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Pardee endures Covid, nursing costs, looks to regional expansion

UNC Health Pardee survived Covid, a new state law that has shifted day surgeries away from hospitals and contract nursing costs that dropped the most recent fiscal year into the red.

“This past year has been a challenging year across the health care continuum but it’s also been a very rewarding year,” hospital President and CEO Jay Kirby told the Henderson County Board of Commissioners last week in his annual update on the operations and financial performance of Pardee, which is owned by Henderson County and operated by UNC Health.

Pardee has added physician practices and satellite clinics, greatly increased advanced care for cancer and cardiac patients and drafted a strategic plan for regional expansion. Here are highlights of the hospital’s serves for the year ending last June 30 and Kirby’s comments:

  • Births up 21 percent: “That has nothing to do with birth rate in Henderson County. It probably has more to do with the conditions outside of Henderson County, where Transylvania, Highlands-Cashiers, Polk County and other areas do not have OB services in their markets so they seek care at the institutions who do provided these services.”
  • Physician practices grow: “The limiting factor that we have today in bringing new providers into our communities is space. Just as any burgeoning community, we’re going to need more space to do medical care.
  • Day surgeries migrate: When the legislature “in its wisdom” adopted Medicaid expansion “it also moved towards reducing certificate-of-need laws, which will now allow freestanding imaging centers, freestanding surgery centers. The reduction is not a reduction in surgeries in Henderson County but it was the location.”
  • Serving the customer base: “If you’re going to be a community that serves Henderson County, you better be good at three things because 62 percent of the people that seek care at Pardee Hospital hold a Medicare card: You better be good at orthopedics, you better be good at cardiac and you better be good at cancer because the 65 and older crowd uses those a lot more.”
  • Surgery success stories: Pardee’s board-certified fellowship-trained breast surgeon is “the busiest breast surgeon in Western North Carolina and we have one of the busiest bariatric surgeons in the region. Our cardiac STEMI (ST Elevation Myocardial Infarction) program has gone from doing less than 50 interventions a year to this year doing over 1,800, and so that is bringing advanced care close to home.”


Nursing costs spike five-fold

The big hammer on the financial side since mid-2020 has been a quintupling of the cost of hospital nursing labor, the primary reason Pardee’s operating margin for the 2022-23 fiscal year dropped to minus-1.21 percent despite a 7.6 percent gain in gross revenue (to $316 million).

“Despite the best efforts of (BRCC president) Dr. Leatherwood and the folks at Blue Ridge Community College, A-B Tech and Western Carolina, there are still not enough nurses to go around to care for the amount of folks that are coming into the healthcare system,” Kirby said.

During the peak of Covid admissions, “we had to make a decision. Were we going to pay $160 an hour for nursing — as opposed to much lower rates in the $27 to $30 range that we normally pay.”

Given the math, Kirby asked out loud how this would work.

“I went to our board and said we’ve got two choices: ‘We can either pay these rates and keep the doors open and beds open, or we can shut down beds and shut down services, because every patient that we see we’re gonna lose money on,’” he recalled. “And it was close to being an admonishment of me for asking that question because our board overwhelmingly said, ‘We’re not going to abandon our community at this time.’”


A regional provider

The way forward as a financially sound, quality-driven provider, Kirby said, is to continue to expand Pardee’s service footprint and offer the advanced care services that a growing — and aging — community demands.

“Yes, we are here first and foremost for the citizens of Henderson County,” he told commissioners. “And what I hear from the citizens of Henderson County is we want to bring advanced care closer to home. That means bringing state-of-the-art cardiovascular, oncology, general surgery and neurology so that people don’t have to travel to Asheville and Greenville. To do that, though, I’ve got to pull primary care referrals from across a region and become a much larger regional provider.”

That’s why the newly developed strategic plan eyes expanded infrastructure to support regional development.

“We have been embraced and welcomed with our presence in Transylvania County,” Kirby said. “We are going to look into the South Asheville market and our priorities will be Henderson and Transylvania and anything south of I-40.”