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In Business Q and A
Lacy Thomas, chief executive of University Medical Center
Interviewed by Michelle Swafford / Staff Writer

Lacy Thomas
Photo by Ethan Miller

As chief executive of University Medical Center, Lacy Thomas is looking to take the hospital to the next level. He has experience doing just that.

Thomas came to University Medical Center in October 2003 after serving as director of John H. Stroger Jr. Hospital in Chicago, which was formerly Cook County Hospital and the setting for the TV show ER.

Since Thomas arrived, UMC has broken ground on a new patient tower, launched an advertising campaign to beef up its image and signed sizable provider contracts to be a hospital choice for people insured by Blue Cross and Blue Shield of Nevada and Coast Casinos Inc.

UMC is a training center for medical students and residents at the University of Nevada School of Medicine and has the only burn center in the state.

Locally Thomas is involved with the Urban Chamber of Commerce, the Nevada Hospital Association Board of Directors and the University of Southern Nevada Board of Directors.

Thomas met recently with In Business Las Vegas to discuss opportunities and challenges facing University Medical Center.

You have a history of overseeing public hospitals that see a large percentage of poor and uninsured patients. What attributes do you bring to UMC from your previous experiences in Chicago at Cook County Hospital, which was later replaced by John H. Stroger Jr. Hospital?

What I bring here is familiarity with that patient population. Public hospitals throughout the country have as part of their mission to provide a safety net for those individuals who do not have access to health care because of their financial and economic needs. The public health care system in this country is something we as citizens have to try to maintain and protect. In my own little way, I try to contribute to that by being an advocate as well as a person that administers those programs. I happen to be a CPA (certified public accountant) so people say I know how to squeeze the most out of a Lincoln so I do my best in that regard as well. Cook County Hospital, which is now the John H. Stroger Jr. Hospital of Cook County -- is the public hospital in Chicago and Cook County, probably one of the largest in the state of Illinois and probably part of the top five or six in the country.

University Medical Center is the only county-owned hospital in the Las Vegas Valley, which is predominately controlled by for-profit hospital operators. How does that situation affect patient care and patient prices?

I think the quality of care in the valley is very good. It is an unusual scenario for an urban part of the country. Most urban parts of the country, the predominant hospitals are not-for-profit, locally controlled. I don't think there's a tremendous impact on the quality of patient care. It's different from other parts of the country. I'm not familiar with how they price their services so I can't respond to that.

Is it harder for UMC to keep up with technology upgrades and other quality-improvement measures because it is not part of a larger system, whereby patients could be transferred to a sister hospital depending on the care they provide?

I don't think so. One of the values that UMC has is that we're affiliated with the University of Nevada School of Medicine so we're right on the cutting edge of technology and different protocols in medical treatment. The county commissioners have committed themselves to providing the types of resources we need to maintain our high technological approach to medical care. In a very short period of time we will have the most advanced radiological imaging system in this part of the country, and that was approved by the Clark County commissioners.

In February, a state report said UMC reported a $7.6 million loss for the last fiscal year, marking the hospitals' third straight year of losses. What is UMC doing to curb its financial losses?

That report is a little bit misleading because that's a loss from operations and because we're a public hospital it is going to be routine that we are going to have a loss from operations. That does not include the county's contribution to UMC's operation. That report was actually very positive because it meant the requirement for the county to subsidize UMC had been decreasing every year for the last few years, which is what our goal is -- to decrease the amount of subsidy required by Clark County.

A state bill that was passed by the Senate and forwarded to the Assembly would redirect money to private hospitals based on the percent of uncompensated care provided as percent of operating revenue. How would this affect UMC's ability to qualify for the funds and how would the hospital compensate for lost funds if the bill passes?

We're very confident that we were able to explain to that Senate committee that the methodology in that bill did not represent the intent that they wanted it to be. That bill has been amended dramatically since it was first presented and it now does not present a threat to UMC's operation. The theory of the bill -- the patients follow the disproportionate share of funding -- is fine except that in the methodology they counted Medicaid payments as indigent care payments. While Medicaid might not pay at the highest rate that some of the other payers pay, it is a payment source. We don't consider Medicaid payments indigent care. Indigent care is, by our definition and by most definitions, where the patient has no financial resources and no source of payment to provide for their medical care. When that gets used in the calculation, UMC is by far the largest provider of indigent care in the entire state and that will continue.

