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Critical Access Hospital Case Study MAYERS MEMORIAL HOSPITAL

S E P T E M B E R 2 0 1 2

Fall River Mills, CA

Is the Medicare Rural Hospital Flexibility (Flex) Program and small rural hospitals’ conversion to Critical Access Hospital (CAH) status improving the quality of care and performance while enhancing local emergency medical services? A case study highlighting Mayers Memorial Hospital, Fall River Mills, California, was conducted as part of California’s Medicare Rural Hospital Flexibility (Flex) Program in order to examine and report on these questions.

C A S E S T U D Y O B J E C T I V E S A N D M E T H O D S The Mayers Memorial Hospital case study was completed to identify changes to the community, hospital, and other aspects of health care, that have occurred due to the hospital’s conversion to Critical Access Hospital (CAH) status and its involvement in the Flex Program. The study also aims to identify needs and issues for Flex Program planning purposes. To accomplish this, the following occurred:

• Local health services and community background information were collected from April to May 2012 on Fall River Mills, California and the surrounding area.

• Interviews of hospital staff, hospital board members, and local emergency medical services (EMS) personnel were conducted in Fall River Mills April 23 and 24, 2012.

• A survey of health care providers (e.g., physicians, physician assistants, nurse practitioners, nurse anesthetists) working at Mayers Memorial Hospital was conducted April – May 2012. The survey response rate was 22 percent.1

• A community focus group was conducted in Falls River Mills on April 23, 2012.

Twenty-eight individuals from the hospital service area were included in the case study process.

The California Department of Health Services, State Office of Rural Health, administers the Flex Program in California and was the sponsor of the case study. Rural Health Solutions, Woodbury, Minnesota conducted the case study and prepared this report.

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1 Health care providers working less than 2 days per month at Mayers Memorial Hospital were not included in the survey.

F A L L R I V E R M I L L S , C A L I F O R N I A A N D T H E S U R R O U N D I N G A R E A 2

The town of Fall River Mills is located in Northeastern California and is served by State Highway 299, the major route running east to west across northern California. Named to commemorate the many mills in town, Fall River Mills is located between the Sierra Nevada and Cascade Mountain ranges and is surrounded by mountains in all four cardinal directions. Fall River Mills is a town that enjoys a fascinating history, complete with entrepreneurial adventurers, treacherous travels through the valley, and conflicts between Native American and Caucasian settlers, and while the first settlers in the 1850’s and 60’s may have come to seek their fortunes in timber milling, residents today are more interested in the wealth of the local landscape. Surrounded by pristine rivers, mountains, lakes, and waterfalls, the area attracts more tourists than lumberjacks.

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This area is home to the Achomawi or Pit River Tribe, which has a long history in the area and makes up 0.5 percent of the population. The Achomawi first occupied Fall River Mills when two Caucasian men named Mr. Bowles and Mr. Rogers first attempted to settle in the area in 1855. As Caucasian settlers began building flour and timber mills and establishing a ferry service, their relationship with the Achomawi was, unfortunately, violent and even deadly. Eventually, the federal government saw the need to protect settlers, and the Army Department of the Pacific established a garrison there for that purpose.

With the garrison established, settlers continued to capitalize on the local natural resources. In 1920, developers in Fall River Mills embarked on an effort to establish the largest Hydroelectric Power Plant system in California's Northeast Wilderness. They also changed the name of the town from Falls City to Fall River Mills in honor of the many mills in town. The tallest mill, The Fall River Feed Mill, stood four stories high and was destroyed by a fire on June 13th, 2003.

Milling continues in the area today, as does agriculture, consisting mainly of wild rice, garlic, mint, hay, lavender, alfalfa, and cattle ranching. Tourism also keeps Fall River Mills on the map, with its wealth of lakes, rivers, mountains, and highly acclaimed golf course. Major employers of the area include Mayers Memorial Hospital and Fall River School District.

2 http://en.wikipedia.org/wiki/Fall_River_Mills,_California

“ You get up and look at the mountains; they are such an asset and you can’t put a value on them.”C a s e S t u d y Pa r t i c i p a n t

Fall River Mills is situated in the Intermountain Area in Shasta County. Fall River, Tule River, Ja-She Creek, Lava Creek, Bear Creek, Shelly Creek and Pit River lie close by and make fishing, boating, canoeing, and water activities a popular pursuit. The Intermountain Area is home to several lakes, including Fall River Lake, Eastman Lake, Lake Britton and Big Lake. Fall River Mills also hosts the annual Fall River Century Bike Ride each spring. Hundreds of cyclists participate in this exciting event.

