00:00 - The following program is sponsored in part by customers

00:04 - bank.

00:14 - We're joined today by Nicole Stallings, president

00:16 - and CEO of the Hospital and Health System Association of PA.

00:20 - ATF reports that about two dozen hospitals in Pennsylvania have closed since 2016.

00:25 - Why is that?

00:26 - Know Pennsylvania's hospitals have

00:29 - historically been under a greater degree of financial distress.

00:33 - It seemed like we were increasingly seeing headlines

00:36 - of service reductions or even closures.

00:39 - And so we issued a third party independent report to really take a look at what was

00:45 - going on with Pennsylvania's hospitals, how they compared to other states.

00:50 - And that report found that it is, increasingly more difficult

00:55 - to operate a hospital in Pennsylvania than in other states.

00:59 - The primary driver of that is inadequate reimbursement.

01:03 - And we know that financial challenges will certainly continue

01:07 - and our hospitals without policy intervention.

01:10 - So that will impact not just access to care, but jobs and economic activity.

01:15 - Is there a prediction for how long this trend will continue?

01:18 - Yeah, this report shows that if we do not have adequate policy

01:22 - intervention, as many as 12 to 14

01:25 - hospitals could close by 2030.

01:28 - No one wants that to happen.

01:30 - And so we are evaluating and advocating

01:34 - to address the primary causes of this financial distress

01:38 - and places where Pennsylvania's hospitals are really an outlier

01:43 - and not as competitive as hospitals in other states.

01:47 - What would be the ideal, legislation that would fix this problem?

01:51 - Sure.

01:52 - The primary driver right now of the situation that hospitals are in

01:55 - is their inadequate reimbursement.

01:58 - And for us, that starts with Medicaid.

02:00 - Pennsylvania pays up, our hospitals

02:03 - $0.71 on the dollar for treating Medicaid patients.

02:08 - That's about 11 percentage points below the national average.

02:12 - As a reminder, Medicaid covers about one in every four Pennsylvanians.

02:16 - And in the future, we will see Medicaid coverage loss.

02:19 - But we're also going to see direct financial cuts to Medicaid reimbursement

02:25 - to hospitals, so that $0.71 on the dollar are going to drop to $0.64.

02:30 - So we would like to see investments now

02:33 - to bring that Medicaid reimbursement up closer to the cost of providing care.

02:38 - But we also need to account for the number of distressed hospitals in our state.

02:42 - So we're seeking funding for distressed hospitals as well.

02:45 - What impact does a hospital closure have on the community that it serves?

02:49 - Yeah.

02:50 - You know, our hospitals are places of healing and hope,

02:55 - but they're also economic anchors in our community.

02:58 - So they support one in every eight jobs.

03:01 - They support about 19% of the state's GDP.

03:05 - And so when a hospital closes, you aren't only losing access to care, having

03:10 - to drive further, to seek care, crossing sometimes county or even state lines.

03:16 - But we also see job loss.

03:19 - We see all of that ripple effect with other economic activity.

03:23 - They're businesses that support hospitals

03:26 - and that benefit from that workforce that are also impacted.

03:31 - And so when our hospital closes, it's really been described as a death spiral

03:35 - where each of these steps really accelerates the next.

03:39 - Oftentimes the biggest shock in these communities isn't just

03:42 - that loss of access, but it's the economic impact as well.

03:47 - Before we get too far, can you explain the work of the Hospital

03:50 - and Health System Association of Pennsylvania? Sure.

03:52 - We are the advocate for Pennsylvania's hospitals, health

03:56 - systems and the patients and communities they serve.

03:59 - We represent over 235 hospitals in our Commonwealth.

04:04 - You mentioned, you know, the Medicaid reimbursement

04:07 - and wanting, more funding for the hospitals.

04:10 - Where would that funding come from?

04:12 - So it starts with, the governor's budget,

04:15 - which we know is being contemplated right now in Harrisburg.

04:19 - I want to acknowledge the, the comments that many members

04:24 - of the Shapiro administration made during budget hearings recognizing,

04:28 - hospital distress right now, before

04:31 - any cuts from the federal budget reconciliation bill even go into effect.

04:35 - But also what that trajectory looks like moving forward.

04:38 - Many of those cabinet secretaries pointed to the report that we issued.

04:43 - And the governor's budget maintains a lot of funding streams for hospitals.

04:48 - But as this report demonstrates, the status quo is not enough.

04:53 - We do need to see new investment so that we can protect care

04:57 - that communities depend on.

