CEO of Covenant Hospital Levelland, Newman Wheeler provided an update of what the hospital is doing and what the scope of healthcare looks like nationally to the Hockley County Commissioners’ Court during a special meeting Monday.
Wheeler provided a financial snapshot for the month of March and informed the Commissioners’ that they are ahead of where the budget was forecasted to this point. He also reminded the Court that the hospital as always been subsidized by Lubbock.
“Lubbock has always helped us with breaking even at the end of the year,” said Wheeler. “But there are some headwinds and some things that are good to know as they have affected hospitals across the country.”
Wheeler stated that there has been an increase in the past 12 months with payers (for example Blue Cross, Blue Shield of Texas) that have been auto denying the payment of services for those insured.
In turn, Covenant continues to file an appeal on that claim or deal which allows the payer to hold that cash flow for another 90 to 120 days.
“It is not just here. Every hospital is going through this with the major payers,” explained Wheeler.
With it happening nationally and not just statewide, there’s been a hiring freeze because of the headwinds that Covenant is facing financially but every hospital system in the country is facing the same issue.
“If I want to buy a mask those are packaged in other countries. It might be Australia or China and for decades we have let that happen because we wanted cheaper prices. And now we’re thinking we need that back here to have more security and better control of supplies. So, we’re going to feel the pain of this for a couple of years.” Wheeler said. With very few medical supplies not manufactured in the USA the cost of these items will continue to increase, and it is feared that over the next few years we will see hospitals start shutting down.
“Like Littlefield, they have good taxpayer base, and they are a hospital district, and the taxpayer pay so much taxes to help fund the hospital but at a certain point of the hospital’s expenses it’s too much” Wheeler stated.
Wheeler added that Covenant is currently in negotiations with Blue Cross, Blue Shield with the West Texas and the New Mexico area. He continued to explain that the payers were refusing to pay more and that has led to negotiations stalling. Currently Covenant are trying to counter that offer with lower expectations. Right now, Covenant is asking for an 8% or 12% increase.
Wheeler alluded to President Donald Trump being correct when it comes to manufacturing overseas in tariffs, “We need to bring manufacturing back here (United States) because most medical supplies are created and manufactured overseas,” explained Wheeler. “So, the tariffs for our health system are probably going to put us at a about a $500 million shortfall system wide. That includes all of Providence and Covenant.”
Calling the situation a concern, Wheeler added that they will have to figure out how to overcome that because it will take a while for the USA to manufacture in the states.
The pharmaceutical side of things are in a similar situation. Wheeler added that they are seeing a 38% to 40% increase on supplies.
Hockley County Judge, Sharla Baldridge asked Newman if the payers are still going through payment once the appeal period is completed.
Newman informed the Court that the payers are going through with payment once the appeal period is complete. He further explained that the payers want to hold onto their money for as long as they can which in turn causes operations to have a cash flow shortage. Sometimes they will pay 80% of it but not the full amount.
Covenant does have teams that work on those denials at any time. Just for the West Texas area in the past 12 months, the last piece of data showed they had about $90 million in holding that they owed Lubbock, Plainview, and Levelland and it was already over 120 days. Those are for legitimate claims and for services already provided, according to Newman.
Hockley County Judge, Sharla Baldridge, asked Newman why the clinic wouldn’t be open on Saturdays. Wheeler added, “In the summer months we just have to pull back because it’s really not in demand, but if the demands were to increase, we can definitely bring it back.”
It was explained that Levelland is a core staffed business for “X” number of patients and activities. One of the things they look at over time is their premium pay and their goal is to try to reduce so they can remain within their budget. With only seeing between four and seven patients over the past eight months, the costs associated with staffing and hours were not efficient.
Moving forward, the Court discussed and took necessary action concerning the 2023 FAST fund-Rural Outreach and Wellness Acknowledgement which is a grant that Covenant would get to receive a free vehicle to do paramedic work with patients that call 911, but they don’t really need to go anywhere.
Covenant is trying to reduce the number of what they call “no transfer, no transport calls.”
Wheeler explained that a lot of resources can be allocated to one call which includes an ambulance, police officers and a fire truck.
“It’s a lot of resources being used for minor stuff like high blood pressure, low blood sugar, they feel woozy, or nauseous, “ said Wheeler. “Its resources that they don’t have, so we are trying to figure out a solution which was to start a program by getting a vehicle for calls like those.”
The Court passed it with no issue with Baldridge stating, “It’s a good opportunity for us to assist our constituents without costing money and give them the covers that they need and help the hospital. It will take some of the pressure off the first responders.”