Burney, California, the largest city (population 3,124) in Mayers Memorial Hospital's service area, is 16 miles southwest of Fall River Mills and 50 miles north of Redding.3 It too is known for its natural beauty and outdoor recreational opportunities: McArthur-Burney Falls Memorial State Park, Burney Falls, fly fishing, skiing, hiking, and many others.

Shasta County is approximately 3,775 square miles with a population of 177,223, or 46.9 persons per square mile. Redding, California, makes up over half of the County’s population but only 1.6 percent of the land. Without Redding, the County’s population density is 23.5 persons per square mile. Shasta County’s population increased 8.6 percent from 2000 to 2010, as compared to the state which experienced 10.0 percent growth during that same time period. Compared to the state as a whole, Shasta County’s population is more likely to be older (16.9 percent of the pop- ulation is 65 years and older), white and non-Hispanic, English speaking, living below poverty, and high school graduates. The median household income for 2006-2010 was $43,944, compared to $60,883 for the state of California. In 2010, the population of Fall River Mills was 573.4

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3 www.census.gov

4 www.census.gov, http://quickfacts. census.gov/qfd/states/06/06089/html

When asked, “What makes Fall River Mills and the surrounding area a healthy place to live?”, case study participants report the following: beautiful environment/scenery, limited/no stress, farming and ranching, clean air, outdoor recreational opportunities (e.g., biking, kayaking, hiking, golfing), good health care providers, support from local businesses and schools, limited access to fast food, low population density, no traffic, and hard working and physically active people.

When asked, “What makes Fall River Mills and the surrounding area an unhealthy place to live?”, case study participants report the following: uninsured population that frequently delays preventative health care services, lower income, limited employment opportunities for young people, lack of parenting/sex education opportunities, lack of housing, extreme weather conditions, agricultural chemicals and equipment, drive time/distance to some conveniences, lack of some essential health services such as mammography and MRI, limited/few specialty health care services, limited number of primary care physicians, air quality due to smoke from wood burning stoves and dust, poor/limited educational opportunities, no gyms/indoor fitness opportunities, high rate of substance abuse, and a lack of public transportation.

“ The weather can be detrimental at times because we cannot get over the mountain.”C a s e S t u d y Pa r t i c i p a n t

Mayers Memorial Hospital Vision:

“To become the provider of first choice for our community by being a leader in rural healthcare.”

Mayers Memorial Hospital Mission Statement:

“Mayers Memorial Hospital District serves the Intermountain area providing outstanding patient-centered healthcare to improve quality of life through dedicated, compassionate staff and innovative technology.”

M A Y E R S M E M O R I A L H O S P I T A L

Mayers Memorial Hospital (aka Mayers Memorial Hospital District) was built in 1956 through donations from the community. The hospital is named after Doctor Mayers and his wife who worked in the community, started the campaign to raise funds to build the hospital but then were tragically killed in an automobile accident.5 Mayers Memorial Hospital converted to CAH status November 1, 2001, making it the 7th CAH in California, and the 484th CAH in the U.S.6

Mayers Memorial Hospital is part of a hospital district that offers a 22-bed hospital (10 beds staffed, 22 beds certified); level IV trauma, emergency, ambulance, inpatient, outpatient, hospice, and obstetric services; and two 24-hour skilled/long- term care nursing facilities (SNF). One 50-bed long-term care facility is attached to the hospital while the other 49-bed facility is located in Burney (16 miles from Fall River Mills). The Burney site includes a 21-bed Alzheimer’s Dementia care unit. While not a part of the hospital and its operations, Mountain Valley Health Centers is a federally qualified health center (FQHC) that operates adjacent to the hospital campus.

The hospital employs approximately 220 people (200 full-time equivalent – FTE – employees). The Chief Executive Officer has been working in the hospital for 2 years, the Chief Clinical Officer for 13 years, the Acute Care Chief Nursing Officer/ Quality Improvement Coordinator for 22 years, the SNF Chief Nursing Officer for 16 years, Human Resources Director for 8 years, and the Controller for 28 years. In addition, there are 18 healthcare providers (physicians and specialists) who work in the hospital at least 2 days per month; however, none are employed by the hospital. Health care providers surveyed report they have worked an average of 8 years at the hospital.

