,050 CFO and moved to Tucson, Arizona. 30 00:01:19,050 --> 00:01:22,110 I didn't get too far out of town before 31 00:01:22,110 --> 00:01:24,110 Scott asked if I could 32 00:01:24,110 --> 00:01:25,070 stay on and we'd work 33 00:01:25,070 --> 00:01:26,350 out some type of arrangement. 34 00:01:26,350 --> 00:01:28,585 So I still reside in Tucson. 35 00:01:28,585 --> 00:01:30,440 I've been doing that for 15 years. 36 00:01:30,440 --> 00:01:32,660 So half of my career has been living in 37 00:01:32,660 --> 00:01:34,720 Tucson and still working 38 00:01:34,720 --> 00:01:35,920 at Pullman Regional Hospital. 39 00:01:35,920 --> 00:01:36,850 Pullman Regional Hospital is 40 00:01:36,850 --> 00:01:37,450 dear to my heart. 41 00:01:37,450 --> 00:01:39,260 I have past board members 42 00:01:39,260 --> 00:01:40,680 in here tonight and they 43 00:01:40,680 --> 00:01:42,420 all know once you 44 00:01:42,420 --> 00:01:44,160 get Pullman Regional into your system, 45 00:01:44,160 --> 00:01:45,400 it's hard to get it out. 46 00:01:45,400 --> 00:01:46,860 It becomes a part of you. 47 00:01:46,860 --> 00:01:48,180 You believe in the community. You believe 48 00:01:48,180 --> 00:01:49,520 a lot in what we're doing. 49 00:01:49,520 --> 00:01:51,460 I really appreciate that, 50 00:01:51,460 --> 00:01:53,860 especially working with fine people like 51 00:01:53,860 --> 00:01:56,570 Mr. Adams and Mrs. Eiler, 52 00:01:56,570 --> 00:01:58,420 Dr. Cagiano that have 53 00:01:58,420 --> 00:02:00,145 really become family members. 54 00:02:00,145 --> 00:02:02,840 Shauna Patrick, who's my controller here, 55 00:02:02,840 --> 00:02:04,700 has been with me, Shauna, 56 00:02:04,700 --> 00:02:06,900 we've been together 16, 17, 18. 57 00:02:06,900 --> 00:02:08,760 I mean, it's been a long time. 58 00:02:08,760 --> 00:02:09,610 >> Twenty years. 59 00:02:09,610 --> 00:02:12,540 >> Yeah, it's amazing. You got great people. 60 00:02:12,540 --> 00:02:15,400 So let me start with a little bit. 61 00:02:15,400 --> 00:02:17,280 One of the nice things about doing it in 62 00:02:17,280 --> 00:02:18,720 this environment is I've 63 00:02:18,720 --> 00:02:19,640 always believed whenever 64 00:02:19,640 --> 00:02:20,660 I'm talking with anybody, 65 00:02:20,660 --> 00:02:23,060 you have to give them a takeaway, 66 00:02:23,060 --> 00:02:25,490 you're investing time here 67 00:02:25,490 --> 00:02:27,680 and if I failed to do that, I failed. 68 00:02:27,680 --> 00:02:28,900 The nice thing is we're feeding you, 69 00:02:28,900 --> 00:02:29,420 so at least you 70 00:02:29,420 --> 00:02:31,090 give away full, hopefully. 71 00:02:31,090 --> 00:02:32,620 So at any point, 72 00:02:32,620 --> 00:02:34,420 if you want more, feel 73 00:02:34,420 --> 00:02:36,600 free to get up and go get more. 74 00:02:36,600 --> 00:02:38,180 And so, at least there's one takeaway, 75 00:02:38,180 --> 00:02:38,990 so I feel good about that. 76 00:02:38,990 --> 00:02:42,300 But let's start with a little bit here. 77 00:02:56,050 --> 00:02:59,130 Well, words of wisdom here. 78 00:03:08,780 --> 00:03:10,940 So being an account, 79 00:03:10,940 --> 00:03:12,495 the pessimistic side of 80 00:03:12,495 --> 00:03:14,420 me that really ring true. 81 00:03:14,420 --> 00:03:15,580 But our goal 82 00:03:15,580 --> 00:03:16,980 tonight is talk a little bit about 83 00:03:16,980 --> 00:03:19,440 healthcare and specifically 84 00:03:19,440 --> 00:03:21,995 healthcare Finance 101. 85 00:03:21,995 --> 00:03:25,175 We have about an hour so 86 00:03:25,175 --> 00:03:26,330 I'll hold pretty true to that. 87 00:03:26,330 --> 00:03:28,950 We'll get you out a little probably early, 88 00:03:28,950 --> 00:03:30,190 but really, this is your time. 89 00:03:30,190 --> 00:03:32,670 If there's questions you have specifically, 90 00:03:32,670 --> 00:03:35,030 I will address those the best I can. 91 00:03:35,030 --> 00:03:36,250 If there's something I don't 92 00:03:36,250 --> 00:03:37,690 know, I'll go find out, 93 00:03:37,690 --> 00:03:39,410 and I'll make sure that you all 94 00:03:39,410 --> 00:03:42,435 know within a few days. 95 00:03:42,435 --> 00:03:44,490 But hopefully, you'll find 96 00:03:44,490 --> 00:03:46,650 this very meaningful in 97 00:03:46,650 --> 00:03:48,140 terms of a better understanding. 98 00:03:48,140 --> 00:03:48,810 So that's our goal. 99 00:03:48,810 --> 00:03:52,250 To do that, we have to have a baseline of knowledge. 100 00:03:52,250 --> 00:03:54,090 We have to have a working platform 101 00:03:54,090 --> 00:03:56,130 to communicate effectively. 102 00:03:56,130 --> 00:03:58,710 Because healthcare, like any industry, 103 00:03:58,710 --> 00:04:00,610 we have acronyms, and 104 00:04:00,610 --> 00:04:01,790 I don't know if it's purposeful, 105 00:04:01,790 --> 00:04:04,035 so nobody else can come in it's like a club. 106 00:04:04,035 --> 00:04:06,250 Or if it's actually the fact that we just 107 00:04:06,250 --> 00:04:08,470 try to simplify our lives by having acronyms, 108 00:04:08,470 --> 00:04:09,550 and we throw them out as 109 00:04:09,550 --> 00:04:10,995 if they're everyday speak. 110 00:04:10,995 --> 00:04:12,870 So let me talk about a little bit of things 111 00:04:12,870 --> 00:04:13,630 just to make sure as 112 00:04:13,630 --> 00:04:14,810 we're going through this, 113 00:04:14,810 --> 00:04:16,150 as I mentioned something, 114 00:04:16,150 --> 00:04:17,535 we're on a common ground. 115 00:04:17,535 --> 00:04:20,410 So first thing, when we taught gross charges, 116 00:04:20,410 --> 00:04:23,030 this is what we bill the patient. 117 00:04:23,030 --> 00:04:24,690 Isn't what we get 118 00:04:24,690 --> 00:04:27,290 paid but any patient comes in, 119 00:04:27,290 --> 00:04:28,730 it's going to be whatever they had done 120 00:04:28,730 --> 00:04:30,370 times whatever quantity of whatever 121 00:04:30,370 --> 00:04:32,610 they did and that's 122 00:04:32,610 --> 00:04:34,565 going to be what gets billed down. 123 00:04:34,565 --> 00:04:37,310 From there, we have contractuals 124 00:04:37,310 --> 00:04:39,990 or deductions from revenue. 125 00:04:39,990 --> 00:04:42,200 That consists of things like bad debt. 126 00:04:42,200 --> 00:04:44,070 We have patients that don't pay their bills, 127 00:04:44,070 --> 00:04:46,350 hard to believe. 128 00:04:46,350 --> 00:04:48,310 We also take care of the indigent, 129 00:04:48,310 --> 00:04:50,210 those that can't pay their bills. 130 00:04:50,210 --> 00:04:51,950 So we have charity care, 131 00:04:51,950 --> 00:04:54,930 ways by which they can have services, 132 00:04:54,930 --> 00:04:56,600 as part of our mission. 133 00:04:56,600 --> 00:04:59,330 And so they'll come in, and if they qualify, 134 00:04:59,330 --> 00:05:00,790 parts or all of 135 00:05:00,790 --> 00:05:02,210 their bill can be written off. 136 00:05:02,210 --> 00:05:03,210 And then in addition to 137 00:05:03,210 --> 00:05:04,690 that, we have contracts. 138 00:05:04,690 --> 00:05:05,990 Now, we have a contract 139 00:05:05,990 --> 00:05:06,770 with federal government, 140 00:05:06,770 --> 00:05:08,310 Medicare and Medicaid Services, 141 00:05:08,310 --> 00:05:10,860 and they tell us what they're gonna pay us. 142 00:05:10,860 --> 00:05:12,800 You don't get to negotiate that. 143 00:05:12,800 --> 00:05:14,270 Under that means you get 144 00:05:14,270 --> 00:05:16,035 told what you're going to get paid. 145 00:05:16,035 --> 00:05:18,210 However, other insurance 146 00:05:18,210 --> 00:05:20,955 companies like Primera, Blue Cross, 147 00:05:20,955 --> 00:05:25,190 now Group Health, Molina, 148 00:05:25,190 --> 00:05:28,910 any of those we negotiate contracts with. 149 00:05:28,910 --> 00:05:30,450 We never get 100%. 150 00:05:30,450 --> 00:05:31,730 Back when I started, 151 00:05:31,730 --> 00:05:33,170 we had contracts that were 152 00:05:33,170 --> 00:05:35,910 98% of charges or 90% of charges. 153 00:05:35,910 --> 00:05:37,390 And today, the best commercial 154 00:05:37,390 --> 00:05:38,890 contract we have is right around 155 00:05:38,890 --> 00:05:43,415 73.5% of charges so, 156 00:05:43,415 --> 00:05:46,630 things have changed significantly. 157 00:05:48,230 --> 00:05:51,210 That was my sign to repeat the question. 158 00:05:51,210 --> 00:05:53,270 So is Medicare, Medicaid 159 00:05:53,270 --> 00:05:55,665 around 33, 34% charges? 160 00:05:55,665 --> 00:05:59,920 The write off is around 45% of charges, 50%. 161 00:05:59,920 --> 00:06:01,990 We'll get into that a little bit of why, 162 00:06:01,990 --> 00:06:04,875 what that means and how that works. 163 00:06:04,875 --> 00:06:06,780 And specifically, it means for 164 00:06:06,780 --> 00:06:08,055 Pullman Regional Hospital. 165 00:06:08,055 --> 00:06:10,090 So if you take that gross charge and you 166 00:06:10,090 --> 00:06:12,790 subtract those write offs, 167 00:06:12,790 --> 00:06:15,050 be it bad debt, be it contractual, 168 00:06:15,050 --> 00:06:16,930 that's really the net revenue. 169 00:06:16,930 --> 00:06:19,510 That's what the hospital has to 170 00:06:19,510 --> 00:06:22,430 be able to fund current expenses, 171 00:06:22,430 --> 00:06:23,990 which would be salaries, wages, 172 00:06:23,990 --> 00:06:26,780 benefits, and future. 173 00:06:26,780 --> 00:06:29,345 Things like capital, etc 174 00:06:29,345 --> 00:06:30,270 that ends up being part of 175 00:06:30,270 --> 00:06:32,155 depreciation and the like. 176 00:06:32,155 --> 00:06:34,550 From there, once you minus all of 177 00:06:34,550 --> 00:06:36,950 those daily operational expenses out, 178 00:06:36,950 --> 00:06:38,610 that's what we have in terms of 179 00:06:38,610 --> 00:06:41,770 our basically operating income. 180 00:06:41,770 --> 00:06:43,930 Now, I'll tell you, in healthcare, 181 00:06:43,930 --> 00:06:45,295 margins are small. 182 00:06:45,295 --> 00:06:47,050 In almost especially 183 00:06:47,050 --> 00:06:48,750 critical access hospitals, 184 00:06:48,750 --> 00:06:50,910 most of them don't 185 00:06:50,910 --> 00:06:53,035 have an operating bottom line. 186 00:06:53,035 --> 00:06:54,990 The only way they have a 187 00:06:54,990 --> 00:06:56,790 positive bottom line and many 188 00:06:56,790 --> 00:06:58,610 don't is the fact 189 00:06:58,610 --> 00:07:00,715 through non operating means. 190 00:07:00,715 --> 00:07:02,780 In our particular case, 191 00:07:02,780 --> 00:07:04,700 we have a great community that supports us. 192 00:07:04,700 --> 00:07:06,320 We're a public hospital district, 193 00:07:06,320 --> 00:07:08,160 and we get tax support, 194 00:07:08,160 --> 00:07:11,080 which has been tremendous blessing to us. 195 00:07:11,080 --> 00:07:12,620 In addition to that, we have 196 00:07:12,620 --> 00:07:15,020 some properties in which we rent. 197 00:07:15,020 --> 00:07:17,000 We get some rental income off of. 198 00:07:17,000 --> 00:07:17,940 That's a non operating. 199 00:07:17,940 --> 00:07:19,930 That's not what we're in the business of doing. 200 00:07:19,930 --> 00:07:21,300 And then other things 201 00:07:21,300 --> 00:07:23,200 are like foundation donations, 202 00:07:23,200 --> 00:07:24,800 which are very beneficial 203 00:07:24,800 --> 00:07:26,080 to us in order to be able to 204 00:07:26,080 --> 00:07:28,760 provide the spectrum and 205 00:07:28,760 --> 00:07:31,260 the overall care that we're able to do 206 00:07:31,260 --> 00:07:34,230 here that many communities can't do. 207 00:07:34,230 --> 00:07:35,820 So a lot of it is 208 00:07:35,820 --> 00:07:36,600 the support we've had 209 00:07:36,600 --> 00:07:38,195 from the community itself. 210 00:07:38,195 --> 00:07:40,590 So that ends up being the net income. 211 00:07:40,590 --> 00:07:42,030 And in our business, it's 212 00:07:42,030 --> 00:07:44,805 almost you can't have a profit. 213 00:07:44,805 --> 00:07:46,710 We're a nonprofit so you 214 00:07:46,710 --> 00:07:48,570 can't have profits, but we have excess. 215 00:07:48,570 --> 00:07:51,110 We have excess of revenue over expenses. 216 00:07:51,110 --> 00:07:53,350 What does that mean? It's bottom line. 217 00:07:53,350 --> 00:07:55,450 You call bottom line, call it net income, 218 00:07:55,450 --> 00:07:56,890 call it anything you want. 219 00:07:56,890 --> 00:07:58,500 It's really your profit. 220 00:07:58,500 --> 00:07:59,250 Now, I'll tell you 221 00:07:59,250 --> 00:08:00,330 a story just for a second. 222 00:08:00,330 --> 00:08:02,170 I'll just digress for a minute. 223 00:08:02,170 --> 00:08:04,180 And Al probably appreciate this. 224 00:08:04,180 --> 00:08:05,830 My wife's a pharmacist, 225 00:08:05,830 --> 00:08:08,110 and she's probably in 226 00:08:08,110 --> 00:08:10,410 terms of knowledge and brightness, 227 00:08:10,410 --> 00:08:12,510 she outshines me by far. 228 00:08:12,510 --> 00:08:17,440 But last her senior year she had to 229 00:08:17,440 --> 00:08:19,720 take an online course or one of those 230 00:08:19,720 --> 00:08:22,320 that just to fill a GR and I said, 231 00:08:22,320 --> 00:08:23,900 I'll take accounting it'll be simple. 232 00:08:23,900 --> 00:08:25,540 I'll teach you. I'll help you. 233 00:08:25,540 --> 00:08:26,520 I thought we were gonna 234 00:08:26,520 --> 00:08:27,500 get divorce our first year of 235 00:08:27,500 --> 00:08:28,740 marriage because she 236 00:08:28,740 --> 00:08:29,840 couldn't understand well, 237 00:08:29,840 --> 00:08:32,160 what's this net income or profit or excess? 238 00:08:32,160 --> 00:08:34,640 Why can't you just call it the same thing? 239 00:08:34,640 --> 00:08:36,845 Oh, it is. It just depends 240 00:08:36,845 --> 00:08:38,940 what business line you're in. 241 00:08:38,940 --> 00:08:40,590 Owner's equity is the same 242 00:08:40,590 --> 00:08:44,805 as the net worth is the same as, 243 00:08:44,805 --> 00:08:46,920 etc, and she just couldn't get it. 244 00:08:46,920 --> 00:08:49,800 I finally just said, 245 00:08:49,800 --> 00:08:52,410 okay, I think somebody else has to help you. 246 00:08:52,410 --> 00:08:53,660 But we got through it, 247 00:08:53,660 --> 00:08:54,320 and we're still married. 248 00:08:54,320 --> 00:08:55,380 It's been 30 years. 249 00:08:55,380 --> 00:08:56,930 So somehow we made it through that. 250 00:08:56,930 --> 00:08:59,600 But a lot of these terms are interchangeable, 251 00:08:59,600 --> 00:09:00,580 and we'll talk about some 252 00:09:00,580 --> 00:09:02,770 of those so I'll throw those out. 253 00:09:02,960 --> 00:09:06,060 Here's your first opportunity to have a quiz. 254 00:09:06,060 --> 00:09:07,770 She said, I can't ask her questions, 255 00:09:07,770 --> 00:09:10,510 but no, this is for the whole room. 256 00:09:10,510 --> 00:09:11,550 Let me ask you a question. 257 00:09:11,550 --> 00:09:13,450 This is your first test. 258 00:09:13,450 --> 00:09:15,410 These are reimbursement theories. 259 00:09:15,410 --> 00:09:16,530 These are different 260 00:09:16,530 --> 00:09:18,830 reimbursement methodologies in healthcare. 261 00:09:18,830 --> 00:09:22,065 One is diagnosis related groups, DRGs. 262 00:09:22,065 --> 00:09:23,570 Folks may have remembered those 263 00:09:23,570 --> 00:09:25,130 came back in the early 80s. 264 00:09:25,130 --> 00:09:26,880 Medicare came down with that and said, 265 00:09:26,880 --> 00:09:28,990 we're going to say every patient that has 266 00:09:28,990 --> 00:09:31,690 a x diagnosis of 267 00:09:31,690 --> 00:09:33,490 this will be in this grouping, 268 00:09:33,490 --> 00:09:34,820 then we're gonna pay y. 269 00:09:34,820 --> 00:09:36,370 So they created this 270 00:09:36,370 --> 00:09:38,730 in order to control their costs. 271 00:09:39,580 --> 00:09:43,130 MSDRGs is another methodologies. 272 00:09:43,130 --> 00:09:45,530 Anybody know what that means? 273 00:09:45,530 --> 00:09:47,430 What's the difference between 274 00:09:47,430 --> 00:09:48,940 a DRG and an MSDRG? 275 00:09:48,940 --> 00:09:50,810 So there's certain things 276 00:09:50,810 --> 00:09:53,585 Medicare don't typically pay for. 277 00:09:53,585 --> 00:09:56,410 Pregnancies not very many people in 278 00:09:56,410 --> 00:09:59,275 the Medicare population are pregnant, etc. 279 00:09:59,275 --> 00:10:01,250 So commercial payers have 280 00:10:01,250 --> 00:10:05,430 additional DRGs listed, 281 00:10:05,430 --> 00:10:06,570 which are the MS side of 282 00:10:06,570 --> 00:10:08,495 it, medical surgical side. 283 00:10:08,495 --> 00:10:12,870 Common procedural terminology, CPTs. 284 00:10:12,870 --> 00:10:15,060 Full charges or percent of 285 00:10:15,060 --> 00:10:17,445 charges. And also costs. 286 00:10:17,445 --> 00:10:18,450 Let me ask the question. 287 00:10:18,450 --> 00:10:21,290 Which of these does Pullman Regional Hospital get paid 288 00:10:21,290 --> 00:10:27,675 under? Go ahead, Mayor. 289 00:10:27,675 --> 00:10:28,260 >> All. 290 00:10:28,260 --> 00:10:30,470 >> Thank you. Good answer. 291 00:10:30,470 --> 00:10:31,835 Every single one of those. 292 00:10:31,835 --> 00:10:33,860 Not confusing whatsoever. 293 00:10:33,860 --> 00:10:35,050 We just got to figure 294 00:10:35,050 --> 00:10:36,650 out which one and play the game right. 295 00:10:36,650 --> 00:10:39,030 And by the way, insurance companies love to 296 00:10:39,030 --> 00:10:40,970 change what's acceptable and non acceptable, 297 00:10:40,970 --> 00:10:42,300 what's allowable, non allowable. 298 00:10:42,300 --> 00:10:43,930 We'll get a little of that. 299 00:10:43,930 --> 00:10:44,970 But we get paid 300 00:10:44,970 --> 00:10:46,110 under every single one of those. 301 00:10:46,110 --> 00:10:48,040 So it's really dependent on the payer. 302 00:10:48,040 --> 00:10:50,310 If we had 100% Medicare, 303 00:10:50,310 --> 00:10:53,330 it's so much easier to budget we don't. 304 00:10:53,330 --> 00:10:57,310 We have a variety of various insurers. 305 00:10:57,310 --> 00:10:59,430 Today, our population in terms of Medicare, 306 00:10:59,430 --> 00:11:02,385 Medicaid runs about 45% of our charges. 307 00:11:02,385 --> 00:11:04,330 Pullman is in a very good position 308 00:11:04,330 --> 00:11:06,270 from the terms of the ability to do what we 309 00:11:06,270 --> 00:11:07,870 do because we have a very good 310 00:11:07,870 --> 00:11:09,730 pair mix due to the fact that we 311 00:11:09,730 --> 00:11:12,270 have Washington State University 312 00:11:12,270 --> 00:11:14,355 here and SEL here. 313 00:11:14,355 --> 00:11:15,950 Not very many communities of 314 00:11:15,950 --> 00:11:18,850 our size in rural America have that luxury. 315 00:11:18,850 --> 00:11:21,265 Most of them typically 316 00:11:21,265 --> 00:11:23,880 you can think of small farming communities. 317 00:11:23,880 --> 00:11:25,390 There's a lot of Medicare, 318 00:11:25,390 --> 00:11:26,630 Medicaid, especially. 319 00:11:26,630 --> 00:11:28,310 You think of Othello, think how 320 00:11:28,310 --> 00:11:30,690 heavily Medicaid their population is. 321 00:11:30,690 --> 00:11:31,830 It's hard to make anything, and 322 00:11:31,830 --> 00:11:34,340 we'll go into why that is in a minute. 323 00:11:34,730 --> 00:11:37,490 So again, we're still laying 324 00:11:37,490 --> 00:11:39,665 some framework about hospital Finance 325 00:11:39,665 --> 00:11:41,570 101 because some of this is 326 00:11:41,570 --> 00:11:43,270 meaningful in how you approach 327 00:11:43,270 --> 00:11:44,790 services you may provide. 328 00:11:44,790 --> 00:11:46,250 Hospital structures, these are 329 00:11:46,250 --> 00:11:47,970 really the three types of structures, 330 00:11:47,970 --> 00:11:50,005 public, which would be federal, state, 331 00:11:50,005 --> 00:11:53,910 local ran facilities, 332 00:11:53,910 --> 00:11:58,080 non for profits, and for profits. 