We’ve long understood that quality, accessible healthcare is a key aspect of any regimen for a robust economy. Our area’s healthcare and medical industry makes an approximately $1 billion direct contribution to our local GDP, with a total economic impact of $4.5 billion annually.
Russ Tyner, President and CEO of Baptist Health, pointed to the industry’s importance in relation to other major sectors, noting that along with state government, the military and auto manufacturing, healthcare is a “primary economic driver for the River Region.” “Secondly, we are constantly recruiting clinicians and professionals from around the country into the community. We are collectively our region’s greatest ambassadors,” Tyner said. Joe Riley, CEO of Jackson Hospital, offered similar thoughts. “Our team is dedicated to creating healthier communities in the region through service, volunteerism and improving overall health outcomes for those we serve,” he said.
In the face of a global pandemic, the River Region’s healthcare and medical industry has risen from its already prominent position of “important” to absolutely essential. Hospitals alone in the tri-county area employ 6,200 people, with another 6,500 jobs indirectly tied to hospitals, making this segment of the industry significant in terms of its tax base, wages and benefits. Yet, these pillars of our healthcare system are in trouble.
And while it certainly didn’t help, COVID-19 isn’t the main cause of hospital woes, according to Dr. Don Williamson, President and CEO of the Alabama Hospital Association. “We don’t know yet the total negative effects of the virus on hospitals, but the pre-COVID numbers weren’t good, and COVID only made everything worse,” he said.
HOSPITAL HEADACHES
The most recent available hospital cost report is for 2018, and its data reveal that Alabama hospitals were running with a median operating margin of negative 7.7 percent, which means 50 percent were losing more than that off their operations, and running with median total margins (which include tax support from the community and investments they have) of negative 2.5 percent. “That means 60 percent of all of our hospitals had negative total margins, and 76 percent are operating in the red,” Williamson said. “And after COVID, we return to a slippery slope that will unfortunately lead to more closures.” The statistics for rural hospitals in the state paint an even bleaker picture: “We estimate there are 10 to 15 rural hospitals always on the edge,” Williamson said.
Williamson outlined several reasons for this financial difficulty, pointing to a high percentage of uninsured individuals — 16 to 20 percent of our adult population — noting these numbers are partly due to Alabama opting not to expand Medicaid. The state also has the lowest rate of Medicare reimbursement in the country. He was quick to offer his thoughts on solutions too, putting the burden on the state and the federal government. “On the state level, we need Medicaid expansion,” he said. “We have good data showing that Medicaid expansion helps hospitals’ financial footing, by, among other things preserving hospital infrastructure.” Data also show that it not only improves physical health outcomes of individuals — People get diagnosed and treated earlier when they have health insurance — it improves their fiscal health as well. “In states that have expanded Medicaid, individuals have lower rates of bankruptcy, because you’ve removed one of major reasons for bankruptcy, medical expenses,” said Williamson.
Gilbert Darrington agrees. The CEO of Health Services, Inc. sees the negative ripple effects of inadequate access to healthcare through his work at Health Services, Inc., which meets a need by offering health and wellness services to insured but also uninsured patients. While he called our local healthcare industry “stable,” he joined Williamson in calling for Medicaid expansion. “It would really help the individuals who are uninsured,” he said.
On the federal level, Williamson believes it’s past time to change the way Medicare reimbursement is calculated; currently, it is based on wages and according to Williamson, “punishes” Alabama for having a low wage index. “There’s no question that it costs more to hire someone in New York City, but is not three times more,” he said. “There is a fundamental flaw in the formula in that if one state goes up, another goes down.”
COVID CRISIS
There’s little doubt the pandemic will only deepen the hole hospitals are in. Preliminary data from a recent Hospital Association survey conducted over six weeks showed that from mid-March to the end of April, Alabama hospitals spent more than $100 million just on costs associated with the virus, purchasing PPE and other supplies, paying overtime and, in some instances, having to hire staffing services. And expenditures have continued in the following months.
There was a major loss of revenue as well. Elective procedures make up a considerable portion of hospitals’ bottom lines, and for a time at the beginning of the pandemic, they were all put on pause. This hit hospitals but also surgeons and other practitioners who perform the procedures.
Tyner got specific on the challenges he and his team have faced, claiming an overload of patients threatened to overwhelm resources. “The sheer volume of patients seeking care in a pandemic environment has presented an exceptional challenge to create the capacity and environment necessary for the significant numbers of COVID-positive patients,” he said. “It has also been difficult to create the environment and capacity necessary for non-COVID patients with cardiac or stroke issues, trauma and the routine care of those with chronic conditions. Offering timely and appropriate care for that population while maintaining an environment free of COVID contamination requires innovation and significant organizational discipline.”
