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Hospital shows $800,000 loss in net revenues through July PDF Print E-mail
Friday, 10 September 2010 10:19

Trustees confirm medical office bldg. will be built despite rumors

• Daily Leader
EDITOR’S NOTE: This is the first in a series of articles concerning the joint meeting Thursday between the Seward County Commission and the Southwest Medical Center Board of Trustees. This story examines the current financial state of the hospital. Future stories will address the actions being taken to correct problems and feedback from Thursday’s audience and members of the commission and the board of trustees.
Amidst recent rumors that officials with Southwest Medical Center were scrapping plans to build a proposed medical office building, a joint meeting took place Thursday between the hospital’s board of trustees and the Seward County Commission.
Commission chairman Joyce Hibler said at the beginning of the meeting that it was important to take steps to get the truth about what is going on with the proposed expansion project for SWMC.
“I feel it’s important we continue to communicate with one another and all of us are informed as to what is taking place,” Hibler said.
Later in the meeting, trustees chairman Joe Sealey said the board voted earlier to move forward with the project despite recent objections. Those included an 18-0 vote by a group of doctors at SWMC to do away with the office building portion of the project.
Hibler said she had been receiving many calls from people, and she said many of them asked questions about issues such as the justification and support of the medical office building when the hospital’s psychiatric department was recently closed, resulting in the layoff of 28 employees.
“I’ve had phone calls after phone calls saying, ‘Sure, these people voted for this, and we’re not against it. We just want you to prove to us you can pay for it,’” Hibler said. “The voters are upset. They’re reading the papers. You’ve laid off, you’ve shut down a department, and you’re going to remodel a hospital?”
Hibler said the numbers in this equation do not add up, and she wanted to know how the hospital could still make the expansion project work with the office building.
“These are questions I have had asked to me, and the only way I know how to answer them was to come to you,” she said to the board of trustees and SWMC CEO Norm Lambert. “We’ve got to quit this gossiping from one to the other. There’s so much talk out there in the community you cannot believe it, and as a board, we need to know and be sure this is what we need to do. Right now, the economy in Seward County is just being hit. We have done good up to now.”
Lambert said hospital officials have toiled over what to do with the situation.
“What we have found is that our inpatient admissions are down 32 percent over last year,” he said. “Our observations have gone up 162 percent. Medicare has said that certain criteria need to be met in order for a patient to be admitted to the hospital as an inpatient. They’ll pay us for that service.”
Lambert said, however, if that criteria is not met, the patient would need to be put in for observation, and they would then be counted as an outpatient.
“If we don’t meet that criteria, they can come back three years later, review the chart and take the money away from us,” he said. “We’ve spent a lot of effort in this last year in working with physicians and trying to give them the rules of the game. The patients sitting in bed getting the nursing care, lab or X-ray are getting the same care. This is part of the game of playing ‘How do we get reimbursed from Medicare.’”
Lambert said if that number of patients were added to the number of actual admissions and it was assumed that they would have been admissions last year, the numbers would be almost equal to last year.
“It’s a little misleading when I say admissions are down 32 percent,” he said. “It is down some. The patient in the bed is down some whether it’s due to the economy, whether it’s due to the fact that for the last two years we’ve heard all about health care reform.”
Lambert said the business of a hospital is cyclical, with more cases coming in the winter and less in the summer.
 “Last winter, it didn’t go up, and it’s not just here in Liberal and Seward County and Southwest Medical Center,” he said. “It’s hospitals all over the state. We’ve talked to people in other states who have said the same thing.”
Surgeries at SWMC were down 13 percent, according to Lambert, who said two of the hospital’s surgeons had a dramatic drop in operations for personal reasons.
“If I take those two physicians out of that and assume that they could have the same volume they did last year, we’re only down 4 percent,” he said. “Those two surgeons have had a pretty dramatic impact on our surgery.”
Lambert said surgery is a profitable line in a hospital.
“It helps support other services that we provide that don’t make money for a hospital,” he said. “That’s what we have to blend together to measure all that together.”
Emergency room visits are down 8 percent through July, according to Lambert.
“When it came to flu season last year, we didn’t have much flu here,” he said. “We didn’t see those emergency room visits.”
Lambert added outpatient visits at SWMC are down 5 percent, and he said there are a number of different ways of measuring this.
“That surgery number is mostly outpatient surgeries,” he said. “With the technology and the way it’s done, most surgeries are done on an outpatient basis.”
Gross revenues are down 3 percent, Lambert said.
“The actual operating revenues are down 6 percent, and at the same time, our operating expenses are only down a little less than 1 percent,” he said. “That’s through July.”
All of this adds up to an $800,000 loss in net income through July, and Lambert said projections show SWMC could have a loss as much as $1.5 million by the end of 2010. He did say there are some positives though.
“We have new physicians,” he said. “Along with all the existing physicians that are extremely important to us, we’ve been able to carry out some of that strategic plan to bring new physicians to the community.”
Lambert said the true impact of those physicians will likely not be felt until next year, however.

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