04:59 - What specific aspects of hospitals would the Medicaid and also state

05:03 - funding go towards?

05:04 - Medicaid covers, one in almost every four Pennsylvanians.

05:08 - And so, the funding that we are seeking

05:11 - could be targeted to services like behavioral health, emergency care,

05:17 - physician services, or it could be more broad based to support all hospitals.

05:22 - I think it's important to note

05:23 - that a medicaid cut, though, it really impacts everyone, because

05:26 - when people lose coverage, they are often delaying care.

05:31 - Then they come to hospital emergency rooms, which get even more crowded.

05:35 - You're often waiting longer there.

05:37 - It's harder to get other appointments.

05:39 - But if we see these cuts taken to the extreme and resulting

05:43 - in hospital closure,

05:44 - that also is going to make everyone in that community lose access to care.

05:49 - So for the 12 to 14 hospitals that could close by 2030,

05:54 - that would add 22 minutes of drive time.

05:58 - That would be $900 million in lost wages.

06:03 - And that ripple effect really continues.

06:06 - And so that's why we are sounding the alarm now.

06:09 - Now is the time to invest in hospital stability and to protect access to care.

06:15 - How much funding does Pennsylvania get for their hospitals

06:17 - from the federal government? It's extensive.

06:20 - I certainly will acknowledge that.

06:22 - But that funding is going to reduce.

06:23 - So when we put, the cuts from the federal budget

06:27 - reconciliation bill, just one provision alone is going to be a $4.5

06:32 - billion reduction in funding to our hospitals.

06:36 - So there are steps that we can take now to start to bridge

06:40 - some of that funding gap and to prepare hospitals for the future.

06:44 - There's also funding that is coming, by way of Rural health

06:47 - transformation funds, $50 billion nationally, that that's $193

06:53 - million have been awarded, each year for five years for Pennsylvania.

06:58 - I think it's critically important to invest in

07:01 - sustaining access to care in rural communities.

07:04 - But I'll make two points.

07:06 - That's a five year temporary funding stream compared to Medicaid cuts

07:11 - that are permanent, and that $193 million

07:15 - equates to about $57 per rural resident.

07:19 - So it comes nowhere close to, filling the the hole,

07:24 - if you will, of the funding cuts that are coming for, all of our hospitals,

07:29 - but in particular our rural hospitals that really rely on Medicaid funding.

07:34 - Can you talk a little bit about the preventative steps

07:36 - that hospitals are taking to prepare for this loss in, Medicaid funding?

07:41 - Yeah.

07:42 - Hospitals are consistently looking

07:45 - for opportunities for efficiencies and cost savings.

07:48 - This Oliver Wyman report found that our cost per discharge is 29%

07:53 - lower than that of other states, and has been increasing

07:57 - at a slower rate, which means that they're putting in the work.

08:01 - But we know that that,

08:02 - is is still going to be a significant cut that they are facing.

08:06 - And so every hospital right now is evaluating partnerships and programs.

08:12 - They're evaluating timelines for capital development and perhaps putting

08:16 - those projects on a different timeline or even putting them on hold.

08:20 - And every hospital is doing scenario plans

08:23 - that include things like service reduction.

08:27 - Perhaps a reduction in force.

08:28 - There are plans for consolidation and even in some instances, plans for closure.

08:33 - We certainly don't want to see any of those things happen,

08:36 - but because hospitals, know that they have this mission

08:40 - of caring for their community, they're doing this planning now and then.

08:43 - They're looking to us to advocate for the investments that they need.

08:46 - Governor Shapiro included, rural health

08:49 - care funding in his new governor, a new budget proposal.

08:52 - What did he say about it?

08:54 - Yeah, that, that ten, $10 million in state funding

08:58 - is going to draw down a federal match and in total will be about $36 million.

09:02 - That can go to rural hospitals.

09:04 - It's critically important.

09:06 - We're very appreciative to see that funding, included

09:10 - in the governor's budget.

09:11 - And he and other members of his administration have consistently

09:15 - been, evaluating the needs of our rural communities.

09:19 - We have been partnering with them as they look to implement

09:23 - the roll out of the rural Health Transformation Funds.

09:26 - It's our hope that those funds will be used to ensuring

09:30 - that we can sustain access to care into the future.

09:33 - Why focus specifically on rural facilities?

09:36 - Yeah, rural hospitals as well as safety net hospitals, see a higher proportion

09:41 - of individuals who are on Medicaid than in our other hospitals.

09:46 - And so with the provisions of the Federal Budget Reconciliation Act,

09:49 - we're going to see two things happen.

