TABLE OF CONTENTS Acknowledgements…………..…………......................................................................................1 Executive Summary…………..………….....................................................................................2 Study Purpose, Methods, and Results............................................................................................6 Methodology..................................................................................................................................6 Analysis/Findings..............................................................................................................9 Financial Performance Profiles........................................................................................10 Hospital Administrator Survey Responses.......................................................................12 Strategic Planning/Facility Development.........................................................................12 Community Leadership/Support......................................................................................13 Financial Capital Position...............................................................................................14 Human Resource/Rural Workforce Challenges...............................................................16 Technology Adoption......................................................................................................16 Summary and Conclusions...........................................................................................................17 Recommendations........................................................................................................................19 APPENDICES..............................................................................................................................23 A Map of 31 Regions/34 Hospitals Surveyed and Zip Code Listing..................................24 B List of the 34 hospitals....................................................................................................27 C Hospital financial ratio and comparison benchmarks......................................................28 D Letter introducing the survey............................................................................................29 E Arizona Rural Hospital Facility Assessment Survey/IHS Survey...................................30 F City Manager Interview Questions and Responses.........................................................43 a. Question 1: “Which phrase best describes how the city perceives its role in hospital development?” b. Question 2: “Which best describes the city’s/community’s needs in hospital development?” c. List of city managers interviewed G Rural physician and bed need over next five years due to projected population growth...........................................................................................................56 H CAH, Rural, Regional Hospital Profitability—Total Margin..........................................57 I CAH, Rural, Regional Hospital Liquidity – Current Ratio.............................................58 J CAH, Rural, Regional Hospital Liquidity—Net Days Revenue in Accounts Receivable.......................................................................................................59 K CAH, Rural, Regional Hospital Capital Structure— Long-term Debt to Capitalization....................................................................................60 L CAH, Rural, Regional Hospital Facility Indicators—Replacement Viability.................61 M CAH, Rural, Regional Hospital Facility – Average Age of Plant...................................62 N CAH, Rural, Regional Hospital Utilization – FTEs/Adjusted Occupied Bed.................63 O Survey Question on strategic plans, development and replacement, pay or mix community role in hospital development, facility development assistance, hospital development priorities, legislative support spending plans, partner familiarity, electronic health record adoption, technology adoption, and facility development issues......................................................................................................... 64 P Indian Health Service Health Care Facilities FY 2009 Planning Construction Budget.........................................................................................80 Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 Arizona Rural Hospital Facilities and Market Study 2008 Acknowledgements We would like to extend appreciation to the Board Members of the Arizona Health Facilities Authority (AHFA) for supporting this Arizona rural hospital facilities study. Arizona’s population growth over the past decade has drawn attention to the need for examining the extent to which existing rural hospital structures not only meet patient needs and demands but also regulatory requirements for patient safety. The AHFA Board realized the importance of gaining a deeper understanding of rural hospital capacity in Arizona, a vision that led to collaboration between the Rural Health Office at The University of Arizona, Mel and Enid Zuckerman College of Public Health (MEZCOPH), and Health Solutions and Market Intelligence, a healthcare management consulting firm located in Arizona whose staff members completed the research and study analysis. Mr. Mike Albertson of Health Solutions and Market Intelligence (HSMI) served as the subcontractor for this report. He contributed most of the work that resulted in the data and projections made in this report. His efforts are appreciated. Also acknowledged are the many hospital administrators and municipal representatives who participated in this study. They freely provided information and observations (to HSMI) about their hospitals, as well as their communities’ economic growth projections. Their knowledge was extremely valuable to the study’s analysis and conclusions. Thanks are also extended to staff members at three Arizona Area Offices of the U. S. Department of Health and Human Services (DHHS) Indian Health Service (IHS): Sandra Pattea, Integrated Services Delivery Network Coordinator, Phoenix Area Office; Genevieve Notah, Associate Director, Navajo Area Office, and John Kittredge, MD., Chief Medical Officer, Tucson Area Office. Oscar Parra at the Rural Health Office is also acknowledged for his work in formating the report for publication. Finally, appreciation is extended to members of the Advisory Committee who contributed time and expertise during the course of the study: • Blaine Bandi, Executive Director, Arizona Health Facilities Authority • Howard Eng, DrPH, Rural Health Office, MEZCOPH • Gary Hart, PhD, Rural Health Office, MEZCOPH • Joyce Hospodar, Rural Health Office, MEZCOPH • John Kitteridge, MD, Medical Director, Tucson Area Office, Indian Health Service • Genevieve Notah, Navajo Area Office, Indian Health Service • Sandra Pattea, Phoenix Area Office Indian Health Service • Patricia Tarango, Bureau Chief, Health Systems Development, Arizona Department of Health Services Alison Hughes, MPA Project Principal Investigator Rural Health Office Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 EXECUTIVE SUMMARY The Arizona Health Facilities Authority (AHFA) was established by the Arizona State legislature in 1977 to issue bonds for the purpose of improving health care for residents of Arizona by providing less expensive financing for health care facilities. In 2007, the AHFA board members sought up-to-date information about the impact of Arizona’s growing population on the need for health facilities renovation and expansion. AHFA contracted with the Rural Health Office (RHO) at The University of Arizona Mel and Enid Zuckerman College of Public Health to facilitate the completion of this study. The RHO subcontracted with Health Solutions and Market Intelligence (HSMI), a healthcare management consulting firm, to implement the study details. The purpose of the study was to identify the issues affecting rural hospital development in Arizona. The issues examined included strategic planning, facility development, financial/capital position, human resource/workforce challenges, community leadership support, and the adoption of health information technology applications. It is important to note that the data presented in this report were aggregated so as to preserve the anonymity of the participating hospitals. A great deal of information shared by the hospitals was proprietary and used only insofar as it could contribute to a balanced and fair report that preserves confidentiality. The study was undertaken in three phases: 1. Define markets and population growth by geographic region 2. Categorize hospitals and trend performance utilization and provide a financial ratio analysis 3. Conduct hospital management surveys Hospitals were divided into four groups: 1. Indian Health Service Hospitals and Tribally-operated Hospitals (Including CAHs) 2. Small/Critical Access Hospitals (<25 census) 3. Rural Hospitals (25<50 census) 4. Regional Hospitals ( >50 census) The study methodology is described, along with an analysis of the findings. These focus on market growth and demand, financial performance profiles of the targeted hospitals, aggregated responses from hospital administrators to a comprehensive survey, Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 hospital strategic planning implementation and facility development plans, community/ leadership support for rural hospitals, financial/capital issues, human resource/rural workforce challenges, and technology adoption. The summary and conclusions presented in the study were drawn from the survey responses and personal interviews conducted by Health Solutions and Market Intelligence (HSMI). An important finding in the study may be found in the section Market Growth and Demand. HSMI projects that between 2008 and 2013 there will be a need for 289 acute care, medical/surgical beds in rural Arizona to serve new populations, and also a need for 227 physicians to serve the growing demand for health care services. The following recommendations are made based on the study conclusions. 1. The Arizona Health Facilities Authority should support replacement facilities or renovation projects for the state’s Small/Critical Access Hospitals, including those operated by IHS and tribal-affiliated organizations. Such support should consider the important role these hospitals play in delivering care to rural people, as well as the importance of the economic impact they have in their communities. Financial viability and market growth should not be the major drivers behind support for facility replacement or renovation projects. 2. Community leaders should urge and support à la carte financing opportunities for Small/Critical Access Hospitals, including those operated by the Indian Health Service (IHS) and tribal-affiliated organizations, to renovate, rebuild or replace their facilities in order to meet the growing population demand for services. 3. The Arizona State Legislature should authorize a technical assistance program for Critical Access Hospitals that need new facilities, to assist them with feasibility studies, planning and architectural assistance. 4. The Arizona State Legislature should examine new methods for providing incentives to physicians and nurses willing to practice in Arizona’s high shortage rural and frontier areas, including Native American communities. 5. The Arizona State Legislature should increase the funding pool for Critical Access Hospitals, proportionate with the increasing number of Rural Hospitals that receive Critical Access designation. Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 6. The Arizona State Legislature should continue to appropriate funds for the Stable, Accessible, Viable and Efficient (SAVE) pool discussed in this report in order that the eligible Critical Access and Rural Hospitals can remain viable and build new facilities, as needed. 7. Arizona’s Congressional delegation should provide leadership in urging Congress to increase Congressional appropriations for the Indian Health Service facility capital budget, and members of the Arizona State Legislature should voice support for such an increase to the Congressional delegation. 8. Programs should be generated by public and private sector agencies that provide mechanisms to recruit and retain health care providers and hospital executives willing to work in rural Arizona. 9. The Arizona State Legislature should increase the funding appropriation designated for the Rural Health Office at The University of Arizona Mel an Enid Zuckerman College of Public Health, with an explicit mandate that this office direct these resources to improve access to care and increase the viability of the most vulnerable rural hospitals. 10. National and state health care reimbursement mechanisms should provide incentives for Rural Hospitals to implement health information technology applications, and to access telemedicine technology and e-prescribing technology. 11. Municipalities, tribal governments, and local Chambers of Commerce should recognize, acknowledge, and support the small hospitals serving their communities, and the importance of the economic impact these hospitals have on the local economy by budgeting funds to support the planning and development of hospitals and medical services in their communities. 12. Recognizing that strategic planning is integral to Rural Hospital survival, hospital administrators should conduct short- and long-term strategic plans, and routinely monitor their progress of such plans, and use the plans as pathways to the future. 13. The Indian Health Service should adopt a policy that urges Rural Hospitals under its jurisdiction to regularly review and update their strategic plans, and to use the plans as pathways to the future. Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 14. The Indian Health Service should establish a formal procedure for eligible IHS Critical Access Hospitals to apply to CMS for swing bed services in order that they can better meet the needs of their elderly patients. 15. A state-wide study is needed of the economic impact of Arizona’s rural health care systems on the health of county and state economies. 16. An ongoing communications and information dissemination system is needed to inform members of the Arizona State Legislature and Arizona’s Congressional delegation about the status of the health care systems serving their communities. 17. Arizona’s Rural Hospitals and Critical Access Hospitals should collaborate in the design and implementation of activities that focus on hospital finance and workforce development. Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 STUDY PURPOSE, METHODS AND RESULTS Purpose of the Study In 2007, The University of Arizona, Mel and Enid Zuckerman College of Public Health, Rural Health Office (RHO), with the support of the Arizona Health Facilities Authority (AHFA) undertook an ambitious study to identify the issues affecting rural hospital facility development in Arizona. This comprehensive study resulted in the participation of 100 percent of the 34 targeted rural hospitals including those managed by the Indian Health Service (IHS) and two by Arizona Indian nations. The study identifies issues related to strategic planning/facility development, financial/ capital position, human resource/workforce challenges, community leadership/support, and technology adoption. To implement the study, an Arizona based healthcare management consulting firm, Health Solutions and Market Intelligence (HSMI), was retained to provide the data and analysis and to summarize study findings. To oversee the study, an Advisory Committee was formed consisting of representatives from the RHO, AHFA, HSMI, IHS, and the Arizona Department of Health Services (ADHS). The Rural Health Office supervised the study, generated the active involvement of Indian Health Service personnel, edited the final report, and prepared recommendations based on information provided. Recommendations that evolved from the study results were developed by the Rural Health Office project staff in collaboration with HSMI, and do not represent the views of the Advisory Committee, most of whom are employed by federal or state agencies. Methodology The study comprised three components: define markets and population growth; categorize hospitals and trend performance and utilization; and, conduct hospital management surveys. The following describes the approach for each component: Define Markets and Population Growth Health Solutions and Market Intelligence initiated the study with a geographic breakout and analysis of 31 rural healthcare regions throughout Arizona (see Appendix A). These regions were defined by contiguous zip code boundaries having one or more dominant Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 hospital providers. However, five of these regions showed no hospital provider dominance primarily due to low population densities attributed to the rurality of the area. Population estimates and projections were gathered for each of the regions. Sources included the Arizona Department of Economic Security, Claritas Inc., and Indian Health Service. These data were profiled in each of the 31 regions, and shared with the managers of small towns or cities with a population base of at least 4,000 people that included a hospital in the community. The city managers (or their designee) validated the current population and provided edits to future population projections. These population projections more accurately forecast growth in the markets and serve as the basis of demographic projections for the study. Additionally, two survey questions were asked relative to the role of hospital development in their communities (Appendix F). They are: 1) which phrase best describes how the city perceives its role in hospital development? 2) which of the following best describes the city’s/community’s needs in hospital development? Categorize Hospitals and Trend Performance and Utilization Based on the acute care utilization of the facilities and populations served, 34 hospitals were categorized into four groups for comparison and analysis (see Appendix B). 1. Indian Health Service (IHS) hospitals comprised the first group identified as (IHS Hospitals = 8) This group contains one Tribally-owned and Triballymanaged hospital not affiliated with IHS. 2. Hospitals with an average acute care patient census of 25 or less comprised the second group (Small/Critical Access Hospitals = 12). 3. Rural hospitals with an average acute-care patient census 25 to 50 (Rural Hospitals = 6). 4. Hospitals with an average acute-care patient census greater than 50 (Regional Hospitals = 8). Regional profiles were developed to include population projections, acute hospital utilization and market share, and acute hospital use rates. The inclusion of IHS discharge data in developing utilization projections likely represents the first time in Arizona history where true medical/surgical use rates could be developed to identify market needs. This factor has increased the reliability and accuracy of the study and enhances the validity of market-based demand for acute hospital beds in regions that border reservations or include reservations within their geographic definitions. Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 All hospitals receiving Medicare payments submit a full Medicare cost report annually to the Centers for Medicare and Medicaid Services (CMS) with the exception of the Indian Health Service which submits Method E cost reports to CMS on behalf of IHS hospitals. An analysis was conducted for each non-IHS hospital on 13 financial performance ratios among the following five indicators: • • • • • Profitability Indicators Liquidity Indicators Capital Structure Indicators Facility Indicators Utilization Indicators The ratios were trended by facility and compared to national benchmarks as well as study group averages. (Appendix C provides the financial ratio and comparison benchmarks for US Rural Hospitals and US Critical Access Hospitals from 2003-2005.) Conduct Hospital Management Surveys In preparation for the distribution of hospital management surveys, Health Solutions and Market Intelligence completed the following tasks: • Prepared regional profiles that included a brief summary of each region. • Introduced the regional profiles and individual city manager responses within the region. • Aggregated city manager response totals for Arizona. • Provided population estimates by region. • Identified hospital-specific discharge utilization by region. • Identified medical/surgical hospital use rates by region. • Identified hospital bed needs and physician needs based on incremental growth by region. • Developed three-year trends on hospital specific financial performance indicators from Medicare Cost Report source data. Subsequently, a survey was developed and submitted to the Rural Health Office which, in turn, sought approval from The University of Arizona’s Institutional Review Board (IRB), with subsequent input from the project Advisory Committee, and distribution to hospital managers. Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 A letter from the study principal at the Rural Health Office (Appendix D) introduced the regional profiles and sought hospital administrator participation in the study through the completion of a 26-question survey (Appendix E). An abbreviated survey removing non-applicable questions was sent to IHS and triballyowned and managed facilities. The letters asked for the administrators to review and validate the information and utilization projections. Of vital importance to secure participation in the survey, hospital administrators were informed that none of their responses would be identifiable and all reporting and analysis would be in aggregate form only. Health Solutions and Market Intelligence contacted each hospital and scheduled on-site survey interviews per administrator availability. The information in the regional profiles was validated by the hospital administrators and the survey was completed. All targeted hospital administrators (100 percent) participated in the survey. They represented eight IHS hospitals, 12 Small/Critical Access Hospitals, six Rural Hospitals, and eight Regional Hospitals.Survey responses were tallied and the following analysis and conclusions were compiled by HSMI. Analysis Findings Health Solutions and Market Intelligence (HSMI) provided aggregate regional profiles for statewide market growth and demand projections. Additionally, financial performance profiles by facility were evaluated by peer group to identify trends and challenges facing rural hospitals in Arizona. The survey responses were categorized by the five areas related to strategic planning/ facility development, financial/capital position, human resource/manpower challenges, community leadership/support, and technology adoption. Market Growth and Demand The following projections were submitted by HSMI based on the analysis and findings of the survey. • Over the five-year period from 2008 to 2013 there will be an increased acute care hospital bed demand of 289 medical/surgical beds to serve new populations in rural Arizona. Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 • The need for additional acute care hospital beds will be complemented by a need for 227 physicians (Appendix G). The above Projections are based on the fact that Less than 30 percent of the hospital bed demand can be absorbed by excess hospital bed capacity, and less than 10 percent of the physician demand can be absorbed by rural physician availability. Alternatively, these demands will increase by the closure of hospitals and/or relocation of physicians out of Arizona’s rural communities. Consequently, it is estimated that approximately 200 net hospital beds and 250 net physicians are needed in rural Arizona to satisfy new demand over the next five years. Over 50 percent of this growth will be in communities served by Regional Hospitals. While current shortages in physician supply will be compounded with additional demand, a hospital’s ability to recruit physicians to these rural communities will dictate their ability to place patients. Even if a hospital has capacity, the lack of physicians will dictate utilization. Financial Performance Profiles Among the non-IHS peer groups, Small/ Critical Access Hospitals provided the greatest financial variability among group hospitals while the larger Regional Hospitals provided the greatest consistency in financial performance among group hospitals (Appendices HN). This business characteristic is typical for explaining volatility of small operations and the benefits realized from economies of scale. The Total Margin Ratio (Net Income/(Net Patient Service Revenue + Total Other Income)) was utilized as the best Profitability Indicator. The graphs in Appendix H show that 50 percent of the Small/ Critical Access Hospitals and 50 percent of the Rural Hospitals have dipped into negative margins over the last four years threatening their survival while the Regional Hospitals have averaged slightly higher than comparative national norms. Two Liquidity Indicators were calculated (Appendices I and J). The Current Ratio (Current Assets/Current Liabilities) graphs show that approximately 17 percent of the Small/Critical Access Hospitals have liabilities greater than assets which are comparable to 20 percent for the Rural Hospitals and 13 percent for the Regional Hospitals. The Net Days Revenue in Accounts Receivable (Accounts Receivable/Uncollectibles)/(Net Patient Service Revenue/Days in Period) graphs show trends for all three groups comparable Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 to national benchmarks. However, during interviews with the HospitalAdministrators, many identified that there has been an unfavorable change upward in this trend over the last 12 months due to payment delays from payors, notably,Arizona’s Medicaid program (AHCCCS). The Capital Structure Indicator calculated was Long-term Debt to Capitalization (Shortterm Notes + Long-term Liabilities)/(Short-term Notes + Long-term Liabilities + Fund Balance) which is a measure of the importance of debt to a hospital just as a homeowner might measure what percent of their home is mortgaged. Obviously, the new construction of a hospital will likely have a higher percentage of debt while no debt is a likely example of a leased facility. Based on the graphs in Appendix K, one Small/ Critical Access Hospital and one Regional Hospital have recently recovered from being “upside down” whereby they owe more than the facilities are worth (liabilities are greater than assets) . More importantly is the aggregation of Small/Critical Access Hospitals having little dependence on (or access to) debt due to low reserves. For a Facility Indicator, the Replacement Viability Ratio (Investments/Accumulated Depreciation) was calculated to measure whether or not the hospitals had funded their investments at the same rate of the facilities depreciation thereby being able to pay for the hospitals replacement when necessary. The graphs (Appendix L) show that Regional Hospitals have the highest ratios indicating strong investment reserves relative to the depreciable “age” of the facility. However, 75 percent of the Small/Critical Access Hospitals have no investment reserves or have ratios well below national benchmarks. Another Facility Indicator calculated to support the Replacement Viability Ratio assessment was Average Age of Plant (Accumulated Depreciation/Depreciation and Amortization). Appendix M shows that all of Arizona’s Rural Hospitals and Regional Hospitals have relatively up-to-date facilities with average age of plant ratios below national benchmarks. However, 25 percent of Small/Critical Access Hospitals have ratios above the national averages indicating that the facilities may almost be fully depreciated. The most consistent comparable measure for a Utilization Indicator is Full Time Equivalent Employees (FTEs) per Adjusted Occupied Bed ((FTEs/((Acute Inpatient Days) X (Total Patient Revenues/Acute Inpatient Revenues)/Days in Period)). The graphs in Appendix N show the economy of scale benefits realized by Arizona’s Rural Hospitals and Regional Hospitals while the Small/Critical Access Hospitals must provide minimum staffing levels regardless of patient volumes. However, all three groups of hospitals maintain average ratios above national benchmarks potentially indicating higher than average nurse to patient ratios and an overall better level of care. Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 Hospital Administrator Survey Responses Survey responses were aggregated by the peer groupings to assure hospital confidentiality and facilitate optimum participation. There were a number of survey response “absolutes”. All administrators indicated that the Medicare Cost Report financial data provided in the ratio analysis was accurate for their hospital. None of the hospitals plan to reduce services. While all of the hospitals identified physician recruitment as a development issue, none of them indicated that this would prevent hospital development. All but two hospitals identified the need to recruit nurses and other allied health staff as development issues. While competition is a significant issue in metropolitan areas, none of the Rural Hospitals surveyed identified it as a factor preventing hospital development. A copy of the survey that was distributed to each hospital administrator is provided in Appendix E. Appendix O provides graphical representations of the survey responses for the following analysis. Strategic Planning/Facility Development There is a distinct correlation between the size of a hospital and the frequency and complexity of strategic planning. Over 60 percent of the Regional Hospitals had reviewed their strategic plans within the last six months, compared to none of the IHS Hospitals. All of the Rural Hospitals had reviewed their strategic plans within the last year compared to only 33 percent of the Small/Critical Access Hospitals. The utilization of outside resources to assist in facility planning and development also varies by facility size. For example, the Regional Hospitals and Rural Hospitals reported that they utilize planning consultants and architects as primary resources 80 percent of the time. On the other hand Small/Critical Access Hospitals indicated that only 10 percent of the time they use such external personnel. IHS Hospitals indicated that they, too, use planning consultants and architects as primary resources only 10 percent of the time. One hundred percent of the Small/Critical Access Hospitals utilize the services of the Rural Health Office as a “primary” or “occasional” resource, compared to over 20 percent of the IHS Hospitals, and “rarely or never” by the larger hospitals seeking planning and development assistance. Over 50 percent of the hospitals’ strategic plans call for the replacement or development of their facility within the next five years. Rural Hospitals represent the greatest development Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 with 83 percent indicating plans for development in five years while only 38 percent of the Regional Hospitals have development plans. When these Regional Hospitals were asked what precluded the planning or development of their facilities, all of them identified a “recent facility expansion”. Conversely, 83 percent of the Small/Critical Access Hospitals that answered this same question noted the lack of performance, capital, or market growth as the primary deterrent to development. Despite these deterrents to growth for the Small/Critical Access Hospitals and IHS Hospitals, 60 percent of the hospitals noted renovation and replacement as the primary driver for development while 100 percent of the Rural Hospitals and Regional Hospitals identified strategic and market growth as primary drivers of development. To meet the challenges of facility development, 50 percent of the hospitals surveyed identified their highest priority in hospital development as the need to improve operating performance. This was followed by another 24 percent identifying the recruitment of staff as the top priority. Community Leadership/Support While none of the Rural Hospitals or Regional Hospitals identified City or Tribal government support as a development issue, over 60 percent of the IHS Hospitals and Small/Critical Access Hospitals identified community support as a development concern. Over 20 percent of IHS Hospitals noted that their affiliated tribal government plays a primary role in hospital planning and development, while the other three groups identified that the local city is “rarely or never” involved in the planning process. When the hospitals were asked to identify the one most important thing that the Arizona Legislature can do to facilitate hospital development, the overwhelming response (50 percent) was for the continued support and an increase in funding allocated through AHCCCS for services to Medicaid recipients. These funds are made possible through two funding pools established by the Arizona State Legislature. The first funding pool is the Critical Access Hospital (CAH) pool established by the Arizona Legislature in 2002. The CAH pool approriates $1.7 million per year with two-thirds from federal and one-third from state funds. These funds have not increased since the program’s inception when it was divided among five CAHs, but is now distributed to 11 hospitals as more of them have received critical access designation. Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 The second funding pool was established in 2005 by the “Stable, Accessible, Viable and Efficient (SAVE) Rural Hospital Payments law that resulted from research that showed that inadequate Medicaid payments could threaten a hospital’s existence.1 The SAVE pool appropriates $12,158,100 per year, with two-thrids from federal and one-third from state funding. SAVE payments are distributed to 19 hospitals. (IHS hospitals and tribally-owned hospitals operate under section 638 of the Indian Self-Determination Act. do NOT receive appropriations from either the Arizona AHCCCS CAH or SAVE funding pools.) The next most important issue identified by hospital administrators was the need for support of Hospital Workforce (physician and nurse) education and development. These two issues were also the top two responses to the question on how the Arizona Legislature could help facilitate improved healthcare. Because IHS Hospitals are funded through Congressional appropriations, there were a handful of responses that noted the Arizona Legislature could facilitate hospital development by urging Congressional increases for IHS appropriations. This limitation resulted in an abbreviated IHS hospital survey being as many of the orignal survey questions were not applicable to IHS facilities. Consequently, responses in the following section are not provided for IHS hospitals. The city manager interviews (Appendix F) identified that some communities without a hospital are allocating resources to support hospital feasibility analysis and development. In fact, over 50 percent of these non-hospital communities believe there is a need for grant funding or budgeting for the evaluation of health service development. Financial/Capital Position Financing/bonding and earnings from operations have historically been the primary sources of capital for many hospitals. The survey responses in this section identified that it continues to be the key source of funding for most of the non-IHS Hospitals. Because of this, there is much less dependence placed on taxing districts, philanthropy, corporate allocation, or third party leasing agreements. In comparison to Regional Hospitals and Rural Hospitals, Small/Critical Access Hospitals are much more familiar with the availability of grant resources from HRSA, USDA, and the Arizona Chamber of Commerce. 1 An AHCCCS-sponsored study of all Arizona hospitals found that hospitals are paid 88 cents on the dollar for services to Medicaid patients (Millman Inc., 2008). Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 The Rural Hospitals and Regional Hospitals were more familiar with venture capital resources to help finance and develop hospitals. Although 100 percent of the Regional Hospitals were familiar with the financing service available through the Arizona Health Facilities Authority, only about 60 percent of the Rural Hospitals and Small/Critical Access Hospitals were familiar with the AHFA opportunities. The gaps in leadership familiarity of financial resources available to Rural Hospitals present an opportunity to increase education and awareness by various state agencies, including the Rural Health Office. Third party payor mix for hospitals has been identified as a challenge affecting profitability. Leading the rankings, the IHS Hospitals averaged a 50 percent favorable rating across all payor groups. While each of the other hospital groups varied in their rankings by payor, there was a consistent theme of unfavorable ratings for Arizona’s Medicaid program, AHCCCS. Over 40 percent of the Small/Critical Access Hospitals ranked AHCCCS reimbursements as unfavorable compared to 50 percent of the Rural Hospitals and 80 percent of the Regional Hospitals. AHCCCS can represent 20 percent of a hospital’s patient base in some rural areas. The unfavorable rating by Arizona’s Rural Hospitals may be representative of hospital C.E.O. apprehension over the financial future of the SAVE and CAH pools that were adopted and funded by the Arizona State Legislature, as explained previously. This, coupled with operating volatility for smaller Rural Hospitals, may present future solvency challenges that may threaten some hospitals’ survival. The Arizona IHS has a proposed budget of $1.3 billion for healthcare facility development for the entire United States over the next 5 years (Appendix P). If Congress funds the budget as proposed, several new Arizona IHS Hospitals and health centers would be constructed using federal funds.This budget is contingent on Congressional appropriations which have been insufficient to meet the IHS facility development needs. Insufficient IHS appropriations is a bellwether for the IHS facility development and is likely the reason many of the IHS Hospital survey responses noted the importance of state legislature support for Congressional allocation of IHS funds to improve healthcare and facility development. Capital estimates for Small/Critical Access Hospitals over the next five years ranged from $114 million to over $246 million, of which $74 - $147 million would likely comprise hospital facility development and the remaining would be for outpatient facilities and equipment. Rural Hospitals estimate capital expenditures over the next five years at $125 Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 - $252 million where $81 - $155 million is projected for hospital facility development. Regional Hospitals estimate capital expenditures over the next five years at $172 - $347 million where $110 - $210 million is projected for hospital facility development. In total, Arizona’s Rural Hospitals are estimating a $2.1 billion dollar capital development budget over the next five years. Human Resource/Rural Workforce Challenges 2 Over a five year period, IHS Hospital management (Chief Executive Officer, Chief Nursing Officer, Chief Financial Officer) turnover average was 150 percent. Small/ Critical Access Hospitals turnover average was 80 percent; Rural Hospital turnover average was 77 percent; and Regional Hospitals averaged was 111 percent turnover. While no correlations were identified, the difference between the highest rate and lowest rate is almost double indicating unique challenges and expertise needed at the various hospital groups. CEO and CFO expertise at hospitals designated as Critical Access have specialized skills not necessary at Rural or Regional Hospitals and this may support a lower rate of turnover. Hospital administrators were asked about causes for physician staff turnover in their communities. The highest response provided by 44 percent of the hospitals identified that the physicians were either retiring or being recruited with more lucrative offers elsewhere. Rural Hospitals and Regional Hospitals noted that success in recruitment and retention reduced turnover and related challenges. However, unique to 25 percent of the Small/ Critical Access Hospitals was the challenge of a revolving door for J-1 Visa physicians. Furthermore, another 16 percent identified that physicians do not want to “take call”. Hospitals that employ physicians on their staff (including hospitalists), also half of the IHS Hospitals and 33 percent of the Small/Critical Access Hospitals, indicated that they do not have recruitment challenges. Additionally, while all of the hospital administrators identified physician recruitment as a development issue, none of them indicated that this would prevent hospital development. All but two hospitals identified the need to recruit nurses and other allied health staff as development issues. 2 In January, 2008 Arizona Governor Napolitano publicly recognized the existence of a state-wide health care workforce supply and demand challenge. She signed an Executive Order requiring the Arizona Department of Commerce to coordinate a public-private effort to develop a health care workforce plan designed to meet the needs of 21st Century Arizona, and provide a framework and timeframe to develop a comprehensive workforce plan. Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 Technology Adoption To better understand technology in Arizona’s Rural Hospitals, each administrator was asked which phase of technology adoption best describes the role technology plays in the hospital. The phrase, “it is an infrastructure issue” was selected by 42 percent of the Small/Critical Access Hospitals followed with another 42 percent for “it is a strategic initiative”. The remaining 18 percent for this group identified that “it is a Return On Investment (ROI) decision”. Half of the IHS Hospitals identified that “it is dictated by corporate” referring to the IHS system infrastructure provided. However, across all hospitals, 42 percent noted that technology “is a strategic initiative”. All of the Rural Hospitals reported that they are using telemedicine applications for clinical consultation at a distant site compared to approximately 75 percent for Small/ Critical Access Hospitals, IHS Hospitals, and Regional Hospitals. Sixty-nine percent of the hospitals reported having completed a workflow analysis and business plan for the implementation of an Electronic Health Record System (EHRS). Additionally, 82 percent had already implemented an EHRS internally. Of the hospitals that have not implemented an EHRS, most of them are at some stage of the process with expected completion within the next two years. Technology adoption for rural Arizona hospitals is a strategic necessity that directly affects hospital infrastructure and development. Technology planning and implementation will increasingly affect facility design and development as Arizona’s hospitals complete the transition to EHRS. Equipment and technology make up a larger proportion of smaller facilities budgeted capital costs than larger hospitals and present development challenges often overshadowing Return On Investment (ROI) analysis. Summary and Conclusions Rural Arizona has four distinct groups of hospital facilities, each with their own unique challenges as described below. 1. Indian Health Service/Tribal Hospitals. These hospitals face challenges familiar to the Small/Critical Access Hospitals, in that they face workforce recruitment challenges, inadequate reimbursement issues, and operational volatility challenges. They are dependent largely on Congressional appropriations to meet facility development needs. Fluctuating levels of annual appropriations have caused delays in facility planning and development, Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 and have impacted the hospitals’ capacity to implement effective strategic planning. A national directive to IHS now requires eligible tribal members seeking health care through IHS Hospitals and clinics to join Medicare and/or Medicaid, with IHS being the payor of last resort. While the hospitals have risen to this challenge as best they can, they have found it difficult to enroll residents who travel vast distances to seek care, and do not bring needed paperwork to prove residency. Further, tribal elders often do not have birth certificates required for enrollment as their birth dates pre-date modern record-keeping methods within tribal cultures. Another challenge faced by IHS hospitals is the need for training new personnel in coding and billing methodology required by CMS for reimbursement. These hospitals have been faced with a “new way of doing business” that has required an entire paradigm shift for their personnel, in order that they can operate like a business, similar to the non-IHS hospitals. Finally, most IHS/Tribal Crtical Access Hospitals have not taken advantage of swing bed opportunities that can benefit their elderly patients. 