Studies highlight hospital health care struggles

SHERIDAN — Recent legislative studies highlighted the delicate balance between health care access and costs Wyoming hospitals struggle to maintain and indicated that Sheridan Memorial Hospital is something of an outlier compared to other hospitals in the state.

The two reports, which were presented to the Wyoming Legislature’s Joint Labor, Health and Social Services Committee last week, showed that most care paid for by private insurance occurred out of state.

That is part of a broader, growing trend that has hospitals concerned, as private insurance plans generally reimburse health care providers at a much higher rate than government insurance plans like Medicare or Medicaid.

In September, SMH published its annual “Community Benefit Report,” which described the returns the hospital sees from different insurance providers.

According to the report, SMH collects between $.75 and $.78 from commercial insurances per dollar billed. The hospital collects between $.48 and $.60 per inpatient dollar billed and $.25 per outpatient dollar billed from Medicare. SMH recovers $.25 per dollar billed from Medicaid and between $.07 and $.12 per dollar billed from patients who self-pay.

While SMH’s bottom line has taken a hit because it has seen a greater percentage of patients pay with government insurance plans, according to CEO Mike McCafferty, it has also seen an overall increase in the number of patients coming through the door.

As a result, SMH has not had problems controlling costs the way many other hospitals in the state has.

This summer, the RAND Corporation released a study that described Wyoming’s hospital costs as exceptionally high. Of the 1,598 nationwide hospitals that report surveyed, however, only 370 offered cheaper inpatient prices than SMH, SMH Chief Financial Officer Nathan Stutte reported.

Franz Fuchs, the Wyoming Department of Health financial analyst who delivered the hospital studies to the Labor Committee last week, explained many hospitals in the state are facing a starkly different set of problems.

SMH benefits from being a medical hub in one of the state’s larger counties. Hospitals in more rural areas of the state, however, are often understaffed and do not see enough patients to financially sustain some of the services they offer, unless they charge extremely high prices for some of those services, according to the report Fuchs presented.

Further, Fuchs said the report shows 10 of the state’s 23 counties have fewer than one doctor per 1,000 people. And the report’s statistics indicate those numbers are not improving.

The gaps in care, the report notes, are mostly related to specialists. But low patient volume has also driven up the costs of many essential services, like emergency care.

To address those rising costs, Fuchs proposed a model that would encourage government intervention to keep costs down for those essential services while letting the market dictate prices for more specialized services.

That way, Fuchs reasoned, a greater percentage of the state would have access to affordable essential health care services.

Last week’s meeting was the Labor Committee’s final meeting before the upcoming legislative session, however, and the group did not sponsor any legislation related to health care costs or access. Whether legislation along those lines emerges during the session remains to be seen.