Rural Health Summit: Robert Mach, CEO of Schoolcraft Memorial Hospital

JJ: Significant challenges. So, let’s talk about challenges because obviously the political landscape today is a little challenging. We’re facing some significant setbacks under HR1 with how we get paid from Medicaid. Michigan is a little unique in that we are we are an expansion state. Then we got the average commercial rate which fought for several years ago, which hospital like mine was 6 million a year. That’s the difference between a margin and no margin. Obviously with the challenges that we’re facing right now in healthcare, what would you identify as your priorities at Schoolcraft in strategies that you’re employing to address that future impact of these Medicaid cuts. Rob, you were at the, we had a rural council not too long ago up north. You heard about some of those attacks on a 340B, nurse staffing ratios, Medicaid cuts. How was your how was your hospital bracing for that? What are you what are you doing to prepare?

RM: I think we’re trying to focus on long term sustainable growth. I think especially small hospitals. It’s so much easier to make a dollar than save a dollar. Or as I tell everybody in the hospital, it’s easier to make $10 then save a dollar in health care. So, how do we grow those service lines that are going to make a difference at the end of the day. So, you invest in specialty care. You invest in radiology and lab. You know I’ve got to get patients using our services right. I’ve always taken a stance in my 30 plus year career that as a critical access hospital. That’s where most of my time have been. We can’t do everything, and we can’t be everything to everybody, but for the things we do, we should do them 110%, and nobody should have to drive by my hospital to get service somewhere else. We’re never going to do cardiac stents or we’re never going to do neurosurgery. But you know what? We’re going to do mammograms and we’re going to do them darn good. We’re going to do primary care, and we’re going to do them darn good. This is my favorite saying, and I say it at almost every meeting I met with a medical staff, board meeting, leaders in our hospital are just I had a town hall the other day. I say it at every meeting, treat every patient like they were your mom or dad, and we will continue to thrive. Don’t chase the dollar, chase quality, because the dollar will follow. So, we’re focusing on long term strategies. Specialty care, reinforce primary care and looking outside and trying to think outside the box a little bit about services we need in our area.

JJ: How do you partner, right.

RM: Yeah, a lot of partnerships, using data to make decisions. Not just my gut all the time. Although I think I got a pretty good gut, but trying to back that up with data, right. Not just kind of going off the fray and saying, oh, let’s recruit a who knows what, and you really don’t need that.

JJ: Then you’ve just spent a lot of money, time and effort.

RM: That and you just spent a lot of money, recruitment, hiring staff, opening that practice. And it’s a failure right. So that’s what we’re concentrating on.

JJ: Well, let’s talk a little bit. Rob, how are you leveraging technology? Do you have any telemedicine you’re doing and do you a partner?

RM: We do. Matter of fact we’ve invested heavily in telemedicine. We partner with another with a company called Beam who provides right now telecom for us. So, I have a cardiologist, but he’s so busy right that we had to bring Beam on. So, they do a Friday for us tele cardiology and they do some reading for us to which now frees up my cardiologist to actually see patients because my cardiologist is reading all the Echo’s, EKGs. I mean, he’s reading all day long and his patient volumes are dropping because he just couldn’t get in. So, it’s free debt up a little bit.

JJ: And is your community following that. Have they have they accepted tele.

RM: It’s very busy. They have accepted it. There are rules around tele. So, the patient still has got to come in to the office, because my doctors the Beam cardiologist is in the state of Washington. So, they have to physically come in and get the cardiologist on the screen. The nurse takes all the vitals and everything, and then the doctor pops on the screen and has the visit with them.

JJ: So, that speaks to the other issue we face, which is barriers in transportation. I think you own your own ambulance.

RM: No, but it is a big issue.

JJ: It’s a big issue in transportation in general. Even beyond emergent transport is critical. Are you seeing that you just don’t you can’t get people to your location.

