The New Reality: Charity Care

Sunday, October 30, 2011
By Steve Twedt, Pittsburgh Post-Gazette
Original article

The demand for charity care is up at one hospital in Fayette County, but so is the can-do spirit

CONNELLSVILLE -- The good people of Fayette County know about doing without -- recent U.S. census data show that one in five Fayette County residents lives in poverty, defined as a family of four with an annual income of just over $22,000.

For Highlands Hospital, the smaller of Fayette County's two acute care facilities, this means a growing percentage of the care it gives is charitable -- care for which the hospital can't and won't collect payment.

Just two years ago, charity care represented 3.9 percent of the hospital's gross revenue; this year, it could reach 5 percent. About 70 percent of Highland's patients are either on Medicare or medical assistance. Fayette County's other hospital, in Uniontown, has seen its charity care grow from $514,000 in 2005 to $3.5 million this year.

With those numbers, many CEOs might spend the day wringing their hands behind closed doors. But Highlands CEO Michelle Cunningham maintains a quiet optimism about her hospital and her community.

"We've always had to run lean. Certainly we have to look at every opportunity [to save or cut costs], but if you're willing, you will find a way."

According to the federal tax forms it files each year, Highlands is now losing between $500,000 and $800,000 a year, and has been running in the red on its operations for about five years, although it gets financial help from the state and foundations.

But there's no line item for the intangibles that keep this hospital going.

Just last month, Highlands opened a weekday school for children with autism, most of it built with grants and public donations and with technical assistance from Cleveland Clinic.

When construction took longer than expected and state licensing officials were scheduled to make an inspection, Ms. Cunningham, much of her administrative staff and community volunteers organized a two-day cleanup, with the CEO among those on hands and knees scrubbing floors.

"There's no ego," said spokeswoman Vicki Meier, of the hospital staff's culture. "We just did it."

Volunteers, both staff and nonstaff, built a second-floor nurses station a couple of years ago, and a local group of women offered to mend the new drapes that now hang in the patient rooms.

"The first time I went into Highlands Hospital, I felt a spirit that I've never felt before," said Fayette County Commissioner Vince Zapotosky.

"It's a hospital, and it's sterile, and it doesn't have the money a UPMC or West Penn Allegheny has. But what it does have is a very special spirit brought forth by the people who work there."

In a sense, the hospital is the community -- Highlands, with 386 full-time employees, is Connellsville's second largest employer behind Connellsville Area School District.

Noting the large number of employees who've worked at Highlands for 20 years or more, "it's really a family-oriented, close-knit group of people who work there," observed Gerald Browell, retired superintendent of Connellsville's school district and current chairman of Highlands' board of directors.

"A lot of us are native to the area, so the roots run a little deeper." When someone gets admitted, he said it's very likely they'll know the people who are caring for them.

Because of that connection, Ms. Cunningham, who started at Highlands 22 years ago working in the dietary department and has been CEO for 11 years, says community residents see themselves as caretakers for the hospital that takes care of them.

Her belief is renewed each month by an elderly man who stops by her office to hand her two $100 bills, saying he just wants to help the hospital. And also by the woman who recently handed her $25, "which was probably more than she could afford, but she wanted it to go to the autism center."

There's no security detail or secretaries between the front door and Ms. Cunningham's second-floor office. People just walk in.

That connection to the community doesn't mean Highlands doesn't struggle. "We always have concerns about the future, because the future is so uncertain. In health care, you don't know what's around the corner," said Mr. Browell.

Cuts in Medicare reimbursements and the rollout of national health care reform all add to the uncertainty, he said, "but we have been able to prove that being smaller does have some advantages" because they can be more nimble.

"There's not a lot of red tape here. We know how to stay within a budget. We don't waste money," agreed Ms. Cunningham.

"We're a bread-and-butter hospital, and that's what we're going to stay."