Why Rural Hospitals Matter

Hey everybody. It's Kevin Stephenson. Thanks for joining me this week on I don't care with yeah. Me, Kevin Stevenson. Really excited about my guests today. It's a long time, really good friend of mine. Scott Manus, Scott Wupp and I don't care. Hey, good morning or good evening, I guess. Whatever time, who knows. But Scott's original vice president for health tech And I'll let him explain explain a little bit about what HealthTech does. But Scott's been in health care over thirty years. I met him when he was a CEO in Dallas, He's he's done that for a number of hospitals, sizes from eighteen beds to four hundred and sixty beds. He's developed a lot of strategic partnerships all across the healthcare landscape. And so, again, Scott, so happy that you were able to join me today. And the reason Scott joined me is I saw an article and shared it on LinkedIn about rural health care. And I said, you know, I I can go both ways on this because I I know the value of rural health care. I've been in rural health care. I love it. But I've also seen some smaller hospitals that really you know, they weren't they didn't have the resources to provide a level of care. And so Scott called me out on her on LinkedIn. And so I asked him, hey, let's come on the show and let's talk a little bit about it. So, Scott, Again, tell my listeners a little bit about you, about HealthTec, and then we'll just hop into into our discussion for today. Well, sure. Well, Kevin, like you said, we've probably known each other close to fifteen years. I've been in healthcare literally all my life. Started at the bedside as a phlebotomist in high school and have held, you know, a lot of positions throughout. Various healthcare organizations, been in government owned hospitals, been in nonprofits, been in for profits, work my way in and out of a variety of CEO offices, and now with HealthTech, I'm a regional vice president, Health Tech is a company that basically does three things at our core. We manage small primarily rural hospitals. We provide consulting services to hospitals, again, primarily rural hospitals, community hospitals, and then we also do interim and permanent placement. For director and executive level team members at hospitals as well. My role specifically is in business development and in managing some of the hospitals that we have management arrangements. Okay. Where are the hospitals that you manage? So they're scattered across the country. We you know, usually where they are is you fly to a remote airport and drive a couple of hours from here. So have some hospitals in Arizona, New Mexico, Montana, Southern, Illinois, Those are ones that are kinda, you know, in my basket right now. Okay. Yeah. So you do get to put a few miles in the air. Oh, yeah. So Well, very good. Well, let's talk about rural health care, rural hospitals. And and what are some of the main issues that we're facing right now? You know? And if you would, one one thing I'd like for us to to kind of hit on is the new designation of rural emergency We've got one really close to me here in Waco, and it's relatively new just started here in January. So I think everybody's still trying to feel that out. But I would like to talk a little bit about that too. Sure. Yeah. So I'd be happy to talk about the Rural Emergency Hospital. It's another whole basket of designation, but just kind of the key issues facing hospitals across the country rural hospitals in particular are are two things, you know, really at the forefront. One is staffing and workforce and just getting qualified people to getting and keeping good people. Right? We've seen through COVID, with all you know, contract agency nursing and all that kind of thing. That's on the downhill slide. Thank goodness. But just good people overall that are, you know, they wanna be in healthcare. Folks have so many options these days. Pay is still an issue as well, but workforce, according to recent ACHE, survey of CEOs, workforce challenges were the number one challenge. Behind that, then are financial challenges, financial viability, operational excellence, those kinds of things. But if you don't have the people, obviously you can't operate the organization. Yeah. Let's touch on that a little bit because I know, you know, here and and I'm in I'm in Waco, Texas. We're for those of you not from Texas, we're we're a town of about a hundred and seventy five thousand, about two hundred and seventy five, two hundred and eighty in the county. So yeah. And we're centrally located between Dallas and Austin. So right on the I thirty five quarter, which is a huge a huge, hugely trafficked highway. And we have a hard time recruiting. So I can imagine You know, what are rural hospitals do? How are you how are you guys recruiting, you know, the requisite nurses and and techs and other clinicians to your hospitals? So a lot of creative ways, right? You've gotta develop your own as much as you can, One of the hospitals that I have is in a community of four thousand people that is the county seat. Right? So it's the biggest town in the county in Montana -- Mhmm. -- of four thousand people. And and towns go down from there to about a thousand, it's probably the next most populous town. So for us, it's working with the local university, working with community colleges, growing nursing programs, growing MA's, even locally through some workforce development in the local community there with the local university. One of the hospitals that I have is in rural