The Transylvania Times -

By Park Baker
Staff Writer 

Hospital Facing $1.5 Million Budget Cut - Brevard NC


Craig James

(Editor's Note: As reported in the Asheville Citizen-Times last week, Mission Health System, which includes Transylvania Regional Hospital (TRH), will cut costs by $42 million next year, which could result in layoffs. TRH is being asked to make $1.5 million in cuts. The article reported that the number of job cuts has yet to be determined as Mission Health predicts a $500 million decrease in payments as more patients seek health care outside of hospitals, and as Medicaid (federal program for the poor) and Medicare (federal program for those 65 and older) reimbursements decline.

Seventy-five percent of Mission Health patients are covered by Medicare and Medicaid.

TRH became a full member hospital of Mission Health in October 2012. TRH had been in a management agreement with Mission Health since Jan. 1, 2011.

The Transylvania Times sat down with interim TRH President Craig James Thursday to discuss the budget cuts and what it means for TRH, the employees who work there and the community members who rely on the hospitals services for their health.

Q: How many jobs could be affected by this?

James: We're really not sure yet. But one thing this budget will not do is compromise quality of care. By mid-August we hope to have it all finalized.

Our new operating budget starts at the beginning of the new fiscal year, Oct. 1.

Q: What is the total number of employees at Transylvania Regional Hospital? What percentage of them are clinical (doctors, nurses, techs) versus non-clinical roles (support/administration)?

James: We have 600 total employees in Transylvania County. Eighty percent of the staff are clinical and provide care to patients, including doctors, nurses, pharmacists, therapists, technicians and nursing aides. The rest are non-clinical in support and administrative roles.

Q: What percentage of total annual costs at TRH are salaries and benefits?

James: 59 percent.

Q: What shifts in the workforce do you anticipate as we see a shift from curative to preventive medicine?

James: We see shifts not only in the way we get paid, which has been 'fee for service,' to population health, where you get paid for reducing health care utilization by improving wellness and keeping people healthy. It's also shifting the model for the delivery of health care services. For example, at TRH 83 percent of our revenues are outpatient. That's where the growth areas are. Hospitals are evolving and have been for many years. We will be training more people on preventive medicine. Right now, the inpatient utilization is flatlining. A lot of that is due to technological advances. Surgeries are faster, safer, and more and more of them are considered outpatient services, and patients are discharged the same day.

Q: What percentage of TRH's patients are covered by government insurance or lack insurance? Are those percentages too high for Transylvania County?

James: Seventy-nine percent of TRH's patients are covered by Medicare, Medicaid or they have no insurance. Here is the current TRH payer mix: 56 percent Medicare; 11 percent Medicaid; 12 percent no insurance (self-pay/charity care); 21 percent commercial insurance. Those percentages are expected given the county demographics. The challenge of a rural community is that the city tends to have more of the jobs, and the rural parts of the county tend to have people that are sicker, older and less employed. The driver of all this is really jobs. We don't have the industry that we used to.

Q: Are you seeing a lower readmission rate at TRH?

James: We have a very low readmission rate and a super-low infection rate. It just takes doing all the little things right.

Q: Can you give us an example of a recent cost increase that TRH has had to deal with?

James: TRH and Mission Health spent $3 million in 2013 to install a modern Electronic Medical Record (EMR) system at TRH. EMRs are required by the Affordable Care Act for hospitals to receive payments for Medicare and Medicaid patients.

This is so that, in the future, doctors anywhere can have access to the medical records of patients, so people can be diagnosed and treated more efficiently.

Q: As reported in the Asheville Citizen-Times, Mission will spend $5 million to further fund Mission Health Partners. The article states that it is a growing group of doctors, hospitals, community health centers and out-patient providers. Can you clarify this?

James: That is a clinical integrated network; it's designed to be able to manage populations. Initially, this network will manage all employees of Mission Health.

Ultimately, we see Medicaid in North Carolina moving more towards an Accountable Care Organization, where that population will be managed by providers that are in network that are within regions.

Mission is essentially creating a network of providers and hospitals to manage a defined population group and drive down costs.

All of the hospitals in the Mission network are already part of this network. This concept is really pushed by the Affordable Care Act, essentially creating incentives to keep people healthy. It is a continuum of care and is ultimately the best thing for health care for the United States. Keeping people out of the hospital is the goal.

Q: With a high population of seniors and a large population of people on Medicaid, how does that affect your finances? How will this new budget impact Transylvania County economically? Has TRH changed its long-term vision as a result of economic hardship in the county?

James: The portfolio of services that we offer are consistent with what you would expect in this community.

We are the largest employer in the county, and we drive the county economically. Here, in Transylvania County, we continue to have a focused effort on our local services and to be a portal for those medical issues that need to be addressed in Asheville. Our payroll and benefit spending is about a $100 million impact on the community. Over the last 10 to 15 years, we've seen a conversion of physicians to an employment model rather than the traditional private practices for those physicians, that's part of our salary investment communities.

Q: What services are the most used at TRH?

James: Diagnostic services are our most utilized services with more than 30,000 visits a year. That includes lab work, radiology, etc.

Our inpatient admittance is less than 2,000 a year.

Q: With the new budget, does this mean there may be more services where, for example, a person who needs stabilization is usually moved to Mission in Asheville, might remain at TRH?

James: No. The main Mission campus, which we call a tertiary facility, will still receive the necessary patients. We will still continue to evaluate patients from the more rural communities and send them along to Mission as needed.

Q: Who owns Transylvania Regional Hospital?

James: Transylvania Regional Hospital is a not-for-profit entity that is governed by a local Board of Trustees, with the sole purpose of meeting the healthcare needs of residents in this community. Mission Health, our parent organization, is also a not-for-profit entity governed by a local board made up of residents of Western North Carolina. So our hospital is "owned" by the community that it serves.

Q: Who is on the Board of Trustees?

James: John F. Holbrook chairman; Charles F. Ayscue; Craig B. James, interim president/CEO; Dr. Richard W. Bock; Roswell S. Bowers,treasurer; Dr. Joseph A. Cohen, chief of medical staff; Dr. Ernesto E. de la Torre; Thelma B. Erickson, secretary; Richard C. Larson; Dr. Mark S. Lemel, vice chief of medical staff; Robert O. Maxwell; Parker J. Platt; Kenneth G. Racht, vice chairman; William A. Towler; Dr. Ora J. Wells; and Ann Y. Young

Q: Will the board vote on this proposed budget , and if they do not agree with the budget, will they have any say?

James:Yes, the board will vote on the budget, and if they don't agree with it, it will go back to the drawing board.


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