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 LANSING, Mich., June 7 /PRNewswire/ -- Michigan's smaller and rural hospitals are not only the center for health care services in many communities across the state, but 92 percent were among the top five employers in their communities as well, according to the results of a new study by the Michigan Hospital Association (MHA).
 The 1993 report on "Michigan's Smaller and Rural Hospitals" showed that 21 percent of the smaller hospitals (less than 100 beds and/or fewer than 4,000 annual admissions) were the largest employer in their community, and 69 percent were one of the top three.
 The report showed small hospitals' average patient margin (the percentage of patient revenue retained after expenses) was -2.1 percent in 1992. One contributing factor to the financial stress on small Michigan hospitals was the $55 million in uncompensated care provided by them in 1991. According to the survey, 47 percent believed their financial situation had improved in the last year, 33 percent said it had worsened, and 20 percent reported it unchanged.
 To increase financial stability, upgrade services, and expand access, especially in light of anticipated health care reform, many small hospitals expect to participate in some form of health care delivery network in the next two years. According to the survey, 57 percent anticipate entering into a cooperative agreement, 49 percent envision a joint venture, and 22 percent expect to affiliate with other hospitals or health care delivery networks.
 "To expand and improve the delivery of care, and to continue to be a positive economic force in their communities, Michigan's smaller hospitals are working together to find solutions," said MHA President Spencer Johnson. "Michigan residents want community-based health care, no matter what type of reforms eventually come out of Washington, D.C., and the state's smaller hospitals are determined to keep health care accountable to the communities they serve."
 The survey also revealed that 92 percent of the responding hospitals reported difficulties recruiting health care professionals. Obstetricians and other physicians topped the list, followed by physical and/or occupational therapists, certified registered nurse anesthetists and RNs.
 Smaller hospitals are still adversely affected by the state's medical liability climate. (Reform legislation has passed the state House and Senate but a physician discipline bill, tie barred to the package, has not yet passed.) Ninety-eight percent said the current liability climate increased "defensive medicine" practices. Several respondents believed the medical liability climate in Michigan contributed to difficulties in recruiting physicians.
 In 1991, smaller hospitals paid some 21,000 workers more than $551 million in salaries and wages, admitted 161,000 inpatients, and recorded 3.7 million outpatient visits. The 1993 "Michigan's Smaller and Rural Hospitals" report presents data from the American Hospitals Association's Annual Survey of Hospitals and the 1993 MHA Smaller Hospital Council Survey. Fifty-two of Michigan's 100 smaller and rural hospitals responded to the MHA survey.
 An executive summary of the report follows.
 Michigan's Smaller and Rural Hospitals
 Michigan Hospital Association
 Executive Summary
 The Michigan Hospital Association conducts an annual survey of Michigan's smaller hospitals, in conjunction with the MHA's Council on Smaller Hospitals. The survey's purpose is to gain information on the characteristics and financial viability of smaller Michigan hospitals, and to examine some of the issues facing hospitals from the smaller facility perspective. Smaller hospitals are defined as those with fewer than 100 beds and/or fewer than 4,000 admissions in 1991. Specific issues that were addressed on the 1993 survey included medical liability; personnel and physician shortages; hospitals' financial situations and characteristics of distressed hospitals; changes in hospital services; quality initiatives; and hospitals' economic impact on their communities. About half of Michigan's smaller hospitals responded to the 1993 survey which revealed that smaller hospitals, both in rural and urban areas, continue to face significant challenges in the rapidly changing health care arena.
 Profile of Smaller Hospitals:
 -- According to the American Hospital Association's Annual Survey of Hospitals, 100 of Michigan's 175 community hospitals had fewer than 100 beds and/or fewer than 4,000 admissions in 1991.
 -- Michigan's smaller hospitals admitted more than 161,000 inpatients in 1991, and provided 1.4 million days of inpatient care.
 -- Smaller hospital inpatient utilization declined steadily from 1981 to 1991. Smaller hospitals' occupancy rate for 1991 dipped to 49.6 percent in 1991, compared to 65.4 percent occupancy among all Michigan hospitals.
 -- From 1981 to 1991, outpatient utilization in Michigan's smaller hospitals increased dramatically. Outpatient visits per 1,000 Michigan population increased 132 percent for smaller hospitals from 1981 to 1991, while outpatient visits per 100 inpatient admissions increased 238 percent.
 -- In 1991, the number of outpatient visits to Michigan's smaller hospitals reached nearly 3.7 million. Of the outpatient visits, more than 845,000 were emergency department visits.
 -- Outpatient revenue, as a percentage of total gross patient revenue, increased from about 15 percent in 1981, to nearly 40 percent in 1991 for smaller hospitals. For all Michigan hospitals (large and small), outpatient revenue as a percentage of total gross patient revenue increased from 15 percent in 1981 to about 31 percent in 1991.
 Smaller Hospital Council Survey Results:
 -- About 47 percent of those responding indicated that their hospital's financial situation this year, as compared to one year ago, was better. A third of respondents believed their facility's financial condition was worse, and about 20 percent thought it was about the same as one year ago.
 -- Responding smaller hospitals' average patient margin (the percentage of patient revenue retained after expenses) was -2.1 percent in 1992. The hospitals' average operating margin was 0.3 percent, and the average total margin was 1.6 percent.
 -- As a percentage of total hospital expenses, medical liability insurance costs accounted for an average of 1.6 percent. Two-thirds of responding hospitals paid for some amount of medical liability insurance for employed, or non-employed physicians.
 -- Ninety-eight percent of respondents believed that Michigan's current medical liability climate increased the practice of "defensive medicine" by medical staff. On a related note, 88 percent said Michigan's medical liability climate increased utilization of ancillary services.

