Becker's Hospital Review

32 CFO / FINANCE Vanderbilt University Medical Center's operating income more than doubles By Ayla Ellison N ashville, Tenn.-based Vanderbilt University Medical Center reported high- er revenue and operating income during the first half of fiscal year 2019 than in the same period of the year prior, according to recently released unaudited financial documents. Four things to know: 1. VUMC reported operating revenues of $2.17 billion in the six months ended Dec. 21, up from $2.01 billion in the same period a year earlier. The boost was largely attributable to higher net patient service revenue, which climbed 8 percent year over year. 2. VUMC's operating expenses increased 6 percent year over year to $2.1 billion in the six months ended Dec. 31. 3. VUMC ended the six-month period with operating income of $73.89 million, up from $30.63 million in the six months ended Dec. 31, 2018. 4. "Our YTD FY19 operating results reflect our focus on increases [in] net patient service revenue while continuing to tightly manage our variable and fixed costs, which is evidenced by the fact that expenses grew at a rate of 6 percent while revenue and net patient revenue grew at 8 percent," VUMC said in the financial documents. "In addition to the significantly improved operating performance, the balance sheet has improved year over year." n North Carolina hospital forced into bankruptcy By Ayla Ellison W ashington County Hospital in Plymouth, N.C., is the subject of an invol- untary bankruptcy petition, according to the Triangle Business Journal. Three petitioners, who are seeking to collect money they're owed for medical supplies, medical transport services and salary payments, filed the invol- untary Chapter 7 bankruptcy petition. Washington County Hospital, which is operated by an affiliate of Kansas City, Mo.- based EmpowerHMS, missed payroll Feb. 8 and suspended all medical services Feb. 14. After services were halted, the Washington County Board of Commission- ers held an emergency meeting to regain control of the hospital. The board also voted to approve the Chapter 7 bankruptcy petition as an unpaid creditor. "Over the coming days and weeks, the county will continue to work closely with its legal counsel, other hospital creditors, and interested outside agencies and part- ners to pursue the appointment of a bankruptcy trustee with authority to exercise legal control over the assets and liabilities of the hospital," states a public service announcement on Washington County's website. Board members said they will work with state and federal agencies to investigate the hospital's recent financial and operational issues. "Washington County is com- mitted to facilitating the restoration of medical services at the hospital facility as quickly as possible," the announcement states. n 1 in 5 rural hospitals at high risk of closing, analysis finds By Kelly Gooch T wenty-one percent of U.S. rural hospitals are at high risk of closing unless their finances improve, ac- cording to an analysis from management consultancy firm Navigant. e study also found 64 percent, or 277, of high financial risk rural hospitals are con- sidered essential to their communities. e analysis — which examined the fi- nancial viability (operating margin, days cash on hand and debt-to-capitalization ratio) and community essentiality of more than 2,000 of the nation's rural hos- pitals — suggests 21 percent or 430 rural hospitals in 43 states are at high risk of closing. ese hospitals represent 21,547 staffed beds, 707,000 annual discharges, 150,000 employees and $21.2 billion total patient revenue, according to Navigant. Of the 43 states, 34 have five or more rural hospitals at risk. Navigant cited payer mix degradation; declining inpatient care driving excess capacity; and inability to leverage inno- vation as factors putting the hospitals at risk. Medicare payment reductions, the age of many rural facilities and a lack of capital to invest in updated, innovative technology were specifically cited. "While the potential for a rural hospital crisis has been known for years, this pre- dictive data sheds light on just how dire the situation could become," the study authors concluded. "Now, by being able to accurately assess the economic health of all rural hospitals in America, there is no choice but to pay attention. Local, state and federal political leaders, as well as hos- pital administrators, must act to protect the well-being of rural hospitals nation- wide and the communities they serve." n

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