Feature Stories - August 2004

Healthcare Checkup

Diagnosing Nevada Ills

by Jessica Groach-Santina

For most Americans, the typical healthcare experience consists of a cursory examination and a hurriedly written prescription. But here in Nevada, the pains are particularly acute and not easily remedied. From high health insurance costs to annual increases in malpractice insurance, to overcrowded emergency rooms and staffing shortages, Nevada’s healthcare industry needs a cure.

"Our challenges here in Nevada aren’t dissimilar from other parts of the country," said Brian Robinson, president of Hospital Corporation of America (HCA)’s Las Vegas market and CEO of Sunrise Hospital and Medical Center in Las Vegas. However, Nevada’s challenges come from its tremendous growth in population – more patients, but not enough physicians, staff or beds to handle them.

"Nevada’s bursting at the seams," agreed Meg Cleary, CEO/managing director of Northern Nevada Medical Center in Sparks. "And with an aging baby boomer population, we’re going to have to figure some things out." The state demographer’s office estimates approximately 265,000 people over the age of 65 currently live in Nevada – a number expected to almost double to over 527,000 by 2024. The fastest-growing segment of the population, those over 85, require even more healthcare services, and their numbers are expected to more than double during the same time frame. For Nevada, this is alarming.

"In both Northern and Southern Nevada, we seem to be behind the eight-ball in expanding," said Bill Welch, president and CEO of the Nevada Hospital Association. "We need beds and we need equipment. There are major expansions in some of the bigger hospitals. We have some control over that. We have less control over staffing licensed professionals. There, we find ourselves a debtor state, trying to import people from other areas of the country."

"As we expand facilities, we aren’t expanding [the number of on-staff] physicians at the same rate," Welch explained, "so we’re asking doctors to be on-call at more than one hospital. That makes coordinating emergency response difficult."

There are additional burdens on the system. Federal regulations require state hospitals to evaluate any patient in the emergency room, insured or not. Therefore, indigent and uninsured patients are using ERs for primary care, causing overcrowding. Nevada has one of the country’s largest uninsured populations, at about 20 percent.

Carl Fitch Sr., CEO of Desert Springs Hospital in Las Vegas, pointed out another factor putting stress on the healthcare system. "Nevada, especially Southern Nevada, suffers from a severe shortage of mental-health services," he said. "We need more acute-care beds, more outpatient services and more ER facilities. Emergency rooms at acute-care hospitals are now filled with mental-health patients waiting to be transferred to appropriate facilities. This keeps us from treating other patients promptly." Fitch suggested the area needs a complete inventory of mental-health services to determine current resources, which can then be compared to both current and future mental-health needs. "The new psychiatric hospital recently approved by the state will help," he said, "but what we’re doing now is only putting a Bandaid on a serious issue that needs attention."

Considering these factors and others, including severe blood shortages, this is a crisis. "We’re actually only making baby steps toward fixing a catastrophic issue," said Welch.

Finding and Keeping Staff

Nevada ranks last in the U.S. in nurses per capita. In fact, the U.S. Department of Health and Human Services reported that Nevada’s nurse-to-patient ratio is 520 nurses per 100,000 people. The national average is 786.

Why the shortfall? Nationally, nursing has been devalued. The nation depends on nurses to offer front-line care, but they have very little influence on decision-making. Mounting administrative requirements and stressful working conditions compound nurses’ diminishing sense of satisfaction.

Nevada does not recognize nursing certifications from other states, and the nursing programs in Nevada are extremely limited financially, making it difficult to graduate enough nurses to fill the shortage locally. "The Legislature agreed to let the nursing schools double their enrollment," said Bob Cooper, economic development manager for the city of Henderson. "But they didn’t provide any funding for it."

Furthermore, nursing isn’t the only segment of Nevada’s healthcare industry experiencing staffing shortages. The state struggles to recruit physicians, pharmacists and physician assistants. According to Cooper, Nevada currently ranks 46th in the nation in the number of physicians per capita. This is due in part to education – medical students in the state’s university system must divide their training time between Las Vegas and Reno. This makes establishing roots difficult.