Nationally hospitals are continuously complaining about inadequate Medicare, Medicaid and insurance reimbursements. How is UMC dealing with its reimbursement concerns?

We have a similar concern. The public requires and desires the latest technology in medical treatment and there's a cost associated with that. The insurance companies and the government payers are pressured from other constraints in terms of what they want to pay for and as a result it's an issue that all hospitals face. We simply have to plan our resource allocation consistent with what we expect to get reimbursed for from providing those services. It is a challenge and we simply have to be very creative in what we do to get those services done.

Some members of the state Assembly have proposed that the Las Vegas Valley's hospital market should be reformed and more government-operated hospitals should be built. What are your thoughts on this proposal and how would that affect UMC?

I don't think it would affect UMC from that standpoint. It's really the decision of the legislators and how they intend to portray that decision to the county taxpayers. The end-funding source for that type of activity is the county taxpayers and to the extent that the county taxpayers would be willing to expand the number of government-owned facilities in the valley, we would respond. Should that happen, UMC would be part of that government system because it would still be a function of county government, which we are -- a function of county government. I don't see that happening though. I don't think the taxpayers of this county are interested in providing more government-controlled health care facilities.

How is UMC grappling with the increasing number of uninsured patients?

It's tough. We annually try to project the number of uninsured patients that we're going to provide services for and that goes into our budgeting process. It goes into the request we present to the county for their subsidy. As part of our mission to provide health care services to all county residents who require it, we have to anticipate there will be some large number of uninsured patients. One of the things we try to do is make sure that we can capture a large enough share of the commercially insured market to offset some of the costs we incur providing for the uninsured market. Money we receive from commercial insurance goes right back into supporting services for all patients.

Many of UMC's local competitors say they are seeing an increase in emergency room patients looking for primary care. Is UMC experiencing similar problems and how is the hospital dealing with this influx of nonemergency patients?

We're having a similar problem. One of the things we're doing is to make sure once we triage the patient and determine that the illness does not require emergency-room treatment, we then refer the patient to one of our outlying facilities that do provide primary care. We try to encourage them to use the local facilities and not the emergency room for primary care.

What does UMC do to assist patients who cannot afford to pay their bills and how often do you absorb the loss as charity care or bad debt?

We do an initial screening with the patient at the point of admission and try to determine what their financial capabilities are. If it is clear they (do not have the ability to pay for) their services, we do refer them to Clark County Social Services. We do have social workers who work with them in terms of Nevada Medicaid or Social Security disability services. We've got a complete package of social services we try to utilize for the patient to help them get some eligibility for services. When all else fails, again, part of our budget provides for indigent patients who cannot pay and have no source of payment. (For those who could pay and opt not to,) those individuals we certainly pursue an aggressive collection campaign. For instance if a person does not want to pay, but certainly has the resources to pay, we would submit their claims to our collection agency and pursue them in that way.

Local hospitals say they are struggling to accommodate the large number of mental health patients that flood their emergency rooms. How is UMC dealing with those patients and what do you think needs to be done to improve the situation?

We are in the same boat as the other hospitals with respect to that problem. The problem really surfaces more in the summer than it does in the winter. Patients who come to us from the police department of their own free will looking for psychiatric support services, in which the current system requires that we give them medical clearance -- the state of Nevada has taken dramatic steps in terms of improving that situation. The building of a new state mental hospital is going to be a tremendous asset to this community. We've gotten them to agree to maintain the old one at the same time because the new one, as it was designed, we thought would be too small. With the new one being expanded to its full capability from the very beginning and maintaining the existing facility, we'll have almost 250 beds for mental health patients, which we think will be sufficient. We are working with the state now to evaluate the kind of services they're going to deliver. One of the things we're a very strong proponent of is that they be able to do medical and psychiatric clearance at that hospital. That's one-stop shopping; they don't have to come to a hospital first to be cleared. If they can provide these services at the psychiatric hospital that clears up the emergency rooms to a great extent right there.

