Penn Highlands Elk Makes Change That Will Bolster Financial Health

Penn Highlands Elk is pleased to announce a new measure approved by the board of directors to stabilize and improve the hospital’s fiscal health. Penn Highlands Elk is in the process of obtaining the Medicare designation of a Critical Access Hospital (CAH).

“Simply stated, that means our hospital serves a critical need for health care in a rural community,” explains Rose Campbell, President of Penn Highlands Elk.

The new designation will positively affect the reimbursement rate that Medicare and Medicaid will pay the hospital for its services. Instead of receiving a percentage of the bill, based on diagnoses codes, the hospital will return to a cost-based reimbursement structure. The largest portion of Penn Highlands Elk’s patients are Medicare or Medicaid participants, and the increased reimbursements will have a positive financial impact.

Penn Highlands Elk has experienced operating losses in four of the last five fiscal years totaling $3.2 million. The decline is due, in large part, to decreased patient volumes. For example, inpatient admissions were down 13 percent and inpatient surgeries were down 10 percent in 2014 over the previous year. Penn Highlands Elk now sees 71 percent of its operating revenue coming from outpatient services.

“It used to be that a patient would stay for at least a couple of days after surgery,” says Campbell. “Now many of our surgeries are done on an outpatient basis. That is a wonderful advancement for our patients, but it does mean fewer people in our hospital beds.” According to a recent article published in Modern Healthcare, new public policy and marketplace incentives are encouraging health systems to promote prevention and keep patients with chronic diseases out of the hospital.

There are 1,326 hospitals across the nation that have already benefitted from critical access status. Pennsylvania now has 13, including Penn Highlands Brookville, which converted in 2006; Charles Cole Memorial Hospital, having converted in 2007; and Titusville Hospital, which made the conversion just last December. Penn Highlands Elk will bring that total to 14.

Penn Highlands Elk will maintain its current 75 bed license at its hospital facility and its 138 bed license for its long-term care facility, Pinecrest Manor. CAHs are able to maintain 25 acute, inpatient beds. Psychiatric, rehabilitation and long-term care units are not included in that total. Therefore, Pinecrest Manor will maintain its current resident base and still have beds available. Penn Highlands Elk’s Generations Unit, a 10 bed inpatient behavioral health specialty unit for seniors, will also not be affected. The hospital’s maternity unit will remain operational after this change, and there will be no change in outpatient services, surgeries or the 24/7 emergency department. For most patients and their families, the new critical access designation will go unnoticed. Penn Highlands Elk will continue providing the same continuum of care it currently delivers, and the new designation will not limit the ability to care for our patients, notes Campbell.

CAHs must limit their length of stay to an annual average of 96 hours. “That’s four days,” continues Campbell. “This should not be problematic. In 2014, our average length of stay was approximately 3.5 days. We rarely see an acute patient stay longer than that.” Swing beds, geropsych and observation cases are excluded from this stipulation.

Should a patient need to stay longer for rehabilitative therapy, the case manager may look into the possibility of a short stay in the hospital’s swing bed program, at Pinecrest Manor or at another appropriate inpatient rehab facility.

The vision for the future is bright at Penn Highlands Elk, notes Campbell. Penn Highlands Healthcare plans to launch several initiatives at Penn Highlands Elk that will help redefine the hospital’s mission, improve customer service, enhance quality and increase access to care. These plans include, but are not limited to recruiting additional physicians and advanced practice providers, thus reducing outmigration of patients from Penn Highlands Elk. Penn Highlands will be working to reconfigure service lines to ensure convenient access to primary, community-based health care. Improving the patient experience and timely throughput at the hospital’s Emergency Department will also be a major focus by the management team. And finally, Penn Highlands is recommitting to the communities of Johnsonburg and Emporium by securing primary care physicians in those communities.

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