Becker's Hospital Review

36 Patricia Gavis Finance, Revenue Cycle & ICD-10 Issues increase in the amount of uninsured and underinsured patients seeking services with several specific outpatient areas — ambulatory surgery, emergency room and private ambulatory — incurring sharp increases in the number of charity care transactions. The hospital successfully launched phase one of our electronic medical record, which consisted of computerized physician order entry, at the end of June. [We] qualified for stage 1 meaningful use for Medicare and recorded approximately $5.3 million in other revenue. However, operating expenses related to the post-activation implementation costs and other infrastructure expenses totaled in excess of $7.2 million, thereby creating an approximate $1.9 million shortfall in operations. Dan Harris Ted Sirotta Finally, Superstorm Sandy dealt a significant blow to our outpatient volumes. Most significantly, our ambulatory renal dialysis center located approximately two miles south of the main hospital campus was destroyed and left approximately 140 dialysis patients without a home. We were able to place approximately 20 to 25 patients in our hospital-based dialysis unit but needed to transfer the remaining patients to other neighboring freestanding centers in various communities surrounding the hospital. This loss of revenue for November and December totaled approximately $1 million. However, South Nassau was successful in expense management related to salary expense. The hospital was under budget by approximately $2.5 million as it continued to closely monitor staffing and the controlling of unnecessary overtime (nursing OT fell by $420,000 from 2011). Patricia Gavis, CFO of Ellenville (N.Y.) Regional Hospital: Like most hospitals, Ellenville Regional Hospital is managing the challenges presented by historic changes in our industry as we work to provide quality care and improve financial performance. Mark Bogen, CFO of South Nassau Communities Hospital in Oceanside, N.Y.: This was a challenging year for the hospital, particularly during the last half of 2012 when inpatient volume dropped off dramatically and the impact of Superstorm Sandy was felt. The operating profit, which included investment income of $8.1 million, was approximately $4 million. Inpatient volume declined by approximately 2 percent from 2011, although this performance needs to be put in perspective in that all Nassau County, N.Y.-based hospitals — where South Nassau is located — showed a decline in inpatient volume of approximately 5.9 percent in 2012 compared to 2011. Uncompensated care was over budget by $3.5 million. The hospital experienced a significant Among our key priorities in 2012 was a continued focus on delivering quality patient care and implementing technological advances to meet meaningful use requirements under the HITECH Act by implementing a hospital-wide electronic health record. At the same time, we worked to ensure the accuracy and completeness of EHR data as it translates into charges. As such, in 2011, we automated our chargemaster management processes and were able to increase charge accuracy by 80 percent in the first month of implementation, helping us to meet revenue and compliance goals. In 2012, we successfully completed a full hospital system conversion, including the implementation of an EHR and attestation for stage 1 meaningful use, 117 days after going live. Ellenville has accomplished significant improvement over the years, going from a hospital on the verge of closure in 2003, to a financially stable and successful hospital by the end of 2012. Our successful improvements in patient safety and quality were also exemplified, as we became the only hospital to be awarded the Northern Metropolitan Hospital Association Quality and Patient Safety Award for a second time. Dan Harris, CFO of Swedish Health Services in Seattle: When I got here in February 2012, Swedish had a $16.7 million loss from operations through the first two months. We forecasted Swedish was on track to lose $7.5 million per month for the rest of the year. Nothing like a crisis for a CFO to get someone's attention. That was where we were at, but we ended the year with a $40 million profit. We forecasted a $90 million loss but actually made $40 million, a difference of $130 million. We created an operations improvement plan and got leadership buy-in. Swedish runs five hospitals with almost 10,000 employees. It's a big organization. For us, it was about creating a plan that people can buy into, support and then execute. Our operations improvement plan [last year] was probably more cost reduction and also process improvement, along with some growth initiatives and revenue enhancement projects. The big three, though, are revenue cycle, supply chain and productivity. The filler is volumes, and there are programs that are growing. This was a process that we borrowed from Providence, and at Swedish, we created our own [vision]. Ted Sirotta, CFO of Northwestern Medical Center in St. Albans, Vt.: We are proud of our financial performance in 2012. We achieved a 16 percent year-over-year increase in net revenues, and our total margin was 13.7 percent. Our financial success was driven in large part by our acute admissions, births and Medicare case mix all running higher than budgeted. Because our hospital is managed by Quorum Health Resources, we are able to participate in a large group purchasing organization. Combined with reasonably good cost control, we were able to carefully manage all costs within the organization.  Attention to detail is a must in today's environment, and we feel even a savings opportunity as small as $1,000 is worth pursuing.  To help us manage costs, our senior leadership closely reviews all capital and personnel requests to ensure need. Separately, our cost accounting system helped us identify opportunities to reduce costs and negotiate insurance contracts, and stock market returns on our investments helped drive our total margin. We cannot achieve the financial success we have had without outstanding patient satisfaction and quality. For example, in 2012, our hospital was recognized for the fifth year in a row with a national special achievement award in patient satisfaction from Avatar. In addition, Northwestern Medical Center was recognized by The Joint Commission as a top performer in the nation for pneumonia care, one of The Joint Commission's key quality measures. n

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