Darrington echoed Tyner, stressing how thin COVID-19 stretched area hospitals when it was at its peak. But HSI has not been overrun with patients, quite the opposite. “Health Services, Inc. has seen a significant reduction in our patient visits. This has hurt us financially,” he said. To adapt, HSI is closely monitoring staffing and supply costs and making necessary adjustments. It has also embraced telemedicine to make vulnerable patients more comfortable in seeking treatment.
To some, this information comes as a surprise, as Dr. Keivan Deravi, President of Economics Research Services, Inc., explained. “You might guess that healthcare would be the last industry negatively affected by a pandemic because of its essential nature in that situation,” he said. “But with the postponement of so many procedures and with the weeks-long closures of some doctor and dentist offices, there have been multiple negative impacts.”
Despite all the current gloomy facts, Williamson noted a bright spot on the horizon; as COVID-19 cases continue to trend down, its adverse effects will begin to be reversed. “There is some positive news. Hospitals lost substantial amounts of money from delaying elective procedures, and those have been turned back on, so that is good,” he said. He remains optimistic about continued progress as well, but cautiously so. “Depending on how COVID-19 goes, if a community has a major outbreak, we may have to restrict those procedures again.”
Tyner is equally encouraged and rightly appreciative of his team, which is 5,600 people strong, praising the grace and strength under pressure that he’s witnessed. “Even under the stress of a persistent global pandemic, local providers remain strong and are performing heroic deeds daily,” he said. “There is nothing normal about what we are all experiencing both in and out of healthcare. But our clinicians and housekeepers, cooks and clerks, doctors and nurses have put their patients’ and the community’s well-being above their own and that of their families. I have never been more proud to be associated with such a dedicated group of high performing and selfless professionals.”
Williamson applauded all of the state’s hospitals, saying he’s been “extraordinarily impressed” with their ability to adapt and flex to meet the needs of the virus while also continuing to provide other necessary care. “We saw them increase ICU beds, shuffle staff and do everything it took to meet demand, and we got through it,” he said.
Riley echoed Williamson and Tyner and expressed appreciation for the backing his team felt from the community. “In collaboration with local businesses and volunteers, our resolve continues to be strong,” he said. “The Montgomery Area Chamber of Commerce partnered with businesses and volunteers to ensure that our healthcare heroes were fed, had necessary services and supplies and most importantly, prayers. We continue to be thankful for the outpouring of support.”
HAVE TO HAVE IT
While it’s clear that the healthcare industry is a key piece of our local economy — according to Deravi, in terms of GDP contribution, it’s about the fourth largest industry, as well as one of our most active — its intangible effects should not be overlooked. “You can’t have a healthy economy or community without a large, efficient and quality healthcare industry in the area. A good healthcare footprint is an attribute of a well-developed economy,” he said. “But none of the statistics consider the great addition to our quality of life.” Tyner shared the same sentiment. “Our area medical providers contribute to a significant quality of life necessary for any community or region that wishes to grow and prosper,” he said.
That’s because without good healthcare, economic development stalls. It’s impossible to grow a community by recruiting new business and keeping current companies here without a strong medical infrastructure. “New businesses look at many factors when considering a location, but near the top of that list is what kind of healthcare their employees will have,” Williamson said.
NOW TRENDING
Changes in healthcare are constant, with discoveries and new technology leading to more successful treatments and better health. And COVID-19 has created its own alterations; Tyner claims our post- COVID healthcare universe will bear little resemblance to the pre-COVID one. But the virus has also influenced — and sometimes accelerated — those trends already at play, like a shift in procedure locations and the increased use of telemedicine. “We’re seeing more procedures move to outpatient from inpatient, and not just at hospitals but across the healthcare spectrum,” Williamson said. “That’s not completely new, but it’s very clearly now moving forward.”
More attention is being paid to post-acute care in an attempt to keep hospital capacity and resources available. “When we send someone home, they stay home,” Williamson said. “We don’t want them coming back with the same issue. That requires diligence to stay on top of what is happening to people once outside of the hospital.” March and April in Alabama saw a dramatic rise in the number of telemedicine visits, yet those numbers dropped again in May, when doctor’s offices re-opened and people felt more comfortable getting out. Still, according to Troy Maxwell, a District Manager with Blue Cross Blue Shield of Alabama, the current numbers are staying far above pre-COVID-19 levels, proving that telemedicine is most likely here to stay. “Prior to COVID-19, we were seeing approximately 2,000 telehealth claims per week. By mid-March, that rose to 14,000 per week,” he said. “In April we were averaging around 70,000 a week, and then in May we saw a decline to 15- 20,000 claims weekly, which is what we are averaging today.”
