Fayette County Memorial Hospital is back in the red after experiencing what hospital officials describe as a "terrible month financially" in April.
Through the first three months of 2009, the hospital's net income was $283,801 but after losing $478,000 in April due to lower revenues and higher expenses, the current balance is $194,261 in the red.
"We had a decent first quarter relative to a lot of hospitals," said Lyndon Christman, the hospital's president and CEO. "April corrected that. Last year at this time, we were at a gain of $100,000. So it was a tremendous flip in one month. It's very surprising to us and there are a lot of factors that go into it."
The number one factor is that the amount of in-patient volumes were down, Christman said. "Across the nation, volumes are down among hospitals," he said. "In the first quarter, we really didn't have the number of volumes down significantly but in April we did."
The reduced number of in-patients around the nation is a direct result of the poor state of the economy, Christman said.
"I think we're seeing nationally that volumes for health care are softening," he said. "People are putting off preventative treatments, they are putting off elective surgeries. People are concerned about their co-pays and health savings accounts. Some people have already lost their jobs, so they're putting off treatments or they think they might lose their jobs, so they can't afford the hospital
treatments. They used to think that health care was recession-proof. But it's not."
However, delaying these preventative treatments could cause more advanced medical problems in the future.
"There's a lot of speculation about what the impact will be," said Christman. "Some people believe by putting things off, you're going to see the more catastrophic impact down the road. We may see a ripple in more significant medical events. If people are putting things off, do we get hit even harder as the safety net in the future when they come in with that more advanced medical problem?"
There was also a shift in the payer mix in April, according to Christman. "We went much more heavily away from commercial payers and into Medicaid," he said. "Our charity care was up over $100,000 just in April. The payer mix and the charity, to me, are functions of the economy. We know that we're a safety net for the community and we're feeling that with the change in our payer mix and the charity care we are providing."
Other increased costs in April, such as adding two additional physicians, were expected by the hospital and should have positive long-term effects.
"We are glad to spend for these costs because the community needs more physicians," said Christman. "For us, that's one way to increase our volumes, by keeping people here and taking care of people here."
The new physicians are Dr. Roulay Thammavong, internal medicine, and Dr. Robert Florea, family practice.
Another positive piece of news the hospital learned Tuesday is that a proposed new fee for hospitals state-wide will be reimbursed to the hospitals in a Senate revision of the two-year state budget proposal.
A document obtained by The Associated Press shows the Republican-controlled Senate's plan to reimburse hospitals for about $330 million in new fees. Before this Senate action, Gov. Ted Strickland proposed the new fee to help balance the budget, but hospitals said the fee could impact the charity care they provide and lead to several thousand layoffs across the state.
"Our concern was that this was going to cost this hospital about $400,000," said Christman. "That was one of the concerns from the Ohio Hospital Association, that with this type of loss, hospitals were going to have to make adjustments in needed services when we're all struggling as it is. So I'm glad to hear that there's been some movement on this. It will be a big benefit to us."
Even with a terrible April, hospital officials aren't ready to panic. Christman said some of the expenses will reverse.
"The bigger concern is the shift in our payer mix and our charity care," he said. "We're not going to panic over one month but as a business, we can't sustain losses like this. We will look to change and see if we can do things differently. I can't really talk about specifics right now. We went through cost reductions once and we'll look at things again. I don't want to overreact to one month. We'll wait and see how May looks too before we make any decisions and move forward."
"Ads published on this site are not for republication in print or web media without the expressed written consent of both the advertiser and The Brown Publishing Company."