333 00:11:58,080 --> 00:11:59,810 In our geographical area, 334 00:11:59,810 --> 00:12:02,300 how many of these do you think we have? 335 00:12:02,850 --> 00:12:06,290 Think of the quad cities here. 336 00:12:07,890 --> 00:12:10,100 You may not. We have 337 00:12:10,100 --> 00:12:12,500 two public hospital districts in this area. 338 00:12:12,500 --> 00:12:13,500 In fact, there are 339 00:12:13,500 --> 00:12:15,925 three public hospital districts in this area. 340 00:12:15,925 --> 00:12:17,540 Pullman Regional Hospital, 341 00:12:17,540 --> 00:12:18,860 we're public hospital district. 342 00:12:18,860 --> 00:12:20,855 Number 1A of Whitman County 343 00:12:20,855 --> 00:12:23,260 doing business as Pullman Regional Hospital. 344 00:12:23,260 --> 00:12:24,440 And then you have 345 00:12:24,440 --> 00:12:26,520 Public Hospital District Number 3. 346 00:12:26,520 --> 00:12:28,130 Anybody name who that is? 347 00:12:28,130 --> 00:12:31,180 Whitman. Can anybody name 348 00:12:31,180 --> 00:12:33,860 the other public hospital district Garfield? 349 00:12:33,860 --> 00:12:36,435 Do the hospital in Garfield? 350 00:12:36,435 --> 00:12:41,700 No, they do a assisted living 351 00:12:41,700 --> 00:12:44,235 in home health, but that's their district. 352 00:12:44,235 --> 00:12:46,100 They used to years and years ago, 353 00:12:46,100 --> 00:12:47,200 there was a hospital, 354 00:12:47,200 --> 00:12:48,955 but they don't have one now. 355 00:12:48,955 --> 00:12:50,860 So those are public hospital. 356 00:12:50,860 --> 00:12:51,960 What about non for profits in 357 00:12:51,960 --> 00:12:53,485 our region? Think of any? 358 00:12:53,485 --> 00:12:57,070 You got Gritman down 359 00:12:57,070 --> 00:12:59,440 the valley, you have Tristate. 360 00:12:59,440 --> 00:13:01,520 Today, you have a for profit in 361 00:13:01,520 --> 00:13:02,800 our backyard you never 362 00:13:02,800 --> 00:13:04,630 had before this last year. 363 00:13:04,630 --> 00:13:09,515 St. Joe's. That will be a new dynamic. 364 00:13:09,515 --> 00:13:11,400 >> Steve, does Garfield 365 00:13:11,400 --> 00:13:12,820 include the EMS system? 366 00:13:12,820 --> 00:13:14,260 >> It very well could. 367 00:13:14,260 --> 00:13:16,660 So does Garfield's hospital 368 00:13:16,660 --> 00:13:18,250 district include the EMS? 369 00:13:18,250 --> 00:13:20,205 Likely to support that. 370 00:13:20,205 --> 00:13:22,665 I'm not clear on that, but likely. 371 00:13:22,665 --> 00:13:25,140 They do have some tax bonds. 372 00:13:25,140 --> 00:13:27,130 So in our population, 373 00:13:27,130 --> 00:13:29,190 you can see this is a distribution 374 00:13:29,190 --> 00:13:31,450 of this across the United States. 375 00:13:31,450 --> 00:13:32,950 Many are not for profit, 376 00:13:32,950 --> 00:13:34,310 as you can imagine, 377 00:13:34,310 --> 00:13:36,480 supported in one way or another. 378 00:13:36,480 --> 00:13:37,970 Not very many for profits. 379 00:13:37,970 --> 00:13:39,910 In fact, CHS, which is 380 00:13:39,910 --> 00:13:43,060 Community Health Systems is one of them. 381 00:13:44,540 --> 00:13:46,350 Almost all of them run 382 00:13:46,350 --> 00:13:47,490 out of Tennessee for some reason. 383 00:13:47,490 --> 00:13:48,770 I don't know if it's a tax advantage or 384 00:13:48,770 --> 00:13:50,490 that's where they all. 385 00:13:50,490 --> 00:13:52,270 RHSC, which actually runs 386 00:13:52,270 --> 00:13:55,510 Tristate is another one of them. 387 00:13:55,510 --> 00:13:57,600 But many of them are divesting 388 00:13:57,600 --> 00:13:59,770 so if they aren't making money, they get out. 389 00:13:59,770 --> 00:14:01,590 I'll tell you, right now, for 390 00:14:01,590 --> 00:14:02,810 profits typically run 391 00:14:02,810 --> 00:14:05,030 margins are working towards 392 00:14:05,030 --> 00:14:06,630 margins in the double digits. 393 00:14:06,630 --> 00:14:08,250 Non for profits are typically 394 00:14:08,250 --> 00:14:11,050 around 1-2% across the United States, 395 00:14:11,050 --> 00:14:13,225 and we're really no different than that. 396 00:14:13,225 --> 00:14:14,730 You'll have a few that are 397 00:14:14,730 --> 00:14:16,710 higher than that, but not very many. 398 00:14:16,710 --> 00:14:18,490 You can see how many are in 399 00:14:18,490 --> 00:14:21,150 urban settings versus rural settings. 400 00:14:21,150 --> 00:14:25,130 So not a complicated system at all. 401 00:14:25,130 --> 00:14:27,060 It's very pretty simple. 402 00:14:27,060 --> 00:14:29,535 This is one segment of that. 403 00:14:29,535 --> 00:14:31,930 Remember, under payment methodologies 404 00:14:31,930 --> 00:14:33,080 we just talked about, 405 00:14:33,080 --> 00:14:34,730 this is one aspect, and this is 406 00:14:34,730 --> 00:14:37,140 just the Affordable Care Act, by the way. 407 00:14:37,140 --> 00:14:39,635 And by the way, 408 00:14:39,635 --> 00:14:43,695 you're here. This is you. 409 00:14:43,695 --> 00:14:46,360 So to get paid, there's really pretty 410 00:14:46,360 --> 00:14:47,580 simple you just got 411 00:14:47,580 --> 00:14:48,810 to work through all of these means. 412 00:14:48,810 --> 00:14:50,860 A lot of regulatory issues 413 00:14:50,860 --> 00:14:52,640 and things so people wonder why 414 00:14:52,640 --> 00:14:54,880 healthcare is a challenge in terms of 415 00:14:54,880 --> 00:14:57,160 reimbursement and making profit 416 00:14:57,160 --> 00:14:58,380 there are so much. 417 00:14:58,380 --> 00:15:00,900 One of the highest regulated bodies 418 00:15:00,900 --> 00:15:02,960 in the United States is hospitals. 419 00:15:02,960 --> 00:15:05,140 This is just to get payment 420 00:15:05,140 --> 00:15:06,570 under this new healthcare system. 421 00:15:06,570 --> 00:15:08,680 So there's no additional taxes 422 00:15:08,680 --> 00:15:09,850 wasted within this at all 423 00:15:09,850 --> 00:15:11,820 it's pretty seamless. 424 00:15:11,820 --> 00:15:13,520 And this is changing all the time, so you 425 00:15:13,520 --> 00:15:15,160 got to learn how to play for it. 426 00:15:15,160 --> 00:15:16,780 This down here, which 427 00:15:16,780 --> 00:15:18,880 is the Medicare Medicaid Services, 428 00:15:18,880 --> 00:15:20,440 it's changed significantly, 429 00:15:20,440 --> 00:15:21,660 especially under physicians, 430 00:15:21,660 --> 00:15:23,480 if you recall and how they got 431 00:15:23,480 --> 00:15:26,060 paid just changed this last year, 432 00:15:26,060 --> 00:15:30,510 and they are going to now their increases, 433 00:15:30,510 --> 00:15:36,630 which was budgeted and under the SQR, 434 00:15:36,630 --> 00:15:38,175 which was the growth. 435 00:15:38,175 --> 00:15:40,210 That's how they got additions 436 00:15:40,210 --> 00:15:41,790 every year. Now they've changed that. 437 00:15:41,790 --> 00:15:43,390 And it's called MACRA, and 438 00:15:43,390 --> 00:15:45,470 the way physicians will see increases, 439 00:15:45,470 --> 00:15:47,175 there'll be no new money 440 00:15:47,175 --> 00:15:48,690 there'll be winners and losers. 441 00:15:48,690 --> 00:15:49,970 And it's all based on 442 00:15:49,970 --> 00:15:52,090 quality and what your reporting scores are. 443 00:15:52,090 --> 00:15:53,270 And if you do it right, 444 00:15:53,270 --> 00:15:54,570 then your neighbor doesn't do it 445 00:15:54,570 --> 00:15:55,810 right he loses money, 446 00:15:55,810 --> 00:15:57,130 and you get some of his money 447 00:15:57,130 --> 00:15:58,610 because it's budget neutral. 448 00:15:58,610 --> 00:16:00,570 And that's the payment increases that 449 00:16:00,570 --> 00:16:02,940 physicians will see moving forward. 450 00:16:02,940 --> 00:16:04,170 How many physicians like 451 00:16:04,170 --> 00:16:06,010 to be under that model? 452 00:16:06,760 --> 00:16:09,350 Not many. 453 00:16:09,350 --> 00:16:12,680 How many people have felt our struggle 454 00:16:12,680 --> 00:16:14,090 even here on a local level 455 00:16:14,090 --> 00:16:15,710 to find a primary care physician? 456 00:16:15,710 --> 00:16:17,900 A few. 457 00:16:17,900 --> 00:16:20,060 It's been a challenge. 458 00:16:20,060 --> 00:16:22,460 We have people retiring, 459 00:16:22,460 --> 00:16:24,365 and it's hard to recruit. 460 00:16:24,365 --> 00:16:27,500 Pullman's very attractive from a destination, 461 00:16:27,500 --> 00:16:28,670 but you can imagine some of 462 00:16:28,670 --> 00:16:29,900 these rural communities where it 463 00:16:29,900 --> 00:16:33,080 is really a struggle when we struggle. 464 00:16:33,080 --> 00:16:35,150 In fact, we were down in 465 00:16:35,150 --> 00:16:38,180 some of our primary care practices. 466 00:16:38,180 --> 00:16:41,030 I say our, because it's a community when I 467 00:16:41,030 --> 00:16:42,770 think half the providers they 468 00:16:42,770 --> 00:16:45,395 used to have four years ago, 469 00:16:45,395 --> 00:16:48,350 and they're trying to recruit in. 470 00:16:48,350 --> 00:16:49,820 It's challenging on the market 471 00:16:49,820 --> 00:16:51,890 because why would you want to do that, 472 00:16:51,890 --> 00:16:54,365 especially under the old payment models? 473 00:16:54,365 --> 00:16:55,880 We're going to talk a little bit about that. 474 00:16:55,880 --> 00:16:57,320 The revenue cycle. 475 00:16:57,320 --> 00:16:58,580 So as you think 476 00:16:58,580 --> 00:17:01,595 about Healthcare Finance 101, 477 00:17:01,595 --> 00:17:03,470 how we make our money is 478 00:17:03,470 --> 00:17:05,690 through seeing volume today. 479 00:17:05,690 --> 00:17:07,490 There will be a point in time, 480 00:17:07,490 --> 00:17:09,065 I think, years from now, 481 00:17:09,065 --> 00:17:10,760 in which the less you see, 482 00:17:10,760 --> 00:17:12,650 the more you make because 483 00:17:12,650 --> 00:17:14,210 it'll be value-based. 484 00:17:14,210 --> 00:17:15,800 You want to keep people healthy, 485 00:17:15,800 --> 00:17:16,820 which should be really our mission. 486 00:17:16,820 --> 00:17:17,780 Today, we keep people 487 00:17:17,780 --> 00:17:18,800 healthy that's not good for 488 00:17:18,800 --> 00:17:19,820 our bottom line, 489 00:17:19,820 --> 00:17:21,050 but it's the right thing to do. 490 00:17:21,050 --> 00:17:22,655 And we're doing those things today. 491 00:17:22,655 --> 00:17:24,380 We have a whole care coordination team 492 00:17:24,380 --> 00:17:25,565 over here with 493 00:17:25,565 --> 00:17:28,610 social workers and we 494 00:17:28,610 --> 00:17:29,780 don't get paid a dime for that, 495 00:17:29,780 --> 00:17:30,710 but it's the right thing to 496 00:17:30,710 --> 00:17:32,255 do for our community. 497 00:17:32,255 --> 00:17:33,890 If I was strictly a 498 00:17:33,890 --> 00:17:35,510 for-profit, you know what? 499 00:17:35,510 --> 00:17:38,510 They wouldn't have that. Your Red Sage 500 00:17:38,510 --> 00:17:40,220 would be open 10:00-2:00. 501 00:17:40,220 --> 00:17:42,065 It wouldn't be open 7:00-7:00, 502 00:17:42,065 --> 00:17:44,180 because I would be cutting every cost 503 00:17:44,180 --> 00:17:45,680 I could out of this organization 504 00:17:45,680 --> 00:17:47,000 and putting every dollar I 505 00:17:47,000 --> 00:17:49,280 could to my stockholders. 506 00:17:49,280 --> 00:17:51,005 There would be things I wouldn't run. 507 00:17:51,005 --> 00:17:54,020 I would not run 7.2 physicians 508 00:17:54,020 --> 00:17:57,050 in my emergency department, not 24/7. 509 00:17:57,050 --> 00:17:58,280 I don't have that many physicians, 510 00:17:58,280 --> 00:17:59,510 but around the clock. 511 00:17:59,510 --> 00:18:01,820 I'd run a bare bones 4.5 FTEs, 512 00:18:01,820 --> 00:18:03,380 run them till the bone and fire and hire 513 00:18:03,380 --> 00:18:05,660 another one coming in two years, 514 00:18:05,660 --> 00:18:07,235 burn them out, get another, 515 00:18:07,235 --> 00:18:08,540 because I could save 516 00:18:08,540 --> 00:18:10,220 hundreds of thousands of dollars. 517 00:18:10,220 --> 00:18:12,815 But the quality of care wouldn't be there, 518 00:18:12,815 --> 00:18:14,495 and you'd just burn through people. 519 00:18:14,495 --> 00:18:15,800 It's not that their quality is 520 00:18:15,800 --> 00:18:18,320 bad because they still score very well. 521 00:18:18,320 --> 00:18:19,520 It's the fact that 522 00:18:19,520 --> 00:18:21,335 the experience is much different. 523 00:18:21,335 --> 00:18:23,150 I speak from a personal level 524 00:18:23,150 --> 00:18:23,810 on many of these. 525 00:18:23,810 --> 00:18:27,335 My wife works for CHS as a pharmacist. 526 00:18:27,335 --> 00:18:30,960 And I will tell you, it has been a struggle. 527 00:18:31,450 --> 00:18:33,980 They opened a brand new facility in 528 00:18:33,980 --> 00:18:37,970 2004, December. Sound familiar? 529 00:18:37,970 --> 00:18:40,380 We opened ours in December. 530 00:18:40,380 --> 00:18:44,170 They have been burned through 15 pharmacists. 531 00:18:44,170 --> 00:18:46,990 They have three at any one time, 532 00:18:46,990 --> 00:18:48,895 and they've burned through 15 pharmacists 533 00:18:48,895 --> 00:18:51,175 since she started to today. 534 00:18:51,175 --> 00:18:53,710 We've had one retire. 535 00:18:53,710 --> 00:18:55,720 Tells you a little difference of 536 00:18:55,720 --> 00:18:57,790 the culture because it's 537 00:18:57,790 --> 00:18:58,660 not about the people, 538 00:18:58,660 --> 00:19:00,055 it's about the bottom line. 539 00:19:00,055 --> 00:19:02,140 So when you think about revenue cycle, 540 00:19:02,140 --> 00:19:05,035 you think zero to zero. 541 00:19:05,035 --> 00:19:06,400 You'll all be experts. 542 00:19:06,400 --> 00:19:07,500 You can start consulting 543 00:19:07,500 --> 00:19:09,125 businesses after tonight, 544 00:19:09,125 --> 00:19:11,750 because not very many people really understand this. 545 00:19:11,750 --> 00:19:13,940 Zero to zero. How much do you owe when 546 00:19:13,940 --> 00:19:14,750 you come in and do 547 00:19:14,750 --> 00:19:16,925 registration or you come in for a lab? 548 00:19:16,925 --> 00:19:18,380 Before you have that down, 549 00:19:18,380 --> 00:19:19,460 how much do you owe the hospital? 550 00:19:19,460 --> 00:19:20,000 Nothing. 551 00:19:20,000 --> 00:19:22,250 You come in, you have that service when 552 00:19:22,250 --> 00:19:23,840 you have that surgery, 553 00:19:23,840 --> 00:19:25,790 whatever, you go through a process. 554 00:19:25,790 --> 00:19:27,335 You hit registration. 555 00:19:27,335 --> 00:19:29,240 Within that registration process, 556 00:19:29,240 --> 00:19:29,990 there's things that should have 557 00:19:29,990 --> 00:19:31,070 happened either before or 558 00:19:31,070 --> 00:19:33,845 happened during with authorization. 559 00:19:33,845 --> 00:19:35,900 Does your insurance authorize you to do this? 560 00:19:35,900 --> 00:19:37,220 Did you have to have a referral? 561 00:19:37,220 --> 00:19:37,880 If you didn't have to have 562 00:19:37,880 --> 00:19:38,630 a referral, I'm sorry, 563 00:19:38,630 --> 00:19:39,290 you'll have to go back to 564 00:19:39,290 --> 00:19:41,000 your primary care, get the referral. 565 00:19:41,000 --> 00:19:42,020 Then when you can come back, we'll have 566 00:19:42,020 --> 00:19:43,355 the procedure after that. 567 00:19:43,355 --> 00:19:44,930 If not, and they didn't 568 00:19:44,930 --> 00:19:46,610 require a referral or we had the referral, 569 00:19:46,610 --> 00:19:48,200 then we have to have authorization because 570 00:19:48,200 --> 00:19:49,190 if we don't have authorization, 571 00:19:49,190 --> 00:19:50,210 they won't pay us. 572 00:19:50,210 --> 00:19:51,995 And if we miss that step, it goes what? 573 00:19:51,995 --> 00:19:54,500 We're out, or we fight insurance companies. 574 00:19:54,500 --> 00:19:56,705 We write a few letters. 575 00:19:56,705 --> 00:19:57,980 I'll tell you this year is 576 00:19:57,980 --> 00:19:59,000 much better than before. 577 00:19:59,000 --> 00:20:01,220 We've had 64 denied claims. 578 00:20:01,220 --> 00:20:01,940 Last year, at this time we 579 00:20:01,940 --> 00:20:03,620 had 250 denied claims. 580 00:20:03,620 --> 00:20:06,440 Jumping through insurance companies' hoops 581 00:20:06,440 --> 00:20:08,990 on trying to get paid. That's this process. 582 00:20:08,990 --> 00:20:10,700 Registration, insurance verification, 583 00:20:10,700 --> 00:20:12,095 point of service collection. 584 00:20:12,095 --> 00:20:13,460 We don't do a ton of that here 585 00:20:13,460 --> 00:20:14,900 because our people are very good 586 00:20:14,900 --> 00:20:16,310 here in Pullman about 587 00:20:16,310 --> 00:20:17,795 paying for their services. 588 00:20:17,795 --> 00:20:18,620 Some places, 589 00:20:18,620 --> 00:20:19,820 they'll require you to almost pay 590 00:20:19,820 --> 00:20:20,870 your deductible upfront 591 00:20:20,870 --> 00:20:22,490 before they'll ever treat you. 592 00:20:22,490 --> 00:20:24,440 Financial clearance all the way 593 00:20:24,440 --> 00:20:26,810 through till the very back end of it. 594 00:20:26,810 --> 00:20:29,045 After we do all of the billing process, 595 00:20:29,045 --> 00:20:30,430 insurance pays, we go out, 596 00:20:30,430 --> 00:20:31,600 we collect the deductible, 597 00:20:31,600 --> 00:20:34,000 we write off the contractual write-off, 598 00:20:34,000 --> 00:20:36,745 that account goes to zero, zero to zero. 599 00:20:36,745 --> 00:20:38,995 That's the revenue cycle. 600 00:20:38,995 --> 00:20:42,850 All of those things have to flow 601 00:20:42,850 --> 00:20:45,610 very fluidly in order to get there. 602 00:20:45,610 --> 00:20:47,725 Sometimes they work seamlessly. 603 00:20:47,725 --> 00:20:50,665 We can get paid 14 days and be done. 604 00:20:50,665 --> 00:20:53,140 On average, Pullman Regional Hospital takes 605 00:20:53,140 --> 00:20:56,450 34 days to collect zero to zero. 606 00:20:56,950 --> 00:20:59,930 How's that compare across the nation? 607 00:20:59,930 --> 00:21:01,880 Across the nation, it's gotten much better. 608 00:21:01,880 --> 00:21:03,020 It used to be around 50 days. 609 00:21:03,020 --> 00:21:05,795 Now it's about 48 days across the nation. 610 00:21:05,795 --> 00:21:07,040 We do very well here, 611 00:21:07,040 --> 00:21:08,465 and we've got good payers. 612 00:21:08,465 --> 00:21:10,430 And some of them, you can get 613 00:21:10,430 --> 00:21:11,645 this whole process done 614 00:21:11,645 --> 00:21:13,205 within a couple of weeks. 615 00:21:13,205 --> 00:21:15,635 Sometimes it's not that easy. 616 00:21:15,635 --> 00:21:16,910 We still have accounts 617 00:21:16,910 --> 00:21:17,900 that we're working on that are 618 00:21:17,900 --> 00:21:20,645 almost a year old. Got denied. 619 00:21:20,645 --> 00:21:22,040 We appealed the denial 620 00:21:22,040 --> 00:21:23,150 because they didn't tell us they 621 00:21:23,150 --> 00:21:24,350 changed the rule on what had 622 00:21:24,350 --> 00:21:25,865 to be authorized beforehand. 623 00:21:25,865 --> 00:21:27,050 We had the physician write 624 00:21:27,050 --> 00:21:29,000 that this is appropriate. 625 00:21:29,000 --> 00:21:30,545 They are in review. 626 00:21:30,545 --> 00:21:31,880 They deny it. We go back through it, 627 00:21:31,880 --> 00:21:32,660 and we fight it. 628 00:21:32,660 --> 00:21:34,610 We finally get it paid, or a patient 629 00:21:34,610 --> 00:21:36,995 comes in and they say I have Primera. 630 00:21:36,995 --> 00:21:38,675 Give you the card. 631 00:21:38,675 --> 00:21:40,010 Come to find out, shoot, 632 00:21:40,010 --> 00:21:41,615 no, I don't. We changed. 633 00:21:41,615 --> 00:21:43,070 But you don't get that until you get 634 00:21:43,070 --> 00:21:44,390 the denial from the insurance company. 635 00:21:44,390 --> 00:21:45,950 You go back through and they go, 636 00:21:45,950 --> 00:21:46,565 no, I haven't. 637 00:21:46,565 --> 00:21:47,150 Then they give you 638 00:21:47,150 --> 00:21:48,140 a different card and you go through 639 00:21:48,140 --> 00:21:51,300 that process and it takes time. 640 00:21:51,610 --> 00:21:54,110 So this is just how this segment 641 00:21:54,110 --> 00:21:55,745 would work zero to zero. 642 00:21:55,745 --> 00:21:57,050 You schedule, you come in, 643 00:21:57,050 --> 00:21:59,390 you check eligibility, you treat, you code. 644 00:21:59,390 --> 00:22:00,530 The coding aspect, 645 00:22:00,530 --> 00:22:01,670 that's your medical records. 