2. Small/Critical Access Hospitals look to the pressing demands of their physician recruitment as an important development effort that impacts their survival strategy. Over the past eight years, 16 of Arizona’s Small Hospitals converted to Critical Access designation in order to benefit financially through better Medicare reimbursement available through the designation. (Of the 16, one IHS Hospital reverted to its former PPS system, and another IHS Hospital closed but retained its outpatient clinic service.) In addition, these hospitals face the following challenges. a. Debt may be one of the biggest challenges for Small Rural Hospitals. Community growth has forced facility expansion for many Small Rural Hospitals, but reimbursement methodologies may not be as beneficial to them as the reimbursement methods for Small Rural Hospitals designated as Critical Access. Further, financial performance and market potential is often marginal at best. As a result replacement is difficult to justify with most lending entities. b. The Small/Critical Access Hospitals and IHS Hospitals are both plagued by the challenges of inefficiency and exponential affect of operational volatility. The loss of just one physician in their community could determine the financial survival of the hospital. This has forced the Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 adoption of an employed medical staff model at many of the hospitals to offset risks. Increasingly, these hospitals are hiring hospitalists that provide dependable care and efficient patient management without the pressure of accountability to another entity. c. Technology adoption is also a burden in many Critical Access Hospitals as the system start-up and maintenance costs to match those of larger hospitals put a disproportionate burden on the overhead of these small hospitals. d. Federal and state grant funding to support electronic health record implementation is very limited. The Rural Health Office plays a vital role in facilitating education and development resources for these facilities, but has experienced budget shortfalls resulting in fewer personnel and fewer services. Population growth in many of these rural communities is static. As a result, the hospitals are forced to adopt a “maintenance” and defensive approach to facility development. Further, it has contributed to situations in which the facilities are outdated and obsolete, and have been fully depreciated for years. 3. Rural Hospitals represent the “purgatory” of rural healthcare. As their size dictates, they lack the operating efficiencies and access to capital enjoyed by the Regional Hospitals. 4. The larger Regional Hospitals in general, have recently completed renovations and expansions, and have the capital reserves and economies of scale to weather future financial challenges. Because of their positive financial position, there are many capital and financing options available to them. They, share similar challenges to those faced by all Rural Arizona Hospitals in physician and staff recruitment and AHCCCS reimbursement shortfalls, however, population growth in their communities tends to be faster than that of the “rural rural” (or frontier) hospital communities. Additionally, over 50 percent of Arizona’s population growth will be serviced by these Regional Hospitals. Recommendations The survival of Arizona’s Small Rural Hospitals is fundamental to the health and economic well-being of the people and the communities they serve. Some of the State’s Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 small hospital facilities are in extreme states of disrepair. In these cases, it is more cost effective to build new facilities than attempt to repair worn out buildings in order to meet state physical facility regulations. It is important to emphasize that constructing new health care facilities is not a panacea for resolving rural health care issues, although new hospital environments are, no doubt, strong morale boosters to rural residents who are dependent on the hospitals for health care. Rural Hospital issues are many. They are complicated and intertwined. Facility expansion or construction must be accompanied by solutions that address other problems identified in this report such as workforce recruitment and retention, the availability of technology to deliver better care and to maintain accurate patient medical records. The Advisory Committee acknowledges the current national and state economic crises that confer limitations in resource distribution. Nevertheless, a compelling case is made to public policy-makers and private sector entrepreneurs on the extent to which the State’s Small Rural Hospitals need explicit financial and policy support that will enable them to not only survive, but also to more effectively deliver health care and be a major economic driver in their communities. To this end, the following recommendations are presented. 3 1. The Arizona Health Facilities Authority should support replacement facilities or renovation projects for the state’s Small/Critical Access Hospitals, including those operated by IHS and tribal-affiliated organizations. Such support should consider the important role these hospitals play in delivering care to rural people, as well as the importance of the economic impact they have in their communities. Financial viability and market growth should not be the major drivers behind support for facility replacement or renovation projects. 2. Community leaders should urge and support à la carte financing opportunities for Small/Critical Access Hospitals, including those operated by the Indian Health Service (IHS) and tribal-affiliated organizations, to renovate, rebuild or replace their facilities in order to meet the growing population demand for services. 3. The Arizona State Legislature should authorize a technical assistance program for Critical Access Hospitals that need new facilities, to assist them with feasibility studies, planning and architectural assistance. 3 Advisory Committee members employed by Federal and Arizona state agencies declined from comment on recommendations made in this reoport due to the nature of their positions. Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 4. The Arizona State Legislature should examine new methods for providing incentives to physicians and nurses willing to practice in Arizona’s high shortage rural and frontier areas, including Native American communities. 5. The Arizona State Legislature should increase the funding pool for Critical Access Hospitals, proportionate with the increasing number of Rural Hospitals that receive Critical Access designation. 6. The Arizona State Legislature should continue to appropriate funds for the Stable, Accessible, Viable and Efficient (SAVE) pool discussed in this report in order that the eligible Critical Access and Rural Hospitals can remain viable and build new facilities, as needed. 7. Arizona’s Congressional delegation should provide leadership in urging Congress to increase Congressional appropriations for the Indian Health Service facility capital budget, and members of the Arizona State Legislature should voice support for such an increase to the Congressional delegation. 8. Programs should be generated by public and private sector agencies that provide mechanisms to recruit and retain health care providers and hospital executives willing to work in rural Arizona. 9. The Arizona State Legislature should increase the funding appropriation designated for the Rural Health Office at The University of Arizona Mel an Enid Zuckerman College of Public Health, with an explicit mandate that this office direct these resources to improve access to care and increase the viability of the most vulnerable rural hospitals. 10. National and state health care reimbursement mechanisms should provide incentives for Rural Hospitals to implement health information technology applications, and to access telemedicine technology and e-prescribing technology. 11. Municipalities, tribal governments, and local Chambers of Commerce should recognize, acknowledge, and support the small hospitals serving their communities, and the importance of the economic impact these hospitals have on the local economy by budgeting funds to support the planning and development of hospitals and medical services in their communities. Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 12. Recognizing that strategic planning is integral to Rural Hospital survival, hospital administrators should conduct short- and long-term strategic plans, and routinely monitor their progress of such plans, and use the plans as pathways to the future. 13. The Indian Health Service should adopt a policy that urges Rural Hospitals under its jurisdiction to regularly review and update their strategic plans, and to use the plans as pathways to the future. 14. The Indian Health Service should establish a formal procedure for eligible IHS Critical Access Hospitals to apply to CMS for swing bed services in order that they can better meet the needs of their elderly patients. 15. A state-wide study is needed of the economic impact of Arizona’s rural health care systems on the health of county and state economies. 16. An ongoing communications and information dissemination system is needed to inform members of the Arizona State Legislature and Arizona’s Congressional delegation about the status of the health care systems serving their communities. 17. Arizona’s Rural Hospitals and Critical Access Hospitals should collaborate in the design and implementation of activities that focus on hospital finance and workforce development. Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 The Arizona Rural Hospital Facilities and Market Study 2008 Appendices Rural Health Office, MEZCOPH, The University of Arizona: The Arizona Rural Hospital Facilities and Market Study 2008 Appendix A 31 Regions 34 Hospitals Indian Hospitals (8) Small/CAH (12) Rural Hospitals (6) Regional Hospitals (8) Codingg initials were selected as a method for identifying regions (See Appendix B for hospital listing) ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix A 31 Region Listing by Zip Code Region B Region CR Gila River FR Navajo/Hopi Region F Region HO Region N Region PS Region SL Region TR 85602 Benson 85247 Sacaton 86020 Cameron 86001 Flagstaff 85942 Woodruff 85621 Nogales 85362 Yarnell 85901 Show Low 85634 Sells 86030 Hotevilla 86002 Flagstaff 86025 Holbrook 85624 Patagonia 86301 Prescott 85902 Show Low Region CT 86033 Kayenta 86003 Flagstaff 86028 Petrified Forest 85628 Nogales 86302 Prescott 85911 Cibecue 85931 Forest Lakes 86034 Keams Canyon 86004 Flagstaff 86029 Sun Valley 85640 Tumacacori 86303 Prescott 85912 White Mntn Lk 85605 Bowie Region BC 86017 Munds Park 86035 Leupp 86011 Flagstaff 86031 Indian Wells 85646 Tubac 86304 Prescott 85923 Clay Springs 85606 Cochise 86426 Fort Mohave 86024 Happy Jack 86039 Kykotsmovi Vill. 86015 Bellemont 86032 Joseph City 85648 Rio Rico 85625 Pearce 86427 Fort Mohave 86322 Camp Verde 86042 Polacca 86016 Gray Mountain 86047 Winslow 86429 Bullhead City 86324 Clarkdale 86043 Second Mesa 86018 Parks 86430 Bullhead City 86325 Cornville 86044 Tonalea 86023 Grand Canyon 86433 Oatman 86326 Cottonwood 86045 Tuba City 86038 Mormon Lake 86436 Topock 86331 Jerome 86053 Kaibeto 86046 Williams 86402 Kingman 86036 Marble Canyon 86323 Chino Valley 85933 Overgaard Region WK 86438 Yucca 86335 Rimrock 86054 Shonto 86320 Ash Fork 86409 Kingman 86052 North Rim 86327 Dewey 85934 Pinedale 85320 Aguila 86439 Bullhead City 86336 Sedona 86502 Chambers 86337 Seligman 86411 Hackberry 86432 Littlefield 86329 Humboldt 85935 Pinetop 85332 Congress 86440 Mohave Valley 86339 Sedona 86503 Chinle 86332 Kirkland 85936 Saint Johns 85358 Wickenburg 86442 Bullhead City 86340 Sedona 86504 Fort Defiance Region G 86413 Golden Valley Region NCR 86333 Mayer 85937 Snowflake 85390 Wickenburg 86446 Mohave Valley 86341 Sedona 86505 Ganado 85273 Superior 86431 Chloride 86040 Page 86334 Paulden 85939 Taylor 86342 Lake Montezuma 86506 Houck 85501 Globe 86437 Valentine 86338 Skull Valley 85941 Whiteriver Region Y 86351 Sedona 86507 Lukachukai 85502 Globe 86441 Dolan Springs Region P 86343 Crown King 85920 Alpine 85333 Dateland 86508 Lupton 85532 Claypool 86444 Meadview 85325 Bouse 85925 Eagar 85336 Gadsden Region D 86510 Pinon 85539 Miami 86445 Willow Beach 85328 Cibola Region S 85927 Greer 85347 Roll 85607 Douglas 86511 Saint Michaels 85334 Ehrenberg 85531 Central 85932 Nutrioso 85349 San Luis 85608 Douglas 86512 Sanders 85344 Parker 85533 Clifton 85938 Springerville 85350 Somerton 85940 Vernon 85609 Dragoon 85630 Saint David Region BS 85603 Bisbee 85620 Naco Region C 86514 Teec Nos Pos 85321 Ajo 86515 Window Rock 85322 Arlington 86520 Blue Gap 85326 Buckeye 85228 Coolidge Region DU 86535 Dennehosto 85337 Gila Bend 85230 Casa Grande 85237 Kearny 86538 Many Farms 85343 Palo Verde 85231 Eloy 85292 Winkelman 86540 Nazlini 85354 Tonopah 85232 Florence 85618 Mammoth 86544 Red Valley 85239 Maricopa 85623 Oracle 86545 Rock Point Region GR 85241 Picacho 85631 San Manuel 86547 Round Rock 85530 Bylas 86556 Tsaile Region FR Havasupai 86435 Supai 86313 Prescott 85928 Heber 85643 Willcox Region K 86021 Colorado City 86314 Prescott Vly 85929 Lakeside 85644 Willcox 86401 Kingman 86022 Fredonia 86321 Bagdad 85930 McNary 86434 Peach Springs 85626 Pirtleville 85291 Valley Farms 85632 San Simon Region NC Region KR Hualapai 85655 Douglas 85272 Stanfield 85924 Concho 85926 Fort Apache Region GB 85221 Bapchule 85223 Arizona City 86305 Prescott 86312 Prescott Vly 86412 Hualapai 85222 Casa Grande Region W 85346 Quartzsite 85534 Duncan 85348 Salome 85535 Eden Region LH 85357 Wenden 85536 Fort Thomas Region SV 85360 Wikieup 85359 Quartzsite 85540 Morenci 85611 Elgin 85365 Yuma 86403 Lake Havasu City 85371 Poston 85543 Pima 85613 Fort Huachuca 85366 Yuma 85546 Safford 85615 Hereford 85367 Yuma 86405 Lake Havasu City Region PA 85548 Safford 85616 Huachuca City 85369 Yuma 86406 Lake Havasu City 85541 Payson 85551 Solomon 85617 Mc Neal 85544 Pine 85552 Thatcher 85635 Sierra Vista 85542 Peridot 85547 Payson 85922 Blue 85636 Sierra Vista 85550 San Carlos 85553 Tonto Basin 85638 Tombstone 85554 Young 85650 Sierra Vista 86404 Lake Havasu City 85670 Fort Huachuca ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 85352 Tacna 85356 Wellton 85364 Yuma Appendix A Phoenix & Tucson Zips not included in study 85001 Phoenix 85041 Phoenix 85205 Mesa 85260 Scottsdale 85318 Glendale 85637 Sonoita 85736 Tucson 85002 Phoenix 85042 Phoenix 85206 Mesa 85261 Scottsdale 85323 Avondale 85639 Topawa 85737 Tucson 85003 Phoenix 85043 Phoenix 85207 Mesa 85262 Scottsdale 85324 Black Canyon City 85641 Vail 85738 Catalina 85004 Phoenix 85044 Phoenix 85208 Mesa 85263 Rio Verde 85329 Cashion 85645 Amado 85739 Tucson 85005 Phoenix 85045 Phoenix 85209 Mesa 85264 Fort McDowell 85331 Cave Creek 85652 Cortaro 85740 Tucson 85006 Phoenix 85046 Phoenix 85210 Mesa 85266 Scottsdale 85335 El Mirage 85653 Marana 85741 Tucson 85007 Phoenix 85048 Phoenix 85211 Mesa 85267 Scottsdale 85338 Goodyear 85654 Rillito 85742 Tucson 85008 Phoenix 85050 Phoenix 85212 Mesa 85268 Fountain Hills 85339 Laveen 85701 Tucson 85743 Tucson 85744 Tucson 85009 Phoenix 85051 Phoenix 85213 Mesa 85269 Fountain Hills 85340 Litchfield Park 85702 Tucson 85010 Phoenix 85053 Phoenix 85214 Mesa 85271 Scottsdale 