Support for Arkansas Week provided by the Arkansas Democrat Gazette, The Arkansas Times and K KUARFM, 89.

And hello again, everyone, and thank you for joining us.

Arkansas and interest rates, Arkansas and marijuana, a couple of things that we'll address a bit later in the broadcast.

First, though Arkansas and its hospitals, many are ailing financially, not on life support, not necessarily but in intensive care.

COVID and its associated costs are a significant factor, but not the only factor in the losses that threaten the survival of some hospitals.

Especially in smaller, mostly rural areas, but not exclusively.

This week, for example, a legislative committee approved a $6 million transfusion to help Washita Regional Medical Centre pay its bills.

The chief executive of the Camden Hospital is Peggy Abbott, who joins us now.

And also on board for this edition, Jodi Tritt of the Arkansas Hospital Association and from Paragould, the Administrator of Methodist Hospital, Barry Davis.

Thanks to all of you for being a part of the broadcast, Miss Abbott.

Abbott, let's begin with you.

You were you were days away from.

I guess the word is insolvency.

Actually, we were in in a crisis mode.

Actually.

It was about June when I realized how can we keep going on, began sounding the alarms, reached out to our Washington delegation, our Arkansas delegation, the governor's office, our representative, David Felding, really got on board and began fanning the flames and drawing some attention to the matter.

It's not something that just started in June.

Actually, we could go back to March the 11th of 2020.

When the first COVID case hit Arkansas, we hospitals were pretty much immediately told that we have to cease elective procedures.

Well, that's the revenue stream that comes into hospitals.

It was as if we were opening the emergency department only and for a while we didn't have a significant number of COVID patients in Camden, AR, but what we did have was an intense decline in revenue stream.

I think that's the point, Steve, that the powers that be tend to overlook when they're questioning.

Or what's going on in your hospital?

Why are you now saying we need more money?

You had money from the Cares Act, you had the payroll protection money, all this federal dollars, all these federal dollars, and the Medicare accelerated payments that we all felt that we needed to take.

And why did we take it?

For the reason I just said to you, our revenue stream has drastically declined.

Our census days have not rebounded.

Right now our census is down 5% overall over last year.

Count another patient.

Count surgeries.

Now, isn't it astounding that surgeries would decline?

But our surgeries, inpatient surgeries, are down 34% / 1 year ago when we still were in the midst of a bit of a COVID surge.

If if COVID was the tipping point though, you said the trouble counter began then, but it really, it had its roots even earlier, did it not?

Absolutely.

Absolutely.

I've been in the hospital world for 35 years and there's not been very many years that I wasn't hearing the CEO talk about tightening our belts.

Now we're a rural hospital, we're an independent hospital.

We don't have a safety net under it.

So we've always had to watch the dollars.

Only for one brief 5 year period have we ever even had a local sales.

That's initiative to help us and that was not renewed when it came time for renewal.

It was not even allowed to go to vote is the bottom line of it.

But we've always had to watch our dollars.

But you move forward into the mid 90s on to the year 2000 and keep coming forward, costs were already escalating, labor costs were already increasing.

What was going on with Medicare and Medicaid?

Nothing.

I cannot even remember the last time we had a significant increase.

In Medicaid dollars here in Arkansas, we get on average $750 a day to care for a Medicaid patient.

Now that can change depending on if it's obstetric or intensive care, but that's on average the Medicare rates are still hovering back in the 90s, the late 90s.

The the reimbursement rates just have not kept up with the time.

So you're right, when COVID hit, it was the tipping point, it tipped us over.

We suddenly had a drastic reduction in in our services.

We had high cost.

Patients to care for COVID hit us hard.

There was a day that every patient in our hospital was a COVID patient, even our obstetrical patients.

So maybe to the average layperson what does that equate to?

You don't allow nurses to come and go from a COVID patients room into perhaps that one room that you have just the regular pneumonia patient.

Let me go to Barry Davis if I can over in E Arkansas.

Mr Davis, you you felt the all of all of these factors that that Miss Abbott was talking about.

We're not exclusive to South Arkansas.

You're feeding them in the delta as well, I gather.

That's correct.

We are considered a rural hospital even though we're in a town of 30,000.

But I heard a reiteration article and and the author commented on there that the fire was lit prior to COVID.

COVID was just the fuel that that flamed the fire, and we're still feeling the effects of that.

Miss Abbott's hospital, Mr at Miss Abbott's Hospital was, I think you said, five days away from basically going broke.

How many camdens are there out there in Arkansas?

