11/14/07 — Hospital had disappointing financial year

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Hospital had disappointing financial year

By Phyllis Moore
Published in News on November 14, 2007 2:06 PM

Financially speaking, 2007 was a "disappointing year" for Wayne Memorial Hospital, officials announced Tuesday.

For the fiscal year ending Sept. 30, the bottom line unaudited figures came in at $6.7 million, compared to a budgeted $12.5 million, said Becky Craig, the hospital's vice president of finance.

"We still made $6 million but the majority of that came from investments," Ms. Craig told the board of trustees.

The year started out well, she explained, with the first quarter being on budget. Things began to fall off during the second quarter, though

That could be attributed to three factors, she said -- lower than expected surgical volumes, lower case mix and a rise in visits to the emergency department, which accounts for the hospital's largest area of uninsured treatment.

Surgical numbers for the year dropped 33 percent following the death of Dr. Jose Guijarro, the only thoracic and vascular surgeon on staff; and the departure of Dr. Mike Hill, a plastic surgeon.

At the same time, the hospital had an increase in behavioral health admissions, with the addition of two psychiatrists hired over the summer, and an increase in less complex cases such as chest pain.

The factors resulted in a reduction of Medicare net revenues of more than $2 million, she said.

Deficits were also reflected in the area of employee benefits.

Nurses required a pay raise, Ms. Craig said, and employee benefits were up $3.1 million, or 17 percent, over the previous year. After three years of relatively low increases, she said that 2007 showed a marked increase in the numbers and severity of employee health insurance claims paid.

For the coming fiscal year, the hospital has made some changes in the plan design to reduce some of the out-of-pocket expenses.

Ms. Craig was philosophical about the hospital's situation.

"The trend is to have a couple good years and a bad year," she said. "This was our bad year. ... We are positive that we'll have a good year coming up."

Board member Jack Best commented, "We didn't make any money last year in operations. It was basically in investments. We're really not making more money but we're providing more services."

In terms of outpatient charges for diagnostic testing, Wayne Memorial actually compares favorably with other hospitals of the same size, Ms. Craig said.

In radiology, for example, which accounts for a large portion of outpatient charges, Wayne Memorial is in the bottom two or three when compared to Wilson, Johnston, Lenoir, Pitt and WakeMed.

"With respect to inpatient charges, Wayne Memorial Hospital has been the lowest among these hospitals for years," she noted. "Wayne Memorial inpatient charges rank among the lowest 15 percent in the U.S., according to Thompson.com data.