646 00:22:01,670 --> 00:22:02,870 Once it gets coded, 647 00:22:02,870 --> 00:22:04,265 and by the way, do this right. 648 00:22:04,265 --> 00:22:07,415 So one thing, let's say you had a total hip. 649 00:22:07,415 --> 00:22:09,230 If the physician didn't write that he put 650 00:22:09,230 --> 00:22:11,510 the device in and didn't chart 651 00:22:11,510 --> 00:22:13,790 that he put the device in 652 00:22:13,790 --> 00:22:16,175 but you are walking around, 653 00:22:16,175 --> 00:22:17,855 evident that you really had a total hip, 654 00:22:17,855 --> 00:22:18,590 we don't get paid 655 00:22:18,590 --> 00:22:20,165 because it wasn't documented. 656 00:22:20,165 --> 00:22:21,710 So if you didn't document, 657 00:22:21,710 --> 00:22:24,500 it doesn't matter if you did it or not. 658 00:22:24,500 --> 00:22:26,330 You didn't do it. So you 659 00:22:26,330 --> 00:22:27,710 got to document for everything you do. 660 00:22:27,710 --> 00:22:30,515 So a lot of this is making sure we educate, 661 00:22:30,515 --> 00:22:32,060 train, and then you 662 00:22:32,060 --> 00:22:33,440 go through the whole collection process, 663 00:22:33,440 --> 00:22:34,760 which is active collections, 664 00:22:34,760 --> 00:22:37,940 insurance billing, post collection, 665 00:22:37,940 --> 00:22:39,545 which if somebody didn't pay, 666 00:22:39,545 --> 00:22:40,820 how do you collect that, 667 00:22:40,820 --> 00:22:41,900 all the way to legal 668 00:22:41,900 --> 00:22:43,850 where you might do liens. 669 00:22:43,850 --> 00:22:46,850 Many times, hopefully, it goes very clearly, 670 00:22:46,850 --> 00:22:49,220 but sometimes it doesn't work as well. 671 00:22:49,220 --> 00:22:51,350 So this is just another aspect of 672 00:22:51,350 --> 00:22:53,780 that. This is one bill. 673 00:22:53,780 --> 00:22:55,580 Fifty percent of everything we 674 00:22:55,580 --> 00:22:57,635 do is going to be done on the front end. 675 00:22:57,635 --> 00:22:59,300 And most hospitals in 676 00:22:59,300 --> 00:23:00,320 the past haven't treated 677 00:23:00,320 --> 00:23:04,340 the registration staff as a key player. 678 00:23:04,340 --> 00:23:06,770 Fifty percent of getting 679 00:23:06,770 --> 00:23:08,465 this right happens there. 680 00:23:08,465 --> 00:23:09,920 If you don't train those people 681 00:23:09,920 --> 00:23:12,290 and you don't keep good people, 682 00:23:12,290 --> 00:23:15,275 you got a 50:50 chance of ever getting paid. 683 00:23:15,275 --> 00:23:20,330 We do a very good job much better, 2015, 684 00:23:20,330 --> 00:23:21,500 we wrote off almost two 685 00:23:21,500 --> 00:23:23,165 point some million dollars 686 00:23:23,165 --> 00:23:24,800 in process errors and 687 00:23:24,800 --> 00:23:27,320 things because the front end was bad. 688 00:23:27,320 --> 00:23:29,435 Now, much of that we denied. 689 00:23:29,435 --> 00:23:31,205 We got denials and stuff. 690 00:23:31,205 --> 00:23:33,725 We had to fight to get every penny of it, 691 00:23:33,725 --> 00:23:35,120 and we do very well at that. 692 00:23:35,120 --> 00:23:36,590 But if we fix it on the front end, 693 00:23:36,590 --> 00:23:38,270 we don't have to fight it on the back end. 694 00:23:38,270 --> 00:23:40,370 And so we did a tremendous amount 695 00:23:40,370 --> 00:23:41,915 of effort to clean this up on the front end. 696 00:23:41,915 --> 00:23:44,465 And today, it's basically gone. 697 00:23:44,465 --> 00:23:46,475 Fifteen percent is in 698 00:23:46,475 --> 00:23:47,960 the actual medical records, 699 00:23:47,960 --> 00:23:49,550 so the coding aspect of this. 700 00:23:49,550 --> 00:23:51,125 This is when it goes through 701 00:23:51,125 --> 00:23:53,645 our coders, inpatient outpatient. 702 00:23:53,645 --> 00:23:55,160 They read the documents. 703 00:23:55,160 --> 00:23:56,450 What was documented? 704 00:23:56,450 --> 00:23:58,895 What should that CPT be? 705 00:23:58,895 --> 00:24:00,680 Make sure they code all of that out 706 00:24:00,680 --> 00:24:03,305 that DRG, that's their job. 707 00:24:03,305 --> 00:24:04,820 If they do very well at that, 708 00:24:04,820 --> 00:24:05,930 we get paid well. 709 00:24:05,930 --> 00:24:07,880 And then 15% is on 710 00:24:07,880 --> 00:24:10,355 the charge entry now charges. 711 00:24:10,355 --> 00:24:12,410 So this happens here. 712 00:24:12,410 --> 00:24:13,610 I've talked to nurses. 713 00:24:13,610 --> 00:24:15,425 I've talked to staff many times saying, 714 00:24:15,425 --> 00:24:17,270 don't make the decision on 715 00:24:17,270 --> 00:24:19,355 what should be charged to the patient or not. 716 00:24:19,355 --> 00:24:22,670 Document effectively so that 717 00:24:22,670 --> 00:24:24,335 we can bill appropriately. 718 00:24:24,335 --> 00:24:25,730 Because if you document 719 00:24:25,730 --> 00:24:27,080 what we did, then we can bill. 720 00:24:27,080 --> 00:24:28,460 If somebody can't pay, I have 721 00:24:28,460 --> 00:24:29,975 all ways to be able to help them, 722 00:24:29,975 --> 00:24:34,010 charity care payment terms. 723 00:24:34,010 --> 00:24:37,100 Let's pay it over 12 months, etc. 724 00:24:37,100 --> 00:24:37,880 Those types of things I 725 00:24:37,880 --> 00:24:38,975 can help patients with. 726 00:24:38,975 --> 00:24:40,310 But if the nurse upfront 727 00:24:40,310 --> 00:24:42,275 decides the poor college student, 728 00:24:42,275 --> 00:24:44,270 they're probably only eating Top Ramen. 729 00:24:44,270 --> 00:24:45,650 Let's not bill them. 730 00:24:45,650 --> 00:24:46,550 I won't charge them for that. 731 00:24:46,550 --> 00:24:47,930 They don't look like they should be. 732 00:24:47,930 --> 00:24:50,540 Then I have to raise charges 733 00:24:50,540 --> 00:24:51,950 somewhere else to cover 734 00:24:51,950 --> 00:24:53,195 that. That's a loss leader. 735 00:24:53,195 --> 00:24:54,785 So we aren't pricing 736 00:24:54,785 --> 00:24:57,215 effectively for everybody else. 737 00:24:57,215 --> 00:24:59,480 We have means by which to handle that. 738 00:24:59,480 --> 00:25:00,920 So let's just bill appropriately. 739 00:25:00,920 --> 00:25:03,290 So that's part of that charge entry side. 740 00:25:03,290 --> 00:25:04,490 That's what they do. 741 00:25:04,490 --> 00:25:06,125 And then the billing aspect, 742 00:25:06,125 --> 00:25:07,340 which is your financial 743 00:25:07,340 --> 00:25:08,900 services component to it. 744 00:25:08,900 --> 00:25:09,770 So a little bit 745 00:25:09,770 --> 00:25:10,970 about Pullman Regional Hospital. 746 00:25:10,970 --> 00:25:11,960 We'll get a little more specific. 747 00:25:11,960 --> 00:25:13,880 Those are some high-level aspects of it. 748 00:25:13,880 --> 00:25:14,690 We're going to drill down a 749 00:25:14,690 --> 00:25:15,950 little more about who we are, 750 00:25:15,950 --> 00:25:18,110 what we do and how it works. 751 00:25:18,110 --> 00:25:20,030 So today, most people 752 00:25:20,030 --> 00:25:21,815 know Pullman Regional Hospital. 753 00:25:21,815 --> 00:25:23,570 But I don't know if very many 754 00:25:23,570 --> 00:25:24,590 people know or how many people 755 00:25:24,590 --> 00:25:25,730 know we have 756 00:25:25,730 --> 00:25:27,425 Pulman Regional Hospital Clinic Network. 757 00:25:27,425 --> 00:25:31,640 We own today three clinic practices directly, 758 00:25:31,640 --> 00:25:32,990 which are wholly owned means 759 00:25:32,990 --> 00:25:34,850 Pullman Regional Hospital is 100% owner. 760 00:25:34,850 --> 00:25:35,870 They're as an LLC, 761 00:25:35,870 --> 00:25:37,820 but really they're 100% 762 00:25:37,820 --> 00:25:38,840 owned by the hospital. 763 00:25:38,840 --> 00:25:43,535 That includes Palouse Pediatrics, 764 00:25:43,535 --> 00:25:47,135 Palouse Psychology & Behavioral Health, and today, 765 00:25:47,135 --> 00:25:49,040 Pullman Family Medicine, who just 766 00:25:49,040 --> 00:25:52,070 joined that clinic network as of April 1st. 767 00:25:52,070 --> 00:25:54,200 So we go back and we talk just a little 768 00:25:54,200 --> 00:25:55,430 bit as to why 769 00:25:55,430 --> 00:25:57,140 we might get into some of these. 770 00:25:57,140 --> 00:25:59,825 In addition to this, we have joint ventures 771 00:25:59,825 --> 00:26:03,005 with really three groups today. 772 00:26:03,005 --> 00:26:05,015 One is Palouse Surgeons. 773 00:26:05,015 --> 00:26:08,195 The other is under Palouse Specialties, 774 00:26:08,195 --> 00:26:11,540 which is Palouse ENT and Palouse Urology. 775 00:26:11,540 --> 00:26:14,030 Those are owned 40% by Pullman, 776 00:26:14,030 --> 00:26:15,485 40% by Gritman, 777 00:26:15,485 --> 00:26:17,225 and 20% by Whitman. 778 00:26:17,225 --> 00:26:18,800 Three hospitals came together. 779 00:26:18,800 --> 00:26:20,780 Why would we do that? That's craziness. 780 00:26:20,780 --> 00:26:23,375 Let them Let them sink or swim. 781 00:26:23,375 --> 00:26:27,800 You're on your own. Dr. Cagiano, 782 00:26:27,800 --> 00:26:29,300 would we have an emergency department if we 783 00:26:29,300 --> 00:26:31,925 had no general surgeons there? 784 00:26:31,925 --> 00:26:34,700 >> It wouldn't be a full emergency services. 785 00:26:34,700 --> 00:26:35,555 >> You couldn't even 786 00:26:35,555 --> 00:26:36,770 offer an emergency department 787 00:26:36,770 --> 00:26:38,075 without having a general surgeon. 788 00:26:38,075 --> 00:26:39,980 You could offer an urgent care. 789 00:26:39,980 --> 00:26:41,690 But by rule and regulations, 790 00:26:41,690 --> 00:26:43,790 you couldn't offer an emergency department. 791 00:26:43,790 --> 00:26:46,100 You wouldn't be a hospital without him. 792 00:26:46,100 --> 00:26:48,185 Well, we had that situation facing us. 793 00:26:48,185 --> 00:26:49,820 We had one general surgeon on 794 00:26:49,820 --> 00:26:52,040 the Palouse running 365 days, 795 00:26:52,040 --> 00:26:54,650 we're doing three hospitals who said enough. 796 00:26:54,650 --> 00:26:56,240 If the hospitals didn't jump in, 797 00:26:56,240 --> 00:26:57,590 we wouldn't have had anybody. 798 00:26:57,590 --> 00:27:00,140 And we said, what do you need? 799 00:27:00,140 --> 00:27:05,405 I will only take call one week every four. 800 00:27:05,405 --> 00:27:08,930 We got to have three other general surgeons. 801 00:27:08,930 --> 00:27:10,340 That's the standard, so 802 00:27:10,340 --> 00:27:11,465 the three hospitals come together. 803 00:27:11,465 --> 00:27:14,705 We have four general surgeons today. 804 00:27:14,705 --> 00:27:16,850 Do they make enough money within 805 00:27:16,850 --> 00:27:18,485 their practice to pay for themselves? 806 00:27:18,485 --> 00:27:21,515 No. Because, really, 807 00:27:21,515 --> 00:27:24,290 for this community, you probably need 3.5, 808 00:27:24,290 --> 00:27:26,480 but it's hard to get a half a doc. 809 00:27:26,480 --> 00:27:28,760 They usually come in wholes for 810 00:27:28,760 --> 00:27:31,040 some reason. I don't want a half a case. 811 00:27:31,040 --> 00:27:32,915 But no, they come in wholes. 812 00:27:32,915 --> 00:27:36,440 And so there's a subsidy. There's a support. 813 00:27:36,440 --> 00:27:37,760 But the services they brought into 814 00:27:37,760 --> 00:27:39,275 the hospital offset that. 815 00:27:39,275 --> 00:27:41,900 That's not always true within primary care. 816 00:27:41,900 --> 00:27:43,490 But without primary care, 817 00:27:43,490 --> 00:27:45,755 we wouldn't have a hospital again 818 00:27:45,755 --> 00:27:46,970 because they had so many 819 00:27:46,970 --> 00:27:48,620 additional tests that they order. 820 00:27:48,620 --> 00:27:49,940 But under that model, 821 00:27:49,940 --> 00:27:51,200 if we go back and look and 822 00:27:51,200 --> 00:27:52,430 how many people want to be under 823 00:27:52,430 --> 00:27:54,080 that payment models that 824 00:27:54,080 --> 00:27:55,490 they were physicians especially? 825 00:27:55,490 --> 00:27:58,040 Physicians coming out of training today, 826 00:27:58,040 --> 00:27:59,840 they want to take care of patients. 827 00:27:59,840 --> 00:28:01,235 They don't want to run their own business. 828 00:28:01,235 --> 00:28:03,380 They want out of the insurance world. 829 00:28:03,380 --> 00:28:05,060 Who would want to do that anyway? 830 00:28:05,060 --> 00:28:07,880 It's a pain. They want to come in. 831 00:28:07,880 --> 00:28:09,320 And by the way, if they come into 832 00:28:09,320 --> 00:28:11,135 Pullman and under our model, 833 00:28:11,135 --> 00:28:14,750 no, you have to be a partner. 834 00:28:14,750 --> 00:28:15,980 And by the way, 835 00:28:15,980 --> 00:28:17,720 your pay is going to go down 836 00:28:17,720 --> 00:28:19,970 25% next year compared to this year. 837 00:28:19,970 --> 00:28:21,155 Now, where do I sign up? 838 00:28:21,155 --> 00:28:22,640 That sounds really good to me. 839 00:28:22,640 --> 00:28:24,305 I have no security 840 00:28:24,305 --> 00:28:25,370 for me and my family. 841 00:28:25,370 --> 00:28:26,675 It's not going to happen. 842 00:28:26,675 --> 00:28:28,490 When you can go to Spokane and have 843 00:28:28,490 --> 00:28:30,050 an income guarantee 844 00:28:30,050 --> 00:28:32,330 that's out of the gate 30, 845 00:28:32,330 --> 00:28:34,250 40% higher and you know 846 00:28:34,250 --> 00:28:35,180 you're going to get paid that every 847 00:28:35,180 --> 00:28:36,950 year plus probably a raise. 848 00:28:36,950 --> 00:28:39,500 You wouldn't come. That's part of 849 00:28:39,500 --> 00:28:41,030 the challenges 850 00:28:41,030 --> 00:28:42,500 Pullman's facing with recruitment. 851 00:28:42,500 --> 00:28:44,390 So today, that's why 852 00:28:44,390 --> 00:28:45,770 physicians coming out of school, 853 00:28:45,770 --> 00:28:47,150 they want an employment model. 854 00:28:47,150 --> 00:28:48,470 And we have met that. 855 00:28:48,470 --> 00:28:50,780 We have adjusted our practices to meet 856 00:28:50,780 --> 00:28:53,510 those things because access 857 00:28:53,510 --> 00:28:56,100 to care is really important on the Palouse. 858 00:28:56,260 --> 00:29:01,805 So we have here about almost 450 employees, 859 00:29:01,805 --> 00:29:04,460 of which 274 are full-time, 860 00:29:04,460 --> 00:29:07,880 174 are part-time. 861 00:29:07,880 --> 00:29:10,940 We have a great volunteer in 862 00:29:10,940 --> 00:29:12,710 auxiliary team that helps 863 00:29:12,710 --> 00:29:14,645 support our services at Pullman. 864 00:29:14,645 --> 00:29:15,905 Some are here tonight, and I 865 00:29:15,905 --> 00:29:17,330 really appreciate that. 866 00:29:17,330 --> 00:29:20,285 And then we have a very active medical staff. 867 00:29:20,285 --> 00:29:22,250 And the nice thing is, we've been fairly 868 00:29:22,250 --> 00:29:24,260 successful on recruiting, which is good. 869 00:29:24,260 --> 00:29:25,490 It continues to be the case. 870 00:29:25,490 --> 00:29:27,170 So I'm happy to say 871 00:29:27,170 --> 00:29:29,420 that folks haven't heard we have 872 00:29:29,420 --> 00:29:30,530 successfully recruited our 873 00:29:30,530 --> 00:29:32,120 fourth orthopedic surgeon to 874 00:29:32,120 --> 00:29:33,890 the Palouse who will 875 00:29:33,890 --> 00:29:35,870 be joining the Inland Orthopedic Group. 876 00:29:35,870 --> 00:29:38,420 That's awesome. Those guys will 877 00:29:38,420 --> 00:29:39,920 be thrilled because that 878 00:29:39,920 --> 00:29:40,760 will make their quality 879 00:29:40,760 --> 00:29:42,110 of life that much better. 880 00:29:42,110 --> 00:29:44,180 On an annual basis, if you go back to 881 00:29:44,180 --> 00:29:47,090 our knowledge base, we gross build. 882 00:29:47,090 --> 00:29:48,440 This is when we collected. 883 00:29:48,440 --> 00:29:49,760 I'd love it if we did. 884 00:29:49,760 --> 00:29:51,530 Life would be so much easier for me. 885 00:29:51,530 --> 00:29:55,250 But we build out 116, almost $117 million. 886 00:29:55,250 --> 00:29:56,540 Pullman Regional Hospital 887 00:29:56,540 --> 00:29:57,545 isn't a small business. 888 00:29:57,545 --> 00:29:59,720 We have a pretty substantial footprint. 889 00:29:59,720 --> 00:30:01,880 Of that, do you know how much we have at 890 00:30:01,880 --> 00:30:04,115 the end of the day last year to work with 891 00:30:04,115 --> 00:30:06,140 to pay future bills 892 00:30:06,140 --> 00:30:08,960 like new equipment technology? 893 00:30:08,960 --> 00:30:11,645 A million dollars. 894 00:30:11,645 --> 00:30:15,720 Not a very high margin in healthcare. 895 00:30:15,850 --> 00:30:18,665 Not a lot to work with. 896 00:30:18,665 --> 00:30:20,510 And that is after we had 897 00:30:20,510 --> 00:30:23,310 donations from the foundations, etc. 898 00:30:23,350 --> 00:30:26,840 We've got to then reinvest in the future, 899 00:30:26,840 --> 00:30:28,520 and that's the way to do it is 900 00:30:28,520 --> 00:30:30,500 by having some type of bottom line. 901 00:30:30,500 --> 00:30:33,980 >> Steve, with the robotics, 902 00:30:33,980 --> 00:30:36,275 I can't remember how much that cost, 903 00:30:36,275 --> 00:30:38,150 but we wouldn't have 904 00:30:38,150 --> 00:30:40,130 been able to all do that. 905 00:30:40,130 --> 00:30:40,820 We'll stick with that. 906 00:30:40,820 --> 00:30:44,135 [NOISE] That's your profit. 907 00:30:44,135 --> 00:30:46,350 Now there's you million dollars. 908 00:30:46,540 --> 00:30:51,230 >> So the question was and the comment was, 909 00:30:51,230 --> 00:30:52,880 in terms of robotics, 910 00:30:52,880 --> 00:30:55,115 and many may or may not know we have 911 00:30:55,115 --> 00:31:00,275 a da Vinci surgically assisted device 912 00:31:00,275 --> 00:31:03,350 in our OR used primarily 913 00:31:03,350 --> 00:31:07,085 for single site incisions, 914 00:31:07,085 --> 00:31:10,640 laparoscopic procedures when the recovery 915 00:31:10,640 --> 00:31:12,560 is so much better because you don't 916 00:31:12,560 --> 00:31:14,210 have the open incision 917 00:31:14,210 --> 00:31:15,260 and you don't have all of 918 00:31:15,260 --> 00:31:19,565 the after recovery time. 919 00:31:19,565 --> 00:31:22,130 It's pretty seamless. 920 00:31:22,130 --> 00:31:23,300 That's probably a wrong word 921 00:31:23,300 --> 00:31:23,990 for an accountant really, 922 00:31:23,990 --> 00:31:25,070 but it seemed to fit. 923 00:31:25,070 --> 00:31:26,990 [LAUGHTER] So it is seamless. 924 00:31:26,990 --> 00:31:28,970 It's pretty much a stitch, and they're done. 925 00:31:28,970 --> 00:31:30,050 But it's amazing what 926 00:31:30,050 --> 00:31:31,190 they can do within that. 927 00:31:31,190 --> 00:31:33,500 That machine alone was over $1 million. 928 00:31:33,500 --> 00:31:34,760 And we had a lot of 929 00:31:34,760 --> 00:31:35,960 people in the community saying, 930 00:31:35,960 --> 00:31:37,835 man, why would you buy such a thing? 931 00:31:37,835 --> 00:31:39,800 We were successful, 932 00:31:39,800 --> 00:31:41,135 and our main reason to do it 933 00:31:41,135 --> 00:31:42,500 wasn't because we'd have an edge in 934 00:31:42,500 --> 00:31:43,940 a market and drive a lot 935 00:31:43,940 --> 00:31:45,725 of business. It was recruitment. 936 00:31:45,725 --> 00:31:47,090 Folks coming out of 937 00:31:47,090 --> 00:31:49,250 urology school today are 938 00:31:49,250 --> 00:31:50,960 trained on a da Vinci. 939 00:31:50,960 --> 00:31:52,040 Are they going to come to 940 00:31:52,040 --> 00:31:53,345 a market that has none, 941 00:31:53,345 --> 00:31:54,800 and that's the only thing they've known? 942 00:31:54,800 --> 00:31:57,410 No. So we were successful in that, 943 00:31:57,410 --> 00:32:01,220 and Dr. Keizur has a partner now, Dr. Smith. 