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Where are all the patients? Inpatient care down at Rice, outpatient up

WILLMAR -- There used to be a time when Rice Memorial Hospital had 60 or more patients occupying beds on a daily basis.

Then the number slid to 50, then to 40.

Inpatient volume has dropped sharply again in the past couple of months, and hospital officials are beginning to suspect this might be permanent.

Patient admissions are 10 to 12 percent lower than they were a year ago, said Bill Fenske, the hospital's chief financial officer.

"For much of September we were seeing a census in the 20s," he said.

The big question, Fe-nske said, is this: "Are we at the bottom yet?"

Patient volumes and revenue were reviewed Friday by the finance committee of the hospital board of directors. The decline in the number of inpatients hasn't appeared to hurt Rice Hospital financially. It has been balanced by a continuing upward trend in outpatient visits, which now make up more than half of the hospital's overall volume.

As of the end of August, Rice had earned a net margin of $331,000, the equivalent of just under a 1 percent return. Its cash position also has improved substantially since the start of the year.

Medicare reimbursement has become higher as a result of Rice's new classification as a Sole Community Hospital, a Medicare category for which it applied and was approved last year.

Fenske said it has bettered the reimbursement rate by at least 2 percent.

"Our revenue is up. It is definitely making an impact," he said.

The patient numbers tell the tale, however. Admissions are down in virtually every area, from intensive care to the women and children's unit. Inpatient surgeries have fallen more than 9 percent compared to a year ago.

Meanwhile the volume has been soaring in the emergency room. Patient visits to the ER have been increasing at a double-digit rate for the past three or four months, Fenske said. "I don't know if we can budget our numbers fast enough to keep up."

Ambulance runs, rehab visits and laboratory tests also are up.

The shift from inpatient to outpatient has been happening for several years but didn't begin to steepen until more recently.

"Many other hospitals saw this shift a year ago," Fenske said. "It's just really hitting us the last two to three years."

It's not entirely clear what's behind the increasing momentum of this trend. Hospital officials believe a shortage of orthopedic surgeons has had some impact on the number of surgeries being done locally, but this doesn't explain why inpatient volume is down in other areas as well.

Board member Dr. Mike Gardner wondered Friday if Rice, which has traditionally been considered a regional hub for hospital services, is losing an increasing slice of its market share to other hospitals.

"It's very frustrating," he said. "We've got this beautiful facility... Staffing is phenomenal. It's like, 'What happened?'"

"We need to be critically looking at why some of these things happen," Fenske agreed.

Hospital officials are attempting to get a grasp on some of these trends. The hospital is in the midst of a strategic planning process whose focus is on market share, physician supply and the future overall direction of Rice Hospital. A preliminary plan is due some time before the end of the year.

Market trends can be difficult to analyze, acknowledged Teri Beyer, chief quality officer for Rice Hospital.

"What causes people to change their pattern of care is of interest. Unfortunately we have limited information," she said.

In the meantime, Rice will soon be tackling the development of a budget for 2010. It'll be important to set realistic projections for patient volume so hospital departments can adjust accordingly, Fenske said.

It's unlikely that inpatient numbers will ever return to their former level, he said. "This shift has become very much permanent now."

Anne Polta

Anne Polta covers health care, business/economic development and general assignment. Her HealthBeat blog can be found at Follow her on Twitter at @AnnePolta.

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