Many believe the public perception of Nevada isn’t conducive to attracting quality medical professionals. "The physicians and quality of care here are truly remarkable, and one of Nevada’s best kept secrets," said Robinson. "The population is blessed to have it. But while Las Vegas is known for many things, healthcare isn’t one of them."

Rural Nevada’s struggles in recruitment are even greater. "Recruitment is very difficult to do here, for physicians and staff," said Dr. Alex Poirier, CEO of Northeastern Nevada Regional Hospital in Elko. "The key is finding the right person who chooses to live in this kind of community."

The High Cost of Practicing Medicine

Once physicians come here, retention is still an issue. "The way we’ve gone to managed care, with oversights by the government and increased administrative work, it fractures the physician-patient relationship," pointed out Larry Matheis, executive director of the Nevada State Medical Association.

In addition to the ever-increasing stresses doctors face, those in Nevada have the added burden of skyrocketing rates for malpractice insurance. Nevada’s rates are among the highest in the country, and increasing each year. "Malpractice for primary care used to be about $5,000 or $6,000 a year. I suspect in coming years, we’ll pay about $30,000," estimated Dr. Anthony L. Pollard, CEO of Rainbow Medical Centers in Las Vegas. "That’s already where ob/gyn is now. Surgeons pay up to $70,000 and neurosurgery goes up even higher, to about $200,000."

Matheis said a few lawsuits in the 1990s resulted in huge and unexpected awards to plaintiffs. Between 1996 and 2001, jury awards in Clark County jumped from roughly $525,000 a year to over $21 million. In 2001, four cases, all involving doctors who specialize in obstetrics and gynecology, resulted in an unprecedented amount of award money. In 2002, the state’s largest malpractice insurance provider, St. Paul, ceased offering coverage in the area due to the many lawsuits. Five of the state’s 11 insurers have pulled out of the market since, and those remaining offer only limited policies.

While some doctors have left Nevada, those who remain must take on a greater number of patients, stressing them even further. According to the Nevada State Medical Association, in 1998 Nevada had a net gain of 205 new doctors. In 2002, it was a mere seven doctors, and in 2003, just 70.

"These people are among the most educated in the community. More and more, you see them leaving to do other things," said Matheis. "It’s a group no one would have thought would leave their profession. So often you hear about it being a ‘calling.’ But most doctors now say they wouldn’t choose this profession again. That’s a reaction."

"The malpractice situation in Nevada is terrible," said Dr. Anthony Marlon, chairman, president and CEO of Sierra Health Services, Inc., which provides managed-care insurance to employers in Southern Nevada. "Specialists in Las Vegas pay three times what they pay in Los Angeles. We do have a crisis. And it’s 100 percent related to lawyers and lawsuits."

Nevada’s medical professionals are calling for tort reform. Until 2003, Nevada had no cap on the amount of money that could be awarded in lawsuits, resulting in huge jury awards. Last year’s Legislature passed a measure to cap awards at $350,000, with the exception of special circumstances or gross negligence. Many doctors say that’s not enough, and that plaintiffs now all claim "special circumstances."

States that passed tort reform, such as California, saw lawsuits diminish, along with malpractice rates. The average ob/gyn in Los Angeles pays a yearly premium of $52,000, while the same physician in Clark County pays over $140,000, according to the NDA.

The Keep Our Doctors in Nevada initiative is a coalition of taxpayer advocates, businesses and doctors urging tort reform in Nevada. The measure mirrors California’s Medical Injury Compensation Reform Act (MICRA), which many say has kept that state’s insurance rates among the lowest in the country. Citizens have an opportunity to vote on the reform in the upcoming November election.

Cooper noted that losing doctors not only affects us personally; it affects the economy, too. "There can be no good growth without healthcare, and without it, people will stop coming here."

