‘Tweener’ status an obstacle for Skiff to overcome

Skiff Medical Center’s recent challenges have been well documented and discussed throughout the community — the reasons behind the challenges and what Skiff hopes to do to remedy it are not as well known. A single word can explain one primary reason for the challenges: tweener.

Among Iowa hospitals, there are four main categories that hospitals fall in: critical access, urban, tweener and rural referral. Skiff is known as a “tweener” hospital, which as the name suggests is “between” the critical access hospitals (CAH) and urban hospitals categories.

“Of Iowa’s 118 hospitals, 82 are classified as critical access hospitals,” Brett Altman, president of Skiff Medical Center said. “Critical access hospitals are paid by Medicare 101 percent of the cost to provide inpatient and outpatient services. One requirement to be a CAH is to have 25 or fewer inpatient beds, but because of the payment formula with Medicare, many of these hospitals have been doing quite well. The program has been a boon to rural areas, providing extra income to buy equipment, recruit providers and renovate or replace their buildings.”

Communities ranging from under 1,000 residents to more than 10,000 residents have critical access hospitals.

“Mercy Health and UnityPoint hospitals in Des Moines are urban hospitals that do more elaborate procedures, such as neurosurgery and cardiology, which are paid at a higher reimbursement,” Altman said. “Besides the larger scope and patient population volumes, these hospitals are usually system hospitals that enjoy some economies of scale.”

As a “tweener” hospital, Skiff is too large and provides levels of care that are too high to qualify to be a critical access hospital, but is too small to have economies of scale and absorb the financial risk associated with prospective payment systems or PPS programs. PPS pays smaller, rural hospitals a flat rate for a diagnosis, regardless of the actual services provided and the related costs. Also, Skiff receives less than a third of what is charged, 30.6 cents on the dollar, opposed to CAH receiving 101 percent.

“Tweener hospitals tend to get paid significantly less than the actual cost to provide inpatient and outpatient services,” Altman said. “The majority of these hospitals have been operating in the red for many years and are documented to have the lowest profitability in comparison to the other payment classifications. Yet, because there are a limited number of hospitals in this category, only eight in Iowa, any requests for serious political attention have fallen on deaf ears.”

To be considered for the critical access hospital status, the hospital must be located at least 35 miles from another hospital. For a time, there was a 35-mile distance waiver that lasted until Dec. 31, 2005. Skiff would have been able to obtain the waiver, but at the time it did not pursue the opportunity.

“At the time, Skiff had an average daily census of 35, a Fortune 500 company was headquartered in the community and Skiff was performing strong financially due to a good payer mix,” Altman said. “It was just bad timing that the waiver expired when it did, just before a great deal of change took place.”

That big change was the closing of the local Maytag facilities and that, along with other factors in the healthcare industry led Skiff to its current status. On average, the daily census at Skiff is 18 with signs indicating that number is declining and will continue in that direction.

The big question is, how can Skiff remain a viable “tweener” hospital and ensure a strong future for the hospital?

“The answer is that we need to partner with a larger organization to expand services, attain economies of scale, boost our performance and provide stability to our medical community,” Altman said. “Recently I thought it might be up to six months before we would know who are preferred partner may be. However, thanks to accelerated affiliation activity in the past several weeks and several more meetings scheduled in the next few weeks with both systems in Des Moines, it’s possible we may have a recommendation before Thanksgiving.”

Contact Staff Writer Jamee A. Pierson at (641) 792-3121 ext. 6534 or jpierson@newtondailynews.com.