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5 http://www.mayersmemorial.com/ourhistory 6 As of June 30, 2012 there are 31 CAHs in California and 1327 in the U.S., 15 hospitals converted to CAH status on November 1, 2001. Source: Flex Program Monitoring Team. www.flexmonitoring.org

Mayers Memorial Hospital’s service area includes the communities of Fall River Mills, Burney, Adin, Bieber, Nubieber, McArthur, Glenburn, Hat Creek, Cassel, Old Station, and Johnson Park. This service area has a population of approximately 10,000 full-time residents. The hospital’s 2011 average daily census for acute/OB inpatients was 2.36 patients, 1.59 for swing bed patients, and 76.64 for long term care residents. The hospital had 3,015 emergency room (ER) visits and provided 1,041 out- patient services, 8,331 laboratory visits, and 3,581 radiology procedures that same year. The nearest hospital to Mayers Memorial Hospital is Mercy Medical Center Mount Shasta (also a CAH) in Mount Shasta, California, 60 miles north of Fall River Mills. The nearest tertiary center is located 70 miles southwest (or 1.25 hours by road) of Fall River Mills in Redding, California.

While Mayers Memorial Hospital patients are referred and transferred to a number of tertiary centers, most are trans- ferred to hospitals in Redding, California, the University of California Davis, or the University of California, San Francisco (both universities are over 230 miles by road). There are no level I trauma centers within 230 miles of Fall River Mills, with the closest in Sacramento, California.

Ambulance services for the area are based out of the Mayers Memorial Hospital. Its service area is approximately one hour in any direction and is operated by teams of paramedics (3 full-time, 3 as needed) and Emergency Medical Technicians (EMTs – 2 full-time, 2 part-time, and 2 as needed). For the past several years, Mayers Memorial Hospital’s EMS squad has had approximately 250 ambulance runs and 85 transports per year. The Burney Fire Protection District and Modoc Medical Center also provide ambulance services for the area.

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I M P A C T O F T H E F L E X P R O G R A M

The national Medicare Rural Hospital Flexibility (Flex) Program was created as part of the federal Balanced Budget Act of 1997. Its goals are to:

1) Convert small rural hospitals to CAH status

2) Improve CAH performance

3) Improve the quality of patient care in CAHs

4) Develop local systems of care through emergency medical services (EMS) integration and community engagement

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Mayers Memorial Hospital was selected for an impact analysis using a case study approach to examine Flex Program outcomes and the impact that CAH conversion has had on the hospital and the community it serves. Data were obtained from the California Department of Health Services, State Office of Rural Health and the national Flex Monitoring Team, as well as case study participants. Case study participants were asked questions related to each of the Flex Program goals, focusing on outcomes, accomplishments, needs, and challenges. Below is a report for each goal, including: goal status, indicators for success, and indicators of ongoing needs and challenges. Although many of the indicators cannot be directly and/or purely attributed to the activities of the California Flex Program, case study participants familiar with the Flex Program report that without it, many accomplishments would have been difficult, delayed, and/or not pursued.

Goal: C O N V E R T H O S P I T A L S T O C A H S T A T U S Status: A C C O M P L I S H E D

I N D I C A T O R S O F O U T C O M E S A C H I E V E D : • Mayers Memorial Hospital was designated a CAH on November 1, 2001.

• It took the hospital approximately 2 years to explore the CAH conversion option, complete a financial feasibility study, work with the Flex Program to prepare for and complete the CAH application process, and be surveyed and licensed as a CAH.

• Hospital staff report they received CAH conversion assistance from California Hospital Association and California Flex Program staff.

• All hospital staff interviewed report they support the hospital’s conversion to CAH status.

• Hospital staff report conversion to CAH status was a “good” decision as it has improved the hospital’s reimbursement and provided them other support through networking, education, sharing of policies and procedures, and other technical assistance.

• All health care providers report they are aware the hospital is a CAH and report it has had an impact on the hospital’s long term viability.

• Several case study participants report Mayers Memorial Hospital is one of the reasons they moved to the area.

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“ We [hospital] have to be here. People’s lives depend on it.

“ CAH status opens a lot of access to resources and not just reimbursement but also education and networking and all of that helps us provide better care.”C a s e S t u d y Pa r t i c i p a n t

”C a s e S t u d y Pa r t i c i p a n t

“ Our hospital could not survive without CAH status; 75% of the patients are Medicare or Medicaid.”C a s e S t u d y Pa r t i c i p a n t

Goal: P E R F O R M A N C E I M P R OV E M E N T Status: O U T C O M E S A C H I E V E D / O N – G O I N G N E E D S

I N D I C A T O R S O F O U T C O M E S A C H I E V E D : • Case study participants Mayers Memorial Hospital District's performance has improved due to changes in organization leadership and its renewed focus on finances and the community.

