Mercy Northwest Arkansas president discusses healthcare costs, updates local expansion

by Kim Souza (ksouza@talkbusiness.net) 729 views 

The healthcare sector is of major import to consumers as it comprises 17% of the U.S. Gross Domestic Product with a spend of $2.7 trillion annually. In Benton and Washington counties it’s also the sector pegged for the biggest growth over the next few years.

There could be around 1,000 new jobs in Northwest Arkansas within the next couple of years just from the opening of Arkansas Children’s Hospital Northwest, from a $240 million investment by Mercy Northwest Arkansas, and substantial investments by Washington Regional Hospital and Northwest Health.

Mercy Northwest Arkansas President Eric Pianalto provided some insight into healthcare during the Cross Church Summit Luncheon in Rogers on Thursday (Feb. 9). When asked for an update on the local hospital expansion, Pianalto told Talk Business & Politics the new 7-story patient tower at Mercy Hospital (Rogers) is on schedule for completion by early 2019. He said it might open six months prior to that given the progress made thus far. Pianalto said the project is running a little over budget, but he isn’t concerned as the budget will be brought back in line.

“We’re building a temporary loading dock and the big crane will come in the next 30 days and you will start seeing the tall steel beams going up. It should move along pretty quickly at that point,” he said.

The hospital expansion will add around 150 new beds, with an end goal of 360 beds to accommodate future growth. The new tower will be around 279,000 square feet and will allow for an expanded neonatal Intensive Care unit which will be located in the new tower. Hospital officials have said this investment is about trying to catch up to demand for the growing region.

COST VS. LIFE EXPECTANCY
Pianalto also spoke about the disconnect between the cost of U.S. healthcare and average life expectancy of Americans. Healthcare spending in the U.S. is nearly double that of the next closest countries of Sweden and Germany where it comprises around 9% of GDP. He said greed and the free market system in which healthcare operates in the U.S. is one of the reasons the costs are so much higher. Many of the healthcare related companies are publicly traded in the U.S., a factor he said typically isn’t the case in other countries. That said, Americans have a great ability to pay more for their healthcare and they do.

But looking at life expectancy, he said U.S. consumers lag behind. The average life expectancy in the U.S. is 78.8  years; Sweden is 82, Germany is 80.9 and Japan is 83.4. He said all the spending in the U.S. doesn’t add to the overall life expectancy for two main reasons — unhealthy lifestyles and a fear of dying.

Pianalto, a native of Northwest Arkansas and immigrant Italian family that helped settle Tontitown in the late 1800s, said his grandfather lived to be 94 years old because he was active, ate smaller portions and drank and smoke in moderation. He said Americans are not good to their bodies and that lack of healthy lifestyle adds to the overall cost of healthcare.

Statistics show that 80% of healthcare spending takes place in the last 90 days of someone’s life and it’s also a significant contributor to the nation’s healthcare spending overall. He said Americans have a fear of dying that doesn’t exist in other cultures. He said physicians are also geared to help consumers try every treatment possible at times in fear of malpractice litigation. But all the spending during the final days of life hasn’t moved the needle on life expectancies in the U.S.

DEMOGRAPHICS, SYSTEM CHANGE
Pianalto was asked about the impact Baby Boomers are having on the heathcare industry. He said this massive demographic is a strain on the system, particularly in the workforce numbers. He said with every four Boomers retiring, there is one professional to take their place, which means physicians, nurses and technicians are being asked to work well into retirement years.

He said the nursing shortage is profound and won’t be solved in his lifetime, but hospitals across the country are learning to adapt the roles of nurses, provide flex schedules and make other accommodations to lengthen the careers of those in this physically and mentally demanding field.

Telemedicine and biometric technology are going to play a role in the future of healthcare in helping the industry adjust to a smaller workforce. He said Mercy has been involved at the state level with legislators and Gov. Asa Hutchinson on the merits of telemedicine in Arkansas. He expects to see state controls lifted a bit after this legislative session.

When asked about the national efforts to repeal and replace the Affordable Care Act, Pianalto said it’s easier said than done. He expects some ACA provisions will stand, but he hopes to see some of the regulatory constraints and mandates unwound.

“It will likely be renamed and the essential components will probably stand. I believe access to healthcare is appropriate,” Pianalto said. “If we could go back 100 years and reconstruct the healthcare system, it would not look like it does now. The way it has evolved over time, it’s a highly complicated system, but healthcare has to survive.”

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