Total operations income for St. John's Medical Center

If you have a high-deductible insurance policy, odds are you’ll put off elective surgeries as long as possible.

That’s what St. John’s Medical Center administrators say is messing with the hospital’s budget in the first quarter of fiscal year 2018.

“We did not have a great month,” hospital Trustee Scott Gibson told the board during its Oct. 26 meeting. He’s the head of the finance committee.

Though the hospital’s operating income was $260,000 when the quarter ended Sept. 30, an operating gain of $3 million was projected.

It was a 91 percent decrease in operating income from the first quarter of 2016, and 87 percent off the 2017 numbers.

“For the first quarter we’ve just seen a downturn in our surgical volumes, which is more or less a national problem that’s been going on in health care,” Chief Financial Officer John Kren said. “We’ve seen it from the big for-profits all the way down to smaller, regional hospitals.”

Chief Operations Officer Dr. Paul Beaupre echoed Kren’s point, saying that fewer surgeries isn’t just a Jackson phenomenon. According to St. John’s, hospitals in other similar ski towns, such as Aspen and Vail, Colorado, and Sun Valley, Idaho, are seeing similar trends. So are regional hospitals like Eastern Idaho Regional Medical Center in Idaho Falls and Madison Memorial Hospital in Rexburg, Idaho.

Beaupre isn’t optimistic the hospital will meet the budget this year — Gibson isn’t either — but it will continue to perform “at a level that is like last year.” Beaupre isn’t worried about the ability to finance planned capital projects, like the new Senior Living Center.

“Having a bad year here and there is just going to happen,” Kren added. “But it isn’t anywhere close to us being concerned about the future.”

Beaupre and Kren said the nationwide trend of fewer elective surgeries is too recent to have predicted when the hospital created the budget.

“People who are on high-deductible plans are making very difficult decisions about when they’re going to access health care,” Beaupre said. “And the unfortunate thing about that is sometimes they wait too long, in which case they are sicker when they come in to see us.”

In health insurance, deductibles are a specified amount of money that the insured must pay before an insurance company will pay for a claim.

“They have so much out of pocket,” Kren said. “It’s much easier for someone to throw their credit card down on the table for a thousand than it is for $10,000.”

Kren gave the example of a bum knee. If you have a low deductible, chances are you’ll have it checked out. But what if you had to the pay the first three, four, five or more thousand before your insurance will cover anything?

“You’d take a few more Advil,” Kren said.

The downturn in elective surgery — 721 during the first quarter of fiscal year 2016, 780 during the first quarter of fiscal year 2017 but down to 674 in the first quarter of fiscal year 2018 — isn’t bad just for patients who would ideally seek care sooner. When insurance deductibles are higher, the hospital ends up with more “bad debt” from when people can’t pay their medical bills.

Observation hours and deliveries are also down, 11 percent and 15 percent respectively, over the past two years. Acute patient days have not changed over that time, while the average daily census of beds filled has increased by 1 percent.

So what is St. John’s doing to anticipate the shifting health care landscape? Beaupre says “diversifying” services while keeping quality up will be key. He mentioned the recent addition of brachytherapy, a cancer treatment, as an example.

Other opportunities to bring back old patients or reach new ones are possible for cardiology, oncology, joint surgery, OB/GYN and urology. Hospital staff hopes to make up the existing shortfall in surgeries by increasing volumes in new or different departments, potentially with the help of new technology.

Chief Communications Officer Karen Connelly said passivity isn’t an option.

“We can’t continue to do the same thing,” she said. “The innovation is more important than ever.”

Another area for improvement, Beaupre said, is attracting Medicare patients back to St. John’s. Strategic planning efforts earlier this year showed there’s a 30 percent movement away from the hospital in that population.

But November won’t necessarily provide a jolt of hope.

“Every month is very important,” Kren said, “but we do typically see a downturn with the offseason in November.”

Sometimes, Kren said, locals come during the offseason to get their elective care when “everybody is gone.”

Either way, visitation picks up around the holidays, and ski tourists, and their injuries, keep the hospital busy.

The end of the year often prompts people who have worked through their deductibles to come in and have elective procedures done. But whether that pattern will continue is uncertain because deductibles might be so high that they haven’t been met.

Keeping quality up, hospital officials said, will help St. John’s ride out uncertainties in the health care field.

“We believe strongly that we need to continue to earn the right to be the sole provider of health care in Jackson,” Beaupre said. “The mantra we use is, ‘Take great care of patients and everything else will take care of itself.’”

Contact Kylie Mohr at 732-7079, or @JHNGschools.

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