Northern Arizona Healthcare interim president and CEO Josh Tinkle dropped in on the Democrats of the Red Rocks’ breakfast meeting at the Sedona Community Center on Friday, Feb. 17, as part of his ongoing promotional tour of the Verde Valley.

Tinkle was joined via Zoom by Stephen Zuckerman, a senior fellow with the Health Policy Center of the Urban Institute in Washington, D.C.

Health care financing in particular dominated the discussion, with Tinkle and Zuckerman differing over the causes of rising health care costs but effectively agreeing that there was little to be done about them at the moment.

Tinkle argued, as he has done in previous interviews, that the revenue side of the health care business is fixed, while expenses are variable and liable to increase. He claimed that 70% of hospitals lost money in 2022 while “insurance companies have their greatest profit in the history of insurance companies.”

“Expenses are not fixed,” Zuckerman said.

He pointed out that hospitals are businesses that can adjust to changing conditions. As an example, he reminisced about a program that paid hospitals to discharge patients more quickly: “Magically, they got patients out of the hospital faster.”

“The administrative costs in the system seem incredibly wasteful,” Zuckerman added.

After reminding the audience that the Medicare trust fund is set to become insolvent in 2028, Zuckerman reassured attendees that Medicare has been on the verge of insolvency since 1965, and that the administrators have always found a way to avert it. He attributed the shortfall in part to the popularity of Medicare Advantage plans, which are expensive for the Department of Health and Human Services but profitable for private insurers.

“The plans do not feel they’re being overpaid,” Zuckerman said. He predicted that Medicare Advantage plans will be “a central target” for future budget cuts, but added, “No one wants to talk about it.”

Zuckerman further observed that “there was a large influx of money” from the federal government to state Medicaid programs during the COVID-19 pandemic, which in Arizona’s case raised the amount of the state’s Medicaid funding being covered by federal money from 70% to 76%, and that up to 4 million people nationwide who had been automatically enrolled in Medicaid during the state of emergency are expected to lose health care coverage as federal emergency programs are rolled back.

Tinkle had a different concern with the influx of federal money during the pandemic, namely that it had led to increased use of contract labor.

“We used to spend $5 million on contract labor,” he told the audience. “This year we’ll probably spend about $60 million.”

All the government money, Tinkle argued, “changed the dynamic of the free market expense side, and it didn’t change any of the revenue side.”

“Hospitals have more money to pay travel nurses to come provide the care,” Tinkle said. He revealed that NAH now has travel nurses making the equivalent of $400,000 a year working next to, and under the direction of, hospitalists making $260,000 a year.

Median household income in Sedona, according to a presentation by city Finance Director Cherie White at last month’s city council retreat, is $58,901.

“Medical suppliers, pharmeceutical companies, there needs to be some oversight of pricing … when you have markets that don’t work,” Zuckerman said. “People really need to ask, is health care going to be run as a business, or is it going to be run more as a public service?”

Zuckerman noted that private health plans are paying hospitals roughly 240% of what Medicare is, which is enabled by “significant consolidation” within the medical industry and health systems buying up private practices, giving these larger organizations increased leverage when negotiating payment rates.

Tinkle admitted that consolidation for leverage with insurance companies or to aid in expense management is currently widespread in health care, but reminded the audience that NAH is a nonprofit health care system not engaged in redistributing its income to shareholders.

DORR board member Stephen Hanks asked Zuckerman to address what he claimed were recent allegations by U.S. Sen. Ron Johnson [R-Wisc.] that Social Security is a “Ponzi scheme.”

“Calling it a Ponzi scheme is a negative way to describe it, but it’s definitely the case that the money that people are paying in over their lives is not sitting in a private account somewhere with their name on it,” Zuckerman said. “There is this kind of rolling taxes that are paid that are used to fund the benefits. The current retirees funded previous retirees, and current workers are funding current retirees.”

“The health care system, whether you’re going to Northern Arizona Healthcare or anywhere, is extremely hard to use,” Tinkle told the audience. “The best way to stay out of our hospitals — not climbing on the roof and all of that stuff — is to go see your primary care physician. And if you can’t get into your primary care physician, that’s a risk.”

“We don’t have the amount of staff that we need,” Tinkle stated in response to a comment by a member of the audience that Sedonans are experiencing 12-hour wait times at the emergency room for such problems as a broken back or appendicitis. “We have the same problem in Flagstaff, to be honest. I would say probably our fastest ED to get into is Sedona.” He attributed the problem in part to “massive disruption of labor.”

Tinkle also said some of the difficulty in recruiting physicians had to do with “trailing spouse fields,” or the reluctance of medical professionals to relocate to an expensive area where their spouse may not be able to find employment.

Zuckerman asked Tinkle if a lack of colleagues in the area was itself a deterrent to recruitment. “Absolutely,” Tinkle replied. “It’s a huge problem … In certain of our areas, we’re not big enough to have enough patients to create a full program or a team.”

Tinkle did offer the audience some details on why several providers are no longer with NAH.

“We had a physician that their common practice would be to come in to the hospital every day, and the first thing that they would do is they would look through all of the people that had been seen in the emergency department in the previous 24 hours and see if they knew any of their names, and then look and see why they were in the hospital,” Tinkle said. “Does anyone feel good about that?”

“We had a physician in one of our primary care clinics that, in front of a patient, picked up their stool, threw it against the wall, and said, ‘I can’t [expletive] deal with you,’” Tinkle continued. “We had a physician who said, ‘I wish all of those unvaccinated [expletive] would just die’ … The staff were afraid to call a particular physician when they had concerns about a patient because they’d get yelled at.”

With regard to NAH’s timeline for hiring a new president and CEO, Tinkle said that a decision will likely be made by May or June.