09:51 - We're going to see people lose Medicaid coverage because of the new timelines.

09:54 - And requirements to maintain eligibility.

09:57 - But we will also see that direct funding cut to Medicaid.

10:02 - And that is going to really disproportionately impact

10:05 - rural hospitals and our safety net hospitals,

10:08 - which are seeing lower volumes because people are leaving rural communities.

10:13 - That community is aging, but they still have to maintain 24,

10:17 - seven emergency rooms or, if they have labor and delivery, 24 seven capacity.

10:23 - And so they have those same cost as other hospitals,

10:25 - but their ability to get that revenue is lower because of the declining volume.

10:29 - How are the funds split across the rural hospitals?

10:32 - Sure.

10:33 - The rural health transformation

10:35 - funds are really going to be released in two phases.

10:37 - As we understand it, in the first two years,

10:40 - there will be grants that will be provided not just to rural hospitals,

10:43 - but to other entities, to ensure access to care.

10:46 - We certainly hope all of our rural hospitals are funded adequately there.

10:50 - But then moving into year three through five,

10:53 - we will see more, regional care collaboratives,

10:58 - hospitals and other partners coming together to put forth proposals

11:03 - to really transform care longer term in their communities.

11:07 - Now, Trib Live reports that states could earn more funding if they

11:11 - restrict people from using food stamps on, quote, unhealthy products, unquote.

11:15 - What is your reaction to that?

11:16 - Yeah, when the state was putting forth the application, there were a series of

11:20 - things that, policy, if that could have, earned us more points,

11:25 - including the provision that you just mentioned, Pennsylvania's

11:31 - leadership, legislative and

11:33 - from the administration came together to determine what, could be done

11:37 - and what we could put forward meaningfully to impact those scores.

11:41 - And so, I do think it's important to note that, again,

11:45 - that $57 per rural resident, we certainly would like to see

11:49 - Pennsylvania receiving more funds given the size of our rural population.

11:53 - A lot of what we've been hearing about is staffing crisis at these

11:57 - health systems are what can they do to increase and retain staff?

12:00 - Yeah.

12:01 - Hospitals continue to navigate persistent workforce shortages.

12:05 - We know that there are double-digit vacancies across virtually every role.

12:10 - And in every instance, those vacancy rates are higher

12:13 - in rural communities than in non rural communities

12:16 - because we know it's harder to recruit to those areas.

12:18 - At the same time, our hospitals have been,

12:22 - implementing a series of steps, everything from permanent pay raises

12:27 - to recruitment and retention bonuses, offering child care, tuition assistance.

12:33 - And these are starting to pay off.

12:35 - We have seen over a 30% reduction in hospital turnover.

12:39 - That said, we still aren't able to meet the demand that we have now.

12:43 - And as Pennsylvania ages, we know that we're going to need even more providers.

12:48 - So there are provisions and proven tools

12:52 - like loan repayment that have been, included.

12:55 - And there's there's certainly some excitement around that.

12:59 - But I think something that's not talked about is,

13:02 - faculty and preceptors

13:04 - often we generate a lot of excitement for nursing, for example.

13:08 - But then schools have to turn away qualified students

13:11 - because they don't have the clinical staff or the clinical sites.

13:15 - And so I think there's a lot of opportunity there.

13:17 - We are certainly trying to do

13:18 - some matchmaking to understand how we can help meet that need.

13:22 - But also to incentivize, faculty so that you're not taking a pay cut

13:28 - when you leave the bedside to teach the future caregivers.

13:31 - And, we are certainly engaged in all of those efforts.

13:34 - What would you like to see done to better protect hospital staff?

13:39 - I think there's a lot of areas of focus from our hospitals.

13:43 - This is something that they are continuously evaluating,

13:47 - training and investing in.

13:49 - We do have some hospitals who would like to implement, weapons

13:54 - detection systems or other means of,

13:58 - supporting the physical security of staff.

14:01 - And because, again, they're on those razor thin budgets, excuse me, margins.

14:06 - And, and they're having to figure out how they could afford that.

14:10 - And so there is a potential to have legislation that would provide

14:14 - some grant funding for these hospitals to be able to invest in security systems.

14:19 - We're very supportive of that.

14:20 - 23 rural counties in Pennsylvania lack labor and delivery services.

14:24 - Why is this?

14:25 - Yeah, it's a trend that we are seeing not just in Pennsylvania

14:29 - but in other states as well.

