Aspen Valley Hospital not trying to be like big city hospitals
Pitkin County residents pay $4 million in property taxes each year to hospital
Special to Colorado Mountain News Media
Aspen Valley Hospital is required to keep on hand enough cash that it could continue to operate for 180 days even if it never collected a single bill in that time, hospital CEO Dave Ressler said.
Over the past decade, Aspen Valley has expanded its office space for practices and clinics. The first two phases are complete, one is half complete and the fourth is expected to cost about $11 million out of the entire $150 million project. Of that total, $50 million in general obligation bonds will be repaid through property taxes. Aspen Valley is two-thirds of the way through a $60 million campaign to raise money through philanthropy. Hospital reserves will be paying the balance.
Ressler has heard the complaints that the hospitals are palaces, with the gleam of bigger urban hospitals but much higher costs. But he says Aspen Valley isn’t trying to duplicate bigger hospitals.
Aspen Valley doesn’t have a cardiac catheter lab and doesn’t do radiation oncology, which is very expensive, and doesn’t do surgery of the heart, lungs or brain. So cancer patients go to Denver or elsewhere for their radiation but return to Aspen Valley for follow-up chemotherapy treatments.
Physicians don’t open blocked arteries at Aspen Valley, but they manage lipids, administer medications and do follow-up care for heart patients.
Collecting bills is a delicate balancing act for rural hospitals. There are people who can’t pay and people who choose not to pay — and they’re treated differently, Aspen Valley Chief Financial Officer Terry Collins said.
If a patient can but doesn’t pay, that’s a bad debt — and that constitutes between 2.5 percent and 3 percent of Aspen Valley’s budget. Notices are sent, but the hospital never takes, say, a car or a house over an unpaid bill. It does, though, make the debt known to credit agencies. So when the patient next applies for a car loan, say, and is refused, he or she will call the hospital, Collins said. “All of a sudden they’re eager to pay.”
The second category are people who are indigent or otherwise simply can’t afford to pay the bill. That’s called charity care. The hospital tries to connect the cash-strapped patients to state programs that offer assistance, or will try to extend the payment period. The charity care that goes uncollected amounts to several million dollars a year, but has dropped significantly since the advent of Obamacare.
The Affordable Care Act years also have seen a steep decline in the number of patients categorized as self-pay, that is, uninsured, with a corresponding increase in those who are on Medicaid. The ACA’s Medicaid expansion provides government-paid for those whose household income is as much as 139 percent of the federal poverty level.
In Pitkin County, residents generally have a positive view of their hospital, even as they contribute $4 million in property taxes to it yearly. For the owner of a $600,000 home in Basalt, that is $240 annually for Aspen Valley Hospital. At those prices, they wouldn’t mind a break on costs, especially with the health margins between revenue and expenses.
But Ressler notes that those margins fluctuate — skinny some years, broader others. The 2016 numbers are going to show a very thin margin, he said.
At Aspen Valley Hospital, charges are evaluated regularly to assure they are competitive and appropriate, Ressler said, acknowledging that prices at his hospital likely will continue to be significantly above the prices in Denver or Colorado Springs.
Aspen Valley does a lot for the community, Ressler said.
It teams with Aspen Skiing Co., the school district, the city and the county in the Valley Health Alliance, which aims to cut costs by improving overall health care, thus lowering usage of the system. And it contributes space and money to help the Colorado Family Mountain Health Clinics provide care to low-income people.
Aspen Valley has already seen a decline in admissions because of the two initiatives, Collins said, and if it means a hit to the hospital’s bottom line, that’s OK.
“We are owned by the community,” Collins said. “The only reason we exist is to meet their medical needs.”
It’s a major pivot, being part of a system of care that focuses on the entire patient — wellness, mental health, staying on top of chronic conditions such as diabetes and asthma, said Elaine Gerson, Ambulatory Services administrator for Aspen Valley.
“It is exciting,” she said, “the shift from patients for volume to patients for value.”
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