SHERIDAN — The leadership team at Sheridan Memorial Hospital took time Monday to meet with candidates for Sheridan County Commission, outlining the hospital’s funding sources, financial benchmarks and the philanthropic giving that makes it all possible.
Ten of the 11 candidates seeking a seat on the commission attended the event. Dennis Fox was the only candidate absent.
CEO Mike McCafferty walked those in attendance through the hospital’s history before explaining the shifts hospitals across the country have had to accommodate. For example, he said health care has experienced a shift away from private practices. Physicians want to focus on patient care, rather than administration of a business. So, McCafferty said, more and more physicians are working under a hospital’s administrative team.
In addition, shifts in how care is reimbursed and a shortage of primary care physicians have impacted how the hospital operates.
While 16 of the 26 hospitals across the state are considered critical access hospitals — and are therefore reimbursed for the cost of care — SMH has 88 beds and operates under a prospective payment system, essentially a fee for service basis.
“We chose to grow, rather than contract,” McCafferty said Monday, explaining why SMH doesn’t qualify as a critical access hospital.
SMH is a county memorial hospital — a political subdivision of the county government — and receives approximately $240,000 from the county each year. Under other models, hospitals are allowed to collect mill levies from those they serve. For example, Johnson County Healthcare Center brings in more than $4 million per year in revenue from its mill and Campbell County Health brings in $19.5 million.
McCafferty noted that the generosity of the community helps keep SMH viable and successful. Charitable giving to the hospital since 1976 has totaled approximately $35.5 million. Still, McCafferty said, the hospital does not have as much cash on hand as it would like. Currently the hospital has about 60 days worth while it aims to have 120 days.
Yet, SMH has a lot to brag about, McCafferty said. The hospital’s cost comparison sits below most of its peer group across the region. For example, the cost to a patient for a major joint replacement in a lower extremity is about $32,500 in Sheridan compared to $44,670 at Ivinson Memorial Hospital, the next lowest cost procedure.
“I’m not saying that health care is inexpensive,” McCafferty pointed out, adding that SMH has held its prices back in order to be competitive in the region and best serve Sheridan County patients.
In addition to procedures, SMH’s average charge per inpatient day is around $3,760 compared to others in the state that top $8,100, and Sheridan’s Medicare spending per beneficiary falls significantly below the state average. Sheridan’s spending is about $5,838 per beneficiary compared to the state’s $7,417 and national spending of $9,171.
Sheridan County Commissioner Mike Nickel noted during the meeting that other counties don’t brag about their hospitals. Instead they face lawsuits and other struggles Sheridan County does not have.
At the end of the presentation, McCafferty opened the room to questions. Candidates asked about bad debt and why some hospitals have brought in outside management, among other topics.
While the presentation gave a brief rundown of the hospital’s operations, McCafferty said he hoped the introduction allowed candidates to get a feel for the complex and dynamic organization as they continue their campaigns.