Olney Hamilton Hospital adjusts for COVID labor and funding shortages

Olney Hamilton Hospital is emerging from two years of Covid-induced staffing and reimbursement challenges in the black, with prospects for growth and new tax revenue in the coming fiscal years, hospital Administrator Mike Huff said at the hospital board’s Feb. 25 meeting.

The city-owned hospital will finish its fiscal year Feb. 28, “in the black” at the tail end of the two-year pandemic, during which health officials urged patients to forgo office visits and elective procedures to avoid getting sick.

“We should finish the year financially fine,” Huff told the board.

The board approved a raise in retirement fund matching rates for hospital employees to combat a nationwide shortage of nurses, nursing assistants and respiratory therapists - many of whom either left the profession or joined staffing companies to earn many times their normal pay on short-term assignments.

Consulting firm Kaufman Hall said hospital labor costs rose 12.6 percent last year, eroding hospital margins nationwide, and two-thirds of nurses surveyed by the American Association of Critical Care Nurses were considering leaving the field as a result of the pandemic. Twenty-one percent polled by the American Nurses Foundation said they planned to resign within the next six months.

The hospital also is considering raising hourly wages to attract and retain workers. “We have a few openings, but we are doing better than 90 percent of hospitals in the state right now who are using some kind of (nurses) agency. We are not - but it could get tighter,” Huff said.

Insurance reimbursements dropped sharply as more patients purchased private insurance plans called Medicare Advantage plans. According to Investopedia. com, the popular plans, advertised on television as all-in-one coverage for seniors, offer low premiums but are known to arbitrarily deny claims and offload costs to long-term sick or hospitalized policyholders.

“Our percentage of true Medicare patients - not Medicare Advantage – is very important to us being able to get reimbursed for the costs,” Huff said. “We’re seeing that we used to be in the low 50 (percent). Last month we were in the low 30 (percent). Medicare Advantage and other commercial products are driving that (reimbursement) number down, and it’s going to adversely affect our ability to get reimbursed for our costs.”

Huff said the hospital would pursue programs that could generate revenue to offset the shortfalls and drive Medicare patients into the system, including a weekly monitoring program for chronically ill patients.

“It’s going to be a tight year. It’s going to be a year we have to get on top of, but we’ll get through it,” Huff said of the coming fiscal year.

“It’s definitely life after [the] stimulus.”

The hospital had “light at the end of the tunnel” in the form of an additional estimated $2 million in tax revenue in the fiscal year 2023 from the NextEra wind farm and the Plug Power hydrogen plant, now under construction in the hospital district.

The board has asked for new fiscal and strategic plans to use those funds to add a second surgical theater and obstetrical delivery room and reconfigure the 1960s-era hospital to handle a larger volume of outpatient cases.

The hospital will take delivery of a new ambulance by year’s end, courtesy of the Young County Commissioners.