Uptick in surgery volume helps fuel profitable month for Rice Hospital
WILLMAR -- An increase in the number of surgeries helped Rice Memorial Hospital end the month of July with a profit, as well as reduce some of the net losses the city-owned hospital has been accumulating since the beginning of the year.
Final figures for August won't be ready until next week, but it appears that August was another financially strong month, said Bill Fenske, chief financial officer at Rice.
"We're optimistic," he said Wednesday.
The hospital's financial performance was reviewed Wednesday by the board of directors.
One of the brightest spots in the report: the hospital's surgery volume, which was 13 percent higher than projections for July, and higher than the number of surgeries a year ago as well.
A decline in patient volume that began in 2009 and continued for the first part of this year has hit surgeries especially hard. Although outpatient procedures have been on the rise, the inpatient surgery volume has lagged way behind.
The noticeable uptick in surgeries during July suggests this trend is beginning to reverse, Fenske said. "That's a very strong indicator to us."
It wasn't enough to put the hospital into the black. As of the end of July, Rice had posted a $1 million operating loss on total operating revenue of $54.5 million. But with the addition of non-operating income, mainly from joint ventures and investments, the Rice organization essentially is breaking even.
There's "still a very long road to make up," Fenske said.
Overall, the hospital's financial position also remains on solid ground, he told the board Wednesday.
"Our balance sheet remains strong," he said. "Our cash and general investments have increased."
Michael Schramm, the hospital's chief executive, said managers are continuing to look at both short-term and long-term measures that can be taken to control costs and increase efficiencies.
One such move, the closing of the School of Radiologic Technology, was announced earlier this week. The two-year program, which trains students to become radiologic technologists, has stopped accepting applications and will graduate its final class in 2012. The elimination of the training program should save an estimated $100,000-plus per year, or close to $300,000 per graduating class.
Other measures are being implemented right away, ranging from staffing adjustments to cutbacks in education and travel. Collectively these have trimmed $326,000 from this year's budget.
"We've had an ongoing list of different things we're looking at," Schramm said. "The majority of these things are already in place."
The number of full-time equivalents also has been reduced by 13, mainly through attrition and reductions in hours. For instance, vacant positions for a staff pharmacist and a full-time intensive care unit nurse have not been filled, Schramm said.
"Today is a new day," he said. "It's much different than it was three, four or five years ago. We need to look at ourselves and make sure we continue to be effective and efficient. We have to look at those staffing levels and make changes."
Efforts will likely intensify as preparations begin for the 2011 budget.
One tool that's expected to help is a new software system that benchmarks Rice's clinical and financial performance against similar-sized hospitals. Schramm said several months' worth of data have been collected and are helping to identify specific areas for improvement.
"It is very helpful information for us," he said.
An operations team has been established to analyze the data and develop a set of goals for the hospital.
"Those wheels are already in motion," Schramm said. "We are prioritizing, knowing we won't be able to tackle everything at once. ... Our work's not done. We've still got work to do."