Feature Stories - August 2003

Healthcare Checkup

The Future of Healthcare In Nevada

by Betty L. Johnson

It is basic business sense that although competition may be good for a capitalistic economy, competitors are rarely happy when a new business opens its doors. This is why Karla Perez, CEO/managing director of Spring Valley Hospital Medical Center was a bit surprised to be welcomed to the community by surrounding hospitals. Another hospital administrator told her he is glad to see the facility come on line. "He is hoping I will take some of the burden off their overly crowded emergency rooms," Perez stated.

Spring Valley Hospital is one of three new hospital campuses that will open in Southern Nevada in the next few months. Owned by Universal Health Services, its campus is located at the corner of Rainbow and Hacienda. Perez notes that her goal is to put the patients back in control of choices about their healthcare. The $70 million facility will include only 176 beds, though each of those will be a private room. The emergency room, however, will be one of the largest in the Las Vegas Valley, with 47 bays.

Southern Hills Hospital, part of the HCA network, is scheduled to open in February 2004. "Our goal is that 85 percent of patients in the emergency room will be seen, treated and either discharged or admitted within 90 minutes," said CEO Ken Armstrong. "That is our commitment." The new hospital is currently under construction at Sunset and Fort Apache, just off the new 215 Beltway.

Catholic Healthcare West (CHW), operators of the only hospitals in Southern Nevada that are non-profit, non-tax supported and religiously sponsored, will open San Martin Hospital with 140 completed beds, with an additional 60 beds slated for future development. Rod Davis, president and CEO of Saint Rose Dominican Hospitals, notes that providing more hospital beds is a necessity for the state of Nevada. "There are serious challenges facing healthcare in Nevada," he said. "One is that we have a capacity problem. Anyone who has been admitted to a hospital and been left to stay in an emergency room or makeshift bed for several days waiting for a regular bed to open up understands that we need more hospital facility capacity. It is an infrastructure need, similar to water, transportation and power needs."

Davis added that CHW has a commitment to the community, and since legally, the company must return any profits made by the company to the community in some form, an emphasis was placed on infrastructure needs. CHW has committed more than $300 million in new facility development from 1998 through 2006.

The Chicken or the Egg?

"I commend any of the systems out there, especially under the circumstances our state is now in, that continue to build new hospitals to keep up with growth," said Bill Welch, president and CEO of the Nevada Hospital Association. "However, which comes first, the beds or the healthcare professionals to staff them?"

Caroline Ford, assistant dean, University of Nevada Reno School of Medicine, Center for Education and Heath Service Outreach, explained, "We are literally in crisis in many areas of the healthcare profession." Shortages in nearly every health-related field are being reported across the state. Hospitals search for qualified pharmacists and radiological technicians, and the nursing shortage is affecting the quality of patient care.

Though the Nevada Nurses Association sponsored state legislation to mandate nurse-patient ratios, it came away from the table with only an interim healthcare committee to study the development of safe and effective nurse staffing systems in Nevada hospitals. Lisa Black, BSN, RN, executive director of the association, notes that it is difficult to muster votes for a bill mandating ratios when there are not sufficient nurses to fill the positions that would be mandated by the legislation.

"Nursing in Nevada is in an unprecedented crisis. Nevada currently has the worst nurse-to-population ratio in the country, with 520 nurses per 100,000 in population," explained Black. "The national average is 782 nurses per 100,000."

How serious is the situation? It is literally life-and-death. A University of Pennsylvania study indicated that the risk of death after surgery increases by 7 percent for every patient added to a registered nurse’s workload after the fourth patient.

The Need for Education

"Nevada currently produces only 264 nurses per year, and our state need is 716 registered nurses per year, just to fill the vacancies created by growth and attrition," said Black. The situation is compounded by the fact that although 249 applicants were accepted to Nevada nursing programs in 2002, there were 504 qualified applicants, many of whom were turned away due to lack of space in the educational programs.