We hope few.

That's really a story that we let our independent hospitals kind of tell on their own.

We have definitely heard from our membership, no matter the size of the hospital, that quarter one and quarter two of this year were some of the worst differences in revenues versus expenses they've seen.

In in their lifetimes as CEOs of hospitals throughout Arkansas.

So that means costs were continually increasing.

I think pharmaceuticals are up 36%, labor costs are up about 20%.

And when you add those things together, fully recognizing Mrs Abbott's point and Barry Davis's point that neither Medicare nor Medicaid have kept up with those costs and commercial payers haven't kept up with the cost either.

In fact, some commercial payers while your premiums are going up and.

And all of our individual premiums are going up.

They haven't given hospitals a requisite increase.

And so that really presents a problem, especially as they add utilization review and other things sort of administratively burdensome on a hospital, which actually makes the cost of care even more expensive.

So you've got a perfect storm with the revenue streams not coming in at the levels that we need them.

And even if revenue streams are coming back in, the expenses are way outpacing.

The revenues that are coming into the hospital anyway to contain those expenses reasonably that is there a reasonable possibility of prospect of controlling that.

I will say that our hospital administrators have done what they can to reduce cost in Arkansas for a very long time.

Arkansas is one of the few states that's really negatively impacted by what's called the area wage index.

That's a national policy in Medicare that basically says the the more efficient.

You are the less you get paid year over year in Medicare and the more the more expensive states get paid because it's a 0 sum game.

So to oversimplify, the more efficient Arkansas becomes in taking care of patients, our costs look less.

So if our costs look less than the cost in New York, for example, Medicare will pay New York hospitals a much higher rate than next year.

Looking back at the cost from the previous year, then it will pay Arkansas.

Hospitals.

So the more efficient we become, we're a self fulfilling prophecy that we've already cut all we can cut.

All right, well, you're talking about a, well, a clinical reality, fiscal reality, but it moves it inevitably into the political sphere, does it not?

I mean, that's the policy arena, which is governed by political factors.

What's the solution?

More money.

Absolutely.

More money.

You had asked me offline if I felt that we were getting attention from the legislators.

I think that some are beginning to understand the criticality of of getting some changes to both the Medicare and Medicaid reimbursements.

Commercial insurance payers are more in the private sector.

How do we influence them?

I think we have to do it one-on-one and kind of fall on their mercy, so to speak.

They have shareholders, they do so they have others that they're accountable to.

But we we must, it's imperative that there be some changes to the Medicare and Medicaid rates.

Medicare is our largest population and most all of the hospitals, especially the rural hospitals.

It's imperative that those rates be adjusted as well as right here in Arkansas, there has to be some attention given to the Medicaid population.

There's something called the low volume adjustment that a hospital that my hospital benefits from.

That's up for consideration and on the national level.

As to whether to continue that or not, we need that money.

We cannot afford to lose $1.00.

And you know, you mentioned that.

What can we do to contain our cost?

In Camden, we're very bare bones.

We've wear many different hats.

And the rural hospitals, you don't have many layers on the administrative business side.

So people think, well, just cut back on your services.

Well, that's a catch 22.

You cut back on services, you cut back on your income.

You also fall away from what?

You're really there for and that's the individual at the end of every decision that's made, every dollar that comes in a human life is impacted.

And I've said this before, and I'd like to say it today, I cannot imagine why any legislative body.

Would turn aside from the needs in health care because in our lives most every human being.

At one time or the other will need a hospital.

Whether it's at the time of birth or at the time of death or somewhere in between, hospitals are one of the most vital needs in America.

In Arkansas, why would we ever sit by and let one hospital close?

We need to take action now, and I'm hoping that some is coming forward.

But Jody, Anne and I and Barry and folks like us, and thanks to you, intend to keep fanning, fanning the flame of this message.

And that's 6 million.

Dollars that we we got, which we haven't received yet, we're still jumping through some hoops to get DHS to release that money to.

I think you'll get it now.

That will be 3 months.

Of our labor cost.

Let me, let me ask, Mr Davis, when you open your books in the morning, assuming you do every morning, assuming you've had a good strong cup of coffee and you look at the hospital's books, where is your that that the dollar that's coming in, how is that going to be apportioned?

And we've got about a minute remaining.

Mr Davis, I want to what are you confronting every morning?

What does as an administrator?

What do you confront every morning fiscally?

The the majority of that in staffing cost, we're a service industry just like any other service industry and and about 6050 depending on the hospital 50 or 60% of our costs are associated with salaries and competition is out there.

