Truman Medical Centers has growing financial challenges and at some point has to address deferred capital improvements, its CEO told county officials this week.
“We understand that you have multiple capital challenges,” TMC President and CEO Charlie Shields told county legislators, a reference to expected plans for a new jail that probably will cost taxpayers roughly $10 million a year for debt service.
TMC has two campuses. The Lakewood facility at Lee’s Summit Road and Gregory Boulevard serves a large number of people from Eastern Jackson County and elsewhere. The Hospital Hill site is at 23rd Street and Holmes Road. More than 3,400 babies were born at TMC last year, it says it has the busiest Level One trauma center in the metro area and, Shields said, it’s the only true safety net hospital in the state.
Shields said Missouri’s refusal to expand Medicaid coverage to uninsured residents is hammering his hospital’s finances. TMC provided $117 million in uncompensated care last year – 28 percent of it to residents of Eastern Jackson County – but only had $93 million to cover that.
Altogether, the two campuses provide 12 percent of all of the uncompensated care in the state. That $117 million is projected to rise to $137 million in the current fiscal year at least in part because of what Shields termed “the destruction of the Affordable Care Act.”
“And that presents a unique challenge for us,” he said.
Missouri is one of 18 states not to expand Medicaid as envisioned under the Affordable Care Act, or Obamacare. That would have extended coverage to an estimated 300,000 Missourians who lack health insurance.
“People need to be in coverage,” Shields said. “That’s the most efficient way to deliver care.”
As it stands, he said, coverage through health exchanges has become too expensive for some. Also, more people are going with high-deductible insurance.
“That affects not just us but every hospital in Kansas City,” he said.
He added, “But we’ve got to work this thing out, because it’s not working, particularly in states that did not expand Medicaid.”
TMC treats a less healthy population than other hospitals. More than 60 percent of its patients have one or more chronic conditions such as asthma, diabetes, obesity, heart failure or sickle cell anemia.
“So the folks we take care of tend to be very sick and very (medically) complex, so that adds to our challenge,” Shields said.
Its mix of patients plays out financially in ways that present more issues:
• The typical Missouri hospital gets 38 percent of its revenue through private health insurance. TMC gets 18 percent.
• Few patients at a typical Missouri hospital – 3 percent – pay their own bills, that is, without Medicare, Medicaid or private coverage. At TMC, its 21 percent. That is, one patient in five lacks insurance.
• That means TMC relies more on public programs. A typical Missouri hospital gets 35 percent of its revenue through Medicare, which covers the elderly. TMC gets 24 percent. But a typical hospital gets 18 percent through Medicaid, which in Missouri covers children, pregnant women and adults with significant disabilities. TMC relies on that for 37 percent of its revenues.
Shields also reminded county legislators, as he has several times in recent years, that some of its buildings are old – at least one at Lakewood goes back more than a century – and capital improvements are needed.
He did not make a request but outlined an idea: The county gives TMC $10 million a year – half for operations and half for debt service. Kansas City gives $26 million a year. Shields suggests shifting all $10 million from the county to debt service, which would allow it to bond for $130 million. The hospital cannot bond on its own and would have to go through the county for that. Shields said the lost $5 million for operations could be made up through greater efficiencies and improved recovery of costs from insurance.
Shields again underlined the two central roles that TMC plays, as the metro area’s safety net hospital and as the primary teaching school for the University of Missouri-Kansas City. Roughly 1,000 medical students and doctors in residency train there annually.
“And we take both of those roles very, very seriously,” he said.
He also touched on other points that suggest the scale of its work and its crucial role in the community:
• About half of its workers – 2,455 people – live in Jackson County.
• It had 86,828 emergency room visits last year, a heavy load.
“To many, that is the place where they get their care,” Shields said.
• It handled 1,395 trauma cases in fiscal year 2018.
“We are the biggest Level One trauma center in Kansas City,” Shields said.
• About half of the babies born in Kansas City each year are delivered at TMC, and that includes 85 to 90 percent of the babies born into poverty (and born at hospitals) in the community.
“And they all receive a great start,” Shields said.