Robinson Memorial Hospital officials are reporting that the county-owned hospital finished 1999 with a healthy bottom line.
The financial success of RMH in Ravenna is significant, according to officials, because the hospital industry "is confronting unprecedented pressure on financial pressure," resulting in hospitals closing across the country. Most recently, three Cleveland hospitals announced they were closing due to financial pressures.
Last year, RMH treated more patients than ever before, with total patient revenues of $169.5 million, representing an 8.5 percent increase over 1998 revenues.
Stephen Colecchi, president and chief executive officer of RMH, said the major reasons for the financial pressure are: "decreases in Medicare reimbursement brought on by the Balanced Budget Act of 1997; increased levels of charity and uncompensated care; slow pays and denial of claims by managed care plans; the staggering costs of new technology; and big increases in pharmaceutical costs."
Colecchi said the major factor has been decreased Medicare reimbursement to hospitals. The Balanced Budget Act of 1997 was intended to reduced Medicare reimbursement to hospitals across the country in the amount of $115 billion over a five-year period.
In actuality, an additional $20 billion was slashed from the program.
For RMH, Medicare reimbursement declined by $3 million in 1999. Medicare represents approximately 38 percent of total patient revenues to the hospital.
During 1999, total charges for services rendered to Medicare patients at RMH was $64,691,000. Total payments received for those services was $28,870,000. The hospital's actual cost to deliver those services was $35,123,000, representing a total loss to RMH of $6,252,000.
Similarly, during 1999 the hospital incurred a loss of $1.23 million for services rendered to medicaid patients.
In spite of these significant losses from Medicare and Medicaid, the hospital finished with a $5.5 million carryover during the year, Colecchi said.
"Although Robinson Memorial is a county-owned, not-for-profit hospital, it is essential that we generate a positive bottom line each year," Colecchi said. "These funds are used to reinvest in property, plant and equipment, and to add staff as necessary to meet increasing patient volume. Since the hospital receives no tax support or direct financial subsidy from the county, it is important that we remain self sufficient."
Colecchi attributed the hospital's positive financial performance to several factors in addition to increased patient volume.
"The single most important factor," Colecchi said, "has been a very effective strategic planning process that involves the hospital Board of Trustees, administration, employees and physicians working together..."
New programs and services established in recent years include the Robinson Surgery Center and the Kent Medical Arts Building, both in Kent; Med Center One in Streetsboro; Aurora Medical Center; and the Robinson Medical Arts Building and Robinson Health and Wellness Center, both in Ravenna.
The hospital's new $10.5 million emergency department opened in late January; and the obstetrics department is being renovated as part of a $2.5 million project to be completed in September.
During 1999 the hospital provided $9.350 million worth of charity and uncompensated care to county residents. Colecchi said such care has increased "significantly over the past five years, from $4.2 million in 1995."
The state provides some assistance through the Care Assurance Program, but RMH received only $2.6 million in 1999. Through the years 1995 through 1999, RMH provided $25 million worth of charity and uncompensated care, Colecchi said.
The hospital's key role in the economic health of the county is represented by its more than 1,400 employees, representing about 1,100 full-time equivalents _ a record number.
The hospital's total operating expenses last year exceeded $92 million with employee's salaries and wages representing $40 million of that.
Despite the increased financial pressures, Colecchi said he is optimistic about the hospital's future.
"I strongly believe that we are in an excellent position to build upon our past successes. With the help of our highly qualified employees and medical staff and the support of the community, we will continue to serve the residents of this area for many years to come," he said.
Comments