The hospital community is funding about 25 percent of nursing education in the state, or $1.3 million a year in scholarships, instructors and books, according to Welch. Without the slots for students to utilize, however, scholarships are useless. "We have just had the legislature agree to double the nursing program beginning this fall as part of its budget," said Welch. As of this writing, however, there was no legislative agreement on future taxes, and there were legislators who hope to re-open the budget. If the increases do take affect, they cannot solve the shortages of today. Education is a process that takes years, and not every nurse trained in Nevada will remain in Nevada.

Doctors Wanted!

Larry Mathias, executive director of the Nevada State Medical Association, said physicians were frustrated by the level of assistance provided to them by the medical malpractice cap passed by the Legislature in the 2002 special session. "We didn’t expect a rollback in premiums, but we had hoped for rates to flatten." The issue, according to Mathias, is lawsuits. Though he insists that the malpractice cap was an important step, he believes there is still much to do. "The bill may be perfect for the trial lawyers, but it hasn’t done enough for the physicians," stated Mathias.

The Nevada Trial Lawyers Association asserts that court remedy is very important to malpractice cases, as medical malpractice is the eighth largest killer in the United States. It also emphasized that 480 new physicians have joined Nevada’s ranks this year, in spite of the malpractice situation.

Mathias responded by pointing out that it is not just the numbers of physicians that concern him, but the field each physician specializes in and his or her experience level. Rod Davis from Saint Rose Dominican agreed. "In the last 18 months, we have lost numerous quality physicians due to the malpractice crisis. We have been unable to recruit additional quality physicians to take their place," stated Davis. "Because of the seriousness of our malpractice crisis in Nevada, I see this as the number one challenge facing healthcare in the state."

Though the number of malpractice cases statewide to be awarded damages are not large, the amounts of those awards spread across an ever-decreasing number of insured physicians is having a catastrophic effect, according to Davis. "I believe any patient who is injured in any way ought to recover reasonable damages. But at the same time, we can’t have a judicial system that is skewed so far in one direction that it starts limiting access to healthcare for our general population."

Correcting the Errors

A side issue of an increasingly litigious society is the chilling effect the fear of a lawsuit may have on the reporting of errors by medical personnel. According to a recent report by the U. S. Department of Health and Human Services, excessive litigation is "an important contributor to ‘defensive medicine’ – the costly use of medical treatments by a doctor for the purpose of avoiding litigation." The report added that 79 percent of physicians revealed that fear of litigation had caused them to order more tests than they would have, based only on professional judgment of what was medically needed.

The Institute of Medicine noted in a recent report, "To Err is Human," that reporting systems are vital to the safety of medical care. However, medical personnel fear information from self-reporting systems will be used against them in lawsuits. The report admonished, "The focus must shift from blaming individuals for past errors to a focus on preventing future errors by designing safety into the system."

Hospital administrators and physicians believe the systems they have in place to track possible errors or medical concerns are working. "You cannot make everything a potential litigation," explained physician spokesman Mathias. "You want to encourage hard looks where the system fails and where it succeeds, and you want to communicate that information across the industry."

The Assurance of Insurance

One look at any emergency room in Nevada brings to light the need for changes to our current method of insuring residents. According to a recent study by the Great Basin Primary Care Association, Nevada’s percent of uninsured remains consistently higher than national averages. Nearly 350,000 people in Nevada remain without the means to access affordable, quality healthcare. The uninsured often rely upon government programs such as Medicaid and Medicare to pay their medical expenses. These programs, however, are reimbursing less for services that are costing more. Those costs must be spread across the paying population – the insured population.

The uninsured realize that the emergency rooms must treat them, so they flock in great numbers to be seen in an emergency room setting for ailments as common as the flu. Patients in need of acute care must wait as the other patients are triaged.

"The cost of healthcare is a big issue," said Dr. Robert London, vice president Health Care Management for Colorado and Nevada for Anthem Blue Cross and Blue Shield. "It is not just Nevada – it is the entire country. Cost trends are up 15 percent to 20 percent over the past four years. These costs include pharmacy, outpatient utilization, inpatient care and professional fees."

Insurers suggest their business is tough today, though some have been able to cover their losses in other areas, such as emergency rooms, with other medical facilities. Peter O’Neal, vice president, public and investor relations of Sierra Health Services Inc., noted Sierra’s bottom line is enhanced by its operation of facilities such as Southwest Medical Associates, and these additional services allow the company to partner with the community.

