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Officials: Henry hospital revenue increased

By Valerie Baldowski

vbaldowski@henryherald.com

Henry Medical Center officials say a slow economy has resulted in a slight drop in inpatient volume, but that the hospital has seen an increase in surgeries and emergency room visits during the first quarter of the current fiscal year. The hospital's revenue is also up, according to Henry Medical Center President and CEO Charlie Scott.

"There is a lot of uncertainty about the future, especially regarding health-care reform," said Scott. "Although we continue to face serious challenges, as do most hospitals throughout the country, I believe Henry Medical Center is well positioned to face the economic uncertainties of 2010."

The hospital experienced an operating loss of about $3.1 million in the first three months of fiscal 2009, he said. By comparison, it showed a positive net income of $904,000 for the same period in fiscal 2010. The hospital's fiscal year runs from July 1 through June 30.

"Part of that is from the [hospital's] investment returns, which are doing much better this year," Scott said.

Another reason for the upward trend is a combination of the higher volume in patient surgery and emergency room (ER) visits, he added.

During the first quarter of fiscal 2010, surgeries were up 6 percent, and ER visits were up 13 percent, from the same period in fiscal 2009.

Inpatient volume and births, however, are off from last year, according to Claude Carruth, the hospital's chief financial officer.

"Inpatient volume is flat," said Carruth. "It's been flat now for about a year and a half, and that's typical in most hospitals around the country. It's a function of the economy."

In a bad economy with high unemployment, Carruth said, many who have lost their jobs, and their health insurance, are less likely to go to the hospital.

According to figures Carruth provided, during the first quarter of fiscal year 2010, the hospital recorded 2,991 inpatient discharges, compared to 3,084 during the same period in fiscal year 2009.

The hospital also had 576 births during the first quarter of fiscal 2010, compared to 602 for the same period in fiscal 2009.

Carruth said the hospital has responded to the economic downturn by renegotiating vendor contracts and putting off equipment purchases.

For the current fiscal year, said Carruth, the Routine Equipment budget from which capital purchases are drawn this fiscal year is $2.3 million.

"In a normal year, it would be somewhere between $6 million and $8 million," he said. "We've really deferred quite a bit this year."

By renegotiating contracts with its vendors to pay less for supplies, he said Henry Medical stands to save more than $1 million in the next 12 months.

The hospital has not had to resort to layoffs, Carruth said, but there haven't been any employee pay raises either. The hospital reduced the rate at which employees accrued paid vacation time, Carruth continued, and lowered its contribution to employees' retirement plan match for the current fiscal year.

"In the employee arena, the decision we had to make, and the choices we were trying to balance, were between preserving everybody's jobs with perhaps somewhat lower benefits this year, or leaving benefits where they were and having to eliminate jobs," he said.