The nursing shortage has created that I have seen bonuses and and and and different types of reimbursements to.

To attract staff, even though we're a rural hospital, we have two larger hospitals 20 miles from here.

And so we're much like the metropolitan areas that we have to compete for staff and and oftentimes that means additional cost that that we don't have.

So that that's been a real issue.

I have a an entire staff of nurses that are dedicated to compliance.

To to regulations, to reimbursement, making sure that we get what dollars that we can from the system.

Well, I want to thank all three of you because we are simply out of time.

We, I hope that you'll come back soon and we'll continue to address this issue a lot more to say about it.

Thank you, a lot more to know about it.

Thank you all very much.

We'll be back in just a moment.

We are back to address a couple of issues that are in need of addressing and here to do it.

W Brown of the Daily Record and Michael Hibbling, news director of KUAR Public Radio in Central Arkansas.

Gentlemen, thanks for coming in Michael's Supreme Court of Arkansas through a little something out there late Thursday afternoon.

Marijuana, recreational marijuana will be on Arkansas November ballots.

Yeah, the state Supreme Court overturned, well, maybe not overturned, but dismissed issues brought up by the State Board of Commissioners, which had said there were problems with the language of the proposed amendment, also the ballot title.

This has been ongoing for a little while.

The state Supreme Court a few weeks ago had said the issue could remain on the ballot.

Until it considered the proposal, but this now will go before voters, and it's seeing if polls are correct.

There's a lot of support for this.

19 states have passed recreational marijuana, and we've got several states elsewhere in the nation that are also going to consider these kind of proposals come six years after we we've got the medical marijuana.

Ballot issue passed and and one of the prize surprising things for me was seeing A52 vote by the Supreme Court.

Pretty strong statement from from the court to get this on the ballot.

I think that they they basically doubled the number of needed signatures needed to get this on the ballot like about 190,000 I think then the the number to to get it on the battle was about 90,000 and they so this I think is a strong statement and I think it's going to pass easily.

If you look at the 2016 ballot referendum in the past has pretty easily, and I thank you, you're going to get a similar type of vote for.

Yeah.

Well, Speaking of strong statements so that the Court's opinion had barely hit the outbox before there was some strong opposition reiterated anyway by groups that are absolutely opposed to recreational marijuana.

Yeah.

I think Jerry Cox said a family council basically said this is gonna be a disaster for the state of Arkansas.

Other national groups came out and said some of the similar statements are, but you also had people in other sides.

And this is a.

It's going to be a financial boom during our financial boom to being a actually opening up to just like the other states selected you mentioned the 19 other States and probably more after this after this election is over you're probably going to have half of the states of the of the 50 states that have recreational marijuana and awful lot of money involved here, Michael.

Yeah, I think that very likely could be an issue too.

We don't know where all the money is coming from in the these ads but.

You have a lot of people who invested in medical marijuana, including people like some former state lawmakers, a lot of people who have put a lot of money into the setup we have right now and I think feel maybe somewhat threatened by recreational marijuana change in the process.

And you could.

And I think one of the things you may see, this may bring out some people to the election that you may not have had.

That are gonna vote in this election to get this this passed so we may see more people at the ballot.

Speaking of money, money is about already does cost a lot more than it used to Wes.

Yeah yeah the the Fed is going to cost still more Federal Reserve raise interest rates to for to to the range of federal target rate which is the the the range the interest rate that that banks pay each other went from 3 went to the range of 3% to 3.25% third time in a row.

That it's gone 3/4 of of a point up what that means in five fifth, the fifth time in 2022 that the interest rates have gone up.

What this mean is that we've gone from zero to probably I think the prime interest rate for all the major banks went up to 6.5%.

That means that the the amount of money that you pay for a mortgage or credit card or any type of loan or car payment, car loan, all those any type of financing from the bank you're going to see.

Go up to the point of it and what the Fed wants to do is basically put a a dowser or just slow down the housing market.

And this is going to do it because most people aren't willing to pay 7 or 8%.

Interest rate to to pay for a mortgage over 30 year period.

Well, you just took my question away from me and that is the impact on the House, the home building industry, the, the the housing industry, yeah, here and elsewhere.

And the thing that they're trying to do is to that put it put to slow down inflation.

I think the consumer price index is at 8.3%, the producer price index is 8.

So and the federal target 4 inch for inflation is 2% annually with four times that right now and inflation doesn't seem to be slowing down, this will.

