Feature Stories - March 2002

Industry Focus: Healthcare

Healthcare Leaders Face Challenges

by Kathleen Foley

Healthcare Professionals in Short Supply

Bill Welch, Nevada Hospital Association: Hospitals are always talking about the shortage of nurses, but clearly there is a shortage of healthcare professionals across the board. Nevada has the worst nurse-to-population ratio in the U.S. and it is going to continue to be the worst as we keep leading the nation in population growth.

Dr. Anthony L. Pollard, Rainbow Medical Center: There are several new hospitals slated for Southern Nevada. Where will the nurses come from to staff them, and what kind of care will patients receive if there is a staffing shortage?

Welch: Five new hospitals are planned in the next two to five years. We are currently producing between 300 and 350 new nurses per year. To keep up with growth we need an increase of 767 nurses per year. The issue is going to get worse before it gets better. No matter what solution we implement today, depending on whether it is an associate degree nurse or a bachelors degree nurse, the soonest we’re going to see any solution to this is three to five years.

Rod A. Davis, St. Rose Dominican Hospital: I was amused by the question, "How can we build new hospitals when we don’t have the nurses to staff them?" You can’t ignore one problem by saying there’s another problem. We have a dire shortage of hospital beds in Southern Nevada and it’s going to get worse in the next five to 10 years. The staffing shortage is a major problem, but we have to address the shortage of hospital beds too. We [St. Rose] are one of the groups announcing another hospital. We plan on conducting intensive national and international recruiting programs.

Welch: During the 2001 legislative session, AB378 was introduced, which would have required the university and community college system to double nursing programs, starting this coming school year. Unfortunately, it was not passed in the original form. What did get passed is a requirement for the university system to develop a plan and a budget for doubling nursing programs, which will be taken back to the 2003 session for consideration. Even doubling the programs will not meet the demands we have today, much less as we continue to grow, but at least it’s a start.

Dr. Anthony Marlon, Sierra Health Services: Do schools indicate that they have a number of applicants in excess of current availability?

Welch: We have six nursing programs in the state of Nevada, with a seventh coming on board with Henderson State College. Of the six nursing programs, five had the ability to increase their student population last year from 50 percent to 100 percent with qualified candidates if they had had the faculty.

Marlon: Don’t you think ultimately with this kind of shortage that supply and demand will drive salaries up for nurses?

William R. Hale, University Medical Center: We have people now who are becoming doctors, lawyers and computer experts who might have become nurses because of the salary issue. We have to put a value on their services. In five to 10 years, salaries will double - we have no choice. But, how to fund that is another question.

Welch: We need to focus on retention of existing staff and start recruiting from outside our state. Otherwise, we’ll end up bidding for the same small pool of nurses who are already here. I was talking to a hospital CEO recently who had paid out over $300,000 in bonuses to keep his hospital’s nurses from being raided by other companies.

Laurie England, Care Network, Inc.: I started out as a registered nurse, and I can tell you that many different issues feed into this. Salaries are a big issue, but it’s also important to remember that nurses are predominately women who are trying to both have careers and be good mothers. Hospital nursing involves shift work and a lot of physical labor. I don’t see an easy solution.

Dr. Weldon Havins, Clark County Medical Society: Last January, there were openings in Southern Nevada programs, but Northern Nevada programs were overcrowded. It’s a shame there isn’t some mechanism of scholarship support so we can move our native Nevadans down here. If they train in-state, they will be more likely to stay here.

Davis: Part of the problem is the perception that nurses are unhappy. We have nurses who absolutely love what they do, who live for the interaction with patients and the opportunity to help people in a time of pain and sorrow. We aren’t communicating those intrinsic benefits of nursing like we ought to be. We as hospital professionals also have to make sure we provide a positive environment where our nurses feel valued, respected and appreciated, and where they have time to perform their nursing chores as they believe they should.

Welch: The Nevada Hospital Association is developing multiple initiatives, both on the federal and state levels. We are talking about articulation [ability to move from north to south statewide] and also scholarships and funding. Retention is a major issue, and also the image of nursing. It’s going to take a collaborative effort of everybody in this room to address this issue.

Malpractice Insurance – Not Available, Not Affordable

Hale: Physicians are hit from both sides: they are reimbursed less and at the same time, they have to pay more for malpractice insurance. The problem is with the government. Many states have caps on liability, but Nevada does not. It’s like open season on the healthcare field. We’re going to have to figure out a way to lobby our representatives to put in caps (on awards for damages). Otherwise, this will ultimately lead to a doctor shortage and it will impact patient care, and that’s something none of us wants to see.

