Hospital forced to pass costs along to insured customers

As Thibodaux Regional Medical Center enters its 35th yearof service, Chief Executive Officer Greg Stock said the hospital’s biggest current concern is the state’s cuts to Medicaid budgets.

Stock said Louisiana Medicaid endured three cuts in the past year, and Gov. Bobby Jindal’s 2011 budget proposal would cut into it even further.

“That’s about $140 million that’s been cut out of hospitals like Thibodaux Regional and Terrebonne General,” said Stock.

Stock added this 15 to 20 percent cut to the already low Medicaid starting point reimbursement could force the hospital to implement cost shifting.

“When a hospital is under reimbursed, it actually costs money for us to provide the care,” said Stock. “We have to subsidize the provision of care through other sources.”

Unfortunately, that means the cost is moved over to the consumer.

“It shifts that over to the hard working people in Louisiana that have health insurance and who have businesses,” said Stock. “And so this cost shifting is nothing more than causing those that have health insurance to pay higher premiums to cover the cost of individuals that are in Medicaid.”

Although TRMC has received less Medicaid reimbursements recently, Stock said the hospital still provides Medicaid patients the same level of care it did before the cuts. But in order to do so, TRMC has spent some of its own money to continue providing the care.

“We’re going into this state Medicaid cuts and Federal Medicaid cuts in pretty good shape in regard to our costs,” said Stock. “We’ve tried to manage our costs well for years, and that’s enabled us to enter the trade, if you will, in pretty good conditions.”

But moving forward, Stock said the hospital will need to begin taking a look at cutting costs.

“We look at things like supply costs, for example, to try and drive those costs down, but it’s very difficult to do that,” said Stock. We’re also working with physicians to try and examine the way care is provided.”

The CEO said hospitals in Louisiana may need to begin examining the services they provide in order to save money.

Although he said TRMC has not begun its service assessment yet, one way the hospital could save money in the future is its shift to a greater amount of outpatient care.

TRMC’s outpatient care has risen to 45 percent in 2010. Outpatient services keep patients out of the hospital for overnight stays, saving the hospital money if the patient is a customer the hospital needs to support financially due to the Medicaid cuts.

Stock thinks the percent of outpatients at TRMC will continue to rise over time due to better technology and health care methods.

“[We have] better ways to treat people that allow people to avoid long hospital stays,” said Stock. “We have been an early adopter of various types of technologies and techniques including our robot that allow minimally invasive types of surgery that really shorten the length of stay and even eliminate the need to be in the hospital.”

Stock said TRMC technology will continue to improve, and there will be more of it as the hospital moves forward.

But in the meantime, Stock said TRMC’s approach is to appeal to lawmakers in order to make sure the cuts to Medicaid reimbursements do not go any deeper.

“It puts cost pressures on us, and all of the other hospitals involved to continue to force us to look at ways to reduce costs,” said Stock. “It is part of the bigger picture of looming cost cuts to hospitals that we think will cause greater pressures on the cost side of providing care.”

Although TRMC has received less Medicaid reimbursements recently, CEO Greg Stock said the hospital still provides Medicaid patients the same level of care it did before the cuts. * Photo courtesy of TRMC