CHEYENNE — Cheyenne Regional Medical Center is likely to lose $70.2 million over the next 10 years because of existing cuts to Medicare.
The loss will come about mostly from $48 million in cuts through the Affordable Care Act and $14 million in cuts from sequestration.
The Affordable Care Act is the national health-care reform measure. Sequestration kicked in automatic cuts after the U.S. House and Senate could not meet a deadline for spending cuts.
CRMC’s projected loss also is due to a proposed $8 million cut in coding adjustment costs for inpatients and a $204,500 loss in bad debt payments.
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The cuts will trim 8.2 percent from the hospital’s operating budget.
CRMC has the largest cut of all Wyoming hospitals. Next up is Wyoming Medical Center in Casper, which stands to lose $51.4 million over 10 years for a 9.6 percent loss.
All of Wyoming’s hospitals combined expect to lose a total of $233 million in the next 10 years because of Medicare cuts. That is a 6.6 percent operating loss.
Cuts already have started, said Dr. John Lucas, CRMC’s chief executive officer.
CRMC’s board of trustees agreed that the hospital will cut $35 million in operating costs over the next three years to help absorb the overall loss.
The plan for the Cheyenne hospital calls for a balanced approach of cuts and more revenue.
CRMC laid off eight high-ranking administrators in February to help save money.
But its top goal in making future cuts is to protect jobs, Lucas said.
“We don’t want to lay anyone off. But you can’t make a promise like that,” he said. “We don’t control the external environment.”
Neil Hilton, vice president of the Wyoming Hospital Association, said hospitals and doctors are finding ways to become more efficient.
People want more value, better quality, better outcomes and more consistency from their health care, Hilton said. Reimbursements to hospitals are changing from paying for how many cases hospitals and doctors do to quality of care.
CRMC leaders plan to get more efficient at buying pharmaceuticals and improve purchasing practices.
They will look at ways to increase efficiency, Lucas said. For example, the average stay for patients at CRMC is too long now, he said.
“Sometimes, a lot of people are parked here an extra day” who could go home, he said.
The hospital must improve management of the cases of very sick and uninsured patients, he said.
Hospital leaders want to make sure they provide good primary and preventive care to avoid higher costs from more care in the long term, Lucas said.
The Affordable Care Act in its original design does not hurt hospitals, Lucas said. Indeed, he supports the ACA plan that would insure 30 million people who are not insured now.
“That’s a good thing to me,” he said. “What’s hurting us is that we’re in a state that didn’t do the Medicaid expansion.”
The decision not to expand the number of people on Medicaid means hospitals don’t get insurance money for caring for them but must provide the money themselves.
“I think it’s our duty as leaders in health care to do everything we can to improve the quality and reduce the cost and make health care affordable,” Lucas said.
Article Date: April 15, 2013