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Rural hospitals across the nation face unique challenges, and many are at risk of closing, according to Dr. Scott Neeley, President and CEO of Sierra Nevada Memorial Hospital (SNMH).
Dr. Neeley was the guest speaker at the Nevada County Community Forum this week on the topic of “Urgent Conversation: How will Sierra Nevada Memorial Hospital survive the rural healthcare crisis?” hosted by Cheryl Dell, former publisher of the Sacramento Bee.
According to Dr. Neeley, the basic rules of economics, supply, and demand, come into play as, in many cases, hospitals have partnered with large corporations that can offer certain advantages such as greater purchasing power, technical support, and specialized equipment.
Sierra Nevada Memorial Hospital (SNMH) is in no danger of closing, according to Dr. Neeley, and SNMH maintains the ability to reinvest in the people and facilities here in Nevada County.
“Our membership in Common Spirit Health and Dignity Health means that we take advantage of a vast amount of purchasing power,” Dr. Neeley said. “We can negotiate the very best prices when it comes to drugs, pacemakers, toilet paper, cleaning fluid, you name it. We benefit from the purchasing power of being part of a very large company.”
Common Spirit Health is the largest nonprofit (501 C 3), community-governed, health care system in the United States, according to Dr. Neeley.
“Common Spirit Health reinvests its profits into its facilities and its people and that’s not something you can say about a for-profit organization,” Dr. Neeley said.
The constant reinvestment impacts the service provided, however, the demand for services in a rural community differs from urban areas.
“An increased incidence of diabetes. An increased incidence of obesity. An increased incidence of other chronic health problems which lead to an increased risk of stroke and cardiovascular disease,” Dr. Neeley said.
“In many rural communities there is an increase of substance abuse issues which is the major cause for premature death in the United States now that the COVID pandemic is mostly over,” Dr. Neeley said.
The greater distances rural patients must travel to receive healthcare in rural areas also impacts health outcomes, according to Dr. Neeley.
Rural hospitals, which may only have the capacity of 15 or 20 beds available, otherwise known as patient census, have difficulty competing with larger hospitals.
To further the problem, the way SNMH and other rural hospitals are funded creates a troubling business model, according to Dr. Neeley.
“The vast majority of patients have health insurance which is funded by the government, either Medi-Cal or Medicaid,” Dr. Neeley said. “Both of those reimburse hospitals and health care providers below the cost of the care provided.”
59% of patients served at SNMH have Medicare, and 23% have Medi-Cal, but the government does not pay the complete bill.
The 14% of patients who are discharged from the hospital that are commercially insured make up the difference, according to Dr. Neeley.
“The 14% of the patients who are commercially insured are funding 71% of the hospital’s revenue,” Dr. Neeley said. “We actually lose money… on all patients that are government funded.”
“On average it costs us almost $6,000 for patients with Medicare that are discharged,” Dr. Neeley said.
Healthy hospitals report over 20% of patients are commercial payers, but SNMH focuses on its mission to serve the community.
“The concept for us is not to have great financial success,” Dr. Neeley said. “We have to keep the doors open… As part of a mission-driven organization, we don’t have the purpose of pleasing shareholders.”
Dr. Neeley made an astute observation when addressing the common issue of lowering the cost of health care.
His opinion was that through healthy living, the health span of a person increases, and that lowers the demand for health care.
“Your health span is 80% outside of the medical care that you get. Some of it is genetic, but a lot of it is how you lived,” Dr. Neeley said. “We have a solid number of people here [in Nevada County] who take things that impact their health span very seriously.”
Smoking, substance abuse, excessive alcohol intake, obesity, the food that you eat, and whether you’re active have the most powerful impact on people’s health span.
The education level of Nevada County residents and the outdoor culture we enjoy may also factor into the health span of a person.
“There’s a lot of talk in the political arena about lowering the cost of health care. I don’t know how you do that,” Dr. Neeley said.
“I know what drugs cost. I know what equipment for a medical center costs. I know what I have to pay in wages… I don’t know how to make healthcare costs lower… other than nibbling around the edges a little. I think that the solution, if there is one… has a lot to do with decreasing the demand. And that has a lot to do with how people live their lives,” Dr. Neeley said.
We need to focus on health.
Dr. Neeley also discussed the importance of quality care and the recruitment and retention of physicians in rural hospitals across the state.
“California is expected to have a shortage of primary care physicians, at least 4,000 by the year 2030,” Dr. Neeley said.
Dr. Neeley recommended building residency programs for training primary care physicians.
“Place based education is a tremendously powerful tool for growing a medical community,” Dr. Neeley said. “We found that starting teaching programs allows us to recruit a slightly different type of doctor, somebody who is perhaps more interested in giving back to the community. Then there’s the opportunity to retain the doctors that you teach.”
Dr. Glenn Gookin, a family medicine specialist in Grass Valley, had the same idea and works to train, recruit, and retain physicians, according to Dr. Neeley.
“Data shows that the majority of physicians will end up practicing within 50 miles from where they were trained,” Dr. Neeley said.
SNMH is larger than most rural hospitals with an average daily census of around 55 patients.
Nursing staff is hard to find across the country along with highly trained and licensed staff.
“We have advantages living in Western Nevada County. A lot of people want to live here. We have about 60 openings in the hospital right now,” Dr. Neeley said.
The most unique challenge for SNMH when it comes to staffing is affordable housing.
“We have people who love working here, but live in Roseville or Auburn,” Dr. Neeley said. “We have some advantages because of the terrific lifestyle and the outdoors and the many cultural advantages we have here. This is not your run-of-the-mill rural community.”
One more reason that hospitals in rural communities make good neighbors is the access to urgent care.
Urgent care is now available at 107 Margaret Lane in Grass Valley as Yubadocs joined in partnership with SNMH after closing its doors.
Walk-in patients will be seen, but appointments are recommended during the hours of 8 a.m. and 6 p.m., Monday through Sunday.
To become a robust organization that survives into the future and continues to provide great care for the people of the County, SNMH is going to do it the old-fashioned way, according to Dr. Neeley.
“We’re going to have a good product… it’s got to be delivered with love and respect. I think if we do that it’s the first step on that path of reliance, Dr. Neeley said. “In the short term, I need people to stop going down the hill to get care.”
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