RM: I cannot. So, I will tell you, transportation is the number one issue in my county right now for our hospital. Here again, it’s not just people getting to the hospital. We live in the U.P. so weather in the wintertime, we’re talking about feet of snow, not three inches. A lot of people live down two tracks in my county. They don’t live right off the main road, which doesn’t even get plowed right in the winter. I mean, we had two blizzards this year where basically the whole county was shut down. So, it’s not just getting to the hospital, which is a huge issue. Our average median income is $35,000 in our county. So, it’s not that much. So, transportation huge I mentioned housing but then on the backside somebody comes into the hospital and needs to go someplace. I can’t get a medical transport out. I mean, my county has one ambulance service, which is run by the county and have one crew on and they can’t leave the county. So, when I need to get somebody out, they start calling for volunteers. So, I would tell you probably 60 or 70% of the time I’m throwing my own staff on the ambulance to transport somebody. They can’t find a paramedic. So, I’ll throw a nurse on the ambulance to get them out. They may have a driver, but they can’t find a paramedic. So, I’m throwing my own nurse or my own respiratory therapist on the rig to go, and we transfer all over the place, right? I mean, we don’t have a lot. We have Marquette, which is about an hour and a half north, but a lot of our transfers either go to Petoskey across the bridge-

JJ: How long? Give me give our listeners an idea. How what kind of drive is that.

RM: So, Petoskey is you’ve got to go all the way around the U.P., down the bridge and across. So, you’re talking a two and a half, three-hour drive or they’re going to Green Bay, which is a 3.5-hour drive.

JJ: So, do you chopper in?

RM: We do chopper in. Here again in the weather half the time they can’t fly and they’ll bring in a fixed wing, which I have a local airport, but you got to plow the airport. So, there’s all kinds of challenges to get patients out.

JJ: So how are you as an executive dealing with those transportation barriers? Are you going to places in your community? Did you go there? Are you trying to how are you combating that.

RM: So, I mentioned one of the combats is we use our own staff to, to get on the ambulance. I mean, we’re doing it right, but back at the hospital we are shorthanded. Which right raises all kinds of other issues. So, we do work collaboratively with our EMS folks in the county. They have a millage. We’re trying to help recruit. I mean, hey, let’s partner somehow in a paramedic or something if we can get them in.

JJ: Yeah, because you have Schoolcraft College.

RM: No, no, no, no college in town. We have we have Bay Community College down the road, which is over in Escanaba, which is about an hour away. They do have a paramedic program. So, we’re trying to recruit some of those. Running the ambulance service is tough too, right? So, I take no joy in our ambulance service that’s run by the county because they have enough time to. So, recruitment is hard for them.

JJ: So, obviously transportation barriers. Barriers in adequate care serving the needs because specialty care and getting them out. Then, all of these complex issues that just seem to overwhelm us at times. Then you get in the midst of that, the news that we got last week from the state of Michigan, which is they’re going to take 10% away of what we’re allowed to charge under a charge, master, and with a zero margin or 1% or a 2% that’s a game over.

RM: A lot of hospitals are going to close under that. If that ever makes it through and you’re absolutely right game over, there will be many hospitals that fold up shop. We’ll be one of them. You’ll probably be one of them. They’re going to be all over the state, if that ever made it through. I mean, with no context, by the way. It’s just thrown out there. We’re going to cut 10% right off the top. Have a nice time, people. Then all the other things that are in that bill too, which are problematic. I don’t know what they’re thinking, I really don’t.

JJ: So, in the midst of all that. Right, I mean, and those are heavy things, what’s keeping you up at night as you think about your organization and your health system? I would assume you’re one of the largest employers.

RM; We are the largest employers. We are the largest employer in Schoolcraft County, 400 people. Next largest is probably the paper mill that keeps me up at night. The paper mill, I guess, over the last several years, has went bankrupt and found a buyer, by the way. So, it’s still open today, but if the paper mill closes that’s rough for our community. Our large employer is limestone. We have a limestone quarry up there. So, either of those go out of business. That’s going to be really rough. It’s going to be a huge problem. Keeping me up at night payment policies. Keep us all up. Like I said, you know, we’re the only business in America that probably charges a dollar and gets reimbursed $0.45. So how do you make ends meet at the end of the day and still provide service to your community that’s needed? That’s the tough part, right? We still need nurses and doctors and X-ray techs and EVS workers and food nutrition people. It’s really tough.