southwestern New Mexico -- Okay. -- town of ten thousand, county of forty thousand, but the next nearest hospital is an hour and forty five minutes away. Right? And so for us, you can't just say, oh, oh, we'll go recruit down the street. No, again, working very collaboratively with the local university, training our own, bringing people up through the organization, and then recruiting from outside sometimes isn't necessary. Mhmm. Yeah. Okay. And and You gotta provide excellent care because the reputation proceeds and people will know whether they wanted to work there or not. Absolutely. Yeah. And and we can we can talk about culture as well here in a few minutes. But you were talking about the financial viability of rural healthcare, and really hospitals as a whole right now. You know, we're all facing, you know, economic pressures, whether it be the the incredible rise over the last couple of years of salvary wages and benefits or the, you know, the inflationary pressures on supplies. You know, talk a little bit about that because that hits differently in rural healthcare? Well, it does to an extent, but you know, the same pressures that you see that we're seeing in large urban system hospitals or hospital systems as a whole. Providence up in Washington state, their reporting seems like quarterly record losses throughout their entire system. That is, you know, when when you look at that and compare that to what's going on in the rural market, In some hospitals, they're experiencing the same exact thing. Maybe fewer number of zeros on the on the trailing end of the number. Right? But regardless of the organization you're in, operational excellence and financial viability have to be paramount. And can't get too fat and happy, can't have too many things that might seem like an initiative but really aren't. Especially if they are, if their financial drains on the organization, So most organizations these days are continually evaluating services and service lines to see if that's something that they wanna stay in. And the biggest indicator of that is the loss of OB services across the country. Yeah. Absolutely. With the maternity desert you know, that are just growing nationally? Yeah. Talk a little bit about that because I was looking at and Scott just just spoke at the Wyoming Hospital Association pretty pretty recently, and was kind enough to send me his presentation. And that really struck me. Was was what you talked about with the with the OB desert. Let's talk a little bit further about that. That's frightening. Share with my audience a little bit about just the scope of that. Well, when you There were There was an article recently in in Becker's Hospital Review. But there you know, there are things out there all the time. But one that really struck me was one from about a month ago in Becker's where it talked about hospitals across the country closing service lines, and it said thirty few hospitals are closing, departments are ending services. What it didn't say in there, and I had to go through and add it up was fifteen of those thirty two were closing OB department. And that has just been a continual trend across the country. Two thirds of the two thirds of the maternity desert, so counties that don't have OB services or in rural areas in the country, And so it's just, it's a growing concern. There aren't enough obstetricians, there, you know, there aren't very many places that are willing to have babies anymore, frankly. Well, two of the two of the, well, three of the five hospitals that I actively am responsible for only do or do will beat two of them. Okay. Okay. Well, I'm telling you, there are more communities that would, you know, love to add that. That's just a service they got out of. Yeah. Well, I'm looking at the map that you had in your presentation, and there's thirty one hundred and forty three total counties in the in the US. Of that, Maternity Care Desert, are in eleven hundred nineteen. So as you said, a third of the counties and it's really interesting. Yeah. Yeah. It's it's all Yeah. There's a lot of that in the rural areas. But, you know, people think, well, you know, if I live in in New England or or, you know, somewhere maybe in California, wherever I'm probably okay. And and I'm really surprised that that's not necessarily, you know, it's not necessarily the case. There are still counties in in those high population areas. That don't have maternity services? Well, again, using an example of the hospital that that I work very closely with in southwestern New Mexico. The next year's hospital is an hour and forty five minutes away. The county is massively large land wise, and yet hour and forty five minutes if if, you know, you're driving to the next nearest place. But if you're driving from a far corner of the county, add another hour onto that. I can tell you. I wouldn't want to be in there by being in the car with my wife for two hours and forty five minutes if she's in labor trying to get there. Absolutely. Yeah, no, that's true. Okay. Let's talk about the impact of Medicaid expansion on rural health care. Mhmm. You know, there are and primarily I mean, Texas is one of the states that has an expanded Medicaid, but, you know, you're talking about Wyoming, Kansas, Wisconsin. And basically, in the entire southeast and part of the United States, how does that affect rural hospitals? Well, you know, in Texas or in Wyoming where I'm more familiar, what it ends up doing is those patients are gonna come to the