May 14, 1998

Charles T. Wallace, M.D., a distinguished member of our faculty and a Charleston County Council member, spoke to the management team at our May 12 communications meeting. His presentation focused upon health care financing in our community, specifically on financing care for the poor. The information he shared was obtained from Department of Health and Environmental Control reports and is highlighted in this newsletter.

Academic health centers throughout the nation are having to focus upon cost control and performance improvement to fulfill their missions and survive in today’s competitive health care market. Each AHC faces special community issues which need to be understood by community leaders, government officials and the general public. Dr. Wallace’s presentation illustrates the tremendous contribution MUSC makes to our community and underscores some of the local issues impacting MUSC.

Dr. Wallace has served MUSC and our community for many years and I greatly admire him for the contributions he has made to MUSC and to our community.

W. Stuart Smith Interim Vice President for Clinical Operations Interim CEO, MUSC Medical Center

Recognition

• Pam Cipriano, Ph.D., administrator of Clinical Services, introduced Jo Ivey, R.N. coordinator for Urology, Module 11, as the MUSC Registered Nurse of the Year. Cipriano said Ivey received nominations from fellow staff members and from physicians. Many patients have complimented her compassion and the fact that she always makes time to help them, listen to their problems or get information they need. Ivey also brings her expertise to other areas of the Medical Center, such as Hollings Cancer Center and wherever urology patients are treated. She is active in the community and participates in urology education and screenings. Earlier this year, she received the Jane Rothaermel Nursing Excellence in Leadership Award. Congratulations to Jo Ivey, MUSC Registered Nurse of the Year.

Announcements

• Eric Frisch, compensation/employee relations analyst in Medical Center Human Resources, announced that preparations are under way for the Medical Center’s competency report to the MUSC Board of Trustees. This report is submitted to the board and is required by the Joint Commission on Accreditation of Healthcare Organizations. Because the report includes aggregate information on employee evaluations, Frisch reminded managers to complete any overdue evaluations as soon as possible.

