Mercy says it must change

Lower revenue and admission rates cited

2/11/2014

Officials with Mercy Health System told about 100 community leaders the health-care industry is undergoing historic changes, and the hospital system is responding by changing the way it operates in the face of declining revenue and lower hospital admission rates.

The health system that includes seven hospitals in the Toledo area, including Mercy St. Vincent Medical Center, presented its annual report card to the community Tuesday during a breakfast meeting at The Pinnacle.

“We have done such a good job in this industry in terms of investment in medication that people who would normally come to the hospital for services now can be treated on an outpatient basis,” said Andrea Price, Mercy president and chief executive officer. She said the number of people admitted to the hospital has dropped dramatically.

“The current care model is unsustainable,” said Brian Smith, executive vice president of the northern region of Catholic Health Partners, the parent company of Mercy Health System.

Mercy, which has about 30 percent of the market share in Toledo, also faces unique financial challenges because about 50 percent of its patients have Medicare as their primary insurance and another 15 percent are covered by Medicaid.

Mercy officials said the federal government has lowered the amount it reimburses health-care providers for Medicare and Medicaid patients.

Private insurance companies also base their reimbursement rates on what the federal government pays for services.

“We take care of the majority of the uninsured patients: the people that live on the margins of society,” Dr. Imran Andrabi, Mercy chief operating officer, said during a meeting with The Blade on Monday.

Dr. Andrabi said the federal government provides funding to hospitals that serve the poor and uninsured to help defray costs, but the resulting Medicare disproportionate share payment has also gone down significantly.

“Just in the last year, that has meant seven to 10 million dollars less coming into a place like St. Vincent's than we had before.

“So when you hear us talk about we are taking care of 50 percent of the underserved population in this community, not having those funds also means we need to do something differently to take care of those patients,” Dr. Andrabi said.

Contact Marlene Harris-Taylor Marlene Harris-Taylor at: mtaylor@theblade.com or 419-724-6091.