• Case study participants report the hospital’s greatest performance achievements over the past 5 years as: staying open, avoiding bankruptcy, having a clean financial audit in 2011, passing a local bond to support physical plant improvements, and strategic and master facility planning.

• The hospital used Flex Program funding to support financial assessments and strategic planning.

• The hospital has made extensive changes to its service contracts, sold leased equipment, outsourced billing, re-built relations with vendors and other partners, eliminated some lines of service, and laid-off employees in order to stabilize and improve hospital finances.

• The hospital has restructured its financing through an accounts payable bond and line of credit and negotiated with vendors to pay off debt. In March 2009, the hospital had $5 million in accounts payable and in April 2012 it had $850,000.

• The hospital had a $1.1 million operating loss in 2010 and a $1.1 million gain in 2011.

• The hospital’s staff turnover rate has decreased from 25 percent in 2009 to 17 percent in 2011.

• The hospital established a revenue cycle committee.

• The hospital applied for and received a $2 million loan from United Health Group for its electronic health record.

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“ I haven’t been excited about our hospital in long, long time but things have changed.”C a s e S t u d y Pa r t i c i p a n t

“ It was insane the amount of work we were doing to get a bill out. Now, more often than not, we bill one time versus multiple times. ”C a s e S t u d y Pa r t i c i p a n t

• The local hospital district passed Measure D (hospital district bonding bill), only one of two hospital districts in the state to pass a bonding bill, that supports master facility planning and facility updates.

• Some hospital staffs have been trained in Lean process improvement.

• The hospital closed its home health services and discon- tinued mobile MRI and mammography services either because of low volumes or financial losses.

• The hospital implemented a pharmacy dispensing system.

• Hospital staffs report they attend the annual Rural Health Symposium, sponsored by the California Flex Program. They report the conference supports networking, sharing of resources and knowledge, and the cultivation of new ideas.

• The hospital offers mental health, dermatology, and endo- crinology services to patients via telemedicine.

• The hospital is a member of the California Critical Access Hospital Network (CCAHN).

• Health care providers report their overall view of the hospital as either “good” or “very good”.

• Health care providers report the greatest accomplishments of the hospital over the past five years as: maintaining access to emergency care services, staying open, establishing an “excellent” lab, retaining “very strong” and “established” health care providers, and providing access to a local psychologist.

• Comments by case study participants related to performance improvement successes include:

— “We’re in the best financial position that I have seen in at least 10 years.”

— “Before, all we [hospital] heard from the community were negative things. Now we are hearing a lot of positives.”

— “This is definitely a CAH and a wonderful but challenging place to work. I have respect for colleagues and co-workers here.”

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P E R F O R M A N C E I M P R OV E M E N T AC H I E V E M E N T S C O N T I N U E D. . .

• Case study participants report the greatest performance challenges of the hospital as: building a new facility/securing the funds to build a new facility, family physician and staff recruitment and retention, billing, fully implementing the hospital’s electronic health record, training staff, remaining financially viable, providing specialty care services locally, building a viable relationship with Mountain Valleys Health Centers, and staffs’ acceptance of change.

• The hospital does not offer mammography or MRI services.

• The hospital is exploring opening a rural health clinic.

• Although the hospital can offer healthcare services via tele- medicine, few patients and providers are utilizing this resource.

• The hospital and Mountain Valleys Health Centers do not have a cohesive working relationship/partnership. The greatest concerns are the lack of health care providers and the need for rotating specialists and urgent care services for patients.

• Hospital staff report a need to increase networking between area health care organizations, such as: other CAHs, long-term care organizations, Pit River Indian Health Services, and Mountain Valleys Health Centers.

• Hospital staff report a need for a statewide or regional CAH focused ICD-10 readiness group and a chief financial officer user group.

• Hospital staff report a need for additional organization-wide strategic planning and business planning.

• The hospital has plans to offer additional health services in Burney and more surgery services in Fall River Mills.

• Case study participants report a need for hospital physical plant upgrades and general maintenance (e.g., removal of cobwebs from exterior walls).

• Case study participants report a need for increased community involvement in the hospital.

• Case study participants report the need for increased access to health improvement/disease prevention programs/services and some specialty care services for the community.

• Case study participants report a need to look at alternative care environments (e.g., assisted living, home care, and visiting nurse service) for patients.

