Curbing ED costs could save rural hospitals

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A recent study confirms that rural hospitals are threatened by significant financial instability. Out of the country’s 1,844 rural hospitals, 453 are vulnerable to closure. In fact, nearly 50% are operating in the red, and this number is steadily increasing, evidenced by the 39% that were operating in the red in 2015. Since 2010, 120 rural facilities have closed. These closures put patients at risk by limiting access to care, so it’s important to take a look at the challenges these hospitals are facing. 

 

Supporting emergency departments is a top financial burden

 

The task of supporting emergency departments is cited as a top financial burden for rural hospitals. Christina Campos, administrator at Guadalupe County Hospital in New Mexico, says, "The greatest financial burden to many rural hospitals is supporting a 24/7 emergency department, where standby staffing costs are high, volumes are relatively low and reimbursement comes nowhere near to covering expenses." 

 

Easing the burden 

When it comes to the financial burden of staffing emergency departments, the cost of call pay is one factor that can be mitigated with creative compensation strategies. For the past 15 years, MaxWorth has worked with healthcare organizations to design call pay programs that are sustainable and cost-efficient. 

 

The first step in curbing the cost of call pay is to end the single-specialty negotiations that rarely result in positive outcomes. Our Physicians’ Call Committee brings ED physicians together and provides them with the opportunity to share the realities of their call burdens with their peers and administration. Then, committee members work together to create a fairness standard for all call pay rates at their facility. At the end of this process, physicians understand that their compensation arrangement has been determined by a fair and standardized process. This understanding decreases agitation around the issue of call pay.

 

The program also satisfies physicians’ demands for higher pay by making their existing compensation more meaningful through our Physicians’ Advantage Plan, which allows physicians to invest their compensation on a pre-tax basis.

 

Long-term sustainability is a financial advantage

 

To ensure the long-term financial sustainability of the program, we use funding methods that help hospitals offset and recoup a portion of the cost of call pay. This ensures the predictability of the expense, which is paramount to an organization operating on a thin margin. 

 

Controlling the cost of call pay can help ease the financial burden of supporting an emergency department. With fewer financial burdens, rural hospitals have a chance to survive in this environment that has caused so many to close their doors, threatening access to care in our rural communities.

 

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