85341 Lukeville 85703 Tucson 85745 Tucson 85011 Phoenix 85054 Phoenix 85215 Mesa 85274 Mesa 85342 Morristown 85704 Tucson 85746 Tucson 85012 Phoenix 85055 Phoenix 85216 Mesa 85275 Mesa 85345 Peoria 85705 Tucson 85747 Tucson 85013 Phoenix 85060 Phoenix 85217 Apache Junction 85277 Mesa 85351 Sun City 85706 Tucson 85748 Tucson 85014 Phoenix 85061 Phoenix 85218 Apache Junction 85278 Apache Junction 85353 Tolleson 85707 Tucson 85749 Tucson 85015 Phoenix 85062 Phoenix 85219 Apache Junction 85279 Florence 85355 Waddell 85708 Tucson 85750 Tucson 85016 Phoenix 85063 Phoenix 85220 Apache Junction 85280 Tempe 85361 Wittmann 85709 Tucson 85751 Tucson 85017 Phoenix 85064 Phoenix 85224 Chandler 85281 Tempe 85363 Youngtown 85710 Tucson 85752 Tucson 85018 Phoenix 85066 Phoenix 85225 Chandler 85282 Tempe 85372 Sun City 85711 Tucson 85754 Tucson 85019 Phoenix 85067 Phoenix 85226 Chandler 85283 Tempe 85373 Sun City 85712 Tucson 85755 Tucson 85020 Phoenix 85068 Phoenix 85227 Chandler Heights 85284 Tempe 85374 Surprise 85713 Tucson 85757 Tucson 85021 Phoenix 85069 Phoenix 85233 Gilbert 85285 Tempe 85375 Sun City West 85714 Tucson 85777 Tucson 85022 Phoenix 85070 Phoenix 85234 Gilbert 85287 Tempe 85376 Sun City West 85715 Tucson 86520 Blue Gap 85023 Phoenix 85071 Phoenix 85235 Hayden 85289 Tempe 85377 Carefree 85716 Tucson 86545 Rock Point 85024 Phoenix 85072 Phoenix 85236 Higley 85290 Tortilla Flat 85378 Surprise 85717 Tucson 85025 Phoenix 85073 Phoenix 85242 Queen Creek 85296 Gilbert 85379 Surprise 85718 Tucson 85026 Phoenix 85074 Phoenix 85243 Queen Creek 85297 Gilbert 85380 Peoria 85719 Tucson 85027 Phoenix 85075 Phoenix 85244 Chandler 85299 Gilbert 85381 Peoria 85720 Tucson 85028 Phoenix 85076 Phoenix 85245 Red Rock 85301 Glendale 85382 Peoria 85721 Tucson 85029 Phoenix 85078 Phoenix 85246 Chandler 85302 Glendale 85383 Peoria 85722 Tucson 85030 Phoenix 85079 Phoenix 85249 Chandler 85303 Glendale 85385 Peoria 85723 Tucson 85031 Phoenix 85080 Phoenix 85250 Scottsdale 85304 Glendale 85387 Surprise 85724 Tucson 85032 Phoenix 85082 Phoenix 85251 Scottsdale 85305 Glendale 85388 Surprise 85725 Tucson 85033 Phoenix 85085 Phoenix 85252 Scottsdale 85306 Glendale 85396 Buckeye 85726 Tucson 85034 Phoenix 85086 Phoenix 85253 Paradise Valley 85307 Glendale 85601 Arivaca 85728 Tucson 85035 Phoenix 85087 New River 85254 Scottsdale 85308 Glendale 85614 Green Valley 85730 Tucson 85036 Phoenix 85099 Phoenix 85255 Scottsdale 85309 Luke AFB 85619 Mount Lemmon 85731 Tucson 85037 Phoenix 85201 Mesa 85256 Scottsdale 85310 Glendale 85622 Green Valley 85732 Tucson 85038 Phoenix 85202 Mesa 85257 Scottsdale 85311 Glendale 85627 Pomerene 85733 Tucson 85039 Phoenix 85203 Mesa 85258 Scottsdale 85312 Glendale 85629 Sahuarita 85734 Tucson 85040 Phoenix 85204 Mesa 85259 Scottsdale 85313 Glendale 85633 Sasabe 85735 Tucson ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix B Small/Critical Access Hospitals: Indian Health Services Hospitals: Wickenburg Regional Hospital Northern Community Community Hospital La Paz Pa Regional Hospital Benson Hospital Copper Queen Community Hospital Southeastern Arizona Medical Center Cobre Valley Community Hospital Sage Memorial Hospital Little Colorado Medical Center Carondolet Holy Cross Hospital Page Hospital White Mountain Regional Medical Center Chinle Health Care Facility Fort Defiance Indian Hospital Hopi Healthcare Center Hu Hu Kam Memorial Hospital** Parker Hospital San Carlos Hospital Sells Hospital Whiteriver Hospital Rural Hospitals: Regional Hospitals: Valley View Medical Center Mt. Graham Community Hospital Summit Regional Medical Center Sierra Vista Regional Medical Center Payson Regional Medical Center Yavapai Regional Medical Center (P. Valley) Verde Valley Medical Center Kingman Regional Medical Center Flagstaff Medical Center Casa Grande Regional Medical Center Havasu Regional Medical Center Yuma Regional Medical Center Western Arizona Regional Medical Center p Regional g Medical Center (Prescott) ( ) Yavapai **Non-IHS Hospital ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix C Fi Financial i l Ratio R ti and d Comparison C i Benchmarks B h k US Rural Hospitals (1) 2003 2004 2005 US Critical Access Hospitals (3) 2003 2004 2005 Profitability Indicators Total Margin Cash Flow Margin (2) Return on Equity 3.41 0.20 7.23 4.31 1.60 8.33 5.25 2.10 9.23 2.29 3.83 4.87 1.79 4.08 4.83 2.63 4.73 5.87 Liquidity Indicators Current Ratio Days Cash on Hand Net Days Revenue in Accounts Receivable 1.96 51.7 61.2 1.96 55.8 57.7 2.00 71.8 55.2 2.08 46.62 60.74 2.08 48.19 58.28 2.11 53.42 57.40 Capital C i S Structure Indicators i Equity Financing Debt Service Coverage (2) Long-term Debt to Capitalization (2) 51.2 3.90 36.0 52.1 4.57 34.0 54.6 5.00 33.4 61.97 2.69 21.83 62.32 2.61 21.73 62.23 2.93 22.47 25.90 8.7 16.27 10.1 23.00 10.1 11.43 11.27 10.94 29.55 29 3.75 29.77 29 3.74 27.88 27 3.67 33.10 10 6.22 33.37 37 5.93 33.99 99 5.92 Facility F ilit Indicators I di t Replacement Viability (2) Average Age of Plant Utilization Indicators Average D A Daily il C Census A Acute t B Beds d FTE's per Adjusted Occupied Bed (1) Source: 2007 Almanac of Hospital Financial & Operating Indicators from Ingenix based on Medicare Cost Report averages (2) Hospital Comparisons are based on Medicare Cost Reports, Reports audited financials, financials and indicator data submitted by hospitals (3) Source: Calculations adopted from the CAH Financial Indicators Report Team based on Medicare Cost Reports averages and funded by Office of Rural Health Policy, HRSA, and US department of Health and Human Services. ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix D Community Environment & Policy Phone (520) 626-3589 1295 Martin Avenue PO Box 245210 FAX (520) 626-8009 Laure Rural Health Office Tucson Dear _________: The Rural Health Office at the University of Arizona has subcontracted with Health Solutions and Market Intelligence (HSAMI) to implement a state-wide rural health facilities study. The project is being funded by the Arizona Health Facilities Authority, a public body funded by the state legislature, which provides tax-exempt financing for nonprofit health care institutions and providers in Arizona. As you know, Arizona and Nevada are the fast growing states in the country. We are extremely aware of the implications that growth has for the future of the health care industry. The study will provide us with an understanding of which pockets of the state are or will be planning for new health care facilities, and will be useful in making recommendations regarding available funding opportunities. Mike Albertson from HSAMI will be contacting you by telephone in the near future to schedule an appointment to meet with you regarding the future health facility needs for your hospital. I am writing to encourage you to discuss this project with him, and to provide him with information that will contribute to an examination of the rural health needs of our state. Participation in the survey is entirely voluntary, and you may withdraw at any time during the interview. Individual responses will not be made public. Only an aggregate analysis will be provided in the final report, and you will receive a copy of that report. Attached you will find the survey for your advance review and discussion with Mr. Albertson at your future meeting. Thank you in advance for your cooperation. If you have any questions, please do not hesitate to call me at 520626-6253 or email me at ahughes@u.arizona.edu Sincerely, Alison M Hughes, MPA Director, Arizona Rural Hospital Flexibility Program Rural Health Office Attachment ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix E Arizona Rural Hospital Facility Assessment Survey The purpose of this survey is to understand what challenges rural hospitals in the State of Arizona face in relation to facility development and replacement. It is understood that there are a number of factors that influence facility development decisions. For this reason, the survey has been divided into four sections: Market Growth and Facility Needs Financial/Capital Position HR & Technology Limitations Individual hospital responses to this survey will not be made public. Only aggregate analysis will be provided in the final report. It is understood that your participation in this survey is voluntary, and that you may withdraw at any time. Market Growth and Facility Needs The attached profile provides a regional review of your hospital’s market share and utilization with market growth projections. Additionally, a summary of interviews with city managers is provided to identify population growth expectations in the region. This survey also includes perspectives on hospital development roles and community needs for hospital development. Please review the attached profile to address questions in this section. 1a) When was your hospital’s strategic plan last reviewed by the board/corporate? ! ! ! ! Over two years ago/do not know One - two years ago Within the last year - six months Within last six months 1b) Which phrase best describes your hospital’s strategic plan & planning process? ! The strategic plan is done every 3-5 years and sits on the shelf ! The strategic plan is essentially the top 3-5 things to be done as determined by the CEO/Board Chair ! The strategic plan is reviewed annually by a planning team and incorporates goals, objectives, and actions that all have assigned responsibility (a management action plan) ! The strategic plan incorporates strategic and operational analysis, management action plan, operating budget and multi-year capital plan and is reviewed and approved by the board at least annually ! The strategic planning process includes a strategic plan with integrated management action plan tied to: A) operating budget; B) capital plan; C) master facility plan; D) management performance evaluation/bonus - and includes board reports on operating objectives (dashboards) and strategic objectives (Management Action Plan) at least quarterly ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix E 1c) Does your hospital’s strategic plan incorporate the development or replacement of your hospital over the next five years? ! Yes (please go to Question 1d) ! No (please go to Question 1e) 1d) What was the primary driver for the decision to develop/replace your hospital? ! ! ! ! ! (select one) Community/market growth Strategic/new program growth and development The facility needs renovation The facility needs replacement Other (please specify) _______________________________________________ 1e) What primary condition exists that precludes the development or replacement of your hospital? ! ! ! ! ! ! (select one) We recently built/replaced/expanded the hospital We do not have the market share/growth to sustain new facility development. Competitor development We lack the operating performance/capital necessary for development Recruitment of qualified staff is a more pressing need at this time Other (please specify) _______________________________________________ 2a) Are you planning to expand or add new hospital services in the next two years (e.g., inpatient services, diagnostic services)? ! Yes (please describe services)_________________________________________ ! No 2b) Are you planning to reduce existing hospital services in the next two years (e.g., inpatient, services, diagnostic services)? ! Yes (please describe services)_________________________________________ ! No 3a) Which (one) statement in general best represents your payor mix situation/perspective? ! ! ! ! ! ! We consider our payor mix satisfactory/favorable We have implemented deliberate efforts to improve our payor mix We do not have a specific payor mix objective Trends in our payor mix are beyond our control Our payor mix is representative of the community we serve Other (please explain)________________________________________________ ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix E 3b) How do you rate the following payors for hospital services? 1 - Favorable 2 - Fair 3 - Unfavorable 4 - Not Applicable ___ Traditional Medicare ___ Medicare (D/Managed) ___ Commercial/Indemnity ___ HMO/PPO Managed Care ___ Medicaid/AHCCCS ___ Other State ___ Private/Business/Occupational Med. Contracts ___ Indian Health Services ___ Other Federal 4) Which characteristics accurately describe the community’s/city’s role in participating in hospital development? ! ! ! ! ! ! ! (select all that apply) Hospital development is primarily the responsibility of the hospital The city plays a major role in facilitating/supporting hospital development There is a strong commitment of the Taxing District There is a questionable commitment of the Taxing District Our hospital has good philanthropic support from the community Our hospital board is the primary representation of community support Other (please specify) _______________________________________________ 5a) Please rate the following entities as to the frequency of use in assisting in planning and development of your hospital facility. 1 - Primarily/Often 2 - Occasionally 3 - Rarely/Never 4 - NA ___ Our corporate parent/affiliate ___ Our internal development team ___ Strategy/facility planning consultants ___ Architects/contractors ___ City leadership ___ Arizona Office of Rural Health ___ Financing entity ___ Equipment vendor ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix E 5b) Please rank from highest to lowest your strategic priorities relative to hospital development? 1 - First priority 7 - Last priority (NA- not a priority) ___ Improve operating performance ___ Identify sources of capital ___ Recruit staff ___ Build community support ___ Attain hospital board approval/buy-in ___ Develop a strategic/capital plan & financial feasibility assessment ___ Identify viable architect/contractor ___ Other (please specify)____________________________________________ ___ Other (please specify)____________________________________________ ___ Other (please specify)____________________________________________ 6a) What do you believe is the one most important thing that the Arizona Legislature can do to facilitate hospital development in rural Arizona? _______________________________________________________________________ _______________________________________________________________________ 6b) What do you believe is the one most important thing that the Arizona Legislature can do to facilitate improved healthcare in rural Arizona? ________________________________________________________________________ ________________________________________________________________________ Finance/Capital Position The attached profile provides a financial ratio analysis of your hospital’s trended position with national comparisons. Please review the attached profile to address questions in this section. 