Grays Harbor News Group
In the state of Washington, 24.8 percent of the population is insured by Medicaid, the government-funded health insurance for low-income citizens. In Grays Harbor County alone, the number is 37.6 percent.
Typically, when doctors and hospitals treat Medicaid patients and then bill the government, the payment rate isn’t enough to cover the provider’s cost of giving treatment.
In the case of Grays Harbor Community Hospital, the state has already agreed to pay 150 percent of what it would reimburse for Medicaid patients at most other places in the state.
That still isn’t enough to get the hospital to break even, said Hospital Administrator Tom Jensen, covering about 90 cents on the dollar for what it costs. This means the nonprofit hospital is essentially subsidizing the government insurance.
In June, that premium rate expires. It’s only in effect now because of a budget proviso approved by the Legislature last session.
It’s in the budget mix again now, and it’s imperative that the governor and Legislature include it in the biennial budget.
The higher reimbursement rate would go to about five “sole community hospitals” around the state — in communities such as this one, farther away from other options than anyone would like to be.
A year ago, when the 150 percent rate was included in the budget, Community Hospital was in danger of going under.
Because of actions taken by the hospital, including painful layoffs, things aren’t as dire now, but the hospital is still losing money. 2018 financials haven’t been released yet, but are sure to show a red bottom line.
In addition to the layoffs, the hospital has adopted productivity practices suggested by consultants, made changes required to get a higher reimbursement rate for Medicaid and Medicare patients treated at hospital district clinics (as opposed to the hospital itself), and refinanced a large debt, which will save up to $5 million in finance costs over the next couple of years.
In other words, it is trying to help itself.
It’s still not enough. It’s clear that a longer-range, sustainable plan for paying for health care in rural areas is needed.
State Rep. Steve Tharinger, D-Sequim, is an important player in looking for a solution. He says the 150 percent reimbursement rate for the next two years can serve as a bridge while a long-term solution is developed.
Part of the solution might entail the hospital offering mental health care of some kind. The need for mental health facilities is so acute, with the state facing the same sort of legal challenges that forced the Legislature to provide more money for education, that it is going to occupy the Legislature’s attention for the next couple of bienniums.
The permanent solution may also push Community Hospital and Summit Pacific Medical Center center together. They are essentially competitors now, even though their business models are different.
Community Hospital provides surgery, a birthing center, trauma care, emergency facilities and the daily grind of a typical hospital.
Summit Pacific stresses wellness and prevention. Compared to Community Hospital, it seems like a new, shiny penny, and it’s siphoning off some of the revenue that would have gone to Community, especially in the emergency department. Also, it is funded on a different model. A large government payer mix doesn’t have the same effect for Summit because it can bill the government at cost.
If the long-term solution creates a more cooperative situation between the two facilities, we’ll all be better off. But right now, the governor and the Legislature need to help this community continue to maintain a viable hospital for what is a very large part of the state.
The Grays Harbor News Group editorial board includes Publisher Mike Hrycko, Daily World Editor Doug Barker, Daily World City Editor David Haerle, North Coast News Editor Angelo Bruscas and Vidette Editor Michael Lang.