hospital, right? They come when they need acute care or when they're having an acute episode concern. And so the hospital's gonna take care of them. What ends up happening is is the hospital doesn't get reimbursed, right? Or has to try to chase them for self pay, and the chances of that are generally pretty slim. And so, that's been tough. That's been tough. In Wyoming alone, I think they've gone to the state legislature, the last nine sessions in a row, trying to get it passed and it's failed every single time. Yeah. Yeah. And Texas is no different. I mean, we're very familiar here. Right? Yeah, absolutely. Absolutely. And silly question, because, you know, not all my audience or healthcare people, why is it Medicaid expansion talk a little bit about that for some folks. And why isn't it, you know, after you explain, why is it just a no brainer? Well, you know, it comes down to there are some politics -- Yep. -- obviously involved. Right? It comes down to how states choose to utilize their their state taxes, whether their income taxes, or sales tax or other things like that. The Medicaid expansion, will can give states additional funding through matching dollars from the feds to expand services to potentially Medicaid eligible people, and you look at it and you say, yeah, on the surface, most have gone down that path, and it's good for them. So why doesn't Texas or why haven't others? And I think it's probably in some ways also, they're afraid of, you know, how deep that hole is, that that they might have to to help fund, especially in Texas with all the border issues we have and other things like that. Yeah. Okay. Well, another issue that we certainly face here in Waco that that I know it's it's rampant throughout the country. It's just the rise in the behavioral health issues that we have in our country. Talk about that in a rural setting where you know, if you're not able to deliver ob services, behavioral health is probably, you know, not going to happen either. Right? Well, yeah. No. Actually, behavioral health probably happens better. Okay. Because the behavioral health services you know, you can do that by telehealth for the most part, and you really can't deliver a baby by telehealth. That makes it a little bit more challenging. You know, it's hard to do a DellC save. Right. But in in the the behavioral health folks, whether you're talking about social workers, psychologists, psychiatrists, license, professional counselors, and others, They were the early adopters and the ones that hardwired how to do telehealth long before COVID. And so and it was because there was a paucity of number of providers across the country, and fewer psychiatrists and you had an opportunity to live somewhere in rural community versus in a large urban setting and, you know, all the family things that you might be looking for coutarments and things like that to go along with it. Why not live in, you know, in a place that you know, may fit your bill a little bit more. And and so that episodic nature of telehealth for behavioral care, especially when it could be very scheduled, very regimented, visit once a week, visit twice a week, visit every other week, from ten to eleven, that kinda thing, has worked out really well. The right on the heels of that, Also, then there were the telepsych evaluations for the and things of that nature. And so as I said, the behavioral health aspect of care in rural markets has been pretty well done for a while, can it be better, of course, Right? There's, you know, there's still a dearth of services for pediatric psychiatry and other things like that. Whereas other services would be much more challenging, but when you're looking at inpatient behavioral health, beds, and things like that, those have been declining -- Yes. -- harder to get into. Definitely not as well funded. Again, the hospital we're very familiar in New Mexico, the next nearest behavioral health hospital is hour and forty five minutes, two hours away, let's say, two hours away, and if patients come into the there, and need to get transferred to an inpatient psychiatric facility, it's a six hour round trip for our team to take them there to make sure that they're safe, take them by ambulance because they're ER patients, CR to year transfer, and get them admitted, and get back. And so that ties up ambulance on a regular basis for us in that community that would otherwise not be in service. Well, and if you even have the capability of getting an open bet, Because as you said -- Right. -- the decline in inpatient beds just over the last three years is approaching ten percent. And so, yeah, that that's an issue. And we have our own behavioral health hospital attached to our hospital. But, you know, to try to find a higher level of care, it's almost impossible. And so we have a number of behavioral health patients that are, you know, n r e r for sometimes, you know, multiple dates. And so but Yeah. But okay. So let's talk about this news designation, rural emergency Hospital. Share with my folks a little bit about that, because I I think it's fascinating. It is very fascinating. I haven't had direct involvement with any of them yet. I'm kinda watching that. I know they're two or three at least that I know of right in Texas -- converted or in that conversion process right now. Probably more of these are ones that are just at the top of my head, and there are a number of others across the country. So basically, what CMS put together now about three years ago, something like that, three