DaytonDailyNews.com

DAYTON — To weather a decline in the percentage of patients covered by private insurance, local hospitals are considering several ways to cut costs and grow revenues.

• The Children's Medical Center of Dayton is looking at slowing or avoiding new hiring, and so far has ordered small spending cuts on travel, supplies and outside services.

The importance of donated funds also has increased, said David Miller, the hospital's chief financial officer.

The hospital relies on foundation assets for 1.9 percent of its budget, or $3.3 million, but doesn't want to dip further into those assets given the recent plunge in the stock market, Miller said. From June to October, the value of those assets dropped more than 21 percent, he said.

• Premier Health Partners, meanwhile, is in the very early stages of assessing what steps it will have to take to compensate for a decline in its percentage of patients covered by private insurance. So far, it is trying to cut the costs of supplies and is leaving some jobs unfilled, said Mark Shaw, Premier's vice president of managed care/decision support.

• The Kettering Medical Center Network, whose hospitals include Grandview, Southview, Sycamore, Charles F. Kettering Memorial and Greene Memorial, is expanding its business into ambulatory care, such as imaging, laboratory services and diagnostic services to increase revenue, said Frank Perez, president and chief executive officer.

The network is also cutting "discretionary" expenses and is seeking to cut the costs of implants such as pacemakers, as well as prostheses, he said.

Long-term fix needed

While Children's and some Premier hospitals deal with a worrisome short-term shift in their "payer mix," hospital executives point to a need for a more systemic fix to the health care system.

Hospitals, after all, aren't going to stop accepting patients, regardless of their ability to pay, said Bryan Bucklew, president/chief executive officer of the Greater Dayton Area Hospital Association. But the costs of that uncompensated care are borne by businesses and individuals who can pay for health care.

Vicki Giambrone, Children's vice president for marketing and external relations, said the dip in private health insurance coverage gives greater urgency to a long-term question: What financial support will state and federal government give hospitals that offer a safety net to families lacking private insurance?

While the Dayton region's health care quandary is not unique, it does have unusual aspects. Unlike most other metropolitan areas, the region doesn't have a public or university-affiliated hospital to help shoulder the health care needs of the indigent population, Bucklew said.

"The amount of public investment in health care in the Dayton region is a lot less than it is in other metropolitan regions in Ohio and across the country," he said.

Local hospital leaders are concerned that state legislators, facing a $7.3 billion funding gap in the upcoming two-year budget, may be tempted to redirect dollars — dollars that currently go to a program that alleviates pressure on hospitals' patient mix, Bucklew said.

The program, called the Health Care Assurance Program, works this way, according to Bucklew:

Hospitals effectively tax themselves, with that money then matched with federal Medicaid dollars. The total pot is then redistributed to hospitals using a formula that takes into account each hospital's payer mix.

Hospitals that see a disproportionate amount of uninsured patients — i.e., urban hospitals like Miami Valley, Grandview, Good Samaritan and Springfield Regional Medical Center — receive the bulk of that money to defray losses they sustain in caring for the uninsured.

In an age of term limits, educating lawmakers, particularly those new to the statehouse, about the need for programs such as HCAP is a top priority, hospital officials said.

Bucklew claims the region has been more proactive than other areas in bringing hospitals, local government and the business community together to find ways to contain costs and ensure continuation of quality health care.

He cited the recent development of Montgomery County SafetyNet as an example.

Still, looking locally for answers to the health care coverage quandaries will only go so far, Bucklew said. "For true, fundamental reform, it's going to have to take place at the state level and at the national level."

Contact this reporter at (937) 225-7457 or

bsutherly@DaytonDailyNews.com.