7a) Do the Medicare Cost Report Ratios in the attached profile accurately represent your hospital’s financial performance? ! Yes ! No (please describe why)_____________________________________________ ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix E 7b) Rate each of the following statements as to their applicability to your hospital’s access to capital: 1- Likely 2- Possible 3- Not Likely 4- Not Applicable ___ We have assets/land/investments that may provide unrealized gains ___ We have capacity in our Taxing District authority to increase revenue ___ We have Donor(s) who have informally pledged financial support ___ Our corporate parent has assured us that capital is available Other Source not apparent on Cost Report (__________________________) 8) How much do you plan/estimate on spending over the next five years on hospital facility development? Hospital Facility ! ! ! ! ! ! Less than $1m $1m - $5m $5m - $10m $10m - $20m $20m - $30m More than $30m Other Facility ! ! ! ! ! ! Less than $1m $1m - $5m $5m - $10m $10m - $20m $20m - $30m More than $30m Equipment ! ! ! ! ! ! Less than $50k $50k - $100k $100k - $500k $500k - $1m $1m - $5m More than $5m 9a) What will be your primary source of capital for the needs above? _____________________________________________________________ 9b) What is your familiarity/utilization with the following capital entities/resources? 1 - Familiar (and have used) 3 - Not Familiar (interested in learning more) 2 - Familiar (but have not used) 4 - Not Familiar (not interested) 5 – NA ___ Our regional/local/community/bank ___ Arizona Health Facilities Authority ___ Industrial Development Authority ___ Critical Access Hospital Designation ___ HUD 242 program ___ Rural Hospital/HRSA Grants ___ USDA Grants and Loans (Enterprise Zone) ___ Arizona Department of Commerce Grants/Programs ___ Venture Capital Firms specializing in Rural Hospitals ___ Venture Development Firms specializing in lease/sale HR & Technology Limitations 10) Does your hospital currently have high speed connectivity for rapid transmission of health care data? ! Yes (please describe services: Broadband T-1, T-3, Satellite access, etc.) __________________________________________________________________ ! No ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix E 11a) Does your hospital currently use telemedicine for clinical consultation at a distant site? ! Yes ! No (see next question) 11b) If you answered no above and would like to gain access to telemedicine technology, please list specialties in which there is interest (e.g., radiology, pathology, dermatology, psychiatry, ophthalmology, pediatrics, etc.). _______________________________________________________________________ _______________________________________________________________________ 12a) Has your hospital completed a work flow analysis and a business plan for implementation of an electronic health record system? ! ! ! ! Yes (both) Work flow analysis only Business plan only No (neither) 12b) Has your hospital implemented any electronic health record system internally? ! Yes (please explain) ________________________________________________ ! No (see next question) 12c) If no to question above, what plans are in place to plan and implement an electronic health record system (e.g., electronic patient record, lab, pharmacy, etc.)? Please describe: ________________________________________________________________ 13) Which two phrases best describe the role technology plays in your hospital facility development? 1 - Dominant Role 2 - Secondary Role (choose only one secondary) ___ Technology is an infrastructure issue that we build our facility around ___ Technology adoption is a ROI decision not necessarily a facility development consideration ___ Technology adoption is dictated by corporate ___ We consider technology adoption as an alternative to facility development ___ Technology adoption is considered a strategic initiative ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix E 14) Which best describes your hospital’s admitting physician staff turnover? ! We do not have a turnover issue with our admitting physicians because we employ/contract for staff ! We do not have a turnover issue with our admitting physicians because we have an effective recruitment and retention program ! We have Visa (J1/ H1-B) revolving door turnover issue ! We have a Generation Y (young physician) turnover issue ! Our admitting Physician turnover issue is primarily due to (please specify) __________________________________________________________________ 15) What has been the hospital’s management turnover for the following three positions? Chief Executive Officer ! One over 5 yr./none ! Two over 5 years ! Three over 5 years ! Four over 5 years ! Five+ over 5 years Chief Financial Officer ! One over 5 yr./none ! Two over 5 years ! Three over 5 years ! Four over 5 years ! Five+ over 5 years Chief Nursing Officer ! One over 5 yr./none ! Two over 5 years ! Three over 5 years ! Four over 5 years ! Five+ over 5 years 16) Rank each issue regarding your hospital facility development efforts? 1 – Dominant Issue (use only once) ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ 2 – Major Issue 3- Concern 4- Non Issue Difficulty in physician recruitment Difficulty in nurse recruitment Difficulty in recruitment of allied health staff (please specify) ___________ Lack of access to capital/financing Limited expertise in developing an strategic and financial plan Facility development vs. technology development conflicts Lack of expertise to assist in various areas of development process Lack of community/population growth and utilization Lack of support from community/civic leadership Other (please specify) ___________________________________________ Other (please specify) ___________________________________________ Other (please specify) ___________________________________________ ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix E – IHS Survey Arizona Rural Hospital Facility Assessment Survey The purpose of this survey is to understand what challenges rural hospitals in the State of Arizona face in relation to facility development and replacement. It is understood that there are a number of factors that influence facility development decisions. For this reason, the survey has been divided into four sections: Market Growth and Facility Needs Financial/Capital Position HR & Technology Limitations Individual hospital responses to this survey will not be made public. Only aggregate analysis will be provided in the final report. It is understood that your participation in this survey is voluntary, and that you may withdraw at any time. Market Growth and Facility Needs The attached profile provides a regional review of your hospital’s market share and utilization with market growth projections. Additionally, a summary of interviews with city managers is provided to identify population growth expectations in the region. This survey also includes perspectives on hospital development roles and community needs for hospital development. Please review the attached profile to address questions in this section. 1a) When was your hospital’s strategic plan last reviewed by the board/corporate? ! ! ! ! Over two years ago/do not know One - two years ago Within the last year - six months Within last six months 1b) Which phrase best describes your hospital’s strategic plan & planning process? ! The strategic plan is done every 3-5 years and sits on the shelf ! The strategic plan is essentially the top 3-5 things to be done as determined by the CEO/Board Chair ! The strategic plan is reviewed annually by a planning team and incorporates goals, objectives, and actions that all have assigned responsibility (a management action plan) ! The strategic plan incorporates strategic and operational analysis, management action plan, operating budget and multi-year capital plan and is reviewed and approved by the board at least annually ! The strategic planning process includes a strategic plan with integrated management action plan tied to: A) operating budget; B) capital plan; C) master facility plan; D) management performance evaluation/bonus - and includes board reports on operating objectives (dashboards) and strategic objectives (Management Action Plan) at least quarterly ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix E – IHS Survey 1c) Does your hospital’s strategic plan incorporate the development or replacement of your hospital over the next five years? ! Yes (please go to Question 1d) ! No (please go to Question 1e) 1d) What was the primary driver for the decision to develop/replace your hospital? ! ! ! ! ! (select one) Community/market growth Strategic/new program growth and development The facility needs renovation The facility needs replacement Other (please specify) _______________________________________________ 1e) What primary condition exists that precludes the development or replacement of your hospital? ! ! ! ! ! ! (select one) We recently built/replaced/expanded the hospital We do not have the market share/growth to sustain new facility development. Competitor development We lack the operating performance/capital necessary for development Recruitment of qualified staff is a more pressing need at this time Other (please specify) _______________________________________________ 2a) Are you planning to expand or add new hospital services in the next two years (e.g., inpatient services, diagnostic services)? ! Yes (please describe services)_________________________________________ ! No 2b) Are you planning to reduce existing hospital services in the next two years (e.g., inpatient, services, diagnostic services)? ! Yes (please describe services)_________________________________________ ! No 3a) Which (one) statement in general best represents your payor mix situation/perspective? ! ! ! ! ! ! We consider our payor mix satisfactory/favorable We have implemented deliberate efforts to improve our payor mix We do not have a specific payor mix objective Trends in our payor mix are beyond our control Our payor mix is representative of the community we serve Other (please explain)________________________________________________ ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix E – IHS Survey 3b) How do you rate the following payors for hospital services? 1 - Favorable 2 - Fair 3 - Unfavorable 4 - Not Applicable ___ Traditional Medicare ___ Medicare (D/Managed) ___ Commercial/Indemnity ___ HMO/PPO Managed Care ___ Medicaid/AHCCCS ___ Other State ___ Private/Business/Occupational Med. Contracts ___ Indian Health Services ___ Other Federal 4) Which characteristics accurately describe the community’s/city’s/tribe’s role in participating in hospital development? ! ! ! ! ! ! ! (select all that apply) Hospital development is primarily the responsibility of the hospital The city plays a major role in facilitating/supporting hospital development There is a strong commitment of the Taxing District There is a questionable commitment of the Taxing District Our hospital has good philanthropic support from the community Our hospital board is the primary representation of community support Other (please specify) _______________________________________________ 5a) Please rate the following entities as to the frequency of use in assisting in planning and development of your hospital facility. 1 - Primarily/Often 2 - Occasionally 3 - Rarely/Never 4 - NA ___ IHS ___ Our internal development team ___ Strategy/facility planning consultants ___ Architects/contractors ___ Tribal leadership ___ Arizona Office of Rural Health ___ Financing entity ___ Equipment vendor ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix E – IHS Survey 5b) Please rank from highest to lowest your strategic priorities relative to hospital development? 1 - First priority 7 - Last priority (NA- not a priority) ___ Improve operating performance ___ Identify sources of capital ___ Recruit staff ___ Build community support ___ Attain hospital board approval/buy-in ___ Develop a strategic/capital plan & financial feasibility assessment ___ Identify viable architect/contractor ___ Other (please specify)____________________________________________ ___ Other (please specify)____________________________________________ ___ Other (please specify)____________________________________________ 6a) What do you believe is the one most important thing that the Arizona Legislature can do to facilitate hospital development in rural Arizona? _______________________________________________________________________ _______________________________________________________________________ 6b) What do you believe is the one most important thing that the Arizona Legislature can do to facilitate improved healthcare in rural Arizona? ________________________________________________________________________ ________________________________________________________________________ HR & Technology Limitations 10) Does your hospital currently have high speed connectivity for rapid transmission of health care data? ! Yes (please describe services: Broadband T-1, T-3, Satellite access, etc.) __________________________________________________________________ ! No ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix E – IHS Survey 11a) Does your hospital currently use telemedicine for clinical consultation at a distant site? ! Yes ! No (see next question) 11b) If you answered no above and would like to gain access to telemedicine technology, please list specialties in which there is interest (e.g., radiology, pathology, dermatology, psychiatry, ophthalmology, pediatrics, etc.). _______________________________________________________________________ _______________________________________________________________________ 12a) Has your hospital completed a work flow analysis and a business plan for implementation of an electronic health record system? ! ! ! ! Yes (both) Work flow analysis only Business plan only No (neither) 12b) Has your hospital implemented any electronic health record system internally? ! Yes (please explain) ________________________________________________ ! No (see next question) 12c) If no to question above, what plans are in place to plan and implement an electronic health record system (e.g., electronic patient record, lab, pharmacy, etc.)? Please describe: ________________________________________________________________ 13) Which two phrases best describe the role technology plays in your hospital facility development? 1 - Dominant Role 2 - Secondary Role (choose only one secondary) ___ Technology is an infrastructure issue that we build our facility around ___ Technology adoption is a ROI decision not necessarily a facility development consideration ___ Technology adoption is dictated by corporate ___ We consider technology adoption as an alternative to facility development ___ Technology adoption is considered a strategic initiative ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix E – IHS Survey 14) Which best describes your hospital’s admitting physician staff turnover? ! We do not have a turnover issue with our admitting physicians because we employ/contract for staff ! We do not have a turnover issue with our admitting physicians because we have an effective recruitment and retention program ! We have Visa (J1/ H1-B) revolving door turnover issue ! We have a Generation Y (young physician) turnover issue ! Our admitting Physician turnover issue is primarily due to (please specify) __________________________________________________________________ 15) What has been the hospital’s management turnover for the following three positions? Chief Executive Officer ! One over 5 yr./none ! Two over 5 years ! Three over 5 years ! Four over 5 years ! Five+ over 5 years Chief Financial Officer ! One over 5 yr./none ! Two over 5 years ! Three over 5 years ! Four over 5 years ! Five+ over 5 years Chief Nursing Officer ! One over 5 yr./none ! Two over 5 years ! Three over 5 years ! Four over 5 years ! Five+ over 5 years 16) Rank each issue regarding your hospital facility development efforts? 