Greg Boyer, Valley Hospital Medical Center: The malpractice issue affects everyone in the healthcare industry, from small businesses to physicians’ offices. Healthcare firms across the board will suffer without appropriate tort reform to limit malpractice costs.

Havins: St. Paul Insurance has decided to get out of writing malpractice insurance. They are the largest malpractice carrier in the United States. In Clark County, they carry over 40 percent of physicians. The only new carrier in the state is MedPro, which anticipates picking up about half the physicians, but if you’ve had significant claim experience or significant reporting of incidents without claims, MedPro does not want you. This is going to force physicians to go to the secondary market.

Davis: Carriers won’t come to Nevada if they can’t make a profit. The carriers have been watching Nevada for years and they’re pulling out now because of [malpractice suit] awards. The only thing that will bring carriers back is a cap on awards.

K.D. Justyn, Summerlin Hospital Medical Center: I talked with four different physicians yesterday, one of whom’s malpractice insurance has gone up to four times what he was paying previously. He has applied for a position in another state and has every intention of leaving. Another is retiring three years earlier than he had planned. Some of the others are just throwing up their hands because they are so frustrated. They are removing some of their privileges at the hospital because they cannot get coverage or they are unwilling to pay what they believe to be exorbitant costs for malpractice insurance.

Pollard: The premium now for delivering babies is over $150,000 a year.

Justyn: That’s exactly it. It was an ob/gyn who removed his privileges to deliver babies. He’s now going to do only gynecology. Previously, we’ve had a very successful time recruiting, but this is clearly going to create a much more difficult picture for us. Losing our physicians –and we are going to start losing our physicians – is going to create a big problem.

James Kilber, Desert Radiologists: Although some specialists like surgeons and obstetricians are being hard hit, radiologists are affected too. The doctors in our practice were covered by St. Paul, and since it pulled out of the market, getting a new insurance carrier has been our number one priority. We’ve looked at 22 different companies, and we’re anticipating at least a 15 percent increase in premiums, and probably a lot more than that.

Todd Meek, Nevada Care: Medical malpractice carriers have had a loss of investment income because of the economic slump, and they’ve taken some pretty big hits as a result of lack of tort reform.

Marlon: Most malpractice carriers are losing money. Their rates are appropriate to the level of jury awards and settlements that are being paid. In Southern Nevada over the last couple years, awards in malpractice cases have nearly tripled. As a result, premiums on average have gone up from 70 percent to 100 percent over the last year.

Justyn: We can understand why premiums went up. My question is, "Who’s going to pay?" Are consumers willing to pay increased medical costs to cover the additional cost of malpractice insurance?

Marlon: Consumers get what they deserve. They don’t want tort reform - they want free access to the courts with no constraints. We could have gotten some tort reform here about four years ago at the Legislature. The Nevada Medical Society decided not to push them for caps, so we get what we deserve too.

Hale: Only a crisis will bring about tort reform. In California, there was such an acute shortage of obstetricians that the state Legislature had to address the issue, and that’s how they got their tort reform done.

Pollard: A book called The Dying Physician By 2008 says that by 2008, costs and expenditures will drive physicians as entrepreneurs out of business. I think it’s right on track. As an independent owner of clinics, I have seen an escalation of costs from 24 percent (of revenues) up to about 84 percent in the last 12 years. [Malpractice insurance] is just another 6 percent or 8 percent added on top of that. We can only see so many patients an hour to try to recoup our costs. At some point, there won’t be enough money to make it happen. At some given point, you say, "How can I get out?" Physicians will start leaving this profession. We feel that we are on the bottom of the food chain.

Marlon: Medicare recently announced a reduction in reimbursements of nearly 6 percent. If physicians are facing increased malpractice costs and lower reimbursement from Medicare, they have to make it up somewhere, and that means costs will go up for patients seeking care.

Gil Silbernagil, Healthsouth Rehabilitation Hospital: When I was in California 12 or 14 years ago, the cost of malpractice insurance was a major issue. Fortunately, the state took action and instituted tort reform. It didn’t solve the entire problem, but it did help contain costs for physicians and other healthcare providers.

Dr. Richard Jones, Aetna: In California, there’s a $250,000 cap on awards for pain and suffering in malpractice cases. Aetna and other insurance companies have been working together with the Clark County Medical Society and the Nevada Medical Society to lobby the Legislature to put a cap on malpractice awards in Nevada. This would help stabilize premium rates. If we can ease the burden on malpractice insurance companies, then we also ease the burden on those who pay the premiums, and allow more physicians to stay in Nevada.

