As financial pressures hit Nebraska hospitals, healthcare leaders explain why

OMAHA, Neb. (WOWT) - Nebraska hospitals say they’re facing historic financial pressures.

The Nebraska Hospital Association says since the pandemic started, they’ve seen the cost of providing healthcare go up significantly. They’re forecasting these higher costs will stick around.

Healthcare leaders say this is due to a number of reasons, including inflation on the cost of medical supplies and medical devices, labor costs, a labor shortage among healthcare workers, and patients’ lengths of stay; meaning some patients are sitting unnecessarily in the hospitals for days.

“We have patients sitting unnecessarily in our hospitals for days on end. We’ve had cases over 400 days where patients have sat unnecessarily in a hospital bed. Hospitals don’t get reimbursed for most of that, or sometimes any of that beyond when they’re ready to be discharged. It also means that we can’t continue to care for other Nebraskans who need care. That has a big impact on our bottom line,” NHA president Jeremy Nordquist said. “On the financial side, we’re also seeing challenges from commercial payers. Commercial payers are throwing additional burdens on our hospitals. We’re seeing more requirements for prior authorizations that take up time, keeping patients unnecessarily again in hospital beds, waiting for that prior authorization to come through. Hospitals have to spend a lot of time and effort appealing denials on those decisions; and then, we’ve even seen payers go as far recently as cutting telehealth payments in half by 50% of what they were previously reimbursing during COVID.”

Ivan Mitchell, CEO of Great Plains Health, said that hospitals are also seeing patients needing care for long periods of time.

“10-15% of the patients in our hospitals over the last year do not meet the requirements to still be in a hospital, and we struggle to get them discharged into nursing homes,” he said. “When you see a hospital have an average length of stay go from three days to four days, that might not sound like a very big deal, but you just increased your cost 25%. Prior to this situation, the average hospital and A-rated hospital would have a 3% margin. So having a 25% increase in your costs is just not something that really is sustainable.”

Kelly Driscoll, president and CEO of Faith Regional Health Services in Norfolk, said health insurance companies have also been adding pressure.

“In 2022, we really saw our payer relationship start to change,” she said. “Insurers are really trying to reduce what they pay us. AHA put out an article: 78% of hospitals say their relationship with commercial insurances is worse. Only 1% said that they were better.”

Even before the pandemic, hospitals were seeing a significant healthcare worker shortage.

The Nebraska Center for Nursing projected that by 2025, we’re going to be short by over 5,500 nurses. They’ve been down by over 2,500 nurses since the start of the COVID-19 pandemic.

60-80% of hospitals’ revenue comes from government-payer sources, like Medicare and Medicaid — and those rates are set by government payers. Medicare in Nebraska for this year will be a 3.2% increase. For Medicaid, it’s a 2% increase — that’s well below the increased costs that the hospitals are seeing.

Hospitals are also brainstorming ways to address other issues, like burnout.

Nick O’Tool, vice president of CHI Health’s finance division, said they’re working on recruiting and focusing on retention.

“What we’re doing is really focusing on our workforce, that’s for us to get back to where we need to be,” he said. “We need to stabilize our workforce where we can. We absolutely know there’s a nursing shortage throughout the country. ... Our big focus has been is, ‘How do we re-engage, re-recruit our existing nurses and staff, keeping them here?’ We think that’s our road to success during these very difficult times. Some of the things that we’re looking at with our new grads are work-life balance. The biggest thing we hear with our nursing force: ‘So how can we get creative with our nursing workforce, creative schedules, well-being offerings to those individuals? So those are some of the things we’re looking at.”