In Pineville, a new administrator from a Texas management firm is shaking up the local hospital in an effort to save it

Kentucky Health News

The crisis in rural hospitals is driven not only by changes in federal reimbursement and patients’ increasing preference for larger hospitals, but in some towns by managerial shortcomings that may follow local tradition but hurt the bottom line. Changing those practices can be difficult, but the new administrator of the Pineville Community Hospital appears to be having success as he grabs the bull by the horns.

Stace Holland (Modern Healthcare photo by Harris Meyer)

Longtime rural hospital administrator Stace Holland has put PCH “on the road to recovery by cutting costs, bringing in more federal funds and getting staffers to change their ways,” Modern Healthcare reports in a long story than delves into the details, from specific expense cuts to clashes with physicians.

The 120-bed hospital is staffed for only 30 (not counting a 26-bed nursing unit) and was losing $6 million a year. Eight months after taking over as CEO, “Holland is well on the way to turning around a struggling not-for-profit facility that still expects to lose $3 million this year. With support from the Plano, Texas-based Community Hospital Corp., which took over management of the hospital in October 2014, Holland already has made significant progress toward stabilizing its finances,” Harris Meyer reports.

“Holland faced a challenge that is all too familiar to rural hospital leaders around the country: declining patient volumes; a preponderance of low-paying Medicare, Medicaid and uninsured patients; public and private rate squeezes; high incidence of chronic disease and drug abuse; difficulty in recruiting physicians; and a shortage of funds to invest in new equipment and services. . . .  To save the hospital, whose previous CEO served nearly 40 years, Holland, Chief Nursing Officer Dinah Jarvis, and CHC knew they had to take tough steps that would unsettle physicians, staffers and local residents accustomed to the old comfortable ways.”

The new ways included a partnership with the Baptist Health hospital in Corbin to help PCH compete with the Appalachian Regional Hospital in nearby Middlesboro, partly with a 12-bed geriatric psychiatry unit; a federal rural health facility license that significantly boosted Medicare and Medicaid payments,” and “clinical protocols to improve quality of care and reduce readmissions,” which were so frequent in 2013 and 2014 that they drew Medicare’s maximum penalty, Meyer reports. But the new protocols, such as “pre-discharge education of congestive-heart-failure patients about medication use and weight monitoring,” riled some physicians.

Dr. Steven Morgan told Meyer, “They want to pound square pegs into round holes.” Dr. Shawn Fugate said he had to fight with CHC for “what he thought were adequate nurse staffing levels, and that CHC is making too many important decisions from afar,” Meyer reports. As an employee of CHC rather than the hospital, Holland can “speak frankly,” Meyer writes. “He recently told an older surgeon who serves on the board that it was time for him to retire.”

Pineville is on the old Wilderness Road (in red) and US 25-E.

Pineville Mayor Scott Madon told Meyer, “Stace has an unbelievable task in what he’s dealing with. He’s trying to reinvent the rural hospital. He has to change the whole thinking, and people don’t like it.” But longtime hospital board member David Gambrell, a real-estate agent whose son will start as a family physician there soon, said Holland’s approach has been “refreshing. . . . We need that kind of honesty. It’s taken Stace coming here to see we needed a new vision.”

Meyer reports, “Local leaders see the Pineville hospital’s survival as pivotal to the future of the town and Bell County, which has no other hospital and has lost many coal-mining jobs. They say the hospital, the city’s largest employer, is key to their economic redevelopment efforts. . . . The Pineville hospital has strong customer loyalty. Its staff—most of whom are local residents who have worked there for many years—have deep ties to the patient population.” Wilma Sizemore, a 70-year-old disabled woman who was admitted in mid-February for bronchitis and dizziness, told him, “I wouldn’t doctor nowhere else but this hospital. They treat me like family here.”

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