944 00:32:01,220 --> 00:32:03,680 And that was a great value. 945 00:32:03,680 --> 00:32:05,630 Dr. Smith, by the way, 946 00:32:05,630 --> 00:32:06,920 the two of them combined 947 00:32:06,920 --> 00:32:10,490 today are doing twice the volume. 948 00:32:10,490 --> 00:32:13,415 The volume was there. We didn't get it all. 949 00:32:13,415 --> 00:32:18,160 So now Moscow also valued from that, 950 00:32:18,160 --> 00:32:20,805 but the whole community value from that. 951 00:32:20,805 --> 00:32:23,040 And so it was really important as 952 00:32:23,040 --> 00:32:26,350 a part of our services that we offer. 953 00:32:26,350 --> 00:32:29,670 We're going to switch 954 00:32:29,670 --> 00:32:30,710 gears a little bit here, 955 00:32:30,710 --> 00:32:31,910 and that's a lot of this. 956 00:32:31,910 --> 00:32:33,810 If you want more, come 957 00:32:33,810 --> 00:32:35,505 to board meetings, Stephan. 958 00:32:35,505 --> 00:32:38,220 It's an ever-evolving thing, 959 00:32:38,220 --> 00:32:39,360 and it'll be different next year. 960 00:32:39,360 --> 00:32:40,990 This presentation would be different than it 961 00:32:40,990 --> 00:32:43,110 is this year because it's changing every day. 962 00:32:43,110 --> 00:32:45,810 But how does Pullman Regional Hospital 963 00:32:45,810 --> 00:32:47,110 develop its prices? 964 00:32:47,110 --> 00:32:49,095 Because that's an important question. 965 00:32:49,095 --> 00:32:52,530 Do we price higher than our competitors? 966 00:32:52,530 --> 00:32:54,070 Do we price differently than 967 00:32:54,070 --> 00:32:56,420 our competitors? How do we do it? 968 00:32:56,420 --> 00:32:57,800 I will tell you when I first 969 00:32:57,800 --> 00:33:00,790 took over in 1995, 970 00:33:00,790 --> 00:33:03,210 I struggled with how hospitals, 971 00:33:03,210 --> 00:33:04,590 especially the ones I was 972 00:33:04,590 --> 00:33:06,210 involved with because I came out of 973 00:33:06,210 --> 00:33:08,330 trying to combine Pullman Regional 974 00:33:08,330 --> 00:33:09,590 and Gritman Medical Center 975 00:33:09,590 --> 00:33:10,990 and ran the corridor for three 976 00:33:10,990 --> 00:33:12,795 years in a joint venture. 977 00:33:12,795 --> 00:33:13,980 I was assistant CFO. 978 00:33:13,980 --> 00:33:15,430 And Gritman did exactly 979 00:33:15,430 --> 00:33:17,150 the same way we did it. 980 00:33:17,150 --> 00:33:21,180 And what you do and what we did, 981 00:33:21,180 --> 00:33:23,670 ashamed of it back then, is 982 00:33:23,670 --> 00:33:25,120 you developed a new service. 983 00:33:25,120 --> 00:33:26,310 You went out and figured out what 984 00:33:26,310 --> 00:33:27,770 the pricing was on many of those. 985 00:33:27,770 --> 00:33:29,530 Let's say it's X-ray and you wanted to 986 00:33:29,530 --> 00:33:31,890 do MRs. What's the average price? 987 00:33:31,890 --> 00:33:32,970 What are other people charging 988 00:33:32,970 --> 00:33:34,850 for this service? 989 00:33:34,850 --> 00:33:36,200 That's how you developed your prices. 990 00:33:36,200 --> 00:33:37,430 What is CMS going to pay us? 991 00:33:37,430 --> 00:33:39,750 Well, CMS pays this and you two times that. 992 00:33:39,750 --> 00:33:41,530 Just a rule of thumb. That's what you do. 993 00:33:41,530 --> 00:33:42,610 And then every year you're 994 00:33:42,610 --> 00:33:45,050 going in the budget, I think I'll raise it. 995 00:33:45,050 --> 00:33:47,020 Yeah, 5% sounds good. 996 00:33:47,020 --> 00:33:48,670 And you do that for 20 years, 997 00:33:48,670 --> 00:33:53,095 and what do your prices reflect? Nothing. 998 00:33:53,095 --> 00:33:56,110 They're meaningless. So we said, 999 00:33:56,110 --> 00:33:57,850 that's not what we want to do in our pricing, 1000 00:33:57,850 --> 00:33:59,290 and we want to be fair and adequate. 1001 00:33:59,290 --> 00:34:01,360 So we go through a structure in 1002 00:34:01,360 --> 00:34:04,345 which we evaluate what are our costs. 1003 00:34:04,345 --> 00:34:05,890 Because we got to cover our cost. 1004 00:34:05,890 --> 00:34:06,670 If we don't cover our costs, 1005 00:34:06,670 --> 00:34:09,640 we aren't here. Pretty obvious. 1006 00:34:09,640 --> 00:34:11,845 What's our required profit? 1007 00:34:11,845 --> 00:34:14,005 Nasty word. That's a four letter word. 1008 00:34:14,005 --> 00:34:15,610 It's actually more than four,. 1009 00:34:15,610 --> 00:34:19,825 No five. No it is six. I can count. 1010 00:34:19,825 --> 00:34:23,500 It's a six-letter word. Profit. We got 1011 00:34:23,500 --> 00:34:24,790 to have excess because we need to 1012 00:34:24,790 --> 00:34:26,320 reinvest back into the facility. 1013 00:34:26,320 --> 00:34:27,670 We have to buy equipment. 1014 00:34:27,670 --> 00:34:28,810 We need technology. 1015 00:34:28,810 --> 00:34:29,950 If not, you're going 1016 00:34:29,950 --> 00:34:31,420 to be obsolete in a little while. 1017 00:34:31,420 --> 00:34:35,530 And then, really, your prices only matter. 1018 00:34:35,530 --> 00:34:37,945 If I was 100% Medicare, 1019 00:34:37,945 --> 00:34:40,540 I'll charge you nothing 1020 00:34:40,540 --> 00:34:41,770 because I get paid 1021 00:34:41,770 --> 00:34:43,270 cost under Medicare program. 1022 00:34:43,270 --> 00:34:44,920 It doesn't matter what I cost. 1023 00:34:44,920 --> 00:34:45,820 I don't matter what I 1024 00:34:45,820 --> 00:34:46,930 charge because they're going to tell 1025 00:34:46,930 --> 00:34:47,650 me they're going to pay so 1026 00:34:47,650 --> 00:34:49,120 why do I matter anyway. 1027 00:34:49,120 --> 00:34:51,505 But that's not true across the board. 1028 00:34:51,505 --> 00:34:52,750 It does matter. 1029 00:34:52,750 --> 00:34:55,405 So prices have to reflect your pair mix. 1030 00:34:55,405 --> 00:34:57,355 What are the insurance companies? 1031 00:34:57,355 --> 00:34:58,990 We go through that process, 1032 00:34:58,990 --> 00:35:00,235 and then we evaluate on 1033 00:35:00,235 --> 00:35:02,860 every single price down to the CPT level, 1034 00:35:02,860 --> 00:35:05,125 which is by procedure. 1035 00:35:05,125 --> 00:35:07,645 What's our cost compared to the market? 1036 00:35:07,645 --> 00:35:11,095 What's the market? If our costs are too high, 1037 00:35:11,095 --> 00:35:14,440 is it fair for me to raise my prices 5%? 1038 00:35:14,440 --> 00:35:16,165 Probably not. 1039 00:35:16,165 --> 00:35:18,410 I should probably control the cost. 1040 00:35:18,660 --> 00:35:21,670 If my costs are within reason, 1041 00:35:21,670 --> 00:35:24,790 then is it okay to raise 5%? Well, maybe. 1042 00:35:24,790 --> 00:35:26,725 But if I have $45 million 1043 00:35:26,725 --> 00:35:29,110 in the bank or $150 million, 1044 00:35:29,110 --> 00:35:30,670 and I want to charge 10% more, 1045 00:35:30,670 --> 00:35:32,050 because as a CFO, 1046 00:35:32,050 --> 00:35:33,730 I'd like to have 180 million. 1047 00:35:33,730 --> 00:35:35,125 That's probably not fair, 1048 00:35:35,125 --> 00:35:37,075 either 'cause I have too much cushion. 1049 00:35:37,075 --> 00:35:38,590 Now, I'm gouging. 1050 00:35:38,590 --> 00:35:40,645 So we look at that as well. 1051 00:35:40,645 --> 00:35:42,715 So we want to be fair and equitable. 1052 00:35:42,715 --> 00:35:43,690 And I don't want to charge 1053 00:35:43,690 --> 00:35:44,530 more than the market. 1054 00:35:44,530 --> 00:35:46,555 And in our market, we look at six hospitals. 1055 00:35:46,555 --> 00:35:48,475 We have to do blended because it would be 1056 00:35:48,475 --> 00:35:51,040 collusion if I was to call Tricity and say, 1057 00:35:51,040 --> 00:35:53,365 what do you pay? What do you charge? 1058 00:35:53,365 --> 00:35:55,600 I wouldn't be Ryan, I'd go 1059 00:35:55,600 --> 00:35:57,130 jail and I don't look good in orange. 1060 00:35:57,130 --> 00:36:00,550 So we do a compilation of six hospitals, 1061 00:36:00,550 --> 00:36:02,410 and we have an external group do this. 1062 00:36:02,410 --> 00:36:04,495 And we say, what is the price 1063 00:36:04,495 --> 00:36:06,835 on an average in the market? 1064 00:36:06,835 --> 00:36:08,680 Now, in some areas, I will tell you, 1065 00:36:08,680 --> 00:36:10,150 specifically an MR, 1066 00:36:10,150 --> 00:36:12,280 we were too high two years ago. 1067 00:36:12,280 --> 00:36:14,395 I had the orthopods call me and 1068 00:36:14,395 --> 00:36:17,380 say they're getting a lot cheaper, 1069 00:36:17,380 --> 00:36:18,940 and people are starting to shop because 1070 00:36:18,940 --> 00:36:20,710 of the fact of high deductible plans, 1071 00:36:20,710 --> 00:36:22,240 where they have $1,500 out 1072 00:36:22,240 --> 00:36:25,030 of pocket, they're shopping. 1073 00:36:25,030 --> 00:36:27,760 We need to look at 1074 00:36:27,760 --> 00:36:30,235 our market a little tighter than broader. 1075 00:36:30,235 --> 00:36:32,440 When you pull Spokane hospitals in, 1076 00:36:32,440 --> 00:36:33,580 Tricity hospitals 1077 00:36:33,580 --> 00:36:34,690 in they're probably too broad. 1078 00:36:34,690 --> 00:36:36,745 So we narrowed that market and say, 1079 00:36:36,745 --> 00:36:38,890 what should we charge for that service? 1080 00:36:38,890 --> 00:36:41,680 And that's how we established our prices. 1081 00:36:41,680 --> 00:36:44,635 So now getting into 1082 00:36:44,635 --> 00:36:46,435 just reimbursement and how we get paid. 1083 00:36:46,435 --> 00:36:48,670 Medicare, Medicaid, 1084 00:36:48,670 --> 00:36:51,655 people remember in 1997, 1085 00:36:51,655 --> 00:36:55,990 the Clinton administration 1086 00:36:55,990 --> 00:36:57,595 balanced the budget. 1087 00:36:57,595 --> 00:36:59,545 And as a result of that, 1088 00:36:59,545 --> 00:37:01,330 there were two hospitals and 1089 00:37:01,330 --> 00:37:03,280 rural communities closing every 1090 00:37:03,280 --> 00:37:05,530 week and people not 1091 00:37:05,530 --> 00:37:07,315 having access to care anymore. 1092 00:37:07,315 --> 00:37:09,430 It's a bad thing. So they came out with 1093 00:37:09,430 --> 00:37:11,110 this determination 1094 00:37:11,110 --> 00:37:13,435 called critical access hospitals. 1095 00:37:13,435 --> 00:37:18,370 It's critical for our weakest population 1096 00:37:18,370 --> 00:37:20,515 in terms of Medicaid, 1097 00:37:20,515 --> 00:37:23,110 people that can't pay in our elders 1098 00:37:23,110 --> 00:37:24,910 to be able to access care 1099 00:37:24,910 --> 00:37:26,275 in these communities, 1100 00:37:26,275 --> 00:37:27,670 we need to do something about it 1101 00:37:27,670 --> 00:37:29,695 because if we, 1102 00:37:29,695 --> 00:37:31,210 federal government not paying them 1103 00:37:31,210 --> 00:37:33,310 enough to stay in existence, 1104 00:37:33,310 --> 00:37:35,380 basically, they're not covering their cost, 1105 00:37:35,380 --> 00:37:36,850 there's not enough volume, 1106 00:37:36,850 --> 00:37:38,260 and they can't survive. 1107 00:37:38,260 --> 00:37:41,485 So that came out. So Medicare pays us today, 1108 00:37:41,485 --> 00:37:45,820 our cost plus 1%. Now, I'll tell you what. 1109 00:37:45,820 --> 00:37:47,440 It's not plus one because we still 1110 00:37:47,440 --> 00:37:49,240 have remember a few years ago, 1111 00:37:49,240 --> 00:37:50,110 sequestration, 1112 00:37:50,110 --> 00:37:51,085 Everybody thought that went away. 1113 00:37:51,085 --> 00:37:53,620 It's still not. We get cost minus 1. 1114 00:37:53,620 --> 00:37:54,580 So we lose money on 1115 00:37:54,580 --> 00:37:56,960 every Medicare Medicaid patient. 1116 00:37:57,270 --> 00:38:00,010 Doesn't mean we shouldn't take care of them. 1117 00:38:00,010 --> 00:38:01,585 We should care for them. 1118 00:38:01,585 --> 00:38:03,475 But we will never make more. 1119 00:38:03,475 --> 00:38:05,290 By the way, I forgot to tell you something. 1120 00:38:05,290 --> 00:38:07,285 It's not truly cost. 1121 00:38:07,285 --> 00:38:09,505 It's allowable cost. 1122 00:38:09,505 --> 00:38:12,520 You know who determines allowable? 1123 00:38:12,520 --> 00:38:14,625 The federal government. 1124 00:38:14,625 --> 00:38:16,320 So you know those same physicians I 1125 00:38:16,320 --> 00:38:18,030 told you about in the emergency department? 1126 00:38:18,030 --> 00:38:19,380 Because physicians can 1127 00:38:19,380 --> 00:38:21,045 bill a professional fee. 1128 00:38:21,045 --> 00:38:23,190 In addition, we build the technical field, 1129 00:38:23,190 --> 00:38:24,540 which is the nursing staff 1130 00:38:24,540 --> 00:38:26,910 and the room board. 1131 00:38:26,910 --> 00:38:28,590 The way Medicare looks at it, 1132 00:38:28,590 --> 00:38:29,940 then that professional fee covers 1133 00:38:29,940 --> 00:38:31,200 that physician cost. 1134 00:38:31,200 --> 00:38:33,330 If there are additional costs, 1135 00:38:33,330 --> 00:38:35,010 like you want them 24/7, 1136 00:38:35,010 --> 00:38:35,970 but there's not a patient 1137 00:38:35,970 --> 00:38:37,815 there, that's your problem. 1138 00:38:37,815 --> 00:38:39,090 That's not our cost. 1139 00:38:39,090 --> 00:38:40,785 So that's non allowable. 1140 00:38:40,785 --> 00:38:43,420 So it's not 100% of your cost. 1141 00:38:43,420 --> 00:38:44,710 It's what Medicare says will be 1142 00:38:44,710 --> 00:38:46,720 100% of your costs. 1143 00:38:46,720 --> 00:38:48,250 And then our commercial players 1144 00:38:48,250 --> 00:38:49,570 have to make up the difference. 1145 00:38:49,570 --> 00:38:50,905 This is the rub. 1146 00:38:50,905 --> 00:38:52,990 This is where commercials are fighting 1147 00:38:52,990 --> 00:38:54,190 back because 1148 00:38:54,190 --> 00:38:55,420 we have employers that are saying, 1149 00:38:55,420 --> 00:38:56,770 wait, I can't have 1150 00:38:56,770 --> 00:38:58,870 double digit increases year 1151 00:38:58,870 --> 00:39:01,075 in and year out on our premiums. 1152 00:39:01,075 --> 00:39:02,275 We say the same thing. 1153 00:39:02,275 --> 00:39:03,490 We provide healthcare, and 1154 00:39:03,490 --> 00:39:04,630 we don't like it either when 1155 00:39:04,630 --> 00:39:07,450 our insurance for our employees 1156 00:39:07,450 --> 00:39:09,370 goes up by 10 or 12%. 1157 00:39:09,370 --> 00:39:10,960 So we start going, okay, how are we doing 1158 00:39:10,960 --> 00:39:12,415 differently? But we're paying ourselves. 1159 00:39:12,415 --> 00:39:14,155 I was like, oh, geez, 1160 00:39:14,155 --> 00:39:16,060 can we do this differently? 1161 00:39:16,060 --> 00:39:18,010 So commercials have really pushed 1162 00:39:18,010 --> 00:39:19,930 back on what they used to pay us. 1163 00:39:19,930 --> 00:39:21,280 That's why I don't get 95% 1164 00:39:21,280 --> 00:39:22,540 of charges anymore. 1165 00:39:22,540 --> 00:39:24,700 And now I get 73.5% of 1166 00:39:24,700 --> 00:39:27,295 charges by some contracts, 1167 00:39:27,295 --> 00:39:28,570 because they're trying to 1168 00:39:28,570 --> 00:39:30,250 drive that price down. 1169 00:39:30,250 --> 00:39:32,215 >> Are those two costs the same? 1170 00:39:32,215 --> 00:39:35,950 >> So are those two costs the same? Yes. 1171 00:39:35,950 --> 00:39:37,570 >> The left and right of diagram? 1172 00:39:37,570 --> 00:39:39,400 >> They are. So it's 1173 00:39:39,400 --> 00:39:42,115 your total cost to provide that service? 1174 00:39:42,115 --> 00:39:45,670 >> Is that a variable cost of 1175 00:39:45,670 --> 00:39:47,050 providing that service as 1176 00:39:47,050 --> 00:39:49,855 opposed to is there an overhead allocation? 1177 00:39:49,855 --> 00:39:52,795 >> Let's go there. Let's talk about that. 1178 00:39:52,795 --> 00:39:54,895 So when are we going to get there? 1179 00:39:54,895 --> 00:39:57,670 So yes, and yes, 1180 00:39:57,670 --> 00:39:59,485 it is a variable. 1181 00:39:59,485 --> 00:40:03,820 But understand in our who we are 1182 00:40:03,820 --> 00:40:06,970 from we being a rural hospital, 1183 00:40:06,970 --> 00:40:08,800 it's semi-variable. 1184 00:40:08,800 --> 00:40:10,750 At only a certain level can you 1185 00:40:10,750 --> 00:40:14,590 go down before you hit a floor. 1186 00:40:14,590 --> 00:40:17,455 We have to by a certain amount, 1187 00:40:17,455 --> 00:40:20,575 if we're going to offer 24/7 emergency care, 1188 00:40:20,575 --> 00:40:22,120 and I can't have nobody 1189 00:40:22,120 --> 00:40:23,440 in there when you show up. 1190 00:40:23,440 --> 00:40:24,580 Somebody has to be 1191 00:40:24,580 --> 00:40:25,390 there with the lights on to 1192 00:40:25,390 --> 00:40:27,640 care for you. That's the floor. 1193 00:40:27,640 --> 00:40:29,350 So it's a semi-variable. 1194 00:40:29,350 --> 00:40:31,330 So there is some fluctuations 1195 00:40:31,330 --> 00:40:33,160 in those costs based on volume. 1196 00:40:33,160 --> 00:40:34,825 But it's really hard, and 1197 00:40:34,825 --> 00:40:36,355 I'll share a little bit about 1198 00:40:36,355 --> 00:40:37,930 Pullman's approach to that 1199 00:40:37,930 --> 00:40:39,970 on how you control those variable costs. 1200 00:40:39,970 --> 00:40:40,660 I will tell you 1201 00:40:40,660 --> 00:40:42,700 from a productivity standpoint, 1202 00:40:42,700 --> 00:40:44,455 what's the number one expense 1203 00:40:44,455 --> 00:40:46,270 you have in healthcare? 1204 00:40:46,270 --> 00:40:48,160 What's your highest cost? 1205 00:40:48,160 --> 00:40:49,280 >> People. 1206 00:40:49,440 --> 00:40:53,080 >> People. We're a service industry. 1207 00:40:53,080 --> 00:40:56,650 Sixty percent of our costs relate to people. 1208 00:40:56,650 --> 00:40:57,970 What's the number one thing 1209 00:40:57,970 --> 00:40:59,755 that you try to control? 1210 00:40:59,755 --> 00:41:03,100 People. Because I can cut 1211 00:41:03,100 --> 00:41:06,220 a lot at trying to chisel down utilities, 1212 00:41:06,220 --> 00:41:07,270 but I can't turn off 1213 00:41:07,270 --> 00:41:09,820 enough lights if I was one staff member 1214 00:41:09,820 --> 00:41:12,190 less to cover that cost 1215 00:41:12,190 --> 00:41:13,345 of turn off all the lights every day 1216 00:41:13,345 --> 00:41:14,995 when somebody walked out of the room. 1217 00:41:14,995 --> 00:41:17,020 So there is some variability. 1218 00:41:17,020 --> 00:41:19,660 Now, one of the challenges there is how 1219 00:41:19,660 --> 00:41:23,890 predictable are our services. 1220 00:41:23,890 --> 00:41:25,060 Can anybody tell me 1221 00:41:25,060 --> 00:41:26,080 how many people are going to come into 1222 00:41:26,080 --> 00:41:27,100 the emergency department 1223 00:41:27,100 --> 00:41:30,115 between seven tonight and nine tonight? 1224 00:41:30,115 --> 00:41:32,350 Is there a football game? 1225 00:41:32,350 --> 00:41:34,660 Probably higher predictability that 1226 00:41:34,660 --> 00:41:35,110 I'm going to have 1227 00:41:35,110 --> 00:41:36,700 more admissions into 1228 00:41:36,700 --> 00:41:38,830 my emergency department than I have when? 1229 00:41:38,830 --> 00:41:40,735 >> And more ambulance runs from the city. 1230 00:41:40,735 --> 00:41:44,530 >> Exactly. You can have some of that, 1231 00:41:44,530 --> 00:41:45,895 but it's still variable, 1232 00:41:45,895 --> 00:41:47,650 and it doesn't always come. 1233 00:41:47,650 --> 00:41:51,520 When we had the Apple cup here, 1234 00:41:51,520 --> 00:41:53,380 we staffed a whole unit just in 1235 00:41:53,380 --> 00:41:55,390 case because the year before 1236 00:41:55,390 --> 00:41:56,860 we were inundated 1237 00:41:56,860 --> 00:41:59,530 and we didn't have that many. 1238 00:41:59,530 --> 00:42:01,555 That's the challenge we run. 1239 00:42:01,555 --> 00:42:03,520 We can run on an inpatient unit, 1240 00:42:03,520 --> 00:42:04,780 med surg unit, 1241 00:42:04,780 --> 00:42:09,685 two inpatients to 12 inpatients. 