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7/13/2017
Sitka considers ways to make its hospital profitable

SITKA (AP) — A study shows an Alaska hospital could become profitable if it discontinues obstetrics, provides surgery by appointment only, changes the way it reports Medicare and Medicaid costs, and transitions its long-term care beds to swing beds.

A report by Stroudwater, a national health care consulting firm, says implementing the changes would improve both the net income and cash position of the Sitka Community Hospital by $2.4 million per year on average.

Stroudwater says if the hospital continues to operate at status quo it will operate in the red, slowly gaining debt over the 10-year period until it is $7 million in the hole.

Rob Allen, Sitka Community Hospital CEO, said he’s pleased with the recommendations but they are a work in progress.

“So far I am pretty happy with it,” he said. “It’s still in draft form and our board will be looking at it and working on it with the consultant. A final draft will be available next week.”

The Assembly will hold a work session with Sitka Community Hospital on Thursday to discuss the report, the Daily Sitka Sentinel reported Tuesday.

One opportunity Allen was interested in is changing long-term care beds to swing beds — but that would take state action, he said.

“It’s very technical and a way to re-license our beds in a different manner and get a different method of reimbursement,” he said.

A swing bed is a hospital bed that can be used either for acute care needs or for skilled nursing as conditions dictate.

The recommendation of eliminating labor and delivery as well as going to a reduced surgery schedule were originally suggested by hospital administration and the Sitka Community Hospital board wanted more information, Allen said. The hospital was going to cut its obstetrics this fall but the board decided to keep providing those services for the time being.

The Stroudwater report highlights how the hospital could improve its cost report internally to yield higher reimbursements.

“Some of it we’re already looking at implementing and making changes,” Allen said.

Sitka Assembly members have varying views on the report, however.

Bob Potrzuski said he was disappointed in the recommendations in the report.

“It really doesn’t do anything to address the health care needs of the community,” he said. “It is simply a business model.”

Potrzuski said the report left him with a lot of questions.