Washington State Hospital Association Critical Access Hospitals: Protecting an Essential Community Resource

Washington State Hospital Association Critical Access Hospital Overview

Washington State Hospital Association Legislative History Federal law: 1997 State law: 2001 Goal: Assure essential health care services in rural areas Must meet certain criteria, including: – No more than 25 inpatient beds – 24 hour emergency services – Defined distance from other hospitals ( miles) – Short stays (4 days or less)

Washington State Hospital Association Washington State Locations

Washington State Hospital Association 38 Critical Access Hospitals 40% of hospitals in state Serve over 60% of state area The only health resource for miles Often center of care network with primary care, long term care, emergency medicine Washington Characteristics

Washington State Hospital Association Medicaid is a Significant Payer Note: Wide range of Medicaid, from 2% – 43% “Other”’ includes uninsured, underinsured, and people who do not pay for care

Washington State Hospital Association State CAH Spending as a Percent of State Medicaid Budget Very Little of Total Medicaid Budget Spent on CAH

Washington State Hospital Association Proposed CAH Reductions CutAmount of Reduction Medicaid Fee-for-Service$27 million Medicaid managed care$15.5 million Federal match$42.5 million TOTAL$85 million

Washington State Hospital Association Total CAH Medicaid Payments Proposed Cut is Almost 50% of Payments Dollars in millions

Washington State Hospital Association Impact of the Reductions

Washington State Hospital Association Individual Hospital Margins Before the Cut Each bar represents an individual hospital

Washington State Hospital Association Individual Hospital Margins After the Cut Each bar represents an individual hospital

Washington State Hospital Association 8th Legislative District Impact Hospital Total Operating Revenue CAH Total Cut Medicaid Payment Reduction Percentage Current Operating Margin Operating Margin after CAH Cut Change to Operating Margin PMH Medical Center 28,502,8902,304, %-9.1%-16.5%-7.3%

Washington State Hospital Association Loss of local services Increased travel time to care Inability to travel for care increases risk of prolonged illness, disability, even death Impact on Patients

Washington State Hospital Association Some CAHs will close—in a few cases, fast Others will eliminate important services Adversely impact access to care In some communities, lives will be lost Loss of Services

Washington State Hospital Association Compromises entire health care system Increases costs by… – Delaying/avoiding care – Requiring long distance transports – Contributing to fragmentation of services Not simply a “rural” problem Effect on System

Washington State Hospital Association Economic Impact Largest/one of the largest employers in town; Significant payroll; excellent family wage jobs Vital for attracting and keeping businesses in the rural community Layoffs and service closures will happen if the cut is enacted Significant ripple effect

Washington State Hospital Association What We Need Legislators to stand strongly against this cut Oppose any budget that includes it

Washington State Hospital Association Questions and Comments