1242 00:42:09,685 --> 00:42:11,800 And that can be a difference in hours, 1243 00:42:11,800 --> 00:42:13,660 and it can be a difference in days. 1244 00:42:13,660 --> 00:42:16,300 So we have 25 beds across the board, 1245 00:42:16,300 --> 00:42:18,835 OB, ICU, and med surg, 1246 00:42:18,835 --> 00:42:23,125 and we can have census from 2-25, 1247 00:42:23,125 --> 00:42:24,730 and that can be within the week, 1248 00:42:24,730 --> 00:42:26,200 and then back to five and then to 10 1249 00:42:26,200 --> 00:42:27,490 and it's 1250 00:42:27,490 --> 00:42:29,200 really hard to get that predictability. 1251 00:42:29,200 --> 00:42:31,885 How do some hospitals deal with that? 1252 00:42:31,885 --> 00:42:33,820 I'll tell you, a lot of your for profits etc. 1253 00:42:33,820 --> 00:42:35,695 will say, okay, staff, 1254 00:42:35,695 --> 00:42:37,510 I hired you full time. 1255 00:42:37,510 --> 00:42:39,280 You have a family and kids. That's all right. 1256 00:42:39,280 --> 00:42:40,405 Come on in. Well, we're going to pay you 1257 00:42:40,405 --> 00:42:42,070 full time. I'm sorry. 1258 00:42:42,070 --> 00:42:43,120 I don't have enough patients, go 1259 00:42:43,120 --> 00:42:46,585 home without pay. 1260 00:42:46,585 --> 00:42:47,860 I do that to you 1261 00:42:47,860 --> 00:42:49,585 three or four times this month. 1262 00:42:49,585 --> 00:42:51,490 Guess what? You're going to the hospital 1263 00:42:51,490 --> 00:42:53,290 down the street that doesn't do that to you. 1264 00:42:53,290 --> 00:42:54,700 We don't low census, 1265 00:42:54,700 --> 00:42:55,840 and a lot of it's low census. 1266 00:42:55,840 --> 00:42:57,805 We don't do a lot of that here because 1267 00:42:57,805 --> 00:43:01,075 your actual turnover rate 1268 00:43:01,075 --> 00:43:02,410 increases significantly. 1269 00:43:02,410 --> 00:43:03,280 It's better to retain 1270 00:43:03,280 --> 00:43:04,240 those employees than it is 1271 00:43:04,240 --> 00:43:06,550 to be training new employees all the time. 1272 00:43:06,550 --> 00:43:08,710 That's part of the challenges we have here. 1273 00:43:08,710 --> 00:43:10,190 And that's why Medicare decided, 1274 00:43:10,190 --> 00:43:11,575 we'll pay you at least your cost 1275 00:43:11,575 --> 00:43:13,945 because when you have enough volume, 1276 00:43:13,945 --> 00:43:15,640 you can cover those loss leaders every 1277 00:43:15,640 --> 00:43:17,575 now and then because you have enough volume, 1278 00:43:17,575 --> 00:43:19,360 and your variability is a lot greater. 1279 00:43:19,360 --> 00:43:20,590 Here it's not, so that's 1280 00:43:20,590 --> 00:43:22,180 why Medicare came in and said, 1281 00:43:22,180 --> 00:43:24,055 we'll pay your cost. 1282 00:43:24,055 --> 00:43:27,760 Problem with that is there's no incentive to 1283 00:43:27,760 --> 00:43:31,465 control your costs. I'll give you an example. 1284 00:43:31,465 --> 00:43:33,280 A lot of our total hips, 1285 00:43:33,280 --> 00:43:36,355 total joints are Medicare population. 1286 00:43:36,355 --> 00:43:38,260 No surprise. Hey, 1287 00:43:38,260 --> 00:43:40,700 you had one? Two. 1288 00:43:41,190 --> 00:43:43,090 >> Which your bodies work? 1289 00:43:43,090 --> 00:43:47,035 >> Of course. Does it help 1290 00:43:47,035 --> 00:43:48,670 Pullman Regional Hospital to 1291 00:43:48,670 --> 00:43:50,230 negotiate with Smith and Nephew and 1292 00:43:50,230 --> 00:43:54,085 Depew on those devices and save money? 1293 00:43:54,085 --> 00:43:56,590 Does it help our bottom line 1294 00:43:56,590 --> 00:44:00,200 for especially the Medicare population? 1295 00:44:00,480 --> 00:44:04,360 Thank you. Not one bit. I get paid my costs. 1296 00:44:04,360 --> 00:44:06,895 Where's my incentive to control the cost? 1297 00:44:06,895 --> 00:44:09,790 However, we did go and we do. 1298 00:44:09,790 --> 00:44:12,010 I negotiated with Depew and 1299 00:44:12,010 --> 00:44:14,200 Smith and Nephew a year and a half ago, 1300 00:44:14,200 --> 00:44:18,550 we saved 1.2 Million in our device costs. 1301 00:44:18,550 --> 00:44:20,815 Most of that goes to the federal government. 1302 00:44:20,815 --> 00:44:23,200 It's the right thing to do, 1303 00:44:23,200 --> 00:44:25,690 because that will save eventually, 1304 00:44:25,690 --> 00:44:27,070 if every hospital worked 1305 00:44:27,070 --> 00:44:28,180 hard at doing those things, 1306 00:44:28,180 --> 00:44:29,290 that saves critical access 1307 00:44:29,290 --> 00:44:31,090 hospitals the chopping block. 1308 00:44:31,090 --> 00:44:33,130 If I lost critical 1309 00:44:33,130 --> 00:44:34,690 access hospital reimbursement today, 1310 00:44:34,690 --> 00:44:35,590 remember that $1 million I 1311 00:44:35,590 --> 00:44:36,880 told you we had last year, 1312 00:44:36,880 --> 00:44:39,740 take five million off of that. 1313 00:44:39,860 --> 00:44:43,480 We would have lost $4 million. 1314 00:44:44,180 --> 00:44:46,800 We wouldn't last. 1315 00:44:46,800 --> 00:44:50,010 You would be amputating major services. 1316 00:44:50,010 --> 00:44:51,570 There'd just be things you would 1317 00:44:51,570 --> 00:44:54,135 not do in this market. 1318 00:44:54,135 --> 00:44:56,010 It just would not be there. 1319 00:44:56,010 --> 00:44:57,390 No, ICU. 1320 00:44:57,390 --> 00:44:58,770 You wouldn't have a hospital around 1321 00:44:58,770 --> 00:45:00,510 this area that had an ICU. 1322 00:45:00,510 --> 00:45:03,285 Behavior health? Forget it. 1323 00:45:03,285 --> 00:45:05,265 Those people are on their own. 1324 00:45:05,265 --> 00:45:08,010 Good luck on managing your drugs and 1325 00:45:08,010 --> 00:45:11,755 your problems because you couldn't afford it. 1326 00:45:11,755 --> 00:45:14,275 Positive margin areas. 1327 00:45:14,275 --> 00:45:15,805 These are where we make money, 1328 00:45:15,805 --> 00:45:17,695 especially on a commercial side. 1329 00:45:17,695 --> 00:45:19,600 Imaging, surgery, pharmacy, 1330 00:45:19,600 --> 00:45:21,565 women's health, lab pathology. 1331 00:45:21,565 --> 00:45:23,725 And we don't actually 1332 00:45:23,725 --> 00:45:25,390 have a pathologist 1333 00:45:25,390 --> 00:45:26,470 that is part of the hospital. 1334 00:45:26,470 --> 00:45:27,610 They're actually a group out of 1335 00:45:27,610 --> 00:45:29,110 Spokane that reside here. 1336 00:45:29,110 --> 00:45:31,210 But those are your moneymakers today. 1337 00:45:31,210 --> 00:45:33,325 Your negative things, medical groups, 1338 00:45:33,325 --> 00:45:35,005 physician practices. 1339 00:45:35,005 --> 00:45:38,110 Oftentimes, for every employed physician 1340 00:45:38,110 --> 00:45:39,280 across the nation, 1341 00:45:39,280 --> 00:45:42,055 in primary care costs $110,000. 1342 00:45:42,055 --> 00:45:44,245 That's net. 1343 00:45:44,245 --> 00:45:45,340 That's the bottom line. 1344 00:45:45,340 --> 00:45:47,020 That's the loss. You cover. 1345 00:45:47,020 --> 00:45:50,155 I'm pretty close to that. 1346 00:45:50,155 --> 00:45:52,165 Not quite. I'm pretty close. 1347 00:45:52,165 --> 00:45:54,340 Transitional care units, your home health, 1348 00:45:54,340 --> 00:45:56,305 your ICUs, your emergency department. 1349 00:45:56,305 --> 00:45:58,675 There's so much fixed cost in those. 1350 00:45:58,675 --> 00:46:01,090 Now, my physicians 1351 00:46:01,090 --> 00:46:02,875 would say they make money. 1352 00:46:02,875 --> 00:46:04,720 But they do, in essence, 1353 00:46:04,720 --> 00:46:06,325 because they order tests. 1354 00:46:06,325 --> 00:46:08,185 People end up going to the surgery. 1355 00:46:08,185 --> 00:46:09,790 It's important to have all of them. 1356 00:46:09,790 --> 00:46:12,010 You can't have one without the other. 1357 00:46:12,010 --> 00:46:14,425 So how much did that cost? 1358 00:46:14,425 --> 00:46:16,660 You go to a store and you look and say, 1359 00:46:16,660 --> 00:46:20,950 okay, what's that TV going to cost me? 1360 00:46:20,950 --> 00:46:23,005 You can see exactly what you want. 1361 00:46:23,005 --> 00:46:24,550 No one patient that come 1362 00:46:24,550 --> 00:46:25,570 through the emergency department 1363 00:46:25,570 --> 00:46:27,700 with the same thing is exactly the same. 1364 00:46:27,700 --> 00:46:29,980 You come in, I do your hip. 1365 00:46:29,980 --> 00:46:31,330 Your hip isn't the same as 1366 00:46:31,330 --> 00:46:33,520 your hip and your hip. 1367 00:46:33,520 --> 00:46:35,500 How long it takes that surgeon 1368 00:46:35,500 --> 00:46:37,210 because you had a complication within 1369 00:46:37,210 --> 00:46:39,580 there can be significantly 1370 00:46:39,580 --> 00:46:40,660 different than the person that 1371 00:46:40,660 --> 00:46:42,100 had no complication. 1372 00:46:42,100 --> 00:46:43,930 The resources and intensity 1373 00:46:43,930 --> 00:46:45,310 of services are much different. 1374 00:46:45,310 --> 00:46:47,950 In some areas you're going to get paid more 1375 00:46:47,950 --> 00:46:50,755 because that DRG will reflect that, 1376 00:46:50,755 --> 00:46:52,810 but not always use the way Medicare pays you, 1377 00:46:52,810 --> 00:46:54,175 they pay you off a DRG. 1378 00:46:54,175 --> 00:46:55,510 Now, there are two different DRGs, 1379 00:46:55,510 --> 00:46:57,490 one with complications, one without. 1380 00:46:57,490 --> 00:46:58,720 But you might have been 1381 00:46:58,720 --> 00:47:01,450 the same surgery without a complication. 1382 00:47:01,450 --> 00:47:03,580 But you might have been in the OR 1383 00:47:03,580 --> 00:47:05,470 because when that surgeon was in there, 1384 00:47:05,470 --> 00:47:06,595 it took a lot more time. 1385 00:47:06,595 --> 00:47:08,605 It took him 45 minutes 1386 00:47:08,605 --> 00:47:11,155 where the other patient took 20 minutes. 1387 00:47:11,155 --> 00:47:13,315 The resources are much different. 1388 00:47:13,315 --> 00:47:15,550 But the amount that we're going to get paid 1389 00:47:15,550 --> 00:47:17,920 is the same for that particular insurance. 1390 00:47:17,920 --> 00:47:19,720 But if you go back to those methodologies, 1391 00:47:19,720 --> 00:47:22,000 remember those cost, 1392 00:47:22,000 --> 00:47:25,540 fixed percentage charges, DRG, MSG, 1393 00:47:25,540 --> 00:47:29,365 MSERG, those all have influences within this. 1394 00:47:29,365 --> 00:47:31,300 So those are all different. 1395 00:47:31,300 --> 00:47:32,680 Hey, we're just talking about 1396 00:47:32,680 --> 00:47:33,580 you, by the way. 1397 00:47:33,580 --> 00:47:35,800 We're talking about orthopedic surgeries. 1398 00:47:35,800 --> 00:47:38,935 Not you specifically, just talk prices. 1399 00:47:38,935 --> 00:47:42,580 Welcome, by the way. So again, 1400 00:47:42,580 --> 00:47:44,050 some reimbursement methodologies 1401 00:47:44,050 --> 00:47:44,680 and we've talked about. 1402 00:47:44,680 --> 00:47:45,550 Under the hospital, 1403 00:47:45,550 --> 00:47:46,930 you have percentage charges. 1404 00:47:46,930 --> 00:47:49,645 You have per diems, case rates, 1405 00:47:49,645 --> 00:47:54,355 a mix of the DRG, MSDRG components to it. 1406 00:47:54,355 --> 00:47:58,930 APGs, which is an outpatient payment scheme, 1407 00:47:58,930 --> 00:48:00,895 we have none of those here. 1408 00:48:00,895 --> 00:48:02,680 They do have them, and 1409 00:48:02,680 --> 00:48:04,420 they are significant across the nation. 1410 00:48:04,420 --> 00:48:06,415 We're just fortunate some 1411 00:48:06,415 --> 00:48:08,110 insurance companies want me to go to there. 1412 00:48:08,110 --> 00:48:09,970 Primera wants us to go to that. 1413 00:48:09,970 --> 00:48:12,895 However, in order to do that, 1414 00:48:12,895 --> 00:48:14,485 the system behind that to 1415 00:48:14,485 --> 00:48:16,960 capture all that would cost us 50,000, 1416 00:48:16,960 --> 00:48:18,475 so I asked Primera to pay for that. 1417 00:48:18,475 --> 00:48:19,870 They didn't want to, so they keep 1418 00:48:19,870 --> 00:48:21,565 paying me percent of charges. 1419 00:48:21,565 --> 00:48:23,125 But there's a big investment. 1420 00:48:23,125 --> 00:48:25,090 We're moving towards VBS, 1421 00:48:25,090 --> 00:48:26,755 which is value based purchasing. 1422 00:48:26,755 --> 00:48:29,050 Bundled. Anybody heard of bundle payments, 1423 00:48:29,050 --> 00:48:31,570 especially the joint replacement program 1424 00:48:31,570 --> 00:48:33,730 that CMS has done across the nation? 1425 00:48:33,730 --> 00:48:35,095 That's a movement. 1426 00:48:35,095 --> 00:48:36,220 What that's doing is saying, 1427 00:48:36,220 --> 00:48:37,360 we're going to give you 1428 00:48:37,360 --> 00:48:40,615 this pot of money between your physician, 1429 00:48:40,615 --> 00:48:43,000 hospital, nursing home, 1430 00:48:43,000 --> 00:48:44,410 and everything else in between, 1431 00:48:44,410 --> 00:48:46,900 PT, etc., you divvy it out. 1432 00:48:46,900 --> 00:48:48,130 You've got to deal with only 1433 00:48:48,130 --> 00:48:49,945 that component of it. 1434 00:48:49,945 --> 00:48:51,865 Problem with that is 1435 00:48:51,865 --> 00:48:53,560 if you're not on the same team, 1436 00:48:53,560 --> 00:48:55,885 you got winners and losers. 1437 00:48:55,885 --> 00:48:58,255 So I'll tell you right now a bundle payment, 1438 00:48:58,255 --> 00:48:58,690 we're going to work 1439 00:48:58,690 --> 00:49:00,175 really closely with physicians. 1440 00:49:00,175 --> 00:49:02,230 I'm sorry, nursing home, 1441 00:49:02,230 --> 00:49:04,690 you're out because I don't want 1442 00:49:04,690 --> 00:49:06,190 that patient with nursing home because 1443 00:49:06,190 --> 00:49:07,930 then I have to give them some of that money. 1444 00:49:07,930 --> 00:49:09,370 So we're going to try to do everything we can 1445 00:49:09,370 --> 00:49:10,990 to keep them within this little group. 1446 00:49:10,990 --> 00:49:12,040 That's why you need 1447 00:49:12,040 --> 00:49:13,375 to work collectively together, 1448 00:49:13,375 --> 00:49:15,850 because usually there's winners 1449 00:49:15,850 --> 00:49:17,290 and losers in those things. 1450 00:49:17,290 --> 00:49:18,550 But that's where it's moving. 1451 00:49:18,550 --> 00:49:19,720 These value based things 1452 00:49:19,720 --> 00:49:21,970 are evolving significantly. 1453 00:49:21,970 --> 00:49:23,830 Eventually, a lot of our payments 1454 00:49:23,830 --> 00:49:24,880 will be based on keeping 1455 00:49:24,880 --> 00:49:26,080 people out of the system, 1456 00:49:26,080 --> 00:49:27,820 which ultimately should be what we're doing. 1457 00:49:27,820 --> 00:49:29,605 That's in the business we're is 1458 00:49:29,605 --> 00:49:30,850 taking care of those in needs 1459 00:49:30,850 --> 00:49:32,800 and trying to keep people healthy. 1460 00:49:32,800 --> 00:49:34,975 But you can't make people be healthy. 1461 00:49:34,975 --> 00:49:37,570 So, these are the basic overviews, 1462 00:49:37,570 --> 00:49:38,410 and we've talked a little bit 1463 00:49:38,410 --> 00:49:39,460 of that within that. 1464 00:49:39,460 --> 00:49:40,780 So you've got for us 1465 00:49:40,780 --> 00:49:42,520 we critical access hospitals. 1466 00:49:42,520 --> 00:49:44,755 Other systems outside of that, 1467 00:49:44,755 --> 00:49:48,445 PPS hospital, progressive payment systems, 1468 00:49:48,445 --> 00:49:50,140 those are your typical urban. 1469 00:49:50,140 --> 00:49:54,070 They're going to get this DRG fixed rate. 1470 00:49:54,070 --> 00:49:55,480 And the more they see then, 1471 00:49:55,480 --> 00:49:56,920 the more they're going to make because 1472 00:49:56,920 --> 00:49:58,615 they can cover their overhead. 1473 00:49:58,615 --> 00:49:59,920 Critical access hospitals were 1474 00:49:59,920 --> 00:50:00,670 not able to do that, 1475 00:50:00,670 --> 00:50:01,480 so that's why they came 1476 00:50:01,480 --> 00:50:03,650 up with this methodology. 1477 00:50:06,740 --> 00:50:09,930 I covered that. We will move on from that. 1478 00:50:09,930 --> 00:50:11,985 I probably covered that. 1479 00:50:11,985 --> 00:50:14,640 So hospitals converted to 1480 00:50:14,640 --> 00:50:17,760 these CAH since cost reimbursement 1481 00:50:17,760 --> 00:50:20,640 was and is greater 1482 00:50:20,640 --> 00:50:21,810 than the reimbursement we would 1483 00:50:21,810 --> 00:50:23,640 have received under PPS. 1484 00:50:23,640 --> 00:50:26,325 So that's why it was important to move to. 1485 00:50:26,325 --> 00:50:28,290 There's requirements to stay that. 1486 00:50:28,290 --> 00:50:30,510 Back under Obama, he 1487 00:50:30,510 --> 00:50:33,510 had within his proposed budget plan, 1488 00:50:33,510 --> 00:50:35,940 you couldn't be a critical access hospitals 1489 00:50:35,940 --> 00:50:38,640 within 10 miles of another facility. 1490 00:50:38,640 --> 00:50:40,230 Or you would lose 1491 00:50:40,230 --> 00:50:42,435 your critical access designation. 1492 00:50:42,435 --> 00:50:45,375 Do you know how far we are from Gritman? 1493 00:50:45,375 --> 00:50:48,450 9.2 miles. Why didn't we 1494 00:50:48,450 --> 00:50:50,145 build it up the hill, another. 1495 00:50:50,145 --> 00:50:51,420 But the issue was, 1496 00:50:51,420 --> 00:50:52,890 who cares if it's 10? 1497 00:50:52,890 --> 00:50:55,905 Why not 15? Why was it 10? 1498 00:50:55,905 --> 00:50:58,455 Because it was a budgetary number. 1499 00:50:58,455 --> 00:50:59,610 They looked to see how 1500 00:50:59,610 --> 00:51:00,855 much could they capture. 1501 00:51:00,855 --> 00:51:02,835 That helps our budget. 1502 00:51:02,835 --> 00:51:06,045 Fortunately enough, Congress did not pass that. 1503 00:51:06,045 --> 00:51:07,620 They didn't even entertain that. 1504 00:51:07,620 --> 00:51:09,120 We only had to go a few 1505 00:51:09,120 --> 00:51:11,130 times to DC to fight that. 1506 00:51:11,130 --> 00:51:13,350 But that was the discussion. 1507 00:51:13,350 --> 00:51:16,080 What's the mileage? 1508 00:51:16,080 --> 00:51:17,250 You know what I would have done, 1509 00:51:17,250 --> 00:51:18,390 Mayor, come and say, 1510 00:51:18,390 --> 00:51:20,340 please close down Bishop Boulevard, 1511 00:51:20,340 --> 00:51:22,380 Mike us go around. 1512 00:51:22,380 --> 00:51:25,050 Let us go half a mile. 1513 00:51:25,050 --> 00:51:28,710 Exactly. Something. We just 0.8 of a mile, 1514 00:51:28,710 --> 00:51:31,080 please figure something out. 1515 00:51:31,080 --> 00:51:33,840 So, Irene, part of your question, 1516 00:51:33,840 --> 00:51:35,130 cost typically in hospital. 1517 00:51:35,130 --> 00:51:36,690 Variable cost includes your supply, 1518 00:51:36,690 --> 00:51:38,040 your implants, your staffing, 1519 00:51:38,040 --> 00:51:39,090 your food, your dietary, 1520 00:51:39,090 --> 00:51:40,890 your pharmacy, fixed costs, 1521 00:51:40,890 --> 00:51:42,990 CEO, core staffing, 1522 00:51:42,990 --> 00:51:45,780 utilities, bad your debt service, 1523 00:51:45,780 --> 00:51:47,190 and then your physician compensation 1524 00:51:47,190 --> 00:51:49,425 because many of them have a fixed payment. 1525 00:51:49,425 --> 00:51:50,190 Not all of them. 1526 00:51:50,190 --> 00:51:51,720 So are very productivity based, 1527 00:51:51,720 --> 00:51:53,040 and so the more you see, 1528 00:51:53,040 --> 00:51:53,670 the more you made, 1529 00:51:53,670 --> 00:51:56,190 but that's changing in their environment. 1530 00:51:56,190 --> 00:51:59,940 So really some of 1531 00:51:59,940 --> 00:52:01,980 these really truly are semi variable. 1532 00:52:01,980 --> 00:52:03,960 There's only a certain level 1533 00:52:03,960 --> 00:52:05,370 that we can go down to. 1534 00:52:05,370 --> 00:52:06,930 So this is supposed to be a true and false. 1535 00:52:06,930 --> 00:52:08,685 I'm just going to give you the answers here. 1536 00:52:08,685 --> 00:52:11,550 Generally, in many are 1537 00:52:11,550 --> 00:52:13,200 not sensitive to volume. 1538 00:52:13,200 --> 00:52:17,055 If we saw 15,000 emergency 1539 00:52:17,055 --> 00:52:19,050 department visits or 1540 00:52:19,050 --> 00:52:21,300 5,000 emergency department visits, 1541 00:52:21,300 --> 00:52:22,590 I'm sure hoping the hospital 1542 00:52:22,590 --> 00:52:24,820 still keeps one CFO. 1543 00:52:25,640 --> 00:52:29,310 It's tongue and cheek. So I'm 1544 00:52:29,310 --> 00:52:31,125 hopefully not volume dependent. 