1 – Dominant Issue (use only once) ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ ___ 2 – Major Issue 3- Concern 4- Non Issue Difficulty in physician recruitment Difficulty in nurse recruitment Difficulty in recruitment of allied health staff (please specify) ___________ Lack of access to capital/financing Limited expertise in developing an strategic and financial plan Facility development vs. technology development conflicts Lack of expertise to assist in various areas of development process Lack of community/population growth and utilization Lack of support from community/civic leadership Other (please specify) ___________________________________________ Other (please specify) ___________________________________________ Other (please specify) ___________________________________________ ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix F City Manager Interview - Question 1 Which phrase best describes how the city perceives its role in hospital development? A A. B. C. Active – it dedicates significant resources to hospital development Neutral – it dedicates some resources to hospital development Passive – it relies on hospital providers and developers to provide hospital services ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix F City Manager Interview - Question 2 Which of the following best describes the cit ’s/comm nit ’s needs in hospital city’s/community’s development? A. B. C. There are no/minimal needs as our hospital provides for the community There is a need for education/consulting on how to work with hospital providers to meet the community’ss needs community There is a need for grant funding or budgeting to determine the feasibility of hospital development ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix F Cit Manager City M Response R Question 1 40 35 30 1C 1B 1A 25 20 15 10 5 0 Tota l for City with Hospita l Tota l for City without Hospita l Tota l ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix F Cit Manager City M Response R Question 2 40 35 30 2C 25 2B 20 2A 15 10 5 0 Total for City with Hospital Total for City without Hospital Total ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix F Interviews with City Managers Region Region B City 2000 Census Az Dept of Economic Security 2006 Estimates Change Benson City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 4,711 Martin Rousch Accurate Double-5 yrs - 8K; 60K - 20 yrs 600 avail. lots + 14K approved C A - Hospital - Hwy 90 4,820 Bisbee City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: 6,090 6,355 John Charley 1% Accurate - 3% over 5 years - great 2nd home/retire market; on hold currently; plan to annex more land; waste water dev major issue; border patrol porovides only jobs C B Rate 109 2.3% 20.0% Region BS Answer to Question 1: Answer to Question 2: 265 4.4% 3.0% Region D Douglas City Manager/Interviewee: Acuracy of '06 06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: 3,348 Answer to Question 1: Answer to Question 2: 14,312 17,660 Curtis Shook 33-4% 4% / year is accurate 2.7% growth expected per year 80-100 units/yr; increase prison pop; 200-300 new bdg/yr; 2nd home-similar to Show Low/Pinetop B C Sierra Vista City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 37,775 Jennifer Thornton 3% is accurate 4% forward 100% new pop - no annexation C A 7,095 Willcox City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: 3,733 3,910 Michael Leighton, Mgr / Christine Whelan, clerk 1% 2% growth per year planned No annex; housing stagnant; low-mod income Young fam/retire; 2 apts=160+; 120 new to community C B 23.4% 14.0% Region SV 44,870 18.8% 20.0% Region W Answer to Question 1: Answer to Question 2: 177 4.7% 10.0% ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix F Interviews with City Managers Region City 2000 Census Az Dept of Economic Security 2006 Estimates Change Rate Region PA Payson City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: Globe City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 13,620 Ray Erlandson 2% 2-2.5% a year Annexed 20-30 from subdivisions Star Valley incorporated C B 15,625 7,486 7,550 Manoj Vyas (he rescheduled three times - then unavailible) 2,005 14.7% 12.5% 64 0.9% 9,232 9,385 Huey Long Accurate 2% and 2% Morenci & Safford Mines; Freport MacMoRan (Phelps Dodge) 8 mi; 19 subdivisions app; Young semi-prof fam; 2,000 homes=6,000 pop A B/C - C 153 1.7% 948 Answer to Question 1: Answer to Question 2: 4,022 4,970 Heath Brown 4%; 4970 - ok 2007 (SEGO 5,200) 5-7% growth yr New Copper mine (Phelps Dodge); 1st new copper mine in 30 yrs B/C - B B Nogales City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 20,878 21,765 John Kissinger Good; Accurate Slower than past No housing development; Partnership with Holy Cross B/C - B B/C - B 887 Region GR No cities from list Region DU No cities from list Region S Safford City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: Thatcher City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: 2.0% 23.6% 27.0% Region N 4.2% 3.0% ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix F Interviews with City Managers Region City Southwestern Quarter Region WK Wickenburg City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 2000 Census Az Dept of Economic Security 2006 Estimates 5,082 6,285 Gary Edwards AZDES - Good; 3-4% Low for 2012; add 1K = 2K Young family growth There was annexation; many more annexations planned Number of developments going through planning B B Change 1,203 Rate 23.7% 25.0% Region C Casa Grande City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: Eloy City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: Florence City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: 25,224 38,455 Jim Thompson 8-9% expect 10% per year for next 5 Population - >10% of growth from annexation 202 grants for hospital C A 13,231 50.0% 10 375 10,375 11 535 11,535 1 160 1,160 Joe Blanton 2% is accurate 20%-30% 2006-07 - 22% increase in prison pop 150,000 homes planned (30-40 Dev. Approved - nobody breaking ground) Robson Ranch - Age Restricted - 225/250 now; sold 300 homes Current - 14,000 - west from prison; 3 @ 1800 beds-4th @ 3000 Industry strong-800 jobs in 2 yrs lack basic services Approved (30-40) - nobody breaking ground Working on infrastructure - waste water treatment water C B 21,295 Answer to Question 1: Answer to Question 2: 17,054 Himansu Patel/Jess 4% CAG - * 400 per year *2.7 over 5 years 6K outside prison counts; 8K current pop. Sept. 07; no - annexation B C Maricopa City (est. Census) City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 15,000 Danielle Casey ok 300% 50-60K (2010) 100K (2012) 25,830 - 32-33K (2007); A C 25,830 52.5% 4,241 11 2% 11.2% 25.0% 24.9% 14.0% 10,830 72.2% 300.0% Region CR No cities from list ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix F Interviews with City Managers Region City 2000 Census Az Dept of Economic Security 2006 Estimates Change Rate Region GB No cities from list Region Y San Luis City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: Somerton City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: 15,322 23,710 8,388 54.7% Jeffrey Philpot 9% is accurate 2007-2012 - 50K by 2010 - 2012 60K+ 300.0% No annexation - All pop; 1,200 homes approved currently In winter - Snow Birds / Agriculture (Illegals/workers-Double); limited water/sewer capacity This year -9K homes - no impact of housing downtown C C Answer to Question 1: Answer to Question 2: 7,266 10,100 Cliff O'Neil 6-7% is accurate Future - 200 houses a year is consistent $3,000 grant - under 40 - young family Becoming bedroom community for Yuma Moving in - air station, Border Patrol, Customs employees C C Yuma City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 77,515 Mark Watson 3% 92,160 - not correct closer to 93,000 5% year - 2012 looks ok Annexation of population - Yes, some C A 92,160 2,834 39.0% 50.0% 14,645 18.9% 25.0% Region TO No cities from list Region P Parker City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 3,140 3,270 Guy Gorman 4% is accurate .7% to 1% per year Land-locked by Tribal lands Current annexation will not increase population 187 units planned over the next 4 years B/C - C A 130 4.1% 4.0% ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix F Interviews with City Managers Region Northern Half Region F Flagstaff City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Az Dept of Economic Security 2006 Estimates 2000 Census City Change Rate 52,894 62,030 9,136 Jim Wine 2-3% Historical 3% per year DES Pop Tax-schools/group hm counts low; No annex; 18-44 pop-college/young; 3K houses planned/possible 5K by 2020; 500 units broke ground -200 by 2012 Target-traditional neighborhood design C B 17.3% 2,842 3,170 Harry Holmes 1-2% is accurate Past OK 2% - maybe less until selling "happens"? Vacant "Luxury lots"/houses; 500-600 hms & 70 more; theme Park-2 yrs out (when and if) Have clinic - does nice job; retirement C A 328 11.5% Colorado City City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 3,334 Dave Darger Accurate 3% growth 2-3% future 716 Page City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 6,809 Bo Thomas / Lona Yes same None A A 7,230 Sedona Sedona City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: 2,963 7,229 3,125 7,885 Answer to Question 1: Answer to Question 2: Williams City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 14.0% 7.0% Region NC 4,050 21.5% 14.0% C A Region NCR 421 6.2% 6.0% Region CT Answer to Question 1: Answer to Question 2: Eric Levitt Accurate 1% - 2% 2 lg condo 240 = 88 retirement-1.7 over 55 750K; 2000 sq ft 160 = PT/second homes Sm growth rate; emergency rm; no past/future annex C C 162 656 5.5% 9.1% 7.0% ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix F Interviews with City Managers Region 2000 Census City Camp Verde City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: Cottonwood City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Az Dept of Economic Security 2006 Estimates 9,451 11,230 Change 1,779 Nancy Buckle 3% 3% a year - subdivision came in moderate range homes-$200,000 or lower 341-ready for development; 252-need sewer 660 - 1 master planned C - Passive - rely on Cottonwood B - Education/consulting Rate 18.8% 15.0% 1,746 Answer to Question 1: Answer to Question 2: 9,179 10,925 Marianne Jimenez / George Gellard / KC Rooney 5% a year is accurate same - 5% a year Verde Santa Fe - 2,000 residents in next 2 years Mesquite Hills - being planned C B Chino Valley City Manager/Interviewee: Acuracy of '06 06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 7,835 Bill Pupo Accurate Growth of 10% 8% - 10% Many commuters moving in A C 4,865 Prescott City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 33,938 42,085 Jane Bristol Low in '06 - 44,000 - 4% No big development - 2%-3% Prescott - VA - 2 specialty surgical hospitals C A 8,147 Prescott Valley City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: 23,535 35,740 Larry Tarkowski 9% 6-7%; 2025 - 75K - 2012 No annexed population 2012 projection = 47K/4848K addition A - Did needs study-provided financial asst. A 12,205 19.0% 20.0% Region PS Answer to Question 1: Answer to Question 2: Snowflake City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 4,460 Mr. Call/Deniese Cox Accurate same 12,700 62.1% 45.0% 5,180 24.0% 12.0% 51.9% 30.0% 720 16.1% 16.0% C A ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix F Interviews with City Managers Region City 2000 Census Az Dept of Economic Security 2006 Estimates Change Rate Taylor City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 3,176 4,270 Eric Duthie Accurate 6% - 6% Stable (possibly higher growth) 5-6% "The Next Prescott" A C 1,094 Eagar City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 4,033 4,530 Bill Greenwood Projections are accurate - most growth over last two years project 2-3% into next 5 years land less expensive than show low B C 497 Springerville City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 1,972 Larisa Bogardus 1-2% Growth is accurate 3-4% 22 Apartments 47 New Housing Units C B 153 Saint Johns City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: 3,269 3,925 Dana Overson Data ok - plan 4% growth estimate 3-4% Construction on 6 developments = 2,000 new pop No pop from 01/02 Annex New 20 bed asst living facility in '07 C B 656 3,582 4,540 Kelly Udall Accurate 4% No population annexed; serv pop doubles in summer; many second homes; 12 develements being planned; forest service land exchange in works C A/B - B 958 34.4% 28.0% Region SL Answer to Question 1: Answer to Question 2: Pinetop-Lakeside City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: Show Low City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: 2,125 7,695 10,555 Ed Muder - Secretary Is Accurate 6% 3,500 new/second homes/20 yrs; high vacancy rate 100% new pop - no annexed pop; 2007-11,473 projection C A 12.3% 12.0% 7.8% 15.0% 20.1% 18.0% 26.7% 20.0% 2,860 37.2% 30.0% ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix F Interviews with City Managers Region Region BC 2000 Census City Bullhead City City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: Answer to Question 1: Answer to Question 2: Az Dept of Economic Security 2006 Estimates 33,769 39,930 Jim Ernster 3% 40K is low/43K current 3% may decrease - 1% for this year and next-due to housing 99% pop growth; no annex; 71K future-way low 63K low for region; closer to 85K; 400 permits/yr C B Change Rate 6,161 18.2% 13.0% Region K Kingman City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: 20,069 27,635 7,566 37.7% Jack Kramer 6% 6% Growth - continue Answer to Question 1: Answer to Question 2: C C Lake Havasu City City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: 41,938 54,610 Charlie Cassens may be light 55k-65k currently 3% to 4% per year over next five years Many people moving from Sothern California Many homes are secondary residence Answer to Question 1: Answer to Question 2: C A/B - B Holbrook City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: 4,917 5,455 Akos Kovach 2% year 10% over next 5 years 3 housing dev - in excess of 1000 units total Industrial/transportation growth focus Fedex just set up transfer station A B 30.0% Region LH 12,672 30.2% 18.0% Region HO Answer to Question 1: Answer to Question 2: 538 Winslow City Manager/Interviewee: Acuracy of '06 AZDES Data: Growth Rate Proj. "07 -'12: Notes/Developments: 9,520 9,945 425 Paul Ferris It is accurate Projecting 3% over next five years 763 Units in development (703 homes and 60 Appts.) over 5 - 10 years 200 acre property being evaluated for potential development Answer to Question 1: Answer to Question 2: B C 10.9% 10.0% 4.5% 3.0% Region KR No cities on list ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix