Resort Area Hospitals: Managing Expanding (and Contracting) Volumes
While operating a hospital in a small community has its unique challenges, try operating a hospital in a small community that is a much larger community during certain parts of the year. That’s the challenge for administrators who run hospitals in resort communities, where tourists can double an area’s population when they come to ski, bike, hike, or engage in a variety of activities--often leading to injuries that require medical care.
David Ressler, CEO, Aspen Valley Hospital in Aspen, Colo., and Karl Gills, CEO, Yampa Valley Medical Center in Steamboat Springs, Colo., discuss how they plan for population surges of 8,000 to 50,000 people during tourist-heavy seasons.
What is your greatest challenge in trying to accommodate seasonal fluctuations?
It’s not hard to attract people to Aspen, particularly young staff who are outdoor oriented. The problem is finding a place for them to stay. The hospital owns about 44 employee housing units, which are used for both permanent and seasonal employees. It’s a logistics challenge to accommodate their needs in terms of pairing roommates and dealing with compatibility issues. We have a full-time housing manager, but it’s a challenge. The other challenge is finding accommodations for those seasonals who would like to stay on. Aspen has one of the highest costs of living in the world.
Karl Gills, CEO, Yampa Valley Medical Center: We use a fair amount of seasonal staffing in our outpatient areas, primarily radiology, ED, and physical therapy. We do have some seasonal employees on our inpatient side, but not so many because the real influx of business is on the outpatient end.
It is hard to find seasonal staff because the cost of living in resort communities like Steamboat Springs is extraordinarily high. Because so much of our business is on fixed payment with Medicare, Medicaid, we aren’t able to raise compensation levels to approach the difference in the cost of housing. So we get potential employees who want to come, but they look at the cost of living and say, “You know I’d love to be there. I just can’t afford to.”
Do you try to assist those who can’t afford the area?
Karl Gills, CEO, Yampa Valley Medical Center: We try to assist to some extent, but we don’t own any employee housing. We have not yet gotten to the place that we have to do that. We are planning construction of transitional housing within the next two to three years that will aid in providing housing for temporary employees and permanent employees relocating to Steamboat. We have in the past, but are no longer cosigning notes from employees. We found the practicality of this option--and the required legal action if an employee leaves the area and defaults on the note--was more of a problem than a benefit.
What are some of your care-related challenges?
David Ressler, CEO, Aspen Valley Hospital: In Aspen, we get a lot of trauma, meaning multiple orthopedic injuries, head injuries, etc., as well as altitude and other sicknesses. We also have the expectations of community members who are literally able to access the finest healthcare services in the world. Many of these people are world travelers and have multiple homes and are accustomed to choosing their providers based on reputation and capability. So, when they’re in Aspen, they reasonably expect to be able to receive a high level of care and a large expanse of services.
Karl Gills, CEO, Yampa Valley Medical Center: Part of that high level of expectation is for technology, equipment, and resources. One of the challenges we have is that we don’t have the patient throughput that an urban or suburban hospital has to offset the cost of providing such a high-level care. So our cost per unit of service is going to be higher. As the community continues to grow, we expect the increased population will help our volumes and that will help reduce that cost per unit.
How are you able to accommodate these expectations?
David Ressler, CEO, Aspen Valley Hospital: For us, it’s very simple: We let quality be our guiding beacon and our nonnegotiable. If we don’t perform a service with sufficient repetition to be able to ensure competency and quality, then we do not feel it is appropriate to provide that service. We look at the array of services that we could offer and focus on those for which we’re going to be doing a sufficient volume. So, we provide a lot of orthopedics, general surgery, general medicine, pediatrics, obstetrics, and also noninvasive cardiology. We have a comprehensive array of services, but again we don’t try to venture into high-risk, low-volume areas.
We also have a number of specialists on staff on a part-time basis, including a urologist and an ear, nose, and throat specialist. Our specialty clinics enable us to provide needed services to members of our community.
How do the fluctuations in business affect your revenue and productivity numbers?
David Ressler, CEO, Aspen Valley Hospital: If you are a traditionally trained hospital administrator who focuses on FTEs per adjusted occupied bed, hours per patient day, or other typical productivity measures, you’ll pull your hair out because there are times when we’re off the charts. Even when you look at our yearly average, our productivity-related performance is very poor. What happens is we’ll literally have one nurse taking care of two to three inpatients just because there aren’t any more patients than that for the off-seasons. For other periods, we have a more typical staffing structure. Overall, we focus on operating performance, budget conformance, and year-over-year comparisons to keep our FTEs in line.
We deal with revenue fluctuations by being fiscally sound all the time in our practices, regardless of the season. In effect, revenues from our busiest months create cash reserves and prepare us for the off-seasons. Our fiscal year starts with a run of revenues during the ski season, and we then try to maintain our position for the rest of the year. However, the summer months are now proving to provide decent volumes and resulting revenues, so it is really just the spring and fall “shoulder” months that we tend to have to withstand.
Karl Gills, CEO, Yampa Valley Medical Center: Our total revenue only fluctuates about 5 percent from our busiest quarter to our slowest quarter. Even with that stability, we do see periods of census fluctuation that makes keeping productivity at national norms a difficult challenge.
Because of the specialty services that we provide and because we function as a regional referral center, a lot of the patient care that we provide isn’t related to the tourist business. Eighty-five percent of our patient revenue volume comes from our five-county primary and secondary service area, which is northwest Colorado. Our tourist or out-of-area patients represent 15 percent of our total business. Injuries from skiing, snowboarding, and so forth is what raises our emergency department and outpatient business. But the other activity is primarily year round.
Because of the specialty services that we provide and because we function as a regional referral center, a lot of the patient care that we provide isn’t related to the tourist business. Eighty-five percent of our patient revenue volume comes from our five-county primary and secondary service area, which is northwest Colorado. Our tourist or out-of-area patients represent 15 percent of our total business. Injuries from skiing, snowboarding, and so forth is what raises our emergency department and outpatient business. But the other activity is primarily year round.