1545 00:52:31,125 --> 00:52:32,835 But at some point, 1546 00:52:32,835 --> 00:52:36,360 like even our human resources, at some point, 1547 00:52:36,360 --> 00:52:38,040 we need additional support when we 1548 00:52:38,040 --> 00:52:40,215 have a few years ago, 1549 00:52:40,215 --> 00:52:43,680 we had 300 employees. 1550 00:52:43,680 --> 00:52:45,450 Now we have 450. 1551 00:52:45,450 --> 00:52:46,650 The amount of paperwork 1552 00:52:46,650 --> 00:52:47,820 and processing the payroll, 1553 00:52:47,820 --> 00:52:49,620 etc, is more intensive. 1554 00:52:49,620 --> 00:52:50,910 So we either have to find 1555 00:52:50,910 --> 00:52:53,835 system applications to do that, technology, 1556 00:52:53,835 --> 00:52:56,040 or we have add resources and 1557 00:52:56,040 --> 00:52:59,010 staffing to be able to help support those. 1558 00:52:59,010 --> 00:53:03,645 So cause volume increase. 1559 00:53:03,645 --> 00:53:04,950 What happens to your fixed 1560 00:53:04,950 --> 00:53:06,405 cost per unit of service? 1561 00:53:06,405 --> 00:53:07,710 So volume goes up, and 1562 00:53:07,710 --> 00:53:09,000 I have a fixed cost, me. 1563 00:53:09,000 --> 00:53:10,785 Let's say we have 100 patients, 1564 00:53:10,785 --> 00:53:12,660 and we allocate the cost of 1565 00:53:12,660 --> 00:53:15,720 administrator over those 100 patients. 1566 00:53:15,720 --> 00:53:17,430 Now I have 200. What happens 1567 00:53:17,430 --> 00:53:18,705 to that cost per unit? 1568 00:53:18,705 --> 00:53:21,345 It goes down. Same thing. 1569 00:53:21,345 --> 00:53:23,865 If we have 200 and it goes down 100, 1570 00:53:23,865 --> 00:53:26,830 that cost per unit goes up. 1571 00:53:27,050 --> 00:53:30,180 Same with variable cost. 1572 00:53:30,180 --> 00:53:31,410 Units of service equals 1573 00:53:31,410 --> 00:53:33,480 patient days for room and board, 1574 00:53:33,480 --> 00:53:36,315 revenue, and charges for ancillary services. 1575 00:53:36,315 --> 00:53:40,300 Reimbursement under PPS hospitals. 1576 00:53:40,400 --> 00:53:42,525 You decrease your volume. 1577 00:53:42,525 --> 00:53:44,880 What happens to your reimbursement? 1578 00:53:44,880 --> 00:53:46,320 It goes down. 1579 00:53:46,320 --> 00:53:47,835 The less you see, the less you make. 1580 00:53:47,835 --> 00:53:49,875 That's traditional. We all know that. 1581 00:53:49,875 --> 00:53:52,830 You go to Walmart. They sell 1,000 TVs. 1582 00:53:52,830 --> 00:53:55,080 They sold thousand TV. 1583 00:53:55,080 --> 00:53:56,790 They sell 2000 and they mad more. 1584 00:53:56,790 --> 00:53:58,785 The more they sell, the more they make. 1585 00:53:58,785 --> 00:54:01,560 Guess what? Kirklaxs hospitals, 1586 00:54:01,560 --> 00:54:04,185 that's counterintuitive. It's not true. 1587 00:54:04,185 --> 00:54:07,065 If I see less patients, 1588 00:54:07,065 --> 00:54:09,210 what's my reimbursement from Medicare going 1589 00:54:09,210 --> 00:54:12,045 to be? It's higher. 1590 00:54:12,045 --> 00:54:16,515 Catch. Why? Because they pay me my cost. 1591 00:54:16,515 --> 00:54:18,885 My cost per unit went up. 1592 00:54:18,885 --> 00:54:20,580 So, the less I see, 1593 00:54:20,580 --> 00:54:22,710 the more I make, more I see, 1594 00:54:22,710 --> 00:54:24,555 the less I make because I'm 1595 00:54:24,555 --> 00:54:26,535 only ever going to get paid my cost. 1596 00:54:26,535 --> 00:54:28,260 It's counterintuitive. 1597 00:54:28,260 --> 00:54:30,450 And so that's always confusing. 1598 00:54:30,450 --> 00:54:31,380 It doesn't matter if you're sitting 1599 00:54:31,380 --> 00:54:32,580 on the board or not, yes, sir. 1600 00:54:32,580 --> 00:54:36,380 >> But don't Medicare define what I mean, 1601 00:54:36,380 --> 00:54:37,805 they have observation bids, 1602 00:54:37,805 --> 00:54:39,380 which you get paid less for 1603 00:54:39,380 --> 00:54:41,195 versus a regular bid. 1604 00:54:41,195 --> 00:54:43,610 So they're defining your costs going to be 1605 00:54:43,610 --> 00:54:44,690 that observation bid 1606 00:54:44,690 --> 00:54:45,830 that's all I want to reimburse. 1607 00:54:45,830 --> 00:54:47,915 Are they doing those kind of things still? 1608 00:54:47,915 --> 00:54:49,520 >> So the question really 1609 00:54:49,520 --> 00:54:51,560 is under Medicare reimbursement, 1610 00:54:51,560 --> 00:54:53,660 how do they define how they'll pay you? 1611 00:54:53,660 --> 00:54:55,880 Do they drive business? 1612 00:54:55,880 --> 00:54:58,160 I'm phrasing this. 1613 00:54:58,160 --> 00:55:00,470 >> Nursing homes, too. Cheaper over 1614 00:55:00,470 --> 00:55:02,525 there than they are than regular hospital. 1615 00:55:02,525 --> 00:55:03,510 >> So are they driving 1616 00:55:03,510 --> 00:55:05,025 businesses to certain things like 1617 00:55:05,025 --> 00:55:08,160 observation, like inpatient care? 1618 00:55:08,160 --> 00:55:10,320 Is it better to have a Medicare patient 1619 00:55:10,320 --> 00:55:12,315 in an inpatient bed or an obs bed? 1620 00:55:12,315 --> 00:55:14,235 Obs Observation, sorry, 1621 00:55:14,235 --> 00:55:16,725 abbreviation. Which one's better? 1622 00:55:16,725 --> 00:55:18,780 For Medicare, honestly, having them in 1623 00:55:18,780 --> 00:55:19,830 an observation bed is 1624 00:55:19,830 --> 00:55:23,080 better because then Medicare, 1625 00:55:23,720 --> 00:55:26,190 constituents or customers have 1626 00:55:26,190 --> 00:55:27,915 to pay 20% of that charge. 1627 00:55:27,915 --> 00:55:29,520 If they're in an inpatient bed, 1628 00:55:29,520 --> 00:55:30,420 they have a straight 1629 00:55:30,420 --> 00:55:31,860 deductible and it's done. 1630 00:55:31,860 --> 00:55:33,840 And if they met that earlier, it's done. 1631 00:55:33,840 --> 00:55:36,960 So Medicare population has 1632 00:55:36,960 --> 00:55:38,805 to pay for that 20%. 1633 00:55:38,805 --> 00:55:40,920 So having them in an outpatient setting 1634 00:55:40,920 --> 00:55:43,425 makes a lot more sense for Medicare. 1635 00:55:43,425 --> 00:55:44,820 They have requirements, so 1636 00:55:44,820 --> 00:55:47,145 now they have it used to be 1637 00:55:47,145 --> 00:55:52,140 based on certain criteria based driven, 1638 00:55:52,140 --> 00:55:53,970 now it's based on 1639 00:55:53,970 --> 00:55:55,470 how many midnights you're in. 1640 00:55:55,470 --> 00:55:57,060 Are you in two? If you're 1641 00:55:57,060 --> 00:55:58,080 in two, then you're knobs. 1642 00:55:58,080 --> 00:55:58,935 If you're in more than two, 1643 00:55:58,935 --> 00:55:59,985 then you're in in. 1644 00:55:59,985 --> 00:56:01,485 It's based on that. 1645 00:56:01,485 --> 00:56:03,540 So by the way, 1646 00:56:03,540 --> 00:56:05,550 we asked for that, and we all hate it. 1647 00:56:05,550 --> 00:56:06,420 Now, we said, we don't 1648 00:56:06,420 --> 00:56:07,650 like the way you're doing this. 1649 00:56:07,650 --> 00:56:08,730 You got to simplify, and then 1650 00:56:08,730 --> 00:56:10,065 they simply we didn't like it. 1651 00:56:10,065 --> 00:56:13,560 So some of the things 1652 00:56:13,560 --> 00:56:14,790 that are influencing healthcare and 1653 00:56:14,790 --> 00:56:16,200 why it's getting challenging. 1654 00:56:16,200 --> 00:56:17,850 We had a major change in 1655 00:56:17,850 --> 00:56:20,310 our classification ICD 10, 1656 00:56:20,310 --> 00:56:22,320 which is your diagnosis 1657 00:56:22,320 --> 00:56:25,005 and related classifications. 1658 00:56:25,005 --> 00:56:28,920 This changed from ICEC 9 to 10 in 2014, 1659 00:56:28,920 --> 00:56:30,660 actually, in 2015, and 1660 00:56:30,660 --> 00:56:32,505 it really substantially changed. 1661 00:56:32,505 --> 00:56:33,795 The coding aspect went from like, 1662 00:56:33,795 --> 00:56:36,840 8,000 codes to 80,000. 1663 00:56:36,840 --> 00:56:38,700 And so it's got a lot more specific. 1664 00:56:38,700 --> 00:56:41,700 It's really hard to run today to get 1665 00:56:41,700 --> 00:56:45,180 any comparables is almost impossible, 1666 00:56:45,180 --> 00:56:46,950 especially on inpatient care 1667 00:56:46,950 --> 00:56:48,030 or surgeries and stuff 1668 00:56:48,030 --> 00:56:49,680 because of the fact that ICD 1669 00:56:49,680 --> 00:56:50,850 10 is so specific, 1670 00:56:50,850 --> 00:56:53,280 like they literally have some. 1671 00:56:53,280 --> 00:56:56,115 If you hit by a car on a rural road, 1672 00:56:56,115 --> 00:56:57,705 then you code it to this. 1673 00:56:57,705 --> 00:57:00,255 But if you were hit by a dog, it's different. 1674 00:57:00,255 --> 00:57:01,680 I could throw some up, 1675 00:57:01,680 --> 00:57:02,790 and you'd be like, really? 1676 00:57:02,790 --> 00:57:05,820 That's a code. And they are that specific. 1677 00:57:05,820 --> 00:57:06,720 It's really strange. 1678 00:57:06,720 --> 00:57:08,055 Some of them are hilarious. 1679 00:57:08,055 --> 00:57:09,450 I don't know how they came up with them, 1680 00:57:09,450 --> 00:57:10,515 but they are like, 1681 00:57:10,515 --> 00:57:12,930 bit by a shark while scuba 1682 00:57:12,930 --> 00:57:16,680 diving. Did they live? 1683 00:57:16,680 --> 00:57:19,155 Inpatient quality reporting, 1684 00:57:19,155 --> 00:57:20,250 the macro which I 1685 00:57:20,250 --> 00:57:22,350 talked about earlier on physician reporting, 1686 00:57:22,350 --> 00:57:23,625 this is significant. 1687 00:57:23,625 --> 00:57:26,835 You could have upwards of 9%. 1688 00:57:26,835 --> 00:57:29,730 Now, for physicians that can be 1689 00:57:29,730 --> 00:57:32,970 a huge swing in their pay in any one year. 1690 00:57:32,970 --> 00:57:34,845 Yet, on the other side, if you do it well, 1691 00:57:34,845 --> 00:57:37,230 you might gain readmission rates. 1692 00:57:37,230 --> 00:57:38,205 We got to monitor that. 1693 00:57:38,205 --> 00:57:39,030 All of these things are 1694 00:57:39,030 --> 00:57:40,890 reporting requirements that we have to do. 1695 00:57:40,890 --> 00:57:42,825 We don't get any additional money, 1696 00:57:42,825 --> 00:57:43,560 but if you don't do them, 1697 00:57:43,560 --> 00:57:45,490 then you make less money. 1698 00:57:45,830 --> 00:57:51,270 So one of the things in that in summary, 1699 00:57:51,270 --> 00:57:53,130 as we start to wrap this up, 1700 00:57:53,130 --> 00:57:55,230 why does our foundation help us? 1701 00:57:55,230 --> 00:57:58,545 There are many non cost based programs. 1702 00:57:58,545 --> 00:58:03,615 Psych and rehab, don't make money. 1703 00:58:03,615 --> 00:58:07,305 So by providing certain services 1704 00:58:07,305 --> 00:58:09,510 and continue to support those 1705 00:58:09,510 --> 00:58:11,010 across the continuing to have 1706 00:58:11,010 --> 00:58:13,200 the foundation helping us within that so 1707 00:58:13,200 --> 00:58:15,660 that we can be self sustaining and 1708 00:58:15,660 --> 00:58:16,680 self determining in our 1709 00:58:16,680 --> 00:58:19,510 future is really important. 1710 00:58:20,180 --> 00:58:23,055 Skilled nursing facilities, SNIFs, 1711 00:58:23,055 --> 00:58:24,495 home health agencies, 1712 00:58:24,495 --> 00:58:26,775 non reimburseable cost centers. 1713 00:58:26,775 --> 00:58:28,290 It's just certain things that we don't get 1714 00:58:28,290 --> 00:58:29,610 any payment for, 1715 00:58:29,610 --> 00:58:30,690 but we want to continue to 1716 00:58:30,690 --> 00:58:31,740 provide those services because 1717 00:58:31,740 --> 00:58:34,530 it's important to our community. 1718 00:58:34,530 --> 00:58:36,570 That's where the foundation that's where 1719 00:58:36,570 --> 00:58:38,880 being a public hospital district really help. 1720 00:58:38,880 --> 00:58:41,880 Other things within cost reimbursement cost 1721 00:58:41,880 --> 00:58:44,295 per head that are non cost services. 1722 00:58:44,295 --> 00:58:45,570 Things like today are 1723 00:58:45,570 --> 00:58:47,280 care coordination, I mentioned earlier. 1724 00:58:47,280 --> 00:58:49,620 This the right thing to do. 1725 00:58:49,620 --> 00:58:52,695 Honestly, it costs us money to do it. 1726 00:58:52,695 --> 00:58:54,195 We look to grants, and 1727 00:58:54,195 --> 00:58:56,130 that's part of the foundation's efforts 1728 00:58:56,130 --> 00:58:58,320 to bring in those type 1729 00:58:58,320 --> 00:58:59,820 of things to help offset that. 1730 00:58:59,820 --> 00:59:01,335 It doesn't dollar for dollar, 1731 00:59:01,335 --> 00:59:03,210 but it's caring for patients and 1732 00:59:03,210 --> 00:59:05,070 getting them in the right place so 1733 00:59:05,070 --> 00:59:06,300 that their care is better 1734 00:59:06,300 --> 00:59:07,380 so that they don't end up in 1735 00:59:07,380 --> 00:59:08,520 the emergency department with 1736 00:59:08,520 --> 00:59:10,590 a major problem down the road. 1737 00:59:10,590 --> 00:59:12,300 Those are really important things to do. 1738 00:59:12,300 --> 00:59:15,100 Nobody's paying for you today. 1739 00:59:16,580 --> 00:59:18,150 Some of the things 1740 00:59:18,150 --> 00:59:19,650 the foundation has really helped us with in 1741 00:59:19,650 --> 00:59:22,590 their giving the whole hydro 1742 00:59:22,590 --> 00:59:24,240 works pool therapy, 1743 00:59:24,240 --> 00:59:25,620 underwater treadmill, we would 1744 00:59:25,620 --> 00:59:26,865 not have had that. 1745 00:59:26,865 --> 00:59:28,380 The system we had had 1746 00:59:28,380 --> 00:59:30,030 failed and would not be obsolete. 1747 00:59:30,030 --> 00:59:32,370 It'd basically be probably 1748 00:59:32,370 --> 00:59:35,610 a mosquito pond. It'd be gone. 1749 00:59:35,610 --> 00:59:38,265 And that helped us tremendously. 1750 00:59:38,265 --> 00:59:41,610 The 3D mammography unit 1751 00:59:41,610 --> 00:59:42,690 where you have been blessed 1752 00:59:42,690 --> 00:59:45,060 with happened in 2014, 1753 00:59:45,060 --> 00:59:47,495 the 2015, various areas, 1754 00:59:47,495 --> 00:59:49,565 a lot of different areas, services. 1755 00:59:49,565 --> 00:59:53,780 In 2016, the OR project. 1756 00:59:53,780 --> 00:59:55,190 And then now one of 1757 00:59:55,190 --> 00:59:57,755 their major efforts is 2017 on the expansion. 1758 00:59:57,755 --> 00:59:59,270 And as we look to that, 1759 00:59:59,270 --> 01:00:00,635 why we needed that. 1760 01:00:00,635 --> 01:00:03,140 In 2004, when we opened this, 1761 01:00:03,140 --> 01:00:05,540 we thought we plenty of space forever, 1762 01:00:05,540 --> 01:00:07,085 and now we're out of space. 1763 01:00:07,085 --> 01:00:10,130 With volume increasing as much as they have, 1764 01:00:10,130 --> 01:00:11,945 as much as 25, 30%, 1765 01:00:11,945 --> 01:00:13,585 we need more space. 1766 01:00:13,585 --> 01:00:15,675 And that will be the case for a while. 1767 01:00:15,675 --> 01:00:17,340 Then there's I've probably got this 1768 01:00:17,340 --> 01:00:19,020 out of order, but the surgery project, 1769 01:00:19,020 --> 01:00:20,190 which is well underway and should 1770 01:00:20,190 --> 01:00:21,960 be done by August, 1771 01:00:21,960 --> 01:00:23,490 end of August and coming online 1772 01:00:23,490 --> 01:00:25,410 by September, which will be perfect. 1773 01:00:25,410 --> 01:00:29,580 So summary Healthcare finances is complicated. 1774 01:00:29,580 --> 01:00:32,400 I mean, we can't do it justice in an hour. 1775 01:00:32,400 --> 01:00:34,110 I hope that you got a little bit of 1776 01:00:34,110 --> 01:00:36,150 taste of the complexity and what 1777 01:00:36,150 --> 01:00:38,295 it means within our institution 1778 01:00:38,295 --> 01:00:40,080 on how we manage that. 1779 01:00:40,080 --> 01:00:42,210 But each input is unique. 1780 01:00:42,210 --> 01:00:44,700 Therefore, care delivery must be flexible. 1781 01:00:44,700 --> 01:00:46,995 It can't be stagnant. 1782 01:00:46,995 --> 01:00:48,720 Everybody we're going to treat you the same. 1783 01:00:48,720 --> 01:00:50,085 We'll put you on a conveyor belt. 1784 01:00:50,085 --> 01:00:51,690 We'll run you through 1785 01:00:51,690 --> 01:00:53,085 because you're all the same, 1786 01:00:53,085 --> 01:00:55,905 and I can then control all my costs that way. 1787 01:00:55,905 --> 01:00:57,705 And we can't do that in healthcare. 1788 01:00:57,705 --> 01:00:59,220 Physician orders drive. 1789 01:00:59,220 --> 01:01:01,740 Physicians still drive everything we do. 1790 01:01:01,740 --> 01:01:04,035 Without physicians in our community, 1791 01:01:04,035 --> 01:01:05,655 we would not have a hospital. 1792 01:01:05,655 --> 01:01:08,220 They still drive everything 1793 01:01:08,220 --> 01:01:09,975 that the care today. 1794 01:01:09,975 --> 01:01:12,345 So orders drive provisions of care, 1795 01:01:12,345 --> 01:01:14,640 adding to the variability. 1796 01:01:14,640 --> 01:01:17,130 Payment is also variable depending 1797 01:01:17,130 --> 01:01:20,040 on who's the insurance payer? 1798 01:01:20,040 --> 01:01:22,125 What coverage do you have? 1799 01:01:22,125 --> 01:01:25,125 Does your insurance company cover that today? 1800 01:01:25,125 --> 01:01:26,745 Not tomorrow? By the way, 1801 01:01:26,745 --> 01:01:28,260 one of those things that we 1802 01:01:28,260 --> 01:01:30,105 want an example of this. What do I mean? 1803 01:01:30,105 --> 01:01:33,540 Primera decided, and I'll say this wrong, 1804 01:01:33,540 --> 01:01:38,250 and please correct me those that, no. 1805 01:01:38,250 --> 01:01:41,640 But Propathol is that the right word, 1806 01:01:41,640 --> 01:01:43,785 the administration of the drug with 1807 01:01:43,785 --> 01:01:46,545 anesthesia drug, especially colonoscopies. 1808 01:01:46,545 --> 01:01:48,225 Doctor Jones likes that. 1809 01:01:48,225 --> 01:01:49,605 It works very well. He wants 1810 01:01:49,605 --> 01:01:51,045 the CRNA in the room. 1811 01:01:51,045 --> 01:01:52,425 >> It's patients wagon too. 1812 01:01:52,425 --> 01:01:53,970 >> Man. I loved it. I had that done. 1813 01:01:53,970 --> 01:01:56,025 It was awesome. I remember nothing. 1814 01:01:56,025 --> 01:01:57,510 But, you know, I got to tell you, 1815 01:01:57,510 --> 01:01:58,650 when I came out of it, I had it done 1816 01:01:58,650 --> 01:02:00,210 here I didn't do it at home. 1817 01:02:00,210 --> 01:02:01,890 And I had John O'Brien, 1818 01:02:01,890 --> 01:02:03,810 my materials manner come in and make 1819 01:02:03,810 --> 01:02:04,770 sure I got to where I 1820 01:02:04,770 --> 01:02:06,570 needed to go after we were done. 1821 01:02:06,570 --> 01:02:09,030 And I told him, Hey, 1822 01:02:09,030 --> 01:02:10,515 call my wife, tell her I died. 1823 01:02:10,515 --> 01:02:11,745 'Cause I thought it'd be funny. 1824 01:02:11,745 --> 01:02:12,600 I don't remember actually 1825 01:02:12,600 --> 01:02:15,240 saying that. I'm glad he didn't call her. 1826 01:02:15,240 --> 01:02:16,500 But I thought it would be funny, 1827 01:02:16,500 --> 01:02:18,030 I guess, apparently. 1828 01:02:18,030 --> 01:02:19,230 He's probably what you tell 1829 01:02:19,230 --> 01:02:20,190 people under that stuff. 1830 01:02:20,190 --> 01:02:22,560 It was awesome. But premier 1831 01:02:22,560 --> 01:02:24,420 decided, we're not paying for that. 1832 01:02:24,420 --> 01:02:26,415 It's an additional cost. 1833 01:02:26,415 --> 01:02:29,175 Even though a physician preference is that, 1834 01:02:29,175 --> 01:02:30,885 they're just not going to pay for it. 1835 01:02:30,885 --> 01:02:34,350 So we help subsidize that for 1836 01:02:34,350 --> 01:02:35,910 the CRNAs because it's really important to 1837 01:02:35,910 --> 01:02:38,655 a physician for that aspect of care. 1838 01:02:38,655 --> 01:02:40,380 That's what insurance companies do, 1839 01:02:40,380 --> 01:02:41,760 so that insurance company is 1840 01:02:41,760 --> 01:02:43,725 part of that negotiating those raised, 1841 01:02:43,725 --> 01:02:46,050 payer mix regulations have 1842 01:02:46,050 --> 01:02:49,260 a big influence of how and what we do here. 1843 01:02:49,260 --> 01:02:50,625 We're going through part of that, 1844 01:02:50,625 --> 01:02:51,690 within the next few months, 1845 01:02:51,690 --> 01:02:53,700 we'll have a review by 1846 01:02:53,700 --> 01:02:55,350 an outside agency that will come 1847 01:02:55,350 --> 01:02:57,030 in and evaluate how we're doing, 1848 01:02:57,030 --> 01:02:58,785 are we meeting the Medicare standards? 