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Hospital leaders are warning that if nothing is done, they are at risk of closing due to poor financial conditions

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News Tech: The hospitals in Arkansas are far from recovering after surviving the outbreak. If conditions don’t improve, mounting financial constraints from the workforce to reimbursements to inflation are resulting in cuts to services and access points and could eventually result in facility closures.

“We’ve seen our expenses, and they’re up more than 10%, which for us means they’re up by more than $100 million compared to the year before COVID, yet our revenues and volumes are really declining. Therefore, you need not be a finance leader to understand that the math is flawed and not sustainable, according to Aduddell.

Peggy Abbott, CEO of Ouachita County Medical Center, and Chad Aduddell, market CEO for CHI St. Vincent in Little Rock, both run Arkansas hospitals. They both stated that for the state’s healthcare system to continue, insurance companies and federal reimbursements must step up.

Hospital margins were thin before COVID, and COVID has undoubtedly made running a hospital or healthcare system more difficult, particularly in a state like Arkansas where we receive lower reimbursements than the rest of the nation, whether from Medicare or private payers. And I believe that many Arkansans are unaware of that, he continued.

“Insurance rates have increased hundreds of thousands of dollars. Overall, we have fewer days of cash-on-hand than I have ever seen. We are really at a crisis point, I think not just here in Arkansas but in America. And I have a concern that it could be the collapse of the healthcare system as we currently know it, if we don’t get some balance to reimbursements from both insurance companies, as Chad said, as well as Medicare and Medicaid,” she added.

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Aduddell said last week Fitch Rating Agency changed its outlook for the nonprofit healthcare sector to “deteriorating” based on labor and inflationary pressures. Both CEOs said they’ve done what they can to cut costs internally and are now moving towards reductions in services and locations. “First, we’re all operators and we’re all going to look internally at the things that we can do leaner, more efficiently. Every hospital in Arkansas, and probably across the country is doing that work, and candidly, we have been doing that work during COVID. So that’s already baked in,” Aduddell said. “We’ve already made as many of those cuts and changes as we can, and now we’re laying people off. And that’s unfortunate, but that’s the step that we were at in July. So what comes next? Well, reduction in services, consolidation of offices and different access sites. So that’s going to make it harder for the community, for Arkansans to access a location that’s close to them.”

“We’re trying to make people aware that we are at a ‘crisis’ point, not just in Camden. That’s a heavy word to use, but as Chad has alluded to, we are there. It’s real. And you know, we don’t get the opportunity, and we don’t want to. We start orchestrating change right here. I applaud the hospitals in Arkansas because we try to make the change and make it happen. We start in the C-suite. In Camden, we’ve already, I voluntarily reduced my salary. Many of our managers did. We had to make the heart-wrenching decision to close the service of a rural health clinic 20 miles from here that we’d operated for 25 years. Those are not easy decisions,” Abbott said.

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