JJ: So, let’s so let’s speak to that because obviously we need those providers. We need those workers. They’re important team members of ours. Here you are faced with some of the most unprecedented times of reimbursement. How do you leverage your voice in Lansing in Washington is because we have critical access hospitals. Listen to this podcast all the time. How do you do it? Because you don’t have a government relations team, I would assume. So how do you do it?

RM: No, not at all. I’ve got me. So, I think we work a lot through MHA, right? I think it’s behooved on us as critical access hospitals to hold MHA to advocate for us. I think they do a good job, but there’s a lot of a lot of a lot of people around the table at MHA at in the hospital association. They have to they have to pick and choose their battles and advocate for all of us. Including the large tertiary center.

JJ: So, the little’s the large, the big, the small, independents.

RM: You know, leverage MHA. I am on the phone or emailing with our representatives all the time. They know me. Oh, the one thing I always ask, so my local US congressional representative, Jack general Jack Bergman, I have a good relationship with him because he’s a marine as well. So, the first time we were on, I call him General Bergman, not Representative Bergman. My CFO is a marine as well, and my CNO is a corpsman. So, we’re all veterans. So, and all I have asked of him and his staff is, hey, when I call, answer the phone because I’m not going to bug you unless I’ve got something really important that’s going on. That’s the same with just our local state representatives, to which, you know, Dave Preston, Senator McBroom, if you see my number pop up, I’m calling you because I need you. I’m not calling you just, you know, chat, right?

JJ: How’s your response been lately?

RM: I think General Bergman’s been very receptive to us. I am really trying to. He’s one of the co-sponsors. Now, I don’t want to do my own horn, but maybe because I raise the issue as he’s a co-sponsor on the Save America’s Rural Hospital Act. It’s not perfect, but I’d love to see that get across the finish line in the lame duck session.

I’d love to see. I would love to as well. Grassley has been trying for almost a decade to get this through, but it’d be nice.

RM: I know General Bergman he’s been trying for. I know he has. So, I know General Bergman signed in on this year. I know I raised the issue with him and he said, let me look at it. So, I know he’s a co-sponsor now. I think that would go a long way in solving a lot of our issues. So maybe we can make a half percent margin at the end of the day to be able to reinvest in technology in our people. I mean, just being able to claim 100% of our bad debt, right? I mean, just being able to claim 100% of our bad debt would be monstrous and that would be monster.

JJ: Oh, that’d be incredible. As bad debt continues to rise.

RM: Right. Charity care since January, by the way. Right. Monstrous as bad debt continues to rise to rise. Charity care. I mean, people without shirts. By the way, Medicare changes of H.R.1. We’re going to see our charity care increase. We’ve already seen it. I’m sure you’ve seen it, too.

JJ: So, we’ve seen it. We’ve seen it. Bad debts already jumped up.

RM: Skyrocketing. So, that would be huge for us.

JJ: So, you’re engaging regularly and you would recommend obviously for the everybody should do it.

RM: I mean you if you’re not going to advocate for yourself who’s going to do it for you. Yeah, you have your hospital associations, but you know, your best advocate is yourself, right. Your employees and your senior team and your board of trustees. I just had them all sign the letter the MHRA put out the other day around this new bill in the legislature. I sent the link to them and said, I need all of you to fill this out and send it to our representatives and tell them what a crazy idea this is.

JJ: Yeah, there’s a lot of crazy ideas out there. Let me ask you one thing. What’s the number one thing keeping you awake at night?

RM: It’s payment policies. It’s all the cuts that are coming, right? Medicaid is going to be like we said, we already see our bad debt going up, right? That’s cash. That’s cash. Not in the bank, by the way.

JJ: So, that is for you. Cash is king. If you don’t have it, it’s not in the bank. You cannot make improvements. So then, lets the reverse of that. What’s exciting for you as you look at the future of maybe not just your hospital but healthcare in general. Do you have any are you excited about anything? Is there anything you’re doing as an organization to integrate into the community?