or four years ago were requirements do requirements for organizations that wanted to convert to a rural emergency hospital status, And so what that is, is a different designation from being a critical access hospital or being a PPS community hospital. And these hospitals could say, you know what, we're no longer gonna admit patients. Mhmm. We're no longer gonna admit inpatients or swing bed patients, at all. We're gonna focus on outpatient services, emergency services, and other outpatient services. And in exchange for that, okay, what do you get, right? In exchange for that, they get about three million dollars a year, a check stroked to them from CMS, and that's sorta to offset small inpatient census that they may have been getting. And then secondarily, they get a boost on rate that they're paying on their outpatient services. Okay. And that boost is, I think, upwards of about five percent. Okay. So a hospital I mean, in their there are a number of hospitals even in Texas that are ten to fifteen million dollar net revenue per year hospitals. Super small, right? And most hospitals these days, especially small rural hospitals, are about Ninety percent of their revenue is from outpatient, maybe ten percent or twenty, fifteen, twenty percent from inpatient services to begin with. A lot of them hang on to inpatient service, and that designation because they don't wanna look like a Band Aid station in their community or other things of that nature. But strategically, Maybe it is a good decision for some hospitals, especially if they're struggling financially, to find staffing, to staff an inpatient unit around the clock, staffing a number of other things around the clock that you would need to have for inpatient services why not consider the rural emergency hospital designation? And then the only thing that you're running around the clock really is your -- Yeah. And in services associated with that, and you can still make all the money you've been making on outpatient plus a little bit more. And so some communities have taken that hard decision and evaluated it and said, yeah, we're losing money and maybe this the way to go, or maybe it's just a better way to go to provide better care in our community? Yeah. Absolutely. Yeah. I I I think one of the other drawbacks that I see is, you know, typically in well, I mean, in a town of our size too. But but especially in the small smaller towns, you know, the hospital is the is the largest employer. Typically. Yep. And so if you start scaling back services, that means scaling back jobs. And so, you know, there's there's multiple impacts on that. And so, Yeah. I know that's what that's what's really causing some hospitals to forgo that, you know, kind of a lifeline if you will to try to see if there's some other way to make it happen. So so Right. One of the interesting things if you don't mind on this is that CMS has said that you have to be a hospital in order to convert rural emergency hospital status. So you had to have already been a hospital. To do that. And and I can see where they probably put that in as a guardrail so that you know, the the fly by night upstarts aren't with starting up rural emergency hospitals now, like we did freestanding -- Right. -- a few years ago, all over the place. Right? The downside of that is, is like there's one community that we're actively talking with right now, in the mountain west area that doesn't have a hospital that would be perfect -- Mhmm. -- probably or a rural emergency hospital designation to get up and up and off the ground and to do something more than just be a clinic, frankly. But they can't do that because they're not a hospital to begin with, and they have no reason to be a hospital. And so that little nuance is preventing them from potentially getting to where they could be and serving their community better. But I understand why those guardrails are there right now. Yeah, absolutely. Yeah, that was one of the first things I thought of too, is how many how many corporations are gonna are going to be created just to be able to do that. So glad that that's not happening. So so let's you know, in the last few minutes that we have, I wanna talk about, you know, the the rural hospitals that are at risk for closure. That's that's incredibly yeah. It's devastating to a community. It's devastating to the to the availability of healthcare. You know, talk about that because, you know, I'm looking at I'm looking at the map in your presentation. And Texas has seventy one hospitals and risk of closure. And, you know, it's What happens to these communities? Well, in some cases, the communities lose that resource. Right? And they no longer have a hospital there, they might be able to keep clinic open or something like that in that community. I know I mean, there are a number of examples in Texas where hospitals have closed, rural hospitals have closed in the recent years, and we see that, you know, from time to time. There were actually, just yesterday, there was announcement of one in Illinois that's closing. We were actually asked to look at that one, you know -- Mhmm. -- looked at it from a distance and said, no, thanks for Like, that place was in really, really, really bad shape. Fortunately for that one, there are two other hospitals within ten minutes either way of community, so it's not as though those communities are gonna not have care, they won't be that far away. There in Texas though, when you're an hour and a half west of Abilene or something