F Interviews with City Managers Region City Region FR Navajo No cities on list 2000 Census Az Dept of Economic Security 2006 Estimates Change Rate Region FR Havasupai No cities on list ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix G Rural Need over next five years due to projected population growth Region Casa Grande Yuma Region PS - Prescott Region CT - Cottonwood R i K - Kingman Region Ki Region BC - Bullhead City Region C - Gila Bend Region F - Flagstaff Region SL - Show Low Region LH - Lake Havasu Region SV - Sierra Vista Region FR Navajo/ Hopi Region PA - Payson Region g S - Safford Region P - Parker Region D - Douglas Physician Need 50.71 76.52 6 2 28.58 13.21 11 31 11.31 9.96 8.60 14 07 14.07 13.72 14.13 10 08 10.08 7.76 2.98 2.16 1.42 2.66 Bed Need 48.38 33 4 33.74 27.58 24.09 20 42 20.42 16.17 14.61 14 55 14.55 12.34 11.70 11 52 11.52 9.71 8.16 4.17 3.50 3.12 Region GR San Carlos Nogales l Region B - Benson Region WK - Wickenburg R i W - Willcox Region Will Region G - Globe Region CR Gila River Region DU - Dudleyville Region PG - Page Region BS - Bisbee Region KR Hualapai Region HO - Holbrook Region NC - North Canyon Region g FR Havasupai p Region TO - Tohono O'odham TOTAL ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Physician Need 0.70 2 48 2.48 2.41 1.98 1 77 1.77 4.15 0.59 2 44 2.44 0.47 0.25 0 19 0.19 1.77 1.89 0.00 -0.09 289 Bed Need 3.07 1 86 1.86 1.69 1.53 1 51 1.51 1.49 0.89 0 85 0.85 0.72 0.70 0 33 0.33 0.20 0.15 -0.06 -1.79 277 Appendix H Profitability - Total Margin CAHs 2003 2004 2005 Rural 2006 2007 2003 2004 2005 Regional 2006 2003 2007 30 30 30 25 25 25 20 20 20 15 15 15 10 10 10 5 5 5 0 0 0 -5 -5 -5 -10 -10 -10 -15 -15 -15 US Critical Access Hospitals US Rural Hospitals Two New Rural Hospitals in 2007 – No Available Data ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 2004 2005 2006 2007 Appendix I Liquidity – Current Ratio CAHs 2003 2004 2005 Rural 2006 2007 2003 2004 2005 Regional 2006 2003 2007 9 9 9 7 7 7 5 5 5 3 3 3 1 1 1 -1 -1 -1 -3 -3 -3 -5 -5 -5 US Critical Access Hospitals Two New Rural Hospitals in 2007 – No Available Data US Rural Hospitals ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 2004 2005 2006 2007 Appendix J Liquidity – Net Days Revenue in Accounts Receivable CAHs 2003 2004 2005 Rural 2006 2007 2003 2004 2005 Regional 2006 2003 2007 120 120 120 100 100 100 80 80 80 60 60 60 40 40 40 20 20 20 0 0 0 US Critical Access Hospitals US Rural Hospitals Two New Rural Hospitals in 2007 – No Available Data ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 2004 2005 2006 2007 Appendix K Capital Structure – Long-term Long term Debt to Capitalization CAHs 2003 2004 2005 Rural 2006 2007 2003 2004 2005 Regional 2006 2003 2007 120 120 120 100 100 100 80 80 80 60 60 60 40 40 40 20 20 20 0 0 0 US Critical Access Hospitals US Rural Hospitals Two New Rural Hospitals in 2007 – No Available Data ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 2004 2005 2006 2007 Appendix L Facility Indicators – Replacement Viability CAHs 2003 2004 2005 Rural 2006 2003 2007 2004 2005 Regional 2006 2007 2003 200 200 200 180 180 180 160 160 160 140 140 140 120 120 120 100 100 100 80 80 80 60 60 60 40 40 40 20 20 20 0 0 0 US Rural Hospitals Two New Rural Hospitals in 2007 – No Available Data ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 2004 2005 2006 2007 Appendix M Facility – Average Age of Plant CAHs 2003 2004 2005 Rural 2006 2007 2003 2004 2005 Regional 2006 2003 2007 40 40 40 35 35 35 30 30 30 25 25 25 20 20 20 15 15 15 10 10 10 5 5 5 0 0 0 -5 -5 -5 US Critical Access Hospitals US Rural Hospitals Two New Rural Hospitals in 2007 – No Available Data ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 2004 2005 2006 2007 Appendix N Utilization – FTEs / Adjusted Occupied Bed CAHs 2003 2004 2005 Rural 2006 2007 2003 2004 2005 Regional 2006 2003 2007 12 12 12 11 11 11 10 10 10 9 9 9 8 8 8 7 7 7 6 6 6 5 5 5 4 4 4 3 3 3 2 2 2 US Critical Access Hospitals US Rural Hospitals Two New Rural Hospitals in 2007 – No Available Data ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 2004 2005 2006 2007 Appendix O – Survey Questions 1a and 1b When was your Strategic Plan last reviewed? 5 What is included in strategic planning process and frequency of review? 4 4 3 3 2 2 1 1 0 0 IHS 2+ yrs CAHs 1-2 yrs Rural 6mo.-1yr. Regional < 6mo. IHS On Shelf CAHs Top 3 things Basic ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Rural Regional Advanced Fully Integrated Appendix O – Survey Questions 1c and 2a Does your Hospital’s Hospital s strategic plan incorporate the development or replacement of the Hospital over the next 5 years? Are you planning to expand or add new hospital services within two years? 13 13 No 12 Yes 11 10 9 9 8 8 7 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 CAH Rural Regional Yes 11 10 IHS No 12 IHS CAH ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Rural Regional Appendix O – Survey Question 4 Which Whi h characteristics h t i ti accurately t l ddescribe ib th the community’s/city’s it ’ / it ’ /tribe’s /t ib ’ role l in i participating in hospital development? IHS CAH Rural Regional 10 9 8 7 6 5 4 3 2 1 0 Hospital's Re sponsibility p y Major City Role Strong Tax Dis Sup. We ak Tax Dist. Sup. Strong Philanthropy ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Board is Comm. Appendix O – Survey Question 5a Rate the following entities as to the frequency of use in assisting in the planning and development of your hospital facility. IHS Primary Occasionally Rarely/Never NA 100% 80% 60% 40% 20% 0% Corp. Inter. Consult Arch/Dev City RHO Fin. Co. Vendor Corp Corp. Inter Inter. Consult Arch/Dev City RHO Fin Co. Fin. Co Vendor CAHs 100% 80% 60% 40% 20% 0% ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix O – Survey Question 5a Rate the following entities as to the frequency of use in assisting in the planning and development of your hospital facility. Rural Primary y Occasionally y Rarely/Never y NA 100% 80% 60% 40% 20% 0% Corp. p Inte r. Consult Arch/De v City y RHO Fin. Co. Ve ndor I t r. Inte C onsult lt A h/D v Arch/De C ity it RHO Fi C o. Fin. V ndor Ve d Regional 100% 80% 60% 40% 20% 0% C orp. ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix O – Survey Questions 1d and 1e What primary condition exists that precludes the development or replacement of your hospital? What is the primary driver for the decision to development or replace the hospital? 8 Needed Replacement 6 Staff Recruitment Lack Performance / Capital Competitor Dev. L k off Market Lack M k t Growth G th Recent Expansion Needed Renov. 7 Strategic g Program g Dev. Market Growth 6 5 4 5 4 3 3 2 2 1 1 0 0 IHS CAH Rural Regional IHS CAH ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Rural Regional Appendix O – Survey Question 3b How do you rate the following payors for hospital services? IHS Favorable Fair Unfavorable 100% 80% 60% 40% 20% 0% Me dicare Me dcare D Comme rcial HMO /PPO AHC CCS Priv. Busine ss IHS Medicare Me dcare D Comme rcial HMO /PPO AHC CCS Priv. Busine ss IHS CAHs 100% 80% 60% 40% 20% 0% ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix O – Survey Question 3b How do yyou rate the following g ppayors y for hospital p services? Rural Favorable Fair Unfavorable 100% 80% 60% 40% 20% 0% Medicare Me dcare D Comme rcial HMO /PPO AHC CCS Priv. Busine ss IHS Me dcare D C omme rcial HMO /PPO AHC C C S Priv. Busine ss IHS Regional 100% 80% 60% 40% 20% 0% Me dicare ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix O – Survey Questions 5b and 3a Which one statement (in general) best represents your payor mix perspective? What is your highest priority in hospital development? Find Capital Attain Board Buy-in Build Community Support Recruit Staff Imp. Opp. Performance 13 12 11 13 Beyond Our Control 12 Represents Community Mix 10 10 9 9 8 8 7 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 IHS CAH Rural Regional No Objective 11 Satisfactory/ Favorable Have Tried to Improve IHS CAH ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Rural Regional Appendix O – Survey Questions 6a and 6b What is the one most important thing that the Arizona Legislature can do to facilitate: Hospital Development (32) " Support and Increase AHCCCS payments (N=16) # # # " Workforce Development(5) p ( ) # # " " " " " to CAHs (2) Preserve reimbursement Rate adjustments for Rural Hospitals p that don’t benefit from economies of scale Support funding for unreimbursed care and 1011 program (2) Improved Healthcare (32) " # # # " # # " " " " Provide incentives for Physicians to move and live in rural Arizona (6) More Educational Support for Physician, Nurse, and Ancillary students (GME, (GME Nursing / Alied Health Programs)(2) Tort Reform Preserve and Increase AHCCCS funding (N=11) # Provide more Educational Support for Physician, Nurse, and Ancillary students Tort Reform Improve Congressional Funding (5) Grant funding for Technology/EMR (2) Abstain from mandating reimbursement in Health Care sector (eg. Healthcare Group, H lth Plan Health Pl off Arizona) Ai ) (2) Support Arizona Health Facilities Authority Ease regulations g on Hospital p Districts Workforce Development (N=14) tto CAH CAHs (2) Equitably Fund AHCCCS and DSH Support funding for Unreimbursed costs and 1011 program Financially Fi i ll supporting ti access to t capital it l for f technology t h l adoption in primary care delivery (3) Support statewide initiatives and collaborations that support improved healthcare and provide incentives to reward and encourage wellness vs "sickness" model (2) Support Arizona Health Facilities Authority Require State and County health programs to recognize responsibility for tribal communities ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix O – Survey Question 8 How much do you plan/estimate on spending over the next 5 years on the following: CAHs " Hospital i l Facility ili # # # # # # " # # # # # 2 3 2 2 1 1 Less than $1m $1m - $5m $5m - $10m $10m - $20m $20m -$30m $30m More than $20m # # # # # Less than $50k $50k - $100k $100k - $500k $500k - $1m $1m -$5m More than $5m Hospital i l Facility ili # # # # # 5 6 1 - # # # # # 1 3 2 4 1 Less than $1m $1m - $5m $5m - $10m $10m - $20m $20m -$30m $30m More than $20m # # # # # Less than $50k $50k - $100k $100k - $500k $500k - $1m $1m -$5m More than $5m Hospital i l Facility ili 1 2 1 2 # # # # # # " # # # # # # " # # # # # # " 5 1 2 Less than $1m $1m - $5m $5m - $10m $10m - $20m $20m -$30m $30m More than $20m 2 1 1 3 - Equipment 2 3 Subtotal $125m+ - $252+ Less than $1m $1m - $5m $5m - $10m $10m - $20m $20m -$30m More than $20m Other Facility 2 1 1 1 Equipment # " Less than $1m $1m - $5m $5m - $10m $10m - $20m $20m -$30m More than $20m " Other Facility # " Subtotal $114m+ - $246m+ Regional # " Equipment # " Less than $1m $1m - $5m $5m - $10m $10m - $20m $20m -$30m More than $20m " Other Facility # " Rural Less than $50k $50k - $100k $100k - $500k $500k - $1m $1m -$5m More than $5m Subtotal ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 2 5 $172m+ - $347m+ Appendix O – Survey Question 9b What is your familiarity with the following entities/resources? CAHs Familiar (have used) Familiar (not used) Not Familiar (Interested) Not Familiar (Not Interested) 100% 80% 60% 40% 20% 0% Local Bank AzHFA IDA CAH Des. HUD 242 HRSA G rants USDA Grants AzDoCommerce V Cap. Firms V. Dev. Firms Local Bank AzHFA IDA CAH Des. HUD 242 HRSA G rants USDA G rants AzDoCommerce V Cap. Firms V. Dev. Firms Local Bank AzHFA IDA CAH Des. HUD 242 HRSA Grants USDA Grants AzDoCommerce ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 V Cap. Firms V. Dev. Firms Rural 100% 80% 60% 40% 20% 0% Regional 100% 80% 60% 40% % 20% 0% Appendix O – Survey Question 12b and 12c Has your hospital implemented any Electronic Health Record System internally? " Yes – please explain # 13 12 11 No # Yes # # 10 # 9 # 8 # 7 6 " 5 No – what plans are in place to implement an EMR? 4 # 3 # 2 # 1 # 0 # IHS CAH Rural Regional Lab, Pharm, Clinic (4) X-Ray, Rad, CPSI (3) Paperless clinics (2) Inpat. M/S, OB, ICU Fully Implemented Next Gen ER # None, Not determined (2) Complete by 2010 Approximately pp y 50% complete p Upgrade Meditech Full EMR System selection complete ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix O – Survey Questions 13 and 14 Which best describes your admitting physician staff turnover? Which dominant phrases best describes the role technology plays in your hospital? Strategic Initiative 13 Alt. to Facility Dev. 13 12 Dictated by Corporate 11 ROI Decision 12 I f Infrastructure Issue I 10 10 None - Employed Staff 8 8 7 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 Rural Regional J-1 Revolving Door None - Effective R&R Program 9 CAH They Don’t want Call 11 9 IHS Better Offers/Retire IHS CAH ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Rural Regional Appendix O – Survey Question 16 Rank each issue regarding your hospital facility development efforts: IHS Dominant Major Concern Non Issue 100% 80% 60% 40% 20% 0% Phy. Rec Capital Pop Growth Allied Rec Nurse Rec Imp Exper Plan Exper. City Supp Fac vs Tech Pop Growth Allied Rec Nurse Rec Imp Exper Plan Exper. Exper City Supp Fac vs Tech CAHs 100% 80% 60% 40% 20% 0% Phy Rec Phy. Capital ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Appendix O – Survey Question 16 Rank each issue regarding your hospital facility development efforts: Rural Dominant Major Concern Non Issue 100% 80% 60% 40% 20% 0% Phy. Rec Capital Pop Growth Allied Rec Nurse Rec Imp Exper Plan Exper. City Supp Pop Growth Allied Rec Nurse Rec Imp Exper Plan Exper. City Supp Fac vs Tech Regional 100% 80% 60% 40% 20% 0% Phy. Rec Capital ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 Fac vs Tech Appendix P Raymond P. Cooke, P.E. DHHS/IHS - Deputy Director Di i i off Facilities Division F iliti Planning Pl i & Construction C t ti Office of Environmental Health & Engineering IHS Health Care Facilities FY 2009 Planned Construction Budget ($000) Arizona Facilities Inpatient AZ AZ Outpatient AZ PIMC Hosp System Cumulative to date 2007 2009 2009 2010 2011 - - - - (1,224) - - - (60 830) (60,830) - - - (26,900) - - (60,240) 224 - - (1,000) SE ACC 2 590 2,590 - - (29 120) (29,120) SW ACC 9,236 (17,664) 5 Year Plan 2008 - (4,110) (29 120) (29,120) - NE ACC Central Hosp & ACC - - - (28,065) - - - - Whiteriver Hosp - - - - Ft Yuma HC 89-96 89 96 - - - (2 163) (2,163) (29 392) (29,392) (11,076) (28,065) (37,883) - 2012 Out years Total cost (49,915) (524,498) (524,498) (91,831) (190,705) - - (31 555) (31,555) AZ Kayenta HC 4,318 (2,000) - (43,320) (43,320) (43,319) - - (136,277) AZ San Carlos 6,604 (2,000) - (42,064) (42,065) (18,000) - - (110,733) AZ Winslow Dilkon (6,126) (33,851) (33,851) (33,850) - Joint Venture Joint Venture AZ+ Health Centers (5) 14,722 Small Health Clinics AZ+ (9) 36 773 36,773 Joint Venture AZ+ Dental 13,434 (2,639) - - (107,678) - (5,000) (5,000) (5,000) (5,000) (5,000) - - - (10 000) (10,000) (10 000) (10,000) (10 000) (10,000) (10 000) (10,000) (10 000) (10,000) - - - (3,000) (3,000) (3,000) (3,000) ____________________________________________________________________________________________________________ Arizona Rural Hospital Facilities and Market Study 2008 -