Ted Simons: Arizona's rural health office is sponsoring the 38th annual rural health conference in the valley this week. This, as many see a healthcare crisis brewing in rural Arizona. Budget cuts are threatening to shut down small rural hospitals that are about the only game in town for the communities they serve. Here to talk about healthcare issues facing rural Arizona is Dr. Lynda Bergsma, director of the Arizona state office of rural health located within the University of Arizona's Mel and Enid Zuckerman office of public health. And Jim Dickson, CEO of the Copper Queen Community Hospital in beautiful Bisbee. Thanks for joining us.
Lynda Bergsma: Thank you.
Ted Simons: What's the state of rural health in Arizona?
Lynda Bergsma: Wow, that's a good question. It's precarious, is what the state is. There are always precarious situations in rural health, unfortunately, and that's why we have to have rural health offices in all 50 states in the union and we have organizations and all kinds of groups in the United States constantly telling our legislators and policymakers they have to be considering rural and they have to think of it differently from urban. Rural is not just a smaller under-resourced version of urban.
Ted Simons: I want to get back to that. The difference between rural and urban. But as far as the state of rural health, how serious is it?
Jim Dickson: Every area outside of Phoenix and Tucson is a medically under-served and healthcare professional shortage area, under federal designation, we don't have half the providers that the rest of the nation has and therefore we have different programs we're entitled to bring healthcare to the rural areas.
Ted Simons: Talk about why they're medically underserved; is it because of logistics of small towns?
Jim Dickson: It's that the population cannot support the salaries and plus, the market is adverse and you have a real shortage of physicians in rural Arizona. We have federal health clinics, rural health clinics that we can offer better salaries and it exacerbates itself in the rural area.
Ted Simons: Is that the major concern, lack of providers, lack of medical folks?
Lynda Bergsma: It's one of the major concerns, for sure. And Jim says, in the United States -- it's a global problem. There's just not a young -- enough young people coming into the pipeline for all of the various health professions. Nurses, pharmacists, doctors and all of those things.
Ted Simons: What can be done? First, why like that, and secondly, how can it be changed?
Lynda Bergsma: Well, there's a lot of things we're trying to do, particularly in rural. One of the things we know about getting young people interested in coming and practicing in rural areas, when they come from rural areas originally. There's an effort amongst a lot people in this state and other states to kind of grow your own and get young people interested in rural health and possible practice in rural health right from, we're talking about grade five and on.
Ted Simons: Uh-huh, we're also talking about AHCCCS. We are now, because it's always underlining these conversations. The impact on the AHCCCS cut to eligibility. What are you seeing in rural Arizona?
Jim Dickson: It's having a severe effect. The rural areas have high census activity, 26% to 40% of the patient volume is AHCCCS. When they cut it back -- we've been frozen for three years and cut the last two years and looking down the barrel of two or three more cuts. I don't think it's too much to say it's a hospital closer. There are lot of hospitals in jeopardy of closing. Multimillion dollar deficits right now and with the additional cuts it will add another million or two.
Ted Simons: The idea of a provider rate cuts, first, explain what we're talking about there.
Jim Dickson: OK. AHCCCS pays each provider a rate and it's a certain amount of money, and then they cut it back by 5% last year and cutting it back by 10%, cumulative, this year. And that doesn't solve the problem. Basically what that does is undermine the operation of a already medically under-served healthcare shortage.
Ted Simons: This disproportionately affects rural areas?
Lynda Bergsma: Yes, they do. In Arizona and throughout the country, they're poor, older and sicker in rural areas and from -- rural areas where there's high unemployment and fragile economy, many disproportionately on AHCCCS and Medicaid AHCCCS and on Medicare that doesn't pay well either. So there's much less private insurances in rural areas covering these people than in urban areas.
Ted Simons: In looking into this, I noticed some concern that the studies done in this area would lump some of these rural hospitals and rural areas in with urban areas and judging from what you say, you really can't do that, can you?
Lynda Bergsma: You can't, and you can't because the rural population is different from the urban population and for one thing, just think about the geography. Very spread out. No public transportation. Can't get places. Can't afford the gas to get places and it's a different -- very different kind of population and something that's not generally recognized when it comes to making policy and regulations.
Ted Simons: Do you agree with that?
Jim Dickson: Absolutely. The AHCCCS department contracted with Milligan. They lumped all the larger hospitals together, and the larger hospitals have better margins. And the smaller hospitals don't and so when they evaluated the cuts, it was an averaging technique, a one size fits all payment technique and that doesn’t work for a rural hospital.
Ted Simons: What you mentioned about this being a hospital closer, how close are we to hospital closing in rural Arizona?
Jim Dickson: Close, when you have a $19 million net operating budget and you lose $4 million, you cannot sustain that for a long period of time. The hospitals, my hospital happens to have a positive bottom line because we've been very frugal. I just laid off 10 people, closed down two services and downsized the construction project from $5.2 million to $3.7 million and this is government federal money that would help us do this. We've got to keep ourselves in shape but there comes a point where you can no longer maintain the system and most rural areas need a good diagnostic battery to do things. There are five of the critical AHCCCS hospitals in AZ that are located below the I-10 corridor. Three of those are running multi-million dollar deficits. This is immigration and everything else involved so you're talking about a loss of 60% to 70% of the hospitals, if the cuts continue, not only do we envision the AHCCCS cut, the affordable care act, Obama care, will cut my hospital alone another million dollars. There's $500 billion worth of the cuts in that bill. Now we're going to take the money from the state and the money from the federal government and on top of that, the immigration money goes away.
Ted Simons: OK. So what do we do here? I know there's a plan for some sort of voluntary donation program. What is that about -- you're the one on that?
Jim Dickson: The Medicare program across the United States has ways to get money in to cover areas of really poor results and we're -- we're pushing a pool called a donation pool, where the hospitals put up the money, the state sends it to the federal government and under the Medicaid program, which is half federal and half state, send the money back and make these hospitals somewhere near whole. When the AHCCCS cuts back, some are at 40%, becomes charity and bad debt. They're covered an enhanced amount. It could save quite a few hospitals.
Ted Simons: That's an idea. There are other new -- I'm sure -- this has -- it's not the opportunity you want but got to be an opportunity to find ways to do things different, because it's reality.
Lynda Bergsma: Yes, I mean, from some vantage point -- united healthcare put out a report. In 2014, not only having all of these issues that you're talking about, Jim, but also going to have a whole lot of people in rural areas now with insurance. That are going to be covered and they're going to need -- they're going to need services and there may not be hospitals available or doctors or nurses available to serve them. So we're in a situation where we have to look at innovation also and one of the innovations Jim knows a lot about, and that's telemedicine.
Jim Dickson: I think we have one of the top telemedicine programs. We do cardiology, stroke, and neurology telemedicine. So in one six month period, we're able to use telemedicine, we reduce the costs to the insurers $500,000, $600,000. Because we didn't ship people to the helicopters and other places. This came through a grant through united healthcare and they saw the efficacy of this.
Ted Simons: It's like you're coming full circle.
Jim Dickson: If we do this, we can manage people and keep them in their homes and they can see specialists without having to travel long distances. We emulated this program we saw in Marshville, Wisconsin. We're the only hospital to use it in the emergency care, the acute care and the clinics.
Ted Simons: We have to stop it there. Good conversation. Thanks for joining us. We appreciate it.
Lynda Bergsma: Thanks a lot.