like that, and the hospital there closes down, you might be thirty, forty minutes to the next nearest hospital. And so it is very relevant, you know, when there been one hundred and thirty six rural hospital closures in the last ten years, that's concerning. And means those communities no longer have, you know, the same level of resources that they get. And and typically, that's around financial viability. Right. Yeah, absolutely. And the misconception that people have is these hospitals that are closing are small. That's not the case. I mean, I've seen, you know, hospitals, three hundred beds, the the hospital in Atlanta that was what about six hundred beds that that shut down. Mhmm. So -- Yep. -- so hospitals, you know, in today's environment, you know, if if you're not watching your operations and if you're not watching your finances. You're at risk. Well, and that brings me to why we do what we do with Health Tech, right? We contract with the hospitals to to manage them and put in best practices and work with the board and the executive teams there to ensure that they're not just financially viable, but they're successful and they're growing and continuing to provide services in their community. That's what we're all about here. I've been in healthcare a really long time. I've been in healthcare in Dallas, and I've been in healthcare in communities three, four thousand. And frankly, I'll take the ones that's three or four thousand in any data. We That fits me pretty well, but the challenges the challenges are real. And when you're in these communities that don't have the resources, they don't have the expertise. Maybe the board members aren't you know, we gotta provide a lot of education to them and and really work with the teams locally to ensure that best practices or put in place to ensure that viability, so they don't end up on this list. Yeah. Well, Scott, I think the work that you and HealthTech does you know, it's it's incredibly valuable for for rural hospitals and just the the accessibility to care for millions and millions of Americans. So thanks for doing that. You know, you you're keeping you're keeping these these facilities afloat. And that Well, we're keeping the lights on, and at the same time providing outstanding care there, we wanna be a resource to those communities. And and grow our footprint, there are a lot of hospitals that are out there struggling right now, and daily, we're reaching out to some of them, just say, hey, you know, if you're open to a conversation, we think we have some solutions. We'd be open to that anyway. That's fantastic. Scott Manus, regional vice president for HealthTech. Thanks thanks so much for joining me on I don't care today. It's been great to see you, my friend. Yeah, good to see you, Kevin, and continue the good work that you're going with Ascension in Wales. Thanks so much. Great to see Alright, everybody. Alright. Look forward to having you next week on I don't care. Have a great week. Talk to you soon. Hey, Scott. Thanks so much for that. That was fantastic. Yeah, good. Hey, thank you. Appreciate it. And, you know, really enjoy it if, you know, you hear about speaking opportunities or opportunities where, you know, we could drop in and help out somebody. Don't hesitate, you know, we'd be we'd be happy to jump in and figure some things out with organizations for sure. Really? Hey, who was it that is converted to oral emergency hospital in your Yes. Is it over here? It's falls in Marlin. Yeah. Okay. Oh, okay. In Marlin. Got it. And I know Lagrange is in the midst. And I can remember Yeah. Range marks in the midst of that right now. They're honestly, I don't know how that place has gone down the tubes as much as it has. They never did, you know, this is a typical thing, right? And we don't have to be recording anymore. But it's a typical scenario where years ago the hospital could have converted to critical access status, But now they can't, because they're too close to other hospitals. I talked to Mark about this probably six months ago. Like, man, frankly, how have you guys driven this thing into the ground? The answer was, you know, they're continuing to be PPS. They're licensed, I think, for forty four beds, And as such, they missed a golden opportunity to be critical access where you get paid a really good rate for a really good per diem for Medicare and Medicaid. And As a result of that, they're getting probably half of the revenue that they could for inpatient services and I don't know much else about the operation of the Lagrange Hospital, right? And some of my friends are the ones that are with the management company that manage that hospital, so I would never say anything bad about about that. But I don't understand, you know, just put you and me, how that's happened. And I'll tell again. Hey, on another note, I've got a a really, really good friend of mine who is an MD NBA who just got Riffed, who is I mean, he has got tremendous strategic abilities, ran ran physician networks, started an ACL, and don't know if you guys and and yeah. He's open to doing some consulting. He doesn't wanna leave Wake out. But open to some consulting. So if you hear of anything, let me know. Okay. Will do. Yeah. I mean, you know, a lot of times people these days are landlords and that makes it a little bit challenging, but Yeah. We'll keep them in mind and see, you know, if they hear anything. Yeah. Great. Scott, take care. Great seeing you get from. Yeah, you bet. Andy time. Okay. Take care. Hey,