By Paul Milton
For The Sunday Gazette
During the height of the COVID pandemic, our entire community rallied around health care workers.
Our team at Ellis was buoyed by people reaching out to them to show their appreciation during those difficult days.
As president and CEO of Ellis Medicine, I’m enormously proud of the dedication and compassion shown by our physicians, nurses and staff. Similarly, I’m grateful for the support shown by our friends, donors and patients.
Ellis’ role in the community was illuminated by the pandemic.
But even before COVID, Ellis always had a critical responsibility to care for the most vulnerable in our society: those in poverty, the working poor and our neighbors covered by Medicaid.
Without Ellis, such populations might have nowhere to turn since access to reliable transportation is a barrier to health care.
As we close our year and ready ourselves for 2023, it is important to take stock of where our health care system is — both here in Schenectady and across the country. The pandemic made clear how important a highly functional health care system — including the state Department of Health, insurers and providers — is to each community. But it also illuminated some critical fault lines.
At the height of the pandemic as we focused on caring for COVID patients, hospitals curtailed or eliminated elective procedures as a way to contain the virus. While this was the right thing to do for safe patient care, we must recognize the reality that this also had serious financial implications. We are grateful for the federal assistance funding we received; however, it was not enough to cover the financial losses.
A staffing crisis, meanwhile, threatened institutions’ ability to provide care. Staffing shortages existed well before March 2020; the pandemic made these shortages worse. Much worse. Without finding solutions to the staffing crisis, hospitals will always be vulnerable.
For many years we have relied on nursing agencies (these are akin to freelance nurses as opposed to nurses working for any one institution). The cost of agency staffing has risen so dramatically that this is one of the biggest threats to a hospital’s financial viability.
That’s just one example of the intensifying pressures on health care institutions. Much of COVID’s incredible financial burden has been borne by health care providers with, quite frankly, no slack in the system.
As health care costs have increased over the years, our country keeps deliberating fixes. Unfortunately, those fixes haven’t proven to be long-term solutions. In my opinion, the health care system is quickly approaching a breaking point.
What’s more, while the cost of care continues to increase, reimbursements from Medicaid and Medicare — representing 70% of Ellis’ payor mix — remain stagnant at best. In fact, there is an arcane formula, the Medicare Wage Index, that determines how hospitals are reimbursed by the federal government.
The complexity of this formula essentially means a hospital right over the border in Massachusetts will get a 26% increase on the Medicare base reimbursement rate, while Ellis will receive a 14% decrease off that base rate, even when the cost to deliver that care is similar in both regions.
In such an environment there is little room for the health care system to right itself. We need to take a long, hard look at new solutions. The first step in finding solutions is to educate the broader community of stakeholders about the nature and severity of the problem. That’s one reason I’m writing this piece.
To find solutions, my colleagues and I must better explain the problem. To that point, I’m pleased to tell our Schenectady and Capital Region communities that Ellis has thus far weathered the COVID storm.
However, nearly three years into the pandemic, our situation is increasingly precarious.
Over the past three years we have been forced to spend from our “rainy-day fund.” While having those reserves available indicates fiscal prudence, utilizing such a fund is clearly not an answer that will sustain us.
The second step to long-term solutions is simply having the will to find them. For too long we’ve pointed fingers and avoided difficult confrontations and conversations. Simply ignoring the clear warning signs that exist — and have been magnified by the pandemic — will no longer suffice.
That’s not a wave of problems on the horizon. It’s a tsunami.
Hospitals across the country are doing their best to adapt. Increasing shared services and consolidations help reduce financial burdens. Working to get patients to the right level of care (for example, a physician appointment or an urgent care visit instead of an expensive emergency room stay) helps reduce costs, and encouraging patients to take an active role in making health care choices helps.
How do we, as a community, make a difference?
We need to make finding solutions for the health care crisis a front-burner issue at all levels — local, state and federal. We need to make hard decisions about how best to move forward and then take that initiative.
Many of us in the health care community are doing just that. We’re doing our best to push this discussion. We need the community’s help.
Where do we go from here? The current system needs a massive overhaul, as it is simply not sustainable.
Let’s restart having the conversation before it is too late.
Paul Milton is the President & CEO of Ellis Medicine, based in Schenectady.