Marlon: I’m involved with the Chamber of Commerce and I’ve had the opportunity to talk to some large employers. We talk about the nursing shortage, we talk about higher malpractice insurance premiums, we talk about a higher cost of doing business. Believe me, over the last three years, with health insurance premiums going up - both insured premiums and self-funded premiums - you’ve got everybody’s attention. We’ve had double-digit increases for the last three years in healthcare costs and it looks to all of us like we’re going to have double-digit increases for the next three to five years.

Linn Billingsley, Kindred Hospital: We need to make politicians see that these huge legal settlements lead to access issues for everyone. Physicians are mobile – if we put up barriers for them to practice in Nevada, they’re free to go somewhere else.

Meek: We need a solid coalition to go to state lawmakers on these issues. Trial lawyers will bring up horror stories about hospitals’ or physicians’ malpractice. The person in Florida who got the wrong leg cut off - that’s what you hear - one case out of all the hundreds of thousands of good outcomes.

Medical Care for Uninsured Patients

Welch: One of the things that affects all of us in this room is indigent care. Just as we have seen our population in general grow, that same type of growth has occurred in the uninsured population. The size of our indigent population is a very serious issue, especially since the events of Sept. 11 caused a number of layoffs in this state.

Hale: Universal healthcare, as proposed at the beginning of the Clinton administration, is dead for now – I don’t see it coming back in the foreseeable future. People are working - sometimes two jobs - and still don’t have health insurance. It’s a real quagmire as to how to resolve this issue. It will get worse before it gets better.

Karla Perez, Desert Springs Hospital: There’s a misconception that all uninsured people go to UMC or other public hospitals. Private hospitals are feeling the pinch, too, especially since Sept. 11, when so many people lost their insurance along with their jobs. When uninsured people go to a hospital emergency room and then don’t have the resources to pay their bills, the hospital has to recoup its losses from somewhere. What ends up happening is that costs increase for those who do have insurance, or who have the money to pay for their care. So it’s not just a problem for the uninsured – it’s everybody’s problem.

Rick Knowland, Healthsouth Rehabilitation Hospital: Another thing to point out is that it often costs more to treat an uninsured patient than it does for someone with insurance, because they often don’t seek treatment until it’s a life-and-death situation. Because they can’t afford preventive care, they wait till they have a medical crisis and then treatment costs a lot more.

Dr. Raj Chanderraj, Clark County Medical Society: There are presently 200,000 uninsured people in Clark County. Most of them are employed, but they don’t have healthcare coverage.

Marlon: We have an employer-based [healthcare insurance] system in this country and I certainly don’t want us to go to a socialist basis. However, I don’t understand why, when we have mandatory workers compensation insurance, we don’t have mandatory health insurance being provided by employers. Some companies ride on the backs of the rest of us who provide insurance for our employees. I’d like to advance the premise that the source of this problem is the employer, and health insurance should be made to be the responsibility of the employer. I don’t buy this stuff that small employers can’t afford to insure employees. If they can’t afford insurance, they should go into a different business where they can afford to insure their support staff.

Chanderraj: These companies are skirting regulations by working people less than 30 hours a week to avoid providing coverage.

Marlon: There is no mandated insurance. That’s the problem.

Pollard: If they mandate that, then they should mandate that the premiums go down.

Maria Soldo, Sierra Health Services: Employees don’t have discretionary income to afford to pay for insurance for dependents. They just can’t afford it. There is a need for subsidies for the working poor and a combination of contributions - taxpayers dollars, employer dollars and employee dollars - to make sure people get the coverage they need.

Welch: There is a movement now to expand the Nevada Check-Up program because of the people laid off after Sept. 11. The state is looking at expanding the program, which currently covers only children, to include the adults of households who meet the financial standards for coverage.

England: I hesitate to open that Pandora’s box and create a safety net, because employers will fall into a safety net if we create it. You have to look at the whole picture of the impact it would have for the community and the state. The growing senior population opens up another issue, in terms of subsidizing what Medicare does not provide. If you arrange to take care of a problem for one part of the population, then another special interest group will demand to be taken care of as well.

Pollard: It’s a socialist program. It would be hard to fit it into a capitalist system and make it work. If we are going to cover everybody, who’s going to pay for it?

Welch: This society has promoted the image that every citizen has the right to every level of service and resource available to mankind. Unfortunately, there are not enough resources to fund that. Either it’s going to take some federal or state funding, or we’re going to face the reality that some people won’t have access to certain types of services. This is a great challenge for us.

Moderator Bill Welch concluded: "We thank the Nevada Business Journal for bringing us all here today. We’ve come together once now, and hopefully we can find a way as a community to come together in the future to create strategies to deal with these challenges."

Kathleen Foley
Kathleen Foley is a freelance writer based in Southern Nevada.