1849 01:02:58,785 --> 01:03:00,990 Technology changes rapidly. 1850 01:03:00,990 --> 01:03:02,520 How do we reinvest in that? 1851 01:03:02,520 --> 01:03:04,320 So we need a profit in order to reinvest, 1852 01:03:04,320 --> 01:03:05,790 or the foundation has stepped in in 1853 01:03:05,790 --> 01:03:07,950 many gaps where we didn't have that 1854 01:03:07,950 --> 01:03:09,480 to be able to offset that and 1855 01:03:09,480 --> 01:03:11,400 help us continue to offer 1856 01:03:11,400 --> 01:03:14,070 high quality technology and 1857 01:03:14,070 --> 01:03:15,930 keep our prices reasonable. 1858 01:03:15,930 --> 01:03:17,820 And then many different players in 1859 01:03:17,820 --> 01:03:22,845 healthcare. Yes, sir. 1860 01:03:22,845 --> 01:03:24,840 >> Truly a negotiable rate 1861 01:03:24,840 --> 01:03:27,630 what I hear from 1862 01:03:27,630 --> 01:03:30,510 insurance companies standard here, 1863 01:03:30,510 --> 01:03:31,860 what is the limitation? 1864 01:03:31,860 --> 01:03:33,555 You may want to negotiate 1865 01:03:33,555 --> 01:03:34,710 you're only going to be told 1866 01:03:34,710 --> 01:03:36,000 how much you're going to get. 1867 01:03:36,000 --> 01:03:37,950 >> So the question is, is it 1868 01:03:37,950 --> 01:03:40,830 a truly negotiated rate or you just told? 1869 01:03:40,830 --> 01:03:43,800 Medicare or Medicaid, they're the big boy 1870 01:03:43,800 --> 01:03:46,875 you're told. You don't negotiate. 1871 01:03:46,875 --> 01:03:49,740 Other commercial payers, you do 1872 01:03:49,740 --> 01:03:52,335 have the opportunity to negotiate. 1873 01:03:52,335 --> 01:03:56,880 You're negotiating power is limited by even 1874 01:03:56,880 --> 01:03:59,745 within our community wall 1875 01:03:59,745 --> 01:04:02,115 by who's negotiating what? 1876 01:04:02,115 --> 01:04:04,830 The more players and as we talk about 1877 01:04:04,830 --> 01:04:06,060 fully integrated health 1878 01:04:06,060 --> 01:04:07,260 systems where you have 1879 01:04:07,260 --> 01:04:09,060 physicians and hospital and 1880 01:04:09,060 --> 01:04:10,470 all that working collectively, 1881 01:04:10,470 --> 01:04:12,825 you have more negotiating power. 1882 01:04:12,825 --> 01:04:14,940 So then you do have the ability to 1883 01:04:14,940 --> 01:04:17,070 go and see now, 1884 01:04:17,070 --> 01:04:19,140 at some point, you got to approve outcomes. 1885 01:04:19,140 --> 01:04:20,670 If you're improving, this is what we're 1886 01:04:20,670 --> 01:04:22,440 doing, and we're working on that, 1887 01:04:22,440 --> 01:04:24,165 part of the center of excellence with 1888 01:04:24,165 --> 01:04:26,385 the orthopedic surgeons 1889 01:04:26,385 --> 01:04:27,975 is in developing that. 1890 01:04:27,975 --> 01:04:29,700 At some point, we will develop 1891 01:04:29,700 --> 01:04:31,440 a bundle payment that we can take to 1892 01:04:31,440 --> 01:04:35,625 a Primera or to a uniform and say, 1893 01:04:35,625 --> 01:04:37,410 why would you want to send your patients to 1894 01:04:37,410 --> 01:04:39,285 the West Side to have this done here? 1895 01:04:39,285 --> 01:04:40,710 Here's our outcomes. By the way, 1896 01:04:40,710 --> 01:04:43,080 our prices are half 1897 01:04:43,080 --> 01:04:45,015 of what they are over there. 1898 01:04:45,015 --> 01:04:46,530 So why wouldn't you want to have it done 1899 01:04:46,530 --> 01:04:48,030 here, keep them local? 1900 01:04:48,030 --> 01:04:49,590 But if you can prove that, you 1901 01:04:49,590 --> 01:04:50,895 got to have statistics to do that. 1902 01:04:50,895 --> 01:04:52,350 You got better negotiating power. 1903 01:04:52,350 --> 01:04:54,900 >> How long negotiation look for? 1904 01:04:54,900 --> 01:04:57,000 >> Typically, two to three years. 1905 01:04:57,000 --> 01:04:58,350 So right now I'm 1906 01:04:58,350 --> 01:05:00,465 working on the Primera contract. 1907 01:05:00,465 --> 01:05:02,850 Hospital loan, it's really hard 1908 01:05:02,850 --> 01:05:05,250 because Grandma just signed last year, 1909 01:05:05,250 --> 01:05:09,060 so I'm not going to get any better than that. 1910 01:05:09,060 --> 01:05:12,060 If I had an isolated market, I could. 1911 01:05:12,060 --> 01:05:14,250 So I would take the same contract 1912 01:05:14,250 --> 01:05:16,755 that Tristate can get with Primera, 1913 01:05:16,755 --> 01:05:20,070 but they have one eighth the number 1914 01:05:20,070 --> 01:05:22,800 of covered lives in their arena, 1915 01:05:22,800 --> 01:05:24,900 so they can get 90 plus percent of charges. 1916 01:05:24,900 --> 01:05:27,105 They just don't have the same volume we do. 1917 01:05:27,105 --> 01:05:29,445 Were here, they can drive a lot of that. 1918 01:05:29,445 --> 01:05:32,340 But it's getting more and more challenging. 1919 01:05:32,340 --> 01:05:35,460 Have people heard of what narrow markets are? 1920 01:05:35,460 --> 01:05:37,350 Okay, so we have 1921 01:05:37,350 --> 01:05:40,500 one in our arena. It's a catalyst group. 1922 01:05:40,500 --> 01:05:42,780 They went directly to 1923 01:05:42,780 --> 01:05:44,730 the Blue Cross of Idaho 1924 01:05:44,730 --> 01:05:47,370 to a very isolated market, 1925 01:05:47,370 --> 01:05:48,510 and they said, We'll 1926 01:05:48,510 --> 01:05:50,070 take care of those patients. 1927 01:05:50,070 --> 01:05:52,020 If that patient goes outside, 1928 01:05:52,020 --> 01:05:56,580 so these are self purchased insurance plans. 1929 01:05:56,580 --> 01:05:59,775 If that patient goes outside of the market, 1930 01:05:59,775 --> 01:06:03,105 they have a $50,000 deductible. 1931 01:06:03,105 --> 01:06:04,740 So they can go to Gritman. 1932 01:06:04,740 --> 01:06:06,315 They can't come to Pullman, 1933 01:06:06,315 --> 01:06:08,295 because that's how narrow 1934 01:06:08,295 --> 01:06:09,750 they did the market. 1935 01:06:09,750 --> 01:06:13,300 They kept it in Idaho. Those are happening. 1936 01:06:13,480 --> 01:06:16,370 >> [inaudible] for pricing supply and 1937 01:06:16,370 --> 01:06:18,920 demand in theory, determines price. 1938 01:06:18,920 --> 01:06:21,920 So how has the Pullman Hospital done 1939 01:06:21,920 --> 01:06:23,555 in demand growth 1940 01:06:23,555 --> 01:06:25,580 compared to population growth? 1941 01:06:25,580 --> 01:06:28,085 How are we competing with the other guys? 1942 01:06:28,085 --> 01:06:30,605 >> How are we competing on supply and demand? 1943 01:06:30,605 --> 01:06:32,480 >> Are we increasing demand 1944 01:06:32,480 --> 01:06:35,300 as fast or faster as the population growth? 1945 01:06:35,300 --> 01:06:37,070 >> Not in all areas. 1946 01:06:37,070 --> 01:06:41,240 So a lot of that is contingent on providers. 1947 01:06:41,240 --> 01:06:42,710 And can you get a provider 1948 01:06:42,710 --> 01:06:43,970 within those specialties? 1949 01:06:43,970 --> 01:06:45,050 One of the things we're 1950 01:06:45,050 --> 01:06:46,640 actively trying to recruit, too, 1951 01:06:46,640 --> 01:06:49,280 and we have been successful here just 1952 01:06:49,280 --> 01:06:52,115 recently is in non invasive cardiology. 1953 01:06:52,115 --> 01:06:54,485 The other areas in pulmonology and sleep. 1954 01:06:54,485 --> 01:06:56,075 The demands there, 1955 01:06:56,075 --> 01:06:57,410 we have to outsource that today, 1956 01:06:57,410 --> 01:06:59,210 so an outside group does all of that. 1957 01:06:59,210 --> 01:07:00,740 All of those funds go outside of 1958 01:07:00,740 --> 01:07:03,230 our market to be able to do that, 1959 01:07:03,230 --> 01:07:04,880 because we may do the study 1960 01:07:04,880 --> 01:07:07,370 here but the providers aren't here. 1961 01:07:07,370 --> 01:07:08,930 So there's no reinvestment back into 1962 01:07:08,930 --> 01:07:11,615 the community for those like services. 1963 01:07:11,615 --> 01:07:13,085 So in some areas, 1964 01:07:13,085 --> 01:07:14,240 it's a real challenge 1965 01:07:14,240 --> 01:07:15,785 because it's specific on that. 1966 01:07:15,785 --> 01:07:17,510 In other areas now we're keeping up, 1967 01:07:17,510 --> 01:07:18,860 and that's one of the reasons we're looking 1968 01:07:18,860 --> 01:07:21,110 at building the fourth or 1969 01:07:21,110 --> 01:07:23,525 adding same day services expansion 1970 01:07:23,525 --> 01:07:25,700 is because the demand has been there. 1971 01:07:25,700 --> 01:07:27,680 We are at capacity and we have 1972 01:07:27,680 --> 01:07:29,900 just no more room in order to get that. 1973 01:07:29,900 --> 01:07:33,320 Now, I say that almost tongue in cheek, 1974 01:07:33,320 --> 01:07:34,700 because there's a lot to 1975 01:07:34,700 --> 01:07:36,020 do with physician preferences. 1976 01:07:36,020 --> 01:07:39,020 And if you're a physician 1977 01:07:39,020 --> 01:07:41,165 and Dr. Tinsted could speak to this, 1978 01:07:41,165 --> 01:07:43,130 you don't want to start surgery at 6:00 at 1979 01:07:43,130 --> 01:07:45,275 night unless it's an emergency. 1980 01:07:45,275 --> 01:07:47,150 You prefer to get in and get out, 1981 01:07:47,150 --> 01:07:48,230 and so you get back to your clinical 1982 01:07:48,230 --> 01:07:49,580 care for your patients. 1983 01:07:49,580 --> 01:07:51,800 And so most physicians have 1984 01:07:51,800 --> 01:07:52,940 blocked schedules because then 1985 01:07:52,940 --> 01:07:54,125 they can control their life. 1986 01:07:54,125 --> 01:07:55,040 They don't want to just, 1987 01:07:55,040 --> 01:07:57,050 what do you have today? 1988 01:07:57,050 --> 01:07:58,340 We'll call and see if we 1989 01:07:58,340 --> 01:07:58,940 can get them in today. 1990 01:07:58,940 --> 01:08:00,665 That doesn't work very well in their life. 1991 01:08:00,665 --> 01:08:03,095 So you have to have that capacity. 1992 01:08:03,095 --> 01:08:04,820 But in order to do that, sometimes you have 1993 01:08:04,820 --> 01:08:05,990 those downsides because nobody 1994 01:08:05,990 --> 01:08:06,670 wants to start 2:00, 1995 01:08:06,670 --> 01:08:07,820 3:00, 4:00 in the afternoon. 1996 01:08:07,820 --> 01:08:09,665 If we could run 24/7 1997 01:08:09,665 --> 01:08:12,545 in those areas and people willing to do it, 1998 01:08:12,545 --> 01:08:15,230 you could control the cost much better. 1999 01:08:15,230 --> 01:08:16,670 But you can't today 2000 01:08:16,670 --> 01:08:18,050 because a lot of it's best off preface. 2001 01:08:18,050 --> 01:08:19,580 >> Practical areas you'll be dealing with. 2002 01:08:19,580 --> 01:08:21,300 >> You might. 2003 01:08:21,910 --> 01:08:23,510 >> [OVERLAPPING] What you have in 2004 01:08:23,510 --> 01:08:24,590 this market is, well, 2005 01:08:24,590 --> 01:08:26,390 I can go 9.2 2006 01:08:26,390 --> 01:08:27,650 miles and I can 2007 01:08:27,650 --> 01:08:28,895 start at 7:00 so I'll take it there. 2008 01:08:28,895 --> 01:08:30,530 Oh, no, wait you stop. We want 2009 01:08:30,530 --> 01:08:32,105 them here we don't want you to do that. 2010 01:08:32,105 --> 01:08:33,830 So some of that predictability 2011 01:08:33,830 --> 01:08:34,820 and stuff is very 2012 01:08:34,820 --> 01:08:36,350 challenging in our markets just 2013 01:08:36,350 --> 01:08:38,510 based on providing healthcare. 2014 01:08:38,510 --> 01:08:40,640 So I don't know if that totally 2015 01:08:40,640 --> 01:08:42,815 answered it adequately or not. 2016 01:08:42,815 --> 01:08:44,255 We can talk more if it didn't, 2017 01:08:44,255 --> 01:08:47,490 no. Other questions? 2018 01:08:49,000 --> 01:08:51,845 >> You must have figures too. 2019 01:08:51,845 --> 01:08:54,230 >> I have a good figure. 2020 01:08:54,230 --> 01:08:56,420 >> [OVERLAPPING] who's top of the game. 2021 01:08:56,420 --> 01:08:58,040 But even a surgeon 2022 01:08:58,040 --> 01:08:59,705 knows that they're only good for 2023 01:08:59,705 --> 01:09:02,465 so many hours of solid surgery 2024 01:09:02,465 --> 01:09:04,310 before they get a 2025 01:09:04,310 --> 01:09:05,840 little punch drunk, too, a little bit. 2026 01:09:05,840 --> 01:09:08,615 So they know that you can commit 2027 01:09:08,615 --> 01:09:12,005 a surgery unit for how long and of course, 2028 01:09:12,005 --> 01:09:14,000 that affect your price too. 2029 01:09:14,000 --> 01:09:17,075 >> Well, yeah, and that's really dependent. 2030 01:09:17,075 --> 01:09:19,040 You're exactly right. 2031 01:09:19,040 --> 01:09:24,710 The quality of care of your providers, 2032 01:09:24,710 --> 01:09:26,810 be it your nursing staff to 2033 01:09:26,810 --> 01:09:29,300 your physicians diminishes greatly 2034 01:09:29,300 --> 01:09:32,000 if you don't give them enough rest time. 2035 01:09:32,000 --> 01:09:35,540 And so one of the key importances 2036 01:09:35,540 --> 01:09:38,120 of recruitment is to provide, 2037 01:09:38,120 --> 01:09:41,180 and especially physicians break in between, 2038 01:09:41,180 --> 01:09:44,345 so they aren't on call all of the time 2039 01:09:44,345 --> 01:09:45,965 because you will burn them out 2040 01:09:45,965 --> 01:09:48,695 and in short order. 2041 01:09:48,695 --> 01:09:52,220 Same goes for your nursing and support staff. 2042 01:09:52,220 --> 01:09:53,300 If they don't have rest 2043 01:09:53,300 --> 01:09:54,770 between shifts, and we used to do this. 2044 01:09:54,770 --> 01:09:56,000 So you'd be done, 2045 01:09:56,000 --> 01:09:56,975 and you had to go late 2046 01:09:56,975 --> 01:09:58,325 because the case went late, 2047 01:09:58,325 --> 01:09:59,750 and you were on call, 2048 01:09:59,750 --> 01:10:00,740 and you got called back, 2049 01:10:00,740 --> 01:10:02,240 and then you had to come back in at 2050 01:10:02,240 --> 01:10:03,170 7:00 in the morning to 2051 01:10:03,170 --> 01:10:04,190 start it all over again. 2052 01:10:04,190 --> 01:10:06,980 The quality goes down. 2053 01:10:06,980 --> 01:10:10,595 Now what we do is we have a call shift. 2054 01:10:10,595 --> 01:10:12,395 And then when they're 2055 01:10:12,395 --> 01:10:13,925 not on call, then they're off. 2056 01:10:13,925 --> 01:10:15,200 So they don't come in the next 2057 01:10:15,200 --> 01:10:16,910 day that's a different group. 2058 01:10:16,910 --> 01:10:18,425 So you have to have staff, 2059 01:10:18,425 --> 01:10:20,555 which adds some cost, 2060 01:10:20,555 --> 01:10:23,000 but it provides a better quality of care. 2061 01:10:23,000 --> 01:10:24,350 Plus rest between shift, 2062 01:10:24,350 --> 01:10:25,370 we guarantee a certain amount 2063 01:10:25,370 --> 01:10:26,720 of rest between shift 2064 01:10:26,720 --> 01:10:30,155 so that they aren't only getting eight, 2065 01:10:30,155 --> 01:10:31,370 that they're getting 10, so 2066 01:10:31,370 --> 01:10:32,720 they get a full night's sleep. 2067 01:10:32,720 --> 01:10:34,550 >> You're speaking of staff, there's 2068 01:10:34,550 --> 01:10:35,630 a difference in cost 2069 01:10:35,630 --> 01:10:37,280 too depending on if you 2070 01:10:37,280 --> 01:10:40,025 have your own staff versus travelers. 2071 01:10:40,025 --> 01:10:42,350 We have allowed travellers 2072 01:10:42,350 --> 01:10:43,520 here from time to time. 2073 01:10:43,520 --> 01:10:44,795 >> Yeah, occasionally. 2074 01:10:44,795 --> 01:10:46,280 >> [inaudible] Swedish in Seattle. 2075 01:10:46,280 --> 01:10:48,320 >> Yeah, 2.5 times the cost for 2076 01:10:48,320 --> 01:10:51,005 traveling compared to what you can keep here. 2077 01:10:51,005 --> 01:10:53,315 You're typically doing that in areas. 2078 01:10:53,315 --> 01:10:56,765 Most of the time here in our market now, 2079 01:10:56,765 --> 01:10:58,310 not when you were on the board, 2080 01:10:58,310 --> 01:10:59,600 we had a problem back then 2081 01:10:59,600 --> 01:11:01,370 just turnover because you 2082 01:11:01,370 --> 01:11:03,260 were doing a lot of low senses, etc. 2083 01:11:03,260 --> 01:11:04,550 Today, if we have 2084 01:11:04,550 --> 01:11:06,380 a travelers generally do 2085 01:11:06,380 --> 01:11:08,255 to somebody that's on maternity leave. 2086 01:11:08,255 --> 01:11:09,485 It's a planned event 2087 01:11:09,485 --> 01:11:10,370 you know they're going to be out 2088 01:11:10,370 --> 01:11:12,620 for 12 weeks. It makes sense. 2089 01:11:12,620 --> 01:11:13,880 You're going to pay a little more, 2090 01:11:13,880 --> 01:11:15,860 but you wouldn't want to hire because you 2091 01:11:15,860 --> 01:11:18,035 made a commitment to employ them forever. 2092 01:11:18,035 --> 01:11:19,775 So you do short term stuff like that. 2093 01:11:19,775 --> 01:11:22,310 We don't have nearly the travelers we 2094 01:11:22,310 --> 01:11:26,130 used to. It's typically that. 2095 01:11:28,690 --> 01:11:32,810 >> Do you think the value based system 2096 01:11:32,810 --> 01:11:34,175 will survive if 2097 01:11:34,175 --> 01:11:37,025 the Affordable Care Act went away? 2098 01:11:37,025 --> 01:11:39,380 That was in the Affordable Care Act, 2099 01:11:39,380 --> 01:11:42,365 meaningful use, etc. 2100 01:11:42,365 --> 01:11:43,610 >> So, will the value 2101 01:11:43,610 --> 01:11:47,000 based payment system continue 2102 01:11:47,000 --> 01:11:52,775 to exist if the Affordable Care Act changes? 2103 01:11:52,775 --> 01:11:54,680 The Affordable Care Act will change, 2104 01:11:54,680 --> 01:11:56,870 inevitably, it'll change somehow. 2105 01:11:56,870 --> 01:11:58,385 It doesn't matter what administration, 2106 01:11:58,385 --> 01:12:02,120 it will change. I do. 2107 01:12:02,120 --> 01:12:05,330 Health care at the rate it was 2108 01:12:05,330 --> 01:12:09,005 going is non sustainable it has to change. 2109 01:12:09,005 --> 01:12:10,565 You can't continue to have 2110 01:12:10,565 --> 01:12:13,310 escalating payments and expect 2111 01:12:13,310 --> 01:12:14,330 anybody to be willing 2112 01:12:14,330 --> 01:12:17,945 to do and be able to pay for it. 2113 01:12:17,945 --> 01:12:19,310 So what does have to change. 2114 01:12:19,310 --> 01:12:22,130 How we deliver healthcare needs to change. 2115 01:12:22,130 --> 01:12:23,510 We're reactionary, 2116 01:12:23,510 --> 01:12:25,595 but America has done that to himself. 2117 01:12:25,595 --> 01:12:27,110 We've done to ourselves. 2118 01:12:27,110 --> 01:12:28,520 We don't want anybody telling us 2119 01:12:28,520 --> 01:12:29,870 what to do we just want to make 2120 01:12:29,870 --> 01:12:31,790 it better when we didn't do it because 2121 01:12:31,790 --> 01:12:35,225 that's a lot of how we live. 2122 01:12:35,225 --> 01:12:38,075 I didn't take care of myself, but fix me now. 2123 01:12:38,075 --> 01:12:40,055 So some of that needs to change. 2124 01:12:40,055 --> 01:12:42,710 That getting in front of that and changing 2125 01:12:42,710 --> 01:12:44,075 our culture and how we 2126 01:12:44,075 --> 01:12:46,325 respond to that needs to change. 2127 01:12:46,325 --> 01:12:48,215 So, yeah, I do believe 2128 01:12:48,215 --> 01:12:49,850 in some sense, it will. 2129 01:12:49,850 --> 01:12:50,900 There's demonstrations that are 2130 01:12:50,900 --> 01:12:53,930 showing how it will be. 2131 01:12:53,930 --> 01:12:55,655 I don't know what it'll take. 2132 01:12:55,655 --> 01:12:57,380 But today, 2133 01:12:57,380 --> 01:13:00,080 part of the problem is the fragmentation in 2134 01:13:00,080 --> 01:13:02,000 healthcare and the lack of 2135 01:13:02,000 --> 01:13:03,170 communication between 2136 01:13:03,170 --> 01:13:04,805 even us and our providers. 2137 01:13:04,805 --> 01:13:05,780 You think you're all on 2138 01:13:05,780 --> 01:13:06,710 the same page, but you're really 2139 01:13:06,710 --> 01:13:08,510 not in all sense. 