The Jackson Clinic has also embraced innovation in the form of increased use of telemedicine. “Through this platform, those seeking care can interface with their provider virtually, preventing unnecessary travel and increased access to care from the comfort of home,” Riley said.
Maxwell thinks the more widespread use of telemedicine is no longer a temporary blip but a reality, one that’s a real plus for the future of healthcare. “These numbers show people early on were staying away from the doctor’s office to avoid possible exposure to COVID-19, but at the same time doctors were able to connect with their patients and keep their practices open through telehealth,” he said. And BCBS is evolving with the times. “We are planning for a long-term telehealth program that builds upon the strengths and wins of our current program,” Maxwell said. HSI is also taking full advantage of telemedicine’s pros, implementing and expanding telemedicine offerings in all its clinics, including the addition of telepsych services in its behavioral health department.
As one of the more tumultuous years in recent memory draws to a close, the future remains uncertain, and that’s as true in the healthcare and medical industry as anywhere else. Yet there are plenty of reasons to remain hopeful. The area’s hospital CEOs stressed that success or failure in our healthcare is not solely determined by charts or graphs or research or equipment, but by people. “Our people remain our greatest asset, and we will continue to motivate and embrace our responsibility, as leaders in healthcare, to provide our teams with resources needed to care for those we serve,” Riley said. Tyner agreed. “The provision of quality healthcare is a local endeavor and is intensely personal. It requires well trained and exceptionally dedicated individuals to function as a team,” he said. “From physicians to laboratory clinicians and nurses to environmental staff, we are fortunate as a community to have the level of professional expertise and compassionate care that we do.”
Q: How has COVID-19 impacted the practice and how has it adapted?
“Alabama Orthopaedic Specialists, P.A. , like other surgical practices, took a hit back in the spring when all elective surgeries were put on hold. The physicians experienced a significantly reduced office load as we all complied with the Governor’s Executive ‘stay at home’ Order. The physicians, as an essential business, continued to see patients following proper social distancing and using appropriate PPE. This limited the ability to see the numbers we are used to seeing. The practice deployed pre-appointment screening and continues to do so today through a pre-appointment reminder call and brief COVID questionnaire. AOS increased vigilance on cleaning, the wearing of masks, personal protective equipment (PPE) usage and installed protective barriers at each of our check-in and checkout counters to enhance protection for our staff and patients. Over the past three months, since the elective surgery hold was released, our patient volumes have mostly returned to pre-COVID levels. Despite the relaxing of some of the lockdown rules, we continue our vigilance to make sure we do all we can do to keep our staff and patients safe.” - RON O’NEAL, ALABAMA ORTHOPAEDIC SPECIALISTS
TECH TALK
We asked the CEOs of the River Region’s major hospitals to share the lowdown on the high-tech equipment they’re currently using to care for their patients.
RUSS TYNER: Baptist Health continues to make significant investments in cutting edge technological capacity. Just a few examples include a fleet of ultraviolet disinfecting robots that are essential to protect patients in the current environment; a system of virtual nursing technology that allows for patient and clinician interaction without face-to-face exposure; surgical robotics; and ultra-modern clinical lab and imaging diagnostic technologies.
JOE RILEY: The Jackson Hospital Wound Care Center uses a comprehensive approach from healthy lifestyle support to hyperbaric oxygen therapy, aiding in the expedited healing of injured tissue and fight against bacterial infections. This is especially beneficial to patients with diabetes.
STAFFING STATS
River Region Recruiting
Facilities and resources are key, but quality people are the foundation of quality healthcare, and getting enough good doctors, nurses and other healthcare professionals to come here is a fulltime job. At Jackson Hospital & Clinic, it’s Hannah Chadee’s job, and she’s got her work cut out for her. She noted the shortage of physicians in the metro Montgomery area.
According to Chadee, Jackson Hospital & Clinic is located within both a Health Professional Shortage Area (HPSA) and a Medically Underserved Area (MUA). “In Montgomery County, the percentage of the population living in an area affected by a HPSA is 36.6 percent.” According to the National Center for Health Workforce Analysis, Alabama is projected to have a deficit in both primary care physicians and physician assistants in 2025, and “America’s Health Rankings” 2019 report ranked Alabama 42nd for the primary care physicians-to-population measure.
Things are a little rosier on the nursing front but still not ideal for all areas. “The state of Alabama as a whole is projected to have an adequate nursing workforce when it comes to Registered Nurses for 2030,” Chadee said. “Although there is an adequate number of RNs, they are disbursed disproportionately throughout the state.”