Have an impact, but will it have an impact to lower home prices or to cause other areas of the car, cars for instance, cars are skyrocketing and energy prices are starting to go back up.

So will this cause inflation to to go down, I don't know.

It's going to take some time eventually maybe, yeah, but but but the one of the things generally when the housing market goes down you start to see some prices in some areas like lumber prices or other commodities that that deal with building a house.

If those prices come down, you may see some prices come down in other areas, but I don't I think it's gonna be a while.

And the danger of this is that when the Fed does this, do you bring the economy in for a soft landing or crash?

We could see a crash.

And when you see a crash, that means that you're ever recession.

Well, Mr Powell, Chairman Powell Michael says this isn't the last one.

We've got more of this medicine to swallow.

Yeah.

Well, we've got a tough times ahead and a lot more decisions to be made in how to rectify the.

Financial environment we're in right now.

Yeah.

Yeah, you saw, saw the reaction, the stock market came down quite a bit well globally too.

I mean, yeah, just just and and the other thing is like you said, there's more pain in the future because the Fed made a very strong statement.

There are more interest rate hikes in the future and that could mean we've seen, we may see interest rates to the highest level we've seen in my generation, 789.

Percent, and we haven't seen that.

I haven't seen that in my life, though.

I want to ask your rage.

Speaking of pain, these are painful days for the Arkansas Senate.

I mean, here we have a Chamber of 35 Members, 34 of whom are being called on a 33, depending on to pass judgment on a colleague, Michael, and it's and it's.

Yeah, mess.

We've got the full Senate now considering recommendations from the Senate Ethics Committee regarding a complaint filed by Senator Alan Clark, Republican of Lonsdale, again, Stephanie Flowers, Democrat of Pine Bluff.

I've spent many days at the Capitol covering this when it was in committee, although much of it was behind closed doors in executive session.

But the committee eventually issued.

Pretty strong recommendations.

#1 dismissed the complaint against Flowers.

She had been reimbursed in automatic reimbursement for hearings that she ended up attending via Zoom.

The head of the Senate, the Senate President Jimmy Hickey, as well as the committee.

Both said that was a clerical issue.

Senator Flowers reimbursed the money.

And on Friday of last week, the Senate accepted the recommendation, voted to not penalize Senator Flowers.

But now we have what's really kind of it.

It was kind of a mess last Friday because the Senate was hearing all kinds of procedural issues, things that were out of the ordinary.

Senator Clark.

Wanted to bring his own attorney to testify and there was it.

It was a very odd situation to be in.

It was hoped the both recommendations could be considered, but after several hours they finally adjourned and they're going to come back on this Tuesday to reconsider whether or not Alan Clark should be sanctioned.

The committee found that his complaints were frivolous.

And retaliatory.

And the recommendations are that he be suspended for the rest of the year in the Senate, also lose his seniority.

Yeah, chairmanship chairmanships.

And the other thing is, is, is that he said when this happens that he's not going to be in attendance, which are it'll be.

That even makes this even the Tuesday session.

That makes it even stranger.

To that's like going to court and and that the person who has been prosecuted or is is is not in a in a in attendance and in the Senate generally has a discus of being above these type of things and and but but you're seeing this develop delve into a situation where it's just it seems to get stranger and stranger each time you you you go over there and see those those hearings Michael yeah and Clark last week he was.

Somewhat emotional.

I mean, he at one point was just like, I wanna get it over with, let's just do something.

I want to get this behind me.

But back for people who may not be familiar with the back story, earlier in the summer he was reprimanded for.

Asking a fellow senator to put his name on a sign in sheet so he'd get reimbursement per diem for an event he did not attend.

He claimed he got sick, had a fever, and that's why he didn't end up actually attending.

But at that time he suggested this is a lot more common than people realized and even made a statement about, you know, burning the house down basically, you know, going after.

Other senators who have, he said been doing similar things and he and senator flowers in particular.

There have been tensions between them.

Yeah.

Going over the years.

Wow.

Yeah.

Yeah.

Yeah.

So this is it's just been a very unpleasant thing and and it's been, I can tell from just the members of the Ethics Committee I think this has been a a painful experience for them to.

Have to sit through hours and hours and hours even into the evening, you know, on one meeting just to go through these allegations and decide how to respond.

Yeah, gotta end it there, guys, because we're simply out of time.

Thanks for coming in.

As always, we thank you for watching.

See you next week.

Support for Arkansas Week provided by the Arkansas Democrat Gazette, The Arkansas Times and KUARFM, 89.