2140 01:13:08,510 --> 01:13:11,915 So streamlining that, 2141 01:13:11,915 --> 01:13:14,000 integrating a lot of that will 2142 01:13:14,000 --> 01:13:16,220 have a lot of impact on that. 2143 01:13:16,220 --> 01:13:18,080 And I do believe that 2144 01:13:18,080 --> 01:13:20,195 it will take such a foothold. 2145 01:13:20,195 --> 01:13:23,420 It started out at 20% demonstration expecting 2146 01:13:23,420 --> 01:13:24,455 two years value based 2147 01:13:24,455 --> 01:13:25,505 purchasing will represent 2148 01:13:25,505 --> 01:13:28,190 80% of the payments in two years. 2149 01:13:28,190 --> 01:13:29,720 They originally thought it would be 2150 01:13:29,720 --> 01:13:31,580 five but that's how 2151 01:13:31,580 --> 01:13:33,560 quickly it has broadcast it out. 2152 01:13:33,560 --> 01:13:35,165 So it's here to stay, 2153 01:13:35,165 --> 01:13:37,565 and we've got to learn how to deal with it. 2154 01:13:37,565 --> 01:13:39,395 The problem will be 2155 01:13:39,395 --> 01:13:41,900 is we're under this payment model, 2156 01:13:41,900 --> 01:13:43,910 which the more we do, the more we make, 2157 01:13:43,910 --> 01:13:44,870 in some sense, I just 2158 01:13:44,870 --> 01:13:46,130 contradicted something else like this. 2159 01:13:46,130 --> 01:13:48,500 But that's the healthcare system 2160 01:13:48,500 --> 01:13:51,575 today, fee for service. 2161 01:13:51,575 --> 01:13:54,575 Tomorrow, when we finally get there, 2162 01:13:54,575 --> 01:13:56,000 I don't know what it'll look like. 2163 01:13:56,000 --> 01:13:58,490 When it's value based and 2164 01:13:58,490 --> 01:13:59,690 you're providing value 2165 01:13:59,690 --> 01:14:01,580 and keeping people healthy, 2166 01:14:01,580 --> 01:14:03,500 how do you bridge that gap? 2167 01:14:03,500 --> 01:14:05,225 That'll be the challenge. 2168 01:14:05,225 --> 01:14:07,460 And hopefully you have enough to 2169 01:14:07,460 --> 01:14:10,700 survive that period of time. 2170 01:14:10,700 --> 01:14:12,290 And so it's really important. 2171 01:14:12,290 --> 01:14:13,730 Now, we utilize again, 2172 01:14:13,730 --> 01:14:15,740 I'm promoting Ruben and his staff. 2173 01:14:15,740 --> 01:14:17,600 But that's what we've determined 2174 01:14:17,600 --> 01:14:20,240 as part of that pathway there to 2175 01:14:20,240 --> 01:14:24,170 survive those time periods so that 2176 01:14:24,170 --> 01:14:26,210 we aren't falling behind in technology and 2177 01:14:26,210 --> 01:14:28,280 other things so that when you get there, 2178 01:14:28,280 --> 01:14:29,480 you can't provide it because you're 2179 01:14:29,480 --> 01:14:31,370 too far behind the curve anyway. 2180 01:14:31,370 --> 01:14:33,830 >> When will it come that you're going 2181 01:14:33,830 --> 01:14:35,720 to be dictated that I 2182 01:14:35,720 --> 01:14:37,820 don't need to have another MRI just 2183 01:14:37,820 --> 01:14:40,760 because I had one here for the specialist. 2184 01:14:40,760 --> 01:14:42,440 And the insurance company is going 2185 01:14:42,440 --> 01:14:44,060 to say you already have one MRI 2186 01:14:44,060 --> 01:14:45,800 for that particular injury 2187 01:14:45,800 --> 01:14:47,180 you don't need to have another one 2188 01:14:47,180 --> 01:14:52,070 or they won't approve the second one. 2189 01:14:52,070 --> 01:14:54,410 >> So the question is, when will that happen? 2190 01:14:54,410 --> 01:14:56,030 When will that occur? 2191 01:14:56,030 --> 01:14:59,000 Meaning, will insurance companies 2192 01:14:59,000 --> 01:15:00,215 dictate the fact that 2193 01:15:00,215 --> 01:15:02,630 somebody else ordered a secondary test 2194 01:15:02,630 --> 01:15:05,645 that has already been done? Is that fair? 2195 01:15:05,645 --> 01:15:07,340 I'm doing this for her. 2196 01:15:07,340 --> 01:15:08,900 She's told me I got to repeat these, 2197 01:15:08,900 --> 01:15:12,170 so I'll get paid tonight. 2198 01:15:12,170 --> 01:15:14,960 No, I'm not getting paid anyway. 2199 01:15:14,960 --> 01:15:17,270 It's cost, I'm going to paid cost. 2200 01:15:17,270 --> 01:15:20,990 So the question is, when will that happen? 2201 01:15:20,990 --> 01:15:25,730 It's happened, that happens today. 2202 01:15:25,990 --> 01:15:29,180 Insurance companies, if you had an MR, 2203 01:15:29,180 --> 01:15:30,410 they aren't going to approve. 2204 01:15:30,410 --> 01:15:33,560 That's part of that whole pre authorization. 2205 01:15:33,560 --> 01:15:36,140 If they see you had this test done, 2206 01:15:36,140 --> 01:15:38,885 they're not approving one for another one. 2207 01:15:38,885 --> 01:15:40,940 They'll deny it, so you 2208 01:15:40,940 --> 01:15:42,770 won't get it. So that happens today? 2209 01:15:42,770 --> 01:15:48,890 [inaudible] Exactly. 2210 01:15:48,890 --> 01:15:50,420 So some of that's happening today. 2211 01:15:50,420 --> 01:15:52,550 Now, is there duplication of services? 2212 01:15:52,550 --> 01:15:54,440 Yes. That still happens in some sense, 2213 01:15:54,440 --> 01:15:56,750 but more and more that's changing. 2214 01:15:56,750 --> 01:15:58,460 So one of the things that 2215 01:15:58,460 --> 01:16:00,710 is when you start looking at 2216 01:16:00,710 --> 01:16:02,210 an integrated model and you 2217 01:16:02,210 --> 01:16:04,640 start looking about coordination, 2218 01:16:04,640 --> 01:16:06,380 it's when you're all on the same team. 2219 01:16:06,380 --> 01:16:08,930 Well Dr. Joe is 2220 01:16:08,930 --> 01:16:10,430 much better at this than I am. 2221 01:16:10,430 --> 01:16:11,510 I'm going to send my patient 2222 01:16:11,510 --> 01:16:12,590 there because 2223 01:16:12,590 --> 01:16:13,955 I know that patient will come back, 2224 01:16:13,955 --> 01:16:16,415 and we're not competing against each other. 2225 01:16:16,415 --> 01:16:19,310 That'll be important to control costs. 2226 01:16:19,310 --> 01:16:20,390 Because today we compete 2227 01:16:20,390 --> 01:16:21,170 against each other for 2228 01:16:21,170 --> 01:16:24,050 the same patient for many different services. 2229 01:16:24,050 --> 01:16:27,035 We have a few more minutes. Yeah, Pat. 2230 01:16:27,035 --> 01:16:28,430 >> Steve, what do you see 2231 01:16:28,430 --> 01:16:31,040 as the overriding benefits 2232 01:16:31,040 --> 01:16:33,515 of acquiring other medical practices. 2233 01:16:33,515 --> 01:16:35,270 That's the first part of my question. 2234 01:16:35,270 --> 01:16:36,695 And the second part is, 2235 01:16:36,695 --> 01:16:40,940 do you see us acquiring more in the future? 2236 01:16:40,940 --> 01:16:42,590 >> So the question is, what are 2237 01:16:42,590 --> 01:16:43,985 the advantages of acquiring 2238 01:16:43,985 --> 01:16:45,425 other medical practices, 2239 01:16:45,425 --> 01:16:48,500 be it physician practices or anything? 2240 01:16:48,500 --> 01:16:50,840 And will we look 2241 01:16:50,840 --> 01:16:52,475 to acquire more in the future? 2242 01:16:52,475 --> 01:16:53,690 I will tell you this Pullman 2243 01:16:53,690 --> 01:16:54,800 Regional Hospital has not 2244 01:16:54,800 --> 01:16:55,940 aggressively ever gone 2245 01:16:55,940 --> 01:16:57,395 out and tried to buy any. 2246 01:16:57,395 --> 01:17:02,180 We have reactionarily responded to requests. 2247 01:17:02,180 --> 01:17:06,005 So Plus Pediatrics as an example, 2009, 2248 01:17:06,005 --> 01:17:10,535 remember, Al, Dr. Frosted, and Mike. 2249 01:17:10,535 --> 01:17:13,940 When Al decided he was going to retire, 2250 01:17:13,940 --> 01:17:16,250 Mike realized I'm going to be basically 2251 01:17:16,250 --> 01:17:17,630 the only pediatrician 2252 01:17:17,630 --> 01:17:18,950 on the blues, I don't want it. 2253 01:17:18,950 --> 01:17:20,345 And I don't want this headache. 2254 01:17:20,345 --> 01:17:21,860 And by the way, I can make more money 2255 01:17:21,860 --> 01:17:23,330 by being a locum and 2256 01:17:23,330 --> 01:17:24,590 traveling and getting out of here 2257 01:17:24,590 --> 01:17:27,260 and making a lot more money. 2258 01:17:27,260 --> 01:17:30,500 So they realized that 2259 01:17:30,500 --> 01:17:31,700 in order to have pediatric, 2260 01:17:31,700 --> 01:17:33,230 which Al had established on 2261 01:17:33,230 --> 01:17:35,600 the Palouse and continued to be here, 2262 01:17:35,600 --> 01:17:36,950 they needed something different. 2263 01:17:36,950 --> 01:17:38,690 They came to the hospital and said, 2264 01:17:38,690 --> 01:17:41,315 would you be willing to look at this? 2265 01:17:41,315 --> 01:17:43,910 And for the sake of the community, 2266 01:17:43,910 --> 01:17:45,215 we responded and say, 2267 01:17:45,215 --> 01:17:46,865 yeah, we'll look at that. 2268 01:17:46,865 --> 01:17:48,710 Most of everything we've 2269 01:17:48,710 --> 01:17:50,870 done has been in response, too. 2270 01:17:50,870 --> 01:17:53,120 So many providers today, 2271 01:17:53,120 --> 01:17:54,620 when they look at the model 2272 01:17:54,620 --> 01:17:55,730 of reimbursement and trying 2273 01:17:55,730 --> 01:17:56,510 to recruit into it, 2274 01:17:56,510 --> 01:17:58,400 are facing challenges and saying, 2275 01:17:58,400 --> 01:17:59,975 people don't want to come to that model, 2276 01:17:59,975 --> 01:18:01,070 they will come to the hospital and say, 2277 01:18:01,070 --> 01:18:02,480 can we look at something different? 2278 01:18:02,480 --> 01:18:03,650 We'll always look and say, 2279 01:18:03,650 --> 01:18:05,105 what does that look like? 2280 01:18:05,105 --> 01:18:07,340 So there's no future plans 2281 01:18:07,340 --> 01:18:09,605 right now to continue, 2282 01:18:09,605 --> 01:18:12,590 but we would respond, being the thing. 2283 01:18:12,590 --> 01:18:14,660 Some have decided to stay independent, 2284 01:18:14,660 --> 01:18:17,000 the advantages that we're 2285 01:18:17,000 --> 01:18:19,835 starting to see that are coming. 2286 01:18:19,835 --> 01:18:21,590 I talked about care coordination, 2287 01:18:21,590 --> 01:18:23,195 I mentioned a couple of different times. 2288 01:18:23,195 --> 01:18:25,730 There are new reimbursement models that 2289 01:18:25,730 --> 01:18:28,445 will pay you per member per month to do that. 2290 01:18:28,445 --> 01:18:30,635 Most all that resides in primary care. 2291 01:18:30,635 --> 01:18:31,910 We had no access 2292 01:18:31,910 --> 01:18:33,515 because we had no primary care. 2293 01:18:33,515 --> 01:18:36,230 Under our clinic network provider 2294 01:18:36,230 --> 01:18:38,060 that to get to 2295 01:18:38,060 --> 01:18:39,650 the new revenue streams that are 2296 01:18:39,650 --> 01:18:42,710 emerging under these value based models, 2297 01:18:42,710 --> 01:18:44,405 that's one of the advantages 2298 01:18:44,405 --> 01:18:47,285 of coordination and integration. 2299 01:18:47,285 --> 01:18:49,595 So that's coming, 2300 01:18:49,595 --> 01:18:51,935 and we're getting ahead of some of that. 2301 01:18:51,935 --> 01:18:54,365 Contract negotiation because you're all going 2302 01:18:54,365 --> 01:18:55,490 to the same person and you're 2303 01:18:55,490 --> 01:18:56,870 not divide and conquer, 2304 01:18:56,870 --> 01:18:58,970 you're going jointly, we'll 2305 01:18:58,970 --> 01:19:01,415 also have some advantages there. 2306 01:19:01,415 --> 01:19:03,500 >> You just took over Pullman 2307 01:19:03,500 --> 01:19:05,045 Family Medicine as of April. 2308 01:19:05,045 --> 01:19:05,855 >> Correct. 2309 01:19:05,855 --> 01:19:06,365 >> So how do 2310 01:19:06,365 --> 01:19:10,560 those competing practices recruit? 2311 01:19:12,880 --> 01:19:14,705 >> Well, 2312 01:19:14,705 --> 01:19:16,400 I'm sure I understand your question. 2313 01:19:16,400 --> 01:19:17,420 >> Do they recruit separately? 2314 01:19:17,420 --> 01:19:18,095 >> No. 2315 01:19:18,095 --> 01:19:19,310 >> If they were asked to recruit 2316 01:19:19,310 --> 01:19:24,920 a general physician [inaudible] 2317 01:19:24,920 --> 01:19:27,485 >> So I see your question now. 2318 01:19:27,485 --> 01:19:30,395 So the question is, is today 2319 01:19:30,395 --> 01:19:32,090 Pullman Family Medicine may 2320 01:19:32,090 --> 01:19:34,625 have an opening. How do they recruit? 2321 01:19:34,625 --> 01:19:36,890 How's the hospital involvement with 2322 01:19:36,890 --> 01:19:38,495 that compared to like Palouse Medical Group? 2323 01:19:38,495 --> 01:19:40,010 Today we're working closely 2324 01:19:40,010 --> 01:19:41,090 with Pullman Family Medicine, 2325 01:19:41,090 --> 01:19:42,140 identifying what the needs 2326 01:19:42,140 --> 01:19:43,175 are of the community, 2327 01:19:43,175 --> 01:19:46,085 what type of provider should be there? 2328 01:19:46,085 --> 01:19:49,220 We work with them jointly. 2329 01:19:49,220 --> 01:19:50,630 Palouse Medical Group because they're 2330 01:19:50,630 --> 01:19:53,645 independent are out doing their thing. 2331 01:19:53,645 --> 01:19:55,595 They're trying to recruit in. 2332 01:19:55,595 --> 01:19:58,980 There's still a competitive model. 2333 01:19:59,110 --> 01:20:01,670 The nice thing is, in our market, 2334 01:20:01,670 --> 01:20:03,770 I'll tell you today, we work 2335 01:20:03,770 --> 01:20:04,730 closely with them and 2336 01:20:04,730 --> 01:20:05,870 have a lot of communication. 2337 01:20:05,870 --> 01:20:08,240 So thankfully enough, it 2338 01:20:08,240 --> 01:20:11,870 isn't eat what one can and kill. 2339 01:20:11,870 --> 01:20:15,740 It's whatever I do for me is just my thing, 2340 01:20:15,740 --> 01:20:17,570 and it's that tragedy of the commons, 2341 01:20:17,570 --> 01:20:18,200 which we're all going to 2342 01:20:18,200 --> 01:20:19,430 fish out of the same pond. 2343 01:20:19,430 --> 01:20:21,260 The more fish I make or catch, 2344 01:20:21,260 --> 01:20:22,190 the better off I am 2345 01:20:22,190 --> 01:20:23,645 until we're all out of fish. 2346 01:20:23,645 --> 01:20:25,925 That doesn't happen today. We do coordinate. 2347 01:20:25,925 --> 01:20:27,350 So there's some communication 2348 01:20:27,350 --> 01:20:29,525 which is nice in our market. 2349 01:20:29,525 --> 01:20:31,475 It's not a stream line, though, 2350 01:20:31,475 --> 01:20:32,990 because we don't have that involvement. 2351 01:20:32,990 --> 01:20:34,070 Yes, sir. 2352 01:20:34,070 --> 01:20:37,055 >> When you talk about coordination, 2353 01:20:37,055 --> 01:20:39,290 you see changes in 2354 01:20:39,290 --> 01:20:42,005 the hospitals, for example, 2355 01:20:42,005 --> 01:20:44,585 with all of the hospitals in this area, 2356 01:20:44,585 --> 01:20:47,720 some of them might end up closing. 2357 01:20:47,720 --> 01:20:49,325 >> That's a great question. 2358 01:20:49,325 --> 01:20:50,840 So the question is, 2359 01:20:50,840 --> 01:20:52,640 in this area will 2360 01:20:52,640 --> 01:20:55,775 all hospitals exist, long term? 2361 01:20:55,775 --> 01:20:57,530 Will some in danger of 2362 01:20:57,530 --> 01:21:00,960 closing or is there better models? 2363 01:21:02,800 --> 01:21:05,780 I couldn't professionally tell you 2364 01:21:05,780 --> 01:21:09,155 that all will exist and should exist. 2365 01:21:09,155 --> 01:21:11,660 There's a lot of duplication of services. 2366 01:21:11,660 --> 01:21:16,265 And I lived the cord run for three years. 2367 01:21:16,265 --> 01:21:20,120 It doesn't make sense to have three RMRIs in 2368 01:21:20,120 --> 01:21:22,550 a basically 20 mile radius when 2369 01:21:22,550 --> 01:21:25,880 they're almost $2 million each. 2370 01:21:25,880 --> 01:21:27,665 Now, you still may need two 2371 01:21:27,665 --> 01:21:28,520 because of volume, 2372 01:21:28,520 --> 01:21:29,675 but it should be volume driven. 2373 01:21:29,675 --> 01:21:33,380 I do eventually believe for this area, 2374 01:21:33,380 --> 01:21:36,200 there has to be coordination of that. 2375 01:21:36,200 --> 01:21:38,600 You could have a very 2376 01:21:38,600 --> 01:21:43,850 effective and inpatient care unit. 2377 01:21:43,850 --> 01:21:45,200 And they focus on that 2378 01:21:45,200 --> 01:21:46,865 and they do it very well. 2379 01:21:46,865 --> 01:21:49,055 And still in communities, 2380 01:21:49,055 --> 01:21:50,540 I'm pointing outside because 2381 01:21:50,540 --> 01:21:51,335 I think Pullman ought to be 2382 01:21:51,335 --> 01:21:53,630 central because they are. 2383 01:21:53,630 --> 01:21:57,065 They're the middle. And then outside that, 2384 01:21:57,065 --> 01:22:00,590 you could have outpatient surgery centers 2385 01:22:00,590 --> 01:22:02,780 or support or urgent care centers, 2386 01:22:02,780 --> 01:22:05,630 etc, but you work collectively. 2387 01:22:05,630 --> 01:22:07,010 I believe long term, 2388 01:22:07,010 --> 01:22:08,285 that's where it'll get to. 2389 01:22:08,285 --> 01:22:11,120 I think until reimbursement dictates 2390 01:22:11,120 --> 01:22:12,455 that, it won't change. 2391 01:22:12,455 --> 01:22:14,615 And under a critical access model, 2392 01:22:14,615 --> 01:22:16,175 because we get paid our costs, 2393 01:22:16,175 --> 01:22:18,320 what advantages is there to do that? 2394 01:22:18,320 --> 01:22:22,140 So, today we have a fake glass bottom, 2395 01:22:22,540 --> 01:22:24,350 there's not a lot of 2396 01:22:24,350 --> 01:22:25,310 incentives to control class. 2397 01:22:25,310 --> 01:22:26,615 There's some. There's not a lot. 2398 01:22:26,615 --> 01:22:28,460 But if that model went away, 2399 01:22:28,460 --> 01:22:30,470 problem is, could you react quick enough? 2400 01:22:30,470 --> 01:22:32,645 I think that some of that's happening, 2401 01:22:32,645 --> 01:22:34,790 we are partners in 2402 01:22:34,790 --> 01:22:36,440 the general surgeon practices, 2403 01:22:36,440 --> 01:22:38,150 the specialty practices, 2404 01:22:38,150 --> 01:22:40,460 medication oncology coming on board. 2405 01:22:40,460 --> 01:22:41,780 That will be collective. 2406 01:22:41,780 --> 01:22:44,495 More and more that communications happening. 2407 01:22:44,495 --> 01:22:47,015 I think that'll evolve long term. How long? 2408 01:22:47,015 --> 01:22:50,480 I have no idea. I realize at some point, 2409 01:22:50,480 --> 01:22:51,200 if that happens, and I 2410 01:22:51,200 --> 01:22:52,730 think that ultimately needs 2411 01:22:52,730 --> 01:22:55,145 to I don't know if you. 2412 01:22:55,145 --> 01:22:56,810 >> That was going on in 2413 01:22:56,810 --> 01:22:58,970 Reagan's time when they 2414 01:22:58,970 --> 01:23:00,530 had if you wanted 2415 01:23:00,530 --> 01:23:04,295 a MRI and Gritman wanted one, 2416 01:23:04,295 --> 01:23:06,695 there was a committee that determine 2417 01:23:06,695 --> 01:23:08,750 whether you ought to have one 2418 01:23:08,750 --> 01:23:11,525 because of the population and the size. 2419 01:23:11,525 --> 01:23:14,030 And that went away. 2420 01:23:14,030 --> 01:23:15,710 >> I think eventually you'll 2421 01:23:15,710 --> 01:23:16,880 come back to some of that. 2422 01:23:16,880 --> 01:23:17,990 I do believe they'll drive. 2423 01:23:17,990 --> 01:23:19,160 >> Some of us remember there was 2424 01:23:19,160 --> 01:23:29,090 a vet school that also [inaudible]. 2425 01:23:29,090 --> 01:23:30,470 >> >> That was my love of 2426 01:23:30,470 --> 01:23:31,760 working for two facilities. 2427 01:23:31,760 --> 01:23:33,305 That was awesome. By the way, 2428 01:23:33,305 --> 01:23:35,195 it is a little after 7:00. 2429 01:23:35,195 --> 01:23:37,370 I do want to be respectful of your time. 2430 01:23:37,370 --> 01:23:39,245 I have nowhere to go, 2431 01:23:39,245 --> 01:23:40,190 I will stick around if 2432 01:23:40,190 --> 01:23:41,120 there are other questions. 2433 01:23:41,120 --> 01:23:42,860 But I appreciate the fact 2434 01:23:42,860 --> 01:23:43,990 that you all team out. Thank you. 2435 01:23:43,990 --> 01:23:44,000 [APPLAUSE] 2436 01:23:44,000 --> 01:23:45,365 >> Thank you, Steve. 2437 01:23:45,365 --> 01:23:48,390 >> Yeah, Ruben. Thank you very much.