RM: Yeah, I think, you know, the thing we do have on our side, we got a lot of smart people in health care, you get into healthcare because you have a calling to serve people. I think all of us do. Right? From the CEO to the housekeeper to your food nutrition person, to your maintenance person, to your X-ray tech, you get into healthcare because you have a you have a burning desire to serve people. That’s why I joined the Marine Corps, right? I wanted to serve. I want to serve our country. Now I get that high by serving my community and the people that we serve, right. So, we have a lot of smart people in health care. If they give us the opportunity and stop shoving crazy regulations down our throats, we can figure it out, because at the end of the day, we just want to take care of our community and we want to do a good job at doing that. So, we have a lot of smart people. I’m really excited about things that are coming out. It’s scary. I think we can leverage some technology. I know we talked a little bit before we started about AI and how we leverage some AI. We use AI in our, you know, we do AI notes now, which my doctors would tell you; I don’t know how I survived 20 years before I had this.

JJ: I know they do like it after you launch it, you know, it just it’s scary.

RM: It’s scary. But man, like I said, the providers who use it now won’t give it up. I think there’s a lot of interesting things on the back side from a business operation perspective. Technologically we can use. Listen, I walk into business office and see stacks and stacks of paperwork of denials now. The insurance companies, Medicare Advantage plans, they make it so hard to collect. I really just believe at the end of the day, it’s going to be our AI fighting against their AI and learning from each other about how we get claims paid and how they don’t pay claims. It’s pretty sad. Like I said, why can’t we just get paid for the things we do? I know I have never known a doctor in my 35 years who is trying to screw over Blue Cross Blue Shield or Medicare by ordering a CAT scan. They’re just trying to do the right thing for their patients. So, for them to get denied on that because I’m trying to do the right thing just seems crazy. So, where’s the trust in that relationship? We have a good relationship, our hospital, but we have a very good relationship with the Blue Cross Blue Shield, and I’m proud of that, but we’ve seen their denials go up 35% this year. We don’t know why, we haven’t changed anything. Leverage your AI.

JJ: It’s across the board. I think I think to your point leverage your AI. Have an opportunity, you know, to on the back end with revenue cycle management. I think there could be some wins there for small hospitals. I think we could talk for two hours.

RM: We probably could buddy.

JJ: You talk about as much as I do and I talk a lot. I have one final question for you. So, in this terrible environment of lack of reimbursement, we’re told that we’re all full of fraud, waste and abuse that we’re no good. We’re worse than car salesman. What piece of advice would you give a new leader who’s rising up today, who says, I want to be a healthcare leader? You and I both know that the number of departures and senior leadership is high right now in this country. They’re retiring. They’re resigning. They’re taking jobs at Walmart. They’re getting out of this industry. But at the end of the day, for the young aspiring one that’s listening today, maybe in Oregon, maybe in Washington, wherever it is they’re listening to saying, JJ, you just presented all the bad stuff. What recommendation would you give us to keep on keeping on? You got decades of experience. What is your rural advice.

RM: So, we started the conversation saying I was in the Marine Corps and I learned more about leadership in the Marine Corps than I did by any piece of paper that hangs on my wall from my MBA. Focus on the things that matter. Take care of your community and the people and have integrity. Have integrity. Do the right thing. At the end of the day, do the right thing. I listened to a talk years ago from a CEO of Big Hospital in Boston, and I still hold this to this day. Never let anybody question your integrity. Do the right thing. At the end of the day, if you do the thing at if you do the right thing, at the end of the day, you can hang your hat on it. I just believe it.

JJ: Robert Mack, great to have you here. Chief executive officer of Schoolcraft Memorial Hospital, 27 years of health care experience, just to glean some pieces of information for him has been very insightful today. Hope to have you back on the podcast in the future. I’d like to do it because we have a lot, a lot that’s facing us here. In the next few years. We might have to extend the time, man. It’s going to be an hour, I promise you. Thanks for joining us today.

RM: Thanks, JJ appreciate you buddy. Appreciate you.

JJ: Appreciate you man. Thank you very much. And thank you to our listeners for tuning in to Rural Health Today! Catch our next segment, Rural Health News, to stay up-to-date on the current state of rural health every Monday wherever you get your podcasts. Don’t forget to check out the latest updates and resources from Rural Health Today at ruralhealthtoday.com and make sure you’re subscribed to the show so you never miss an episode. Until next time, remember the power of rural!