TRMC has more than a $415 million impact on economy

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June 2, 2012

TRMC has more than a $415 million impact on economy

Anonymous CNHI The Tifton Gazette Sat Jun 02, 2012, 09:38 PM EDT

TIFTON — Tift Regional Medical Center has more than a $415 million impact on the local economy, according to a recent report by the Georgia Hospital Association, the state’s largest hospital trade association.

The report revealed that TRMC had direct expenditures of more than $180 million in 2010. When combined with an economic multiplier developed by the United States Department of Commerce’s Bureau of Economic Analysis, the total economic impact of those expenditures was more $415 million.

This output multiplier considers the “ripple” effect of direct hospital expenditures on other sectors of the economy, such as medical supplies, durable medical equipment and pharmaceuticals. Economic multipliers are used to model the resulting impact of a change in one industry on the “circular flow” of spending within an economy as a whole.

TRMC is Tift County’s single largest employer with 1,700 employees. In addition, TRMC recently announced an agreement to acquire Memorial Hospital of Adel and Memorial Convalescent Home in Cook County, which adds another 250 employees. The acquisition will be finalized on July 1.

The GHA report noted that as a supplement to the 1,950 people directly employed by TRMC, the hospital’s presence in the region creates an additional 3,655 jobs to the community. This includes physician offices, nursing homes, suppliers, home health care and more.

“This new report shows that, even in these difficult economic times, TRMC has an enormous positive impact on our local economy,” said William T. Richardson, TRMC president/CEO. “We thank the community for their support and we continue to work hard to ensure that the citizens of this region have access to quality health care services.”

While TRMC remains a major component of the area’s economic engine, the hospital’s leadership, like the rest of the Georgia hospital community, say they are concerned about a wide array of economic challenges that have made it increasingly difficult to meet the community’s health care needs, including continued cuts in Medicare and Medicaid payments and a fast-growing uninsured population.

TRMC is financially solid, but more than a third of all hospitals in Georgia are operating with negative margins.

In March, TRMC announced the hospital carved out $14 million in annual expenses through a cost-reduction initiative designed to meet challenges in future health care delivery. TRMC streamlined its operating budget by five percent which included a workforce reduction of 40 positions. By reallocating resources to areas that offer the most growth potential for TRMC, the hospital has since been able to rehire 25 percent of the employees affected by the workforce reduction for other positions.

TRMC launched the cost-reduction initiative from a position of strength, and it is considered an investment into the future of the hospital and the community it serves, said Richardson.

“We’re extremely concerned with the current operating environment for hospitals, and federal health care reform remains uncertain,” he stated. “Our ability to provide quality care on a 24/7 basis is being compromised when, in many cases, we’re seeing an increasing number of uninsured patients while the state is paying us far less than what it actually costs to treat Medicaid patients.”

In fiscal year 2011, TRMC deducted $366.8 million from revenue due to under payments by Medicare and Medicaid. In addition, TRMC provided $57.5 million in charitable/indigent care and wrote-off another $25.6 million in uncollectable amounts. In comparison, TRMC received only $3.5 million from the state’s indigent care trust fund.

Hospitals are also contending with surgeons who are opening their own private, outpatient ambulatory surgery centers. Richardson said such centers have a negative effect on community hospitals like TRMC and increase costs for those who require care within the hospital. Traditionally, community hospitals rely on revenue from profitable surgeries to help cross-subsidize medical services that do not financially break even, such as the emergency room, intensive care unit and community outreach clinics.

“Surgeons with ambulatory surgery centers typically siphon off insured patients and send the self-pay and underinsured patients to the hospital,” said Richardson. “This financially weakens the hospital and constricts funding for essential services. Studies also show that there is a dramatic increase in the number of operations at an ambulatory surgery center by a surgeon if he or she has a financial investment in the facility. Such overutilization contributes to rising costs, which is at the heart of the federal health care reform debate.”

TRMC is not financially supported by Tift County or any other county.

“Though we are under the direction of the Hospital Authority of Tift County, whose members are appointed by the Tift County Board of Commissioners, we are a totally self-sustaining health care institution,” Richardson stated.

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