Adding To The Problem?

Many doctors contend that some of the cost of healthcare can be attributed directly to insurance companies. Dr. Neil B. Straus, MD, insisted that the current state of healthcare in Nevada is a dream compared to what it was like when he entered practice in the state, due to medical and staffing advances. His retirement from practice, however, is due in large part to frustration that his ability to care for patients was being hampered by insurance companies, which seem to constantly second-guess his medical decisions. "I opened my office with a $6 charge for an office visit," he said, explaining that new physicians cannot afford to open offices, due in part to the overhead increases from insurance companies demanding explanations of each test and treatment.

London replied that Anthem Blue Cross and Blue Shield is "trying to reduce that medical hassle. I believe we are moving away from ‘too much managed and not enough care.’ Let’s facilitate physicians and have the doctor in charge of healthcare." For instance, London pointed out his company has begun a "Pay for Performance" program that will pay hospitals more if they improve using computerized-order entries, and other initiatives.

"The pubic perception is, ‘Managed care is horrible, but my doctor is great,’" said London. To change that perception, the company is designing new products and hoping to educate consumers on how to keep themselves healthy to lower healthcare costs.

Looking Ahead

The healthcare landscape is a changing field. As medicine itself begins to evolve, most experts agree we will see changes in the way our medical needs are met. Physicians’ assistants and nurse practitioners may become more prevalent. These specialized healthcare providers can do many of the routine tasks of a physician, allowing the doctor more time to deal directly with critical patient needs.

Technology will aid in lowering the error rate in medication, as well as in the earlier diagnosis of many conditions. Sierra Health Services reported that physicians in its Southwest Medical Associates group now have handheld devices that allow them to do prescription ordering and check formularies right in the office with the patient. O’Neal indicates the company is currently working to create an electronic medical record to reduce the amount of paperwork and allow easy access to a patient’s total record.

Nevada will also have to look at how we are educating our children, and begin to emphasis the sciences, especially medicine at a much younger age. Programs to teach math and science at the middle school level must be expanded, and the excitement of a career in the medical field passed to future generations. We will also need to educate patients, so consumers will understand how to utilize medical advice and medical facilities more wisely, and what steps they can take to remain healthy.

New ways to insure our population must be considered, and reimbursement for those medical services provided to our needy must be increased to appropriate levels, said Bill Welch. "In a perfect world, the federal government would change formulary to help states out with Medicaid. The state will have to raise taxes, in my opinion. On a national basis, it would be nice if Congress would step up to the challenge so we aren’t piece-mealing tort reform in each state."

The state will need to step up to the plate and provide the necessary college education for its own doctors and nurses, if it hopes to supply its own needs. Those needs that cannot economically be met in Nevada, must be contracted to other states, as we purchase slots for our students in the programs of out-of-state universities.

"Nevada has a resilient economy, and we have the resources to turn that into medical care," said Larry Mathias. "We are now large enough to have specialists and special units and basic care is at its highest level ever."

David Dahan, CEO of Orgill-Singer and Associates, a spokesperson for the Las Vegas Chamber of Commerce and an executive board member of Nevadans for Affordable Healthcare, noted that "Las Vegas is always ahead of the curve – we always seem to find a way to fix our problems. For example, in Las Vegas, we have some of the greatest radiology facilities and hospitals. There does need to be a closer working relationship between physicians, attorneys and insurance carriers to look at the issues in a more comprehensive way. If healthcare is not affordable, the quality of life is greatly reduced and we all suffer."

Welch agreed. "If you want a state to succeed – if you want economic development and growth – there are two things you have to have in place. You need a quality education system, both K-12 and upper education, and you need a quality healthcare delivery system. As we talk about wanting to diversify our economy, we had better not cripple the two things that must be in place to get us to that goal. The future of healthcare in Nevada will continue to be a challenge in the foreseeable future. At the same time, you have individuals in the industry in this state who are committed to ensure that quality services are available. Regardless of the challenges and differences we are confronted with, we will continue to ensure that is the case."

