With declining patient volume and little leverage to negotiate insurers’ rates, Ellwood City Hospital is facing the biggest challenge of its 103-year existence.
President and CEO Carolyn Izzo, who started as a staff ICU nurse at the hospital 41 years ago, says the hospital’s management is trying to “redesign” the 46-bed facility to keep it open, even as she and the board try to sort out what that would entail.
Market forces are working against them.
The cold fact is that Ellwood City Hospital has been living with negative margins since 1998 with a $1.8 million operating loss in fiscal 2015, $1 million more than the previous year. To keep the place running, they’ve had to tap into hospital foundation money while Mrs. Izzo and her staff have shifted services to accommodate their aging clientele and cut back in other areas when they seemingly had no other choice.
Still, the red ink writing is on the wall.
“We’re looking for a partner. We need to be part of something,” she said in an interview last week. “We just can’t remain independent.”
A low point came two years ago, when 67 hospital employees — nearly 15 percent of the workforce — were laid off, the cuts sweeping through virtually every department. “I knew these 67 people who lost their job. I knew their children,” Mrs. Izzo said. “But we’re doing what we had to do to survive.”
There’s more than the hospital’s survival at stake, too, said Ellwood City Mayor Anthony Court, who is also Mrs. Izzo’s cousin.
“The possibility that we could lose this hospital makes me sick,” he said in disgust.
Ellwood City is a place that’s seen its share of businesses closing or leaving town, he said, “but we’ve been rebounding in other areas.” And through those ups and downs, Ellwood City’s hospital — the borough’s second largest employer behind Ellwood City Forge — has been a stabilizing anchor, a mainstay Ellwood City residents could always count on.
“A lot of the patients there are elderly,” Mr. Court said. “Can you picture them having to drive 25-30 minutes to Cranberry? In inclement weather? It would be almost devastating for them.”
Ellwood City Hospital, in a sense, is a victim of geography, scale and demographics. The current three-story facility, built in the 1970’s, has more space now than it needs to serve the community but it’s still too small to expand its service area. And where would it go?
Jameson Hospital, just 15 miles north in New Castle, is a consent decree away from joining the UPMC health system in an agreement that will relieve Jameson of its debt obligations while pumping in $70 million to invest in physician recruitment and capital improvements.
Mrs. Izzo would love to find a match like that for Ellwood City, but a tentative collaboration agreement with Butler Health System four years ago fell apart and other entreaties have stalled. At one point, she said, they even reached out to for-profit firms outside Pennsylvania.
“They just said, ‘You’re too small.’”
The hospital’s size comes into play, too, when it comes to negotiating reimbursement contracts with commercial insurers, she noted. “They say, ‘If you don’t like the rate we’re giving you, OK, we’ll just go on down the road. We don’t need you.’”
Mrs. Izzo describes her facility as “a meat-and-potatoes, run-of-the-mill hospital.” A heart attack patient will not get a bypass there but, in a medical emergency where every minute counts, the staff can stabilize patients until they can be safely transferred.
The hospital features a wound center, a vein center and a pain center, as well as a 10-bed geriatric unit for the elderly with signs of dementia. On average, only 18 of the 46 medical-surgical beds have patients in them any given day. They’re considering converting some of those beds to other uses, such as skilled nursing, but they have to retain some inpatient beds to keep the emergency department open.
Mrs. Izzo and Chief Quality Officer Beverly Annarumo remain steadfastly proud of the care that patients receive at their hospital, so an announcement in December by the Centers for Medicare and Medicaid Services that Ellwood City was among eight area hospitals in “the worst performing quartile” carried a particular sting.
That finding, they pointed out, was based on three incidents over a two-year period when the hospital had 2,889 admissions. One of those incidents was based on a pressure ulcer sore that Mrs. Izzo suspects had simply gone unrecorded when the patient was admitted. The other two involved accidental punctures.
Because of the “worst performing quartile” designation, CMS is now docking Ellwood City one percent on its reimbursements, costing the hospital $29,100 that it couldn’t afford to lose.
Mrs. Izzo said board members are considering their next moves, knowing the continued encroachment into the hospital foundation fund is not sustainable. She said they see their responsibility “to preserve some kind of health care services to the community” but what that means for the hospital’s future remains unclear.
“I’m a postcard for what’s happening to rural health care in this country,” she said, “and I don’t want to be that.”
Steve Twedt: stwedt@post-gazette.com or 412-263-1963.
First Published: February 8, 2016, 5:00 a.m.