What distinguishes UMC from its competitors and how do you attract patients who have a variety of choices for treatment?

The quality of care we deliver. We believe we provide the highest level of quality of health care of any institution in the valley and we do that one patient at a time. As we render services to patients and they have a positive experience, they tell that to somebody else. They tell that to their doctor. They tell it to the neighbors, and UMC becomes the hospital of choice. That's our design; we're the hospital of choice regardless of what type of insurance or payment mechanism you have. We're doing a lot in the community. We have a lot of senior citizens programs through our family resources center that reaches out to the community.

We've done a lot of upgrades to the facility. We're making changes that will improve both our image in the community as well as our services that we provide. We were the only hospital that was ranked by U.S. News & World Report last year in Nevada. We ranked 47th in neurology and neurosurgery and that's one of our centers of excellence. We have 11 centers of excellence that we focus on, ensuring that the resources we put in those programs retain (their) top-notch status in terms of patient care. Everybody knows we're a good trauma center. We're the only burn center in the western region of this country. We do a great job with orthopedics, but there's all the services that we provide: cardiology as well as radiological services; again, very highly regarded in the community. I can't underscore the significance of the relationship with the University of Nevada School of Medicine, but that also gets tied to a teaching facility. Being a teaching hospital ensures that we're always looking at technological changes that happen in the medical industry.

UMC operates 10 Quick Care centers in the Las Vegas Valley, which provide primary and urgent care services. How are those centers doing financially and are there plans to expand or decrease the number of centers?

All of our facilities except for two are primary and urgent combined. The McCarran facility is all urgent because it primarily takes care of visitors coming through the airport. The enterprise facility is all urgent as well. We're going to convert the Sunset facility as all primary because of the type of the price of space they're asking for there. We look at expansion based upon patient demand. I've had inquiries in the other parts of the valley where patients have asked if we can put a Quick Care there and we've looked at it. We're doing a couple of assessments now about different locations, but it's going to be driven upon patient need and demand for the area. We think we've got the valley pretty well covered now, but that was done a couple of years ago. With the growth of residents in the valley, we've had to take a look at whether we are providing enough outreach services so that access to care is available to the patients and the residents of our county.

In December, UMC broke ground on a $57 million patient tower that includes private patient rooms and a larger burn unit, which is the only one in Nevada. Is the project still on schedule to be completed in 2007, and is it still likely to change the hospital's payer mix to attract more insured patients?

Yes, it is on track. I'm not relying on the tower to change our patient mix. I'm relying on our ability to demonstrate to the public that we are a viable alternative. Whether insured or uninsured, we are a viable alternative. Again, as we provide quality services, as we reach out to the community and they know more about UMC's services and its programs, we're starting to see a greater attraction to commercially insured patients. We signed the first ever Blue Cross Blue Shield contract last fall, which is 150,000 lives in the Las Vegas Valley. We signed another contract with Humana to provide services to their patients. We signed with the Coast Casino group to provide services to their employees. We're signing some fairly large agreements with commercial insurance groups and now we have to prove to their beneficiaries that we can provide the services they need and I think we'll do that. The new tower provides another initiative to attract patients, but it will not be the only rationale to attract more paying patients. We've got to do that with our quality of service one patient at a time.

Let's talk about the nursing shortage. What is UMC doing to recruit and retain nurses?

All we can. Without blowing our horn too much, we've done a fairly good job of retaining a large number of nurses. Our nursing retention is better than most. We are doing a lot of outreach to other states. A lot of it has to do with outreach to some other community colleges and universities around the area where we are participating in the nurse training program and directly recruit those nurses as they come through those training programs. It's a dogfight in trying to keep nurses and attract nurses, but we're doing our best.

Michelle Swafford covers health care and small business for In Business Las Vegas and its sister publication, the Las Vegas Sun. She can be reached at by e-mail at swafford@lasvegassun.com or at (702) 259-2326.

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