New Hospitals:

Las Vegas - Spring Valley Hospital, $70 million, 176-bed facility, scheduled to open October 1, 2003. Operated by Universal Health Services (also operates Summerlin, Desert Springs and Valley).

Las Vegas - Southern Hills Hospital, $140 million, 129-bed facility, scheduled to open February, 2004. Operated by Las Vegas-HCA (also operates Sunrise and MountainView)

Las Vegas - San Martin Hospital, $150 million, 200 bed facility, scheduled to open in 2005. Operated by Catholic Healthcare West (also operates St. Rose Dominican and St. Rose Siena campus)

Expansions:

Las Vegas - Valley Hospital, emergency room will nearly double in size, with 21 beds in main treatment area, a 10-bed clinical decision unit, a 13-bed fast track unit and a six-bed and five-medical-chair discharge unit.

Las Vegas – University Medical Center, a new 175,00-square-foot patient care tower on the east end of the hospital campus will be started before the end of the year. The project will be five stories high and contain four patient floors. The project also calls for the demolition of some of the single-story buildings on the east part of the campus, and several other remodeling and construction projects.
North Las Vegas - Lake Mead Hospital (owned by Tenet Healthcare Corp.) completed expansion June 5, 2003 of the facility’s emergency room, adding 2,612 square feet of space and expanding the bed count to 20.

Reno - Washoe Medical Center, expanding to become a new acute care hospital. Project includes construction of two new facilities, adding 116,000 square feet to the campus.

Reno – Saint Mary’s, adding a six-story, 215,000-square-foot professional office building, a six-story parking structure, a new emergency department that triples the size of the current facility, and expansion of the West Tower, adding 60 beds, a new resource center, retail pharmacy and dining area.

Frequently Asked Questions

A. "Many practices use ‘physician extenders’ and have had tremendous success with them. It is very expensive to have me, a trained OB/Gyn, sit and do pap smears all day. It is not cost-effective. If the bucket of money presented for healthcare is limited, should highly-trained physicians do routine screening or should you have a nurse practitioner do those types of screenings?" (Dr. Robert London, vice president Health Care Management for Colorado and Nevada for Anthem Blue Cross and Blue Shield)

A. "It is a matter that physicians are spread so thin and compensation is so low. The number of patients and the type of practice also plays a role." (Larry Mathias, executive director of the Nevada State Medical Association)

A. "Nurse practitioners are highly-trained and highly-educated professionals. Many patients, once they have seen a nurse practitioner, choose to continue with this level of care. Patients relate that they appreciate that APNs spend more time looking at their entire health picture than do physicians, who tend to be more problem-oriented." (Lisa Black, executive director of the Nevada Nurses Association)

A. "Formularies vary with each insurer. Insurance is not designed to pay for 100 percent of your healthcare. We tier it so generic drugs have the least expensive co-pay and we have two other tiers. You can get more expensive drugs, but they have a higher co-pay. Anthem Blue Cross and Blue Shield has its own formulary, and it is based on quality and ethics." (Dr. London)

A. "This is entirely a cost issue. The drugs that are not covered are generally the more expensive drugs." (Larry Mathias)

A. "There are drugs that are equally as effective that are available at a lower cost. If a drug has a lower-cost equivalent – a clinically-effective equivalent – in most cases, insurance companies will recommend that lower cost-drug should be prescribed. If the physician insists that a patient use the higher-cost drug, however, it will be available at an added expense. There is an authorization process that physicians go through to prescribe these higher-cost medications. We do not however, select formulary based solely on cost. Clinical effectiveness is the number-one criteria and cost is number two. The costs of prescription drugs are actually coming down and stabilizing at about a 10 percent rate [of inflation] for us. These lower costs are due in part to many popular drugs moving to an over-the-counter availability, such as Claritin. As early as last year, the inflation on an annual basis was 15 percent to 20 percent, and obviously, we can’t absorb that. Generics, however, can be used to keep costs stable and low." (Peter O’Neal, vice president, public and investor relations of Sierra Health Services Inc.)