Faced with this, Jackson continues to place a greater emphasis on physician recruitment and retention, and Chadee is dedicated to identifying the factors that are contributing to the current challenges. “We have developed a comprehensive approach to physician recruitment and retention at our institution,” she said. “We work with more than 75 search firms to attract and recruit world-class physicians to our system.” And she’s not letting COVID-19 get in the way, scheduling virtual interviews that include several members of the physician and support staff, as well as virtual calls where the candidate can tour Jackson’s facility and meet members of the healthcare team. The next step is putting the community in the spotlight. “Introductions are made for the candidate with local realtors who provide information about the schools, neighborhoods, cultural activities and restaurants. Additionally, candidates are sent links to online videos with community information,” she said. “For candidates, finding an environment in which they feel comfortable and close to other physicians as well as community members is essential.”
Chadee stressed that headway has been made in recent years. “The landscape of recruitment for young professionals, to include physicians, has improved with a collaborative effort by the City, the County, the Montgomery Area Chamber of Commerce and local industry, including banks, educational institutions and real estate professionals,” she said.
It’s promising progress, as Russ Tyner, CEO of Baptist Health, underscored how vital recruitment and retention efforts are. “While COVID-19 issues dominate today’s issues list, there is a post-COVID reality that still requires that we continue to create and recruit the next generation of quality clinicians and leaders for the local and regional healthcare market,” he said. “This is paramount for continued success.”
BY THE NUMBERS: HEALTHCARE INDUSTRY IMPACT
- DIRECT JOBS: (AS OF 2018) 18,300 IN MONTGOMERY COUNTY, ABOUT 10.5 % OF ENTIRE EMPLOYMENT
- NO. 2 LARGEST EMPLOYER IN THE AREA
- ABOUT 9% OF THE LOCAL ECONOMY Approximately $1 billion direct contribution to Montgomery County GDP
BY THE NUMBERS: DOCTOR DEFICIT
- Alabama falls in the TOP 10 of states experiencing the worst physician shortages.
- THE 2019 ANNUAL REPORT published by the Association of American Medical Colleges indicates that the physician supply and demand may see a NATIONAL SHORTAGE of NEARLY 122,000 PHYSICIANS by 2032.
- BY 2033, a primary care physician shortage of between 21,400 and 55,200 is projected.
- In addition to an overall shortage of primary care physicians, oncology and surgery are projected to be the hardest hit specialties.
- WITHIN 5 YEARS, new cancer cases are projected to INCREASE BY 42%; number of oncologists is only EXPECTED TO INCREASE BY 28%.
COVID COSTS: WE’RE ALL IN THIS TOGETHER
From mid-March to the end of April, Alabama hospitals spent more than $100 million just on costs associated with the virus, purchasing PPE and other supplies, paying overtime and, in some instances, having to hire staffing services.
CHANGING TIMES: TELEMEDICINE TRENDING
March and April in Alabama saw a dramatic rise in the number of telemedicine visits, yet those numbers dropped again in May, when doctor’s offices re-opened and people felt more comfortable getting out. At the peak in April, Blue Cross Blue Shield of Alabama was averaging around 70,000 telehealth claims a week.
Health Services, Inc.: HEALTHCARE FOR ALL
“Our main role is to provide health and wellness to insured and un-insured patients in the River Region. Another huge mission for us is to educate and give back to the community. We normally conduct annual health fairs at each one of our locations but since the COVID-19 outbreak has disrupted many activities, we have instead been providing free COVID-19 testing in Montgomery and Lowndes Counties.” – Gilbert Darrington, CEO, Health Services, Inc.
CHILD CARE
The River Region will soon have a dedicated pediatric facility at Baptist Medical Center East, allowing that hospital to give its youngest patients the focused care they often require. Russ Tyner, Baptist Health CEO, explained why the system is making this move. “Baptist Health operates three acute care hospitals, with all three having Emergency Services facilities that are often over-taxed,” he said. “We would predict over 165,000 visits this year. Many are pediatric patients. In fact, nearly a quarter of those are pediatric visits that are mingled in with all three adult-oriented facilities. To relieve some of that unsustainable volume and better serve a pediatric population, we are planning to build a dedicated Pediatric Pavilion at Baptist Medical Center East.”
The pandemic has slowed plans some, but they’re still moving ahead and currently include a dedicated and separate Pediatric Emergency facility with 20-plus additional pediatric beds. “Our intent is to create a community pediatric service line that will allow families to get the emergent and ongoing children’s healthcare needs tended to in our community and region with a dedicated and expanded cadre of specialized clinicians,” Tyner said. “It holds exciting potential for Montgomery and the region.”