Hospital Care for the Poor—A Review of DHEC Hospital Reports

• At the May 12 communications meeting, Charles T. Wallace, M.D., professor of anesthesia and perioperative medicine and Charleston County Council member, presented the management team with a comparison of Charleston area hospitals in several performance categories and in the amount of care provided to indigent patients. His data is based on 1995, 1996 and 1997 Department of Health and Environmental Control reports from all hospitals.
• Wallace said he tracks this information so that the facts can be made available to elected officials who are wrestling with decisions about health care financing in our community, a controversial and complicated subject. Wallace told the management team that he was speaking to them in his capacity as a county council member, not as an MUSC faculty member.
• Wallace began his presentation about health care for the poor with a review of Charleston Memorial Hospital’s record of care. The role of CMH, which is owned by Charleston County but managed by MUSC, has changed a great deal over the years. Twenty-five years ago, CMH provided medical and surgical care and had the only fully staffed, 24-hour emergency room in the county. Even then, however, MUSC provided obstetrical, pediatric and specialty care to CMH’s patients.
• By 1986, a number of area hospitals opened 24-hour emergency rooms, and the State General Assembly passed the Medically Indigent Assistance Program, or MIAP, a fund supported by all counties and used to help pay for hospital care for the poor.
• In 1992, MUSC tried an innovative idea and created a low-cost obstetrical unit at CMH and also encouraged the state to increase Medicaid funding for mothers who qualified. These efforts were successful, and as Medicaid payments from S.C. were increased, patients covered by the program became more attractive to private physicians. Numbers of obstetrics patients using CMH dropped and the unit closed in 1994. (The McClennan-Banks Ambulatory Care Center also opened in 1992 and remains a busy facility.)
• Utilization across all inpatient, acute care areas at CMH continued to drop as did funding from Charleston County. Last year, all surgery services were moved to Medical University Hospital.
• Wallace said the establishment of the MIAP and generous assistance from MUSC has enabled the county to reduce funding without reducing care at CMH. At one point, funding from the county was $7.8 million a year. Today’s funding of $1.6 million a year represents the cost of debt service. In short, the county is paying off CMH’s debts while MUSC provides all the hospital’s services. The council’s goal is to eventually drop county funding to zero.
• Wallace pointed out that the county funds the local EMS, charging patients who use it, and also pays for the care of those incarcerated in the county jail. Interestingly, the county’s funding for the county jail ($1.6 million) is the same amount as their current funding for CMH.
• Wallace compared MUSC Medical Center, Roper Hospital, Trident Regional Medical Center, Charleston Memorial Hospital, Bon Secours-St. Francis Xavier Hospital and East Cooper Regional Medical Center by number of beds, admissions, days of care per patient, number of employees per bed, and also by the number of babies delivered, surgeries performed, open heart procedures performed, outpatient visits and emergency room encounters. Highlights of these statistics reported for 1995, 1996 and 1997 include:
• MUSC has the most beds and East Cooper has the fewest.
• MUSC’s total admissions have grown approximately 20 percent during the 1995-97 reporting period while Roper’s and Trident’s have reportedly remained about the same.
• The hospital delivering the highest number of babies for the 1995-97 reporting period is Trident. Bon Secours’ numbers have dropped in the last three years, while MUSC’s have increased and Roper’s have stayed about the same.
• MUSC’s outpatient visits have increased by approximately 85,000 in the last three years.
• Wallace next reviewed the data concerning delivery of care to Medicare, Medicaid and MIAP patients. While Roper sees the highest number of Medicare patients, MUSC sees the most Medicaid and MIAP patients. Wallace said he identified the percentage of inpatient care to the poor each hospital provides by dividing the total number of patient days of Medicaid and MIAP patients by the total days of care recorded by the hospitals. Using this formula, the percentages of inpatient care delivered to the poor in 1996 and 1997 by area hospitals are as follows: MUSC Medical Center—35.9 percent Charleston Memorial Hospital—32.88 percent Trident Regional Medical Center—11.02 percent Bon Secours-St. Francis Xavier Hospital—9.28percent Roper Hospital—8.28 percent East Cooper Regional Medical Center—7.42 percent
• Wallace also discussed Charleston County Council’s support of local hospitals and the recent issue of financing MUSC Rutledge Tower through a bond issued by the county. He explained that Charleston County does not lend money to local hospitals, but a state law allows the county to process a request for tax-exempt financing, which then goes to the State Budget and Control Board for approval. If the request is approved, a private lender lends money at tax-exempt rates.
• Last year, MUSC requested such a tax-exempt bond in the amount of $85 million to refinance the purchase of Rutledge Tower. In the history of the county council, no such bond has been turned down. However, this bond was opposed by some local physicians who filed a lawsuit and argued that it represented unfair competition. The lawsuit is scheduled to be heard by the State Supreme Court.
• MUSC’s use of the Rutledge Tower is a win-win-win situation, according to Wallace. Bon Secours-St. Francis was able to sell the hospital when it needed to with no uncertainty, taxpayers did not incur any costs for a new building for MUSC’s outpatient services and patients (including indigent patients) benefit from expanded services.
• Since 1979, Charleston County has approved bonds in the amounts of $299 million for Roper Hospital and $305 million for Bon Secours-St. Francis Xavier Hospital. Since 1986, MUSC has benefited from $148 million in bonds, including the $85 million bond to finance MUSC Rutledge Tower which is still being contested before the court. Wallace calculated that the hold up of the MUSC Rutledge Tower bond is costing $141,000 per month in excess interest. He equated that sum to the cost of a medical procedure, such as a liver transplant.
• Wallace closed by acknowledging that some see his affiliation with MUSC as a conflict of interest in issues regarding health care, but he hopes elected officials locally and in Columbia are able to get all the facts about these issues as they make decisions about health care financing.
• Anyone interested in a copy of Wallace’s report should call Jane Smith at 792-4120.