Consumers and the Healthcare Business

All of these factors contribute to the rising cost of health insurance, and chances of a decrease are slim. "The population is getting older, there’s more expensive technology being developed every day, there are more expensive drugs, and we’re living longer," said Marlon. The light at the end of the tunnel is a single-digit increase. Avoiding double-digit increases is like dying and going to heaven."

Dr. William Bannen, vice president of Nevada Healthcare Management (a division of Anthem Blue Cross/Blue Shield), said malpractice insurance rates affect what the average person pays as well. "It contributes to the cost of care, and everybody ends up paying for it. Now hospitals are being charged per night to keep a specialist on, so that’s an added cost."

Others say that lifestyle changes are a big factor in costs. "Obesity is a big problem," stated Cleary. "It has caused challenges to healthcare that we’ve never dealt with before, such as risky bariatric surgeries, nutritional and psychological support, sensitivity training, instrumentation and equipment, larger operating tables."

As a result, patients pay more. But as Marlon pointed out, sometimes increased fees force people to reconsider unnecessary procedures. "If it’s free, you demand it, whether you need it or not. We don’t want to deny people healthcare, but we want them to at least think about it."

Collecting payment from insurance companies remains a difficulty for doctors. "We’re usually waiting about 60 days on insurance payments," said Pollard, "and patients either pay later than that, or don’t pay at all. We’re at the mercy of the insurance companies, and we just hope we’ve earned enough respect from our patients that they’ll pay their portion."

Fremont Medical Centers, among other healthcare providers, meets consistently with insurers to negotiate lower rates. "We’ve been aggressive in asking for better rates. If insurers don’t work with us, we drop their plan," said Greg Griffin. "But that puts patients in the middle. They develop a relationship with a doctor, and now they have to see someone else. But we’re trying to get more efficient, to see more patients, hoping to see savings."

Welch said the Nevada Hospital Association is working to get more hospitals to accept Medicaid, while negotiating improvements in the Medicaid system. It is also working with the Nevada Division of Insurance to get timely payments, and are developing a physician-owned medical malpractice insurance program. All could help ease high costs.

Even insurers are working to keep their rates down. By working with hospitals to improve efficiency, and encouraging patient education and preventive care through a number of programs, Anthem Blue Cross/Blue Shield hopes people will start to take better care of themselves, which may help lower costs.

What’s the Prognosis?

Many believe the future of Nevada’s healthcare system is bright. Robinson said in the past year, Sunrise’s new hires have increased by 65 percent, and 18 percent of those have been from out-of-state. Cleary explained that in 2003, Northern Nevada Medical had its best year ever in terms of volume and staff. In Elko, a movement is underway to convert a closed medical clinic into a facility to treat veterans and indigent patients, which should relieve overcrowding at the emergency room of Northeastern Nevada Regional Hospital. According to Dr. Paul Killpatrick, president of Great Basin College and vice-chair of the hospital board, Nevada’s congressional delegation is seeking federal funding

The city of Henderson formed the Southern Nevada Medical Industry Coalition (SNMIC), comprised of approximately 150 professionals from various industries, to assist growth in the healthcare industry. The SNMIC identifies improvement opportunities in healthcare, and works to address these needs through public relations efforts and lobbying. "We’ve been extremely successful as a community. The economy is booming, people keep moving here, housing prices are rising," said Cooper. "Growth has driven opportunities and challenges. Everybody has an asset, and everyone can offer something to help the situation."

Recently established in Henderson to help accommodate the area’s growth, will be Tuoro University College of Osteopathic Medicine is the first private college of osteopathic medicine in Nevada. The school’s inaugural class will contain 75 medical students and 30 physician assistant students.

"There’s one way to increase staff, and that’s to change people’s perception," said Tuoro’s Dr. Michael Crovetti. "We’ve got great doctors, but no one thinks of Las Vegas and medicine together. It’s going to become an attractive community for medical professionals."

Even with such tough challenges before them, Nevada’s healthcare professionals believe things are headed in the right direction. "Every challenge creates an opportunity to do it better and smarter," said Welch. "We’re all going to have to tighten our belts and be smarter, but I see the glass as half full. And I think most of us in this industry have that same philosophy."