14:30 - And, that maternity care desert is about the size of the state

14:34 - of Connecticut here in our commonwealth.

14:38 - It could be for a variety of reasons.

14:40 - Certainly, the number of deliveries that are occurring at these hospitals

14:44 - has declined.

14:46 - It's difficult to attract that highly specialized

14:50 - labor and delivery staff and to maintain those services.

14:54 - 24 seven when you have that lower volume.

14:57 - So we have, some hospitals

15:00 - in our rural hospitals that may only be delivering three babies

15:04 - a week, whereas others in non rural areas delivering three babies a day.

15:08 - So very different circumstances but at the same cost.

15:12 - The final factor that we believe is impacting access

15:15 - to maternal care here in Pennsylvania is medical liability.

15:19 - We know that, an environment that is, very highly litigious

15:25 - and has outlier, payouts like Pennsylvania's does.

15:29 - The highest payouts per cap it a in the country.

15:32 - It impacts where and how people want to practice medicine.

15:36 - And we believe that is something that's going to need to be addressed to help

15:41 - address the maternal health deserts that we are seeing.

15:44 - How are patients impacted by the maternal health deserts?

15:48 - We know that you're having to travel further to deliver.

15:52 - There are very few freestanding birthing centers in our commonwealth.

15:57 - One just closed.

15:58 - Recently, in the southeast, citing specifically

16:03 - medical liability and low Medicaid reimbursement.

16:06 - So all of these factors that we've talked about, Medicaid reimbursement,

16:10 - medical liability, workforce shortages, and the other I'd put on the table

16:14 - is our regulatory environment.

16:15 - Overall, these are all state levers.

16:17 - These are things that state policymakers can do, to address

16:22 - and to improve the environment here in the Commonwealth.

16:24 - Our report clearly lays those out.

16:26 - And we as an organization

16:28 - are ready to sit at the table and help move policy forward.

16:31 - You mentioned regulatory reform.

16:33 - That's something Governor Shapiro talks a lot about.

16:36 - How would this apply to medical centers?

16:38 - So the, regulations that impact

16:42 - hospital licensure were last updated in 1980.

16:46 - Care delivery has changed a lot in the last 46 years.

16:51 - We know that the Department of Health is currently undergoing a process

16:55 - right now where they're reviewing and looking to update those regulations.

16:58 - It frankly can't happen soon enough when hospitals are trying to deliver

17:03 - modern care in a framework that was done in 1980.

17:09 - It is, costly.

17:11 - It takes caregivers away from the bedside.

17:15 - And frankly, it needs to be a priority.

17:18 - And and it's certainly a priority for our organization.

17:21 - What would need to be done to have more either labor and delivery services

17:26 - or just hospitals in general, be brought to these rural areas?

17:30 - It's going to come back to the, structural deficit

17:34 - that all of our hospitals are operating under, because Pennsylvania

17:39 - has fallen behind, adequately supporting hospitals.

17:42 - And it starts with reimbursement.

17:44 - And so our ask one, two and three are all around Medicaid

17:47 - funding, again, 1111 percentage points below the national median.

17:52 - There's more that we can do there.

17:54 - When you have strong hospitals, you have strong communities.

17:58 - And we've really been delivering that message.

18:01 - I believe that there is an understanding of how linked those

18:05 - two things are, and we're very optimistic that we can get some some change.

18:09 - Lastly, could you talk about some of the other legislative priorities

18:12 - that the or your organization has, for this legislative session?

18:16 - Sure.

18:16 - We are certainly looking at opportunities to continue to address some of these

18:22 - significant pain points around workforce shortages and workplace violence.

18:27 - Medicaid reimbursement, though, is our is our top priority.

18:31 - We also think it's important to make sure

18:34 - that we are looking at capacity, not just in hospitals, but in communities.

18:39 - And that comes back to behavioral health.

18:41 - Oftentimes, individuals are having to seek behavioral health care in hospital

18:45 - emergency rooms.

18:46 - And so we are very supportive of efforts to look at, supportive

18:52 - settings outside of the hospital, ensuring people can get to where they need to be.

18:56 - An emergency department is often

18:57 - not where you want to be when you are in behavioral health crisis.

19:00 - It's loud. It's chaotic.

19:01 - And so we are supportive of, of studies and also looking at mechanisms

19:06 - to directly get individuals

19:07 - who are in behavioral crisis to the settings that they need to be in.

19:11 - Nicole Stallings, president and CEO of the Hospital

19:14 - and Health System Association of Pennsylvania, thank you for your time.

19:17 - Thank you.