Month of January makes strong financial turn-around for Veterans Memorial Hospital

by Brianne Eilers

January 2010 financially proved to be a much better month for Veterans Memorial Hospital (VMH) in Waukon than January of 2009. While the hospital's net income of $3,438 may not seem to be that significant of an amount, VMH Administrator Mike Myers pointed out that last January, VMH was facing a loss of around $100,000. “It was a dramatically different month from last year,” Myers stated.
While many areas were down, including acute days, total surgeries, outpatient lab, cardiac rehab, and E.R., the fact that the expenses were also under budget was what helped to make for a profit in January. Myers noted that this February is looking “fairly strong”, and further noted that last February, the hospital lost around $85,000. “Any loss less than that is better than last year, and even if we make a little bit, reality is we will be ahead of where we were last year,” Myers explained. Looking at the total profit, year-to-date VMH is sitting with a profit of $59,767.
Days in Account Receivable are up to 83.2, due in part to personnel matters, and Myers noted that they have hired someone to fill a position there.  Home Health also has a new employee, and Myers noted they are “really picking up speed and catching up there."
In other financial matters, cash reserves are at $1,425,000, and VMH is trying to keep that amount around $1.5 million, in order to help the hospital through some of the tougher months. VMH has been working on its operating budget, which will project a 2% profit margin instead of the 3-4% profit margins projected in years past. “The reality is, those days are fading fast,” Myers explained of the lower profit margin projection.
The operating budget is crafted on a variety of assumptions, and Myers explained that VMH would not exactly know what direction they are taking until they close the books in April, which Myers stated is pretty much the normal procedure for VMH. More details will be available at a later time.
In regards to the ongoing Press Ganey surveys scores, VMH has seen a dip in scores in January for Patient Satisfaction, which the hospital is looking into. However, for the Fourth Quarter of 2009, VMH had a 93% of 5 ratings on Likelihood to Recommend to Family and Friends for inpatient and 81% of 5’s for ER patients in the same category. ER is continuing to be strong. Press Ganey also sent VMH a letter recognizing the inpatient department for a statistically significant improvement of 3.2 in their mean score points and overall patient satisfaction from October through December of 2009.
In working to keep the public abreast of the healthcare situation, Myers noted that at the State level, “everyone up there still has their hand out, and they (the legislature) still has a bunch of money to cut out of the budget to make it comply with the statutes for Iowa law.” He further explained that pretty much every area is being looked at for funding cuts, but at this time Medicaid seems to be safe from more cuts, however, that could change in the future.
A bill that would restrict nurse anesthetists from practicing pain control did not make it far enough in the process to even receive a vote, so they can still practice pain control. “Which they have done safely throughout the United States,” Myers noted.
The Iowa Care Program, formerly called State Papers, was also discussed. This program helps to pay health care costs for those in the State of Iowa who can’t get health insurance on their own. However, the individuals who qualified could only go to certain hospitals to have their care covered. Now, a law has been passed to pay for care provided at other hospitals and facilities for emergency care.
Myers also noted that a “hot topic” that is probably on many peoples’ minds right now is the rising rate of insurance premiums. He noted that individual rates are being raised as much as 46%, while in Iowa it seems to be anywhere between 18-23%. Myers noted that Wellmark has implemented a new payment procedure for outpatient that is being called “budget neutral.”
Myers noted that some hospitals, like Burlington for example, will be looking at a $2 million dollar cut in revenue, while VMH is looking at a $38,000 cut in revenue. “We are looking at what they are doing to determine if that is really reflective of healthcare, and that has yet to be resolved,” Myers noted.
Myers also attended a Legislative Day February 24, and one thing he came away from it with was the fact that the days of healthcare as we know it and are used to are coming to an end. “The reality is that all of the money that is out there tied up in debt or promised to programs, there is just not enough to go around,” Myers explained. “And at some point the system is going to mandate real reform.” He further explained that while incentives, practices and rewards have all pretty much stayed the same, there will be a time coming when money is going to do a lot of talking and will force society to look at how healthcare is delivered. Myers noted that having healthy people is the core of any healthcare system, and that changes will come when the system moves more towards having healthier people, and evaluating the health of a community and reimbursing accordingly.
In other matters, VMH is looking more seriously at how they do evaluations, to make them more efficient and timely, to help them be able to respond more quickly to changes. VMH has also been looking at discharge planning, and implementing new software as well as looking at timeliness to educate people, and there has been a rise in their Press Ganey scores.
The annual retention rate turnover report revealed a 10% turnover rate. VMH strives to keep the rate at 10% or less, but Myers noted that with the average age of their workforce, and in the future, there will be groups of people reaching retirement age within months or years of each other, and 10% may become an unrealistic number. VMH will be working to prepare for that time.
Myers also touched on a report on the economic impact of the health sector in Allamakee County, and the hospital’s impact (including payroll, bringing people here and home health) is almost $10 million dollars. Physicians and dentists bring in another $11 million, nursing and residential care brings in about $10 million, and pharmacy is “well over” a quarter of a million. Total, the healthcare sector brings in $31.6 million to Allamakee County. “Obviously, it’s a big sector in the county,” Myers noted. The impact at the State level is $14.3 billion.