Partnerships essential to deliver rural health care

The Legislative Finance Committee recently met to discuss New Mexico’s rural health care challenges. This is an issue that impacts every hospital in New Mexico and has consequences for your access to health care.

The pandemic revealed the many strengths of our health care organizations and their resilient caregivers. It also revealed a seismic shift in the economics of providing health care services.

Today, health care organizations are struggling as they experience the financial challenges facing other companies. Whether in the newspaper, online or on TV, none of us can escape the conversation about the complex financial challenges now facing various industries. These include labor shortages, increasing labor costs, supply chain gaps and inflationary pressures.

New Mexico hospitals are not immune to these pressures. At Christus St. Vincent, we are navigating this complex environment to sustain programs and services that our community needs, doing so at a time when we are caring for more in our community than before the pandemic. It’s astonishing. If you find difficulty getting a timely clinic appointment or wonder why waiting rooms are a bit fuller than they used to be, it’s largely because more of our regional neighbors are having to travel farther to receive care here.

With roughly the same number of employees today as before the pandemic, this increased demand for services is happening at a time when our labor costs to ensure a competitive wage are 27% higher, our supply and pharmaceutical costs are 12% higher, and our hospital insurance premiums have increased over 110%, and in some hospitals over 200%, because of our state medical malpractice law. Add to this the cash flow challenges caused by insurers that are slow to pay hospitals and are increasingly denying payment for your medical care.

While we are not yet experiencing the negative margins of other hospitals, our reimbursements for delivering care are not sufficient to cover the costs of providing that care.

The Legislative Finance Committee discussed the myriad challenges causing New Mexico hospitals to make difficult decisions to consolidate, downsize, eliminate services or close. Unfortunately, many of our rural hospitals have already eliminated less profitable services such as intensive care and labor and delivery, and others are reducing the number of beds available to care for patients.

As the safety net hospital for our region, we understand more than ever there are services that our nonprofit hospital would not offer or would curtail were they not subsidized from another aspect of our hospital business.

Unlike private equity, for-profit companies that take a subset of patients based on ability to pay and within a narrow range of profitable medical services, our mission work includes subsidized services like labor and delivery, primary care, behavioral health, palliative care, charity care, etc. These are vital to having a comprehensive, full-service health care system in our community.

To navigate this complexity, we routinely scrutinize supply costs and utilization, cautiously monitor the size and growth of the workforce, and continuously assess all services. Because margins contribute to the financial viability of our nonprofit health care system, as they do with any business, we ensure we are billing for services with reasonable margins to help offset the costs of providing our comprehensive services and state-of-the-art facilities.

In this very difficult climate, we stand committed to and support our rural hospitals and the communities they serve. New Mexicans should not have to travel great distances to receive care that can be reasonably provided close to home. And large health systems shouldn’t have to carry a heavier burden with the inadequate financial and limited human resources to do so. Rural hospitals, in collaboration with large hospitals like Christus St. Vincent, are a vital partner in the delivery of regional care. We need each other to care for New Mexico.