Garfield County Hospital: Andrew Craigie, Chief Executive Officer

by HCE Exchange on May 8, 2012

Perhaps some of the hardest-hit hospitals these days are small, rural critical-access hospitals. Garfield County Hospital in Pomeroy, Wash., is currently facing significant challenges to ensure its doors stay open so it can continue to provide care to the community that depends on it.

Garfield County Hospital services a fairly large geographic area with a sparse population of about 2,300 people. It sits near the border of Idaho, and the referral pattern leans toward that direction. For a rural hospital, Garfield County is fairly accessible, being located on State Highway 12. The public hospital has 25 beds, and it also offers a rural health clinic, an emergency room, diagnostic laboratory services, and physical therapy.

Patients have access to regional medical centers about 40 minutes east toward Idaho and about an hour southwest toward Oregon.

Going Lean to cut costs

About eight years ago the hospital began a culture-change initiative to create a more homelike environment and to improve efficiency.

“We wanted our culture and environment to reflect the same warmth and charm of our community,” said Andrew Craigie, chief executive officer. “It has taken a long time, and it’s an ongoing process, but the culture change has been effective. We are family-focused, and there’s not an institutional feel about our facility.”

In addition to culture change, Garfield County Hospital implemented Lean Six Sigma process-improvement methods across numerous operating areas.

“Lean has been fundamental to helping us achieve and sustain gains in the organization from direct care to medical records to admissions to revenue-cycle improvement,” he said.

The Lean process has also influenced the hospital’s current efforts to meet meaningful-use criteria. The hospital has identified a preferred electronic medical records vendor, but is struggling to find interim financing to begin the implementation process.

Making ends meet

Garfield County Hospital is still facing financial challenges, resulting in big changes to the organization. The hospital had subsidized the nursing-home part of the facility based on the needs of the community, but in recent years, that service has become unsustainable. The hospital made the decision to eliminate surplus nursing-home bed capacity by closing 20 of its nursing-home beds. The hospital system expects this decision to help bring greater financial stability based on utilization and reimbursement.

Craigie said that in the early years, the nursing home was in high demand by the community, even though the contribution wasn’t enough to cover the cost of operating the nursing home.

In 2007, the hospital began to see a decline in utilization, reaching only 70 percent in 2010. The service area’s population has also declined during the past decade as well, and state initiatives encouraged people to find alternatives to nursing homes by making it difficult for them to qualify for benefits or creating incentives for them to use alternatives. The deficit attributable to  the nursing home in 2010 reached $1 million, a large chunk of the hospital’s $8 million budget. It became evident that a reduction in beds was necessary.

However, reducing the beds hasn’t yet improved the hospital’s finances.

“Medicare rates haven’t stabilized yet to reflect the new bed count, so we have about an $800,000 cash-flow loss because of this destabilization, even though we are almost exactly on budget this year,” Craigie said.

Even with changes and Lean initiatives, the hospital is facing financial struggles. Recently, the  community has stepped up by approving a $750,000 tax levy to fund maintenance and operations of the facility until reimbursement stabilizes.

During this period, Garfield County Hospital is doing everything it can to free up cash flow, while trying to preserve staff. Most of the staff have taken a reduction in hours, and executive staff, including Craigie, has taken a 40-percent pay cut in the interim.

A member of the community

The challenges faced by Garfield County Hospital are common to many rural facilities, which, although small, are important members of the communities they serve. Garfield County Hospital is reaching out to the community to help it understand the struggles it faces.

“We want to preserve our credibility with the community, to make sure they understand that what we’re experiencing is not because the hospital is poorly run or ignoring its responsibility,” Craigie said. “Our small rural communities are worthy of the services we provide. If we weren’t here, our patients wouldn’t have services close to home. It is essential to sustain our rural health systems.”

Rural hospitals provide a unique setting for community-based initiatives and close observation of outcomes, particularly related to chronic conditions such as diabetes. Garfield County Hospital is implementing a health-home initiative in the primary-care environment to connect with patients and create an environment of care that fosters productive relationships between the practice team and patients. The hospital is reporting outcome metrics for diabetes, cardiovascular disease, and other chronic conditions, and it is developing a structured approach to managing those encounters using a chronic-care model.

“As a rural hospital, we have a unique opportunity to affect the quality of health for our communities that urban settings don’t have,” Craigie said. “We have close relationships with our patients. They are our neighbors, our kids, our peers, and families. We have a special opportunity to serve and make a difference in the community we live in.”

-by Patricia Chaney

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