• Case study participants report a need for geographically balanced hospital board member representation (e.g., Burney and Fall River Mills).

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I N D I C A T O R S O F O N – G O I N G P E R F O R – M A N C E I M P R O V E M E N T N E E D S / C H A L L E N G E S :

“ I’m not even sure the community knows the hospital offers services through telemedicine.”C a s e S t u d y Pa r t i c i p a n t

“ If there is any building in town that needs to be painted and clean, it’s the hospital.”C a s e S t u d y Pa r t i c i p a n t

“ We need to talk to Mountain Valley; we need to work with them. They’re important to us and we’re important to them. ”C a s e S t u d y Pa r t i c i p a n t

• Case study participants report a need for more financial/performance networking between CAHs in California and the region.

• Community members report confusion regarding the hospital’s discount program for time-of-service payments made by patients and inconsistent billing practices.

• When asked how the hospital should spend $25,000 in grant funds, case study participants (non-physicians) report: EMR implementation and training, bariatric equipment for patients, new beds and lifts, ICD-10 training, documentation training for nurses and physicians, showers for long-term care residents, patient and staff safety programs, Trauma Nurse Core Course training, health fair focused on Hispanics, and internal staff communications.

• When asked how the hospital should spend $40,000 in grant funds, health care providers report: healthcare provider recruitment, bonuses for nurses, portable ultrasound for the emergency room, and enhanced emergency room facilities.

• Comments by case study participants related to performance improvement needs/challenges include:

— “Everyone has tried to keep the hospital here [Fall River Mills]. It’s been a struggle since day one and it probably always will be.”

— “The hospital needs about $36 million to build a 35,000 square foot hospital.”

— “There are lots of questions about where to put a new hospital.”

— “We need to work with Mountain Valleys Health Centers; there is no question about it.”

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P E R F O R M A N C E I M P R OV E M E N T O N – G O I N G N E E D S / C H A L L E N G E S C O N T I N U E D. . .

Performance Improvement

HIGHLIGHTS: Mayers Memorial Hospital has improved many

aspects of its operation and physical plant since

CAH conversion; however, most case study

participants report its change in leadership,

stabilized medical staff, discontinued unprofitable

contracts, and rebuilt vendor relationships as the

changes that have had the biggest impact on

hospital performance.

OUTCOMES: Decreasing accounts receivable

by $4.15 million over a 4-year period, reversing

a $1.1 million operating loss into a $1.1 million

gain in one year, improving its current ratio

from 0.7 to 2.05, and decreasing staff turnover

by 7 percent over a three-year period.

Goal: I M P R OV E T H E Q UA L I T Y O F PA T I E N T C A R E Status: O U T C O M E S A C H I E V E D / O N – G O I N G N E E D S

I N D I C A T O R S O F O U T C O M E S A C H I E V E D : • The hospital developed a quality plan and has set up the structure to focus on key hospital areas (e.g., surgery) and establish baseline data. The first area of focus will be congestive heart failure based on CMS’ core measures.

• The hospital has improved quality through:

— Updating hospital protocols, standard orders, and standards of care.

— Using trauma registry data as part of its quality improvement process.

— Assigning a staff person to be in charge of hospital infection control and consequently putting all of the infection control policies and procedures in place.

— Implementing programs directed to improve patient safety, organization culture, and customer service.

• Hospital staff report the hospital’s greatest quality improvement achievement as having no hospital acquired infections in 2011 and beginning implementation of the hospital’s electronic health record.

• Case study participants report high satisfaction for the health care providers serving the area.

• Hospital staff report their involvement with CCAHN, Bedside Trust, the Rural Health Symposium, and other Flex Program training and workshops have resulted in the hospital engaging in quality improvement programs and adopting change sooner.

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“ I am sure we [hospital] would have made these quality improvement changes eventually, it just would have taken a lot longer [without the Flex Program].”C a s e S t u d y Pa r t i c i p a n t

“ The culture of the organ-ization has changed: it is more patient-centered.”C a s e S t u d y Pa r t i c i p a n t

• The hospital is one of six CAHs in California that is designated as a trauma center (level IV).

• The hospital emergency department, as part of its Level IV trauma center designation, participates in the Sierra Sacramento Valley (SSV) Local EMS Authority (LEMSA) trauma quality meetings. Their first meeting was held in February 2012.

• Some hospital staff have been trained in Lean process improvement.

• Long-term care staff participate in monthly training, typically via webinar. Examples of two recent

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