-- Ninety-two percent of smaller hospital survey respondents reported that they currently have difficulty recruiting health professionals. Obstetricians and non-OB physicians topped the ranking of health professionals that were most difficult to recruit.
 -- Sixty-five percent of respondents reported that there was not adequate obstetrical coverage in their hospital market/service area.
 -- Survey respondents most frequently selected medical liability costs (76 percent), hospital location (71 percent), and Michigan's regulatory climate (64 percent), as the reasons for their difficulty in recruiting health professionals.
 -- Ninety-eight percent of survey respondents agreed that the costs of complying with external quality review requirements, such as the Joint Commission on Accreditation of Healthcare Organizations and the Michigan Peer Review Organization, were increasing, while only 22 percent agreed that the costs of complying with external quality review requirements were balanced by the value of the information that reviewers provided to the hospitals, such as JCAHO survey results, Health Care Financing Administration Mortality Data, and MPRO reports.
 -- Eighty-seven percent of respondents reported that their facility had increased outpatient services in the past year.
 -- About half of responding hospitals had applied for Michigan's swing bed program, and 34 percent of eligible smaller hospitals had applied for the state's bed banking program.
 -- Nearly 57 percent of respondents anticipate that their hospital will enter into a cooperative arrangement with another facility or system within the next two years, and 49 percent expect to enter into a joint venture.
 -- More than half of respondents (55 percent) would consider a health care role other than acute care services as an appropriate option for their institution.
 -- Smaller hospitals are an important part of their surrounding communities' economies. Ninety-two percent of responding smaller hospitals were among the top five employers in their communities, and 69 percent were among the top three employers.
 For more information, contact the MHA Health Policy Analysis Department at 517-323-3443.
 -0- 6/7/93
 /CONTACT: Patrick Foley or Sherry Mirasola of Michigan Hospital Association, 517-323-3443/

CO: Michigan Hospital Association ST: Michigan IN: HEA SU:

KE-ML -- DE019 -- 6167 06/07/93 15:55 EDT
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Date:Jun 7, 1993

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