Jun 26, 2008 - 04:07:25 CDT
FARGO (AP) - Hospital officials in North Dakota are not surprised by staff cuts planned at Fargo's MeritCare Health System."We're all teetering on the edge," said Kevin Seehafer, chief financial officer at Trinity Health in Minot.
MeritCare, the state's largest hospital, plans to discuss the staff cuts Thursday.
Health officials say Medicare reimbursements play a major role in the financial health of hospitals in the state. About 55 percent of revenue received by the state's hospitals comes from the federal health insurance program for seniors and people with disabilities, said Chip Thomas, president of the North Dakota Healthcare Association.
North Dakota hospitals are at the low end of Medicare payments, which are based on a formula.
The Centers for Medicaid and Medicare Services assigns a base rate for every diagnosis, such as pneumonia or a heart valve replacement. That rate is then adjusted by using several components, including a hospital's location. A wage index, determined by a three-year rolling average wage at a hospital, is a large factor in that formula, Thomas said.
North Dakota's history of low wages and a false belief that labor costs in rural areas are cheaper than in urban areas keep the state at the bottom of the index and, therefore, at the bottom of Medicare reimbursements, he said.
For treating a patient with pneumonia, North Dakota hospitals receive about $3,380, according to the Congressional Research Center. Treating the same patient in New York nets a hospital $5,240; in Washington, D.C., $6,590.
"That doesn't seem quite fair," said Seehafer of Trinity.
Even such rural states as North Dakota must pay competitive salaries to recruit many health care workers, Seehafer said. Hospitals everywhere also must stay current with technology to offer the best care for patients.
"And you can't tell me it's cheaper to buy an MRI scanner in North Dakota than in Boston," he said.
Shortfalls in Medicare and Medicaid payments are in addition to a possible 2.5 percent reduction in payments from Blue Cross Blue Shield North Dakota, the state's largest insurer, said Dwight Thompson, the chief financial officer at Altru Health System in Grand Forks.
"You operate in a more challenging environment," Thompson said.
Altru has limited capital expenditures and delayed growth plans, Thompson said.
Medicare funding cuts last year meant MedCenter One in Bismarck had to cut $1.5 million from its budget, Paul Morth, vice president of finance, said in a written statement. The cuts included money for its parish nurse program.
Trinity's patient numbers have increased, but the hospital has tried to cut supply costs, Seehafer said.
"We're just a blip away from being in the same shape as MeritCare," he said.
A group of health care providers in the state plans to develop recommendations over the summer and present them to Sen. Kent Conrad, D-N.D., by November.
B in M wrote on Jun 26, 2008 10:21 AM:
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