Hospital finances improve: October figures show $88,915 in profit including taxpayer assistance
Friday, December 22, 2017 - 9:54am
In October Jefferson Hospital showed a healthy profit on its bottom line.
CEO Lou Semrad reported these numbers to the Jefferson County Commissioners last week and shared his optimism for the future of healthcare in the county.
He was careful to point out that the profit would not have been possible without the support of the 3 mil tax supported by voters on the March referendum earlier this year. However, even without that revenue, statements show a trend of improvements that Semrad believes will carry the hospital closer to overall profitability.
According to October’s financial statements, while gross patient revenue is down compared to the same month in 2016, a reduction in expenses and a serious decrease in revenue deductions show a significant improvement over last year’s numbers.
Before any of the tax revenue supported by county voters earlier this year is included, the month’s financials show a $238,748 improvement in their bottom line.
Excluding the tax support, Jefferson Hospital lost $44,140 in October. In the same month of 2016, the hospital lost $282,888.
With the tax support this year added in, Jefferson Hospital turned a profit of $88,915 in October.
November’s and December’s numbers will be presented to the board in January.
“So with the taxpayers’ contribution, we made money,” Semrad said. “And I think it’s important to let the citizens know that we are on a schedule of paying back what the county loaned us at the rate of about $10,000 a month.”
Last year, before the referendum was passed, the county loaned the hospital $100,000 a month to cover its operating expenses. The hospital has been repaying the $600,000 in loans in monthly installments.
Year to date, through October, the hospital has lost $410,219 in 2017 compared to $1.8 million in the same period of 2016.
“So we’re still losing money, but we’re bailing faster than we’re taking on,” Semrad said. “And this includes a lot of money from the county, but you can look here without the county money and see we’re making progress.”
In addition to keeping an eye on overtime, Semrad said he works to keep the number of Full Time Equivalent positions at the hospital to around 127.
While expenses are down compared to last year, the CEO says that the real difference as well as the key to future successes is on the revenue side of the table.
“We’re doing a better job collecting,” Semrad said. “I’ve said all along we don’t have an expense problem. We have a revenue problem.”
The hospital’s outpatient volumes were up in October over the same month last year and Semrad said he can attribute some of that to the medical staff, like the addition of Dr. Sam Franklin, who have referred patients to other services the hospital offers.
But even more than that, Semrad says that on the billing side, Jefferson Hospital is doing a much better job of collecting money it is owed.
Earlier this year he brought in a revenue cycle audit team that has been working to identify ways to improve collections from insurance companies.
Semrad said the hospital learned a lot from the team.
“Now we are moving away from them,” he said. “The plan was always to bring it in house. They helped point the direction for us and two weeks ago we hired a revenue cycle specialist. I don’t think this hospital has ever had that. Her only job is to make sure we bill correctly and that we collect money.”
The hospital has also outsourced its Medicare billing and over the last few months has seen steady improvement. In just the last two months it has seen more than $80,000 in growth.
Semrad said that on average, the hospital collects about 72 percent of what is charged out from the clinics, about 53 percent of what is charged out from actual admissions to the hospital and about 22 percent of what is charged for outpatient procedures.
“There’s room for improvement in the others, but that’s where we’re going panning for gold,” Semrad said. “Every 1 percent increase is about $150,000 a year cash in the bank.”
The hospital has been collecting about 21 or 22 percent of the $15 million gross it has been charging for these procedures.
“There was never any denial management process before,” Semrad said. “We submit a bill to, say, Blue Cross, who then denies it. Well, then you have to go and work that claim. You have to fix it and then resubmit it. We weren’t always doing that. They didn’t have a revenue cycle director saying this is where we’re going. We have great expectations and hope for the processes we are putting into place to improve our revenue collection, We’re going to fix the system. We’re going to make it effective, and then we’ll be efficient.”
Semrad also said that while the hospital is certainly focused on financial improvements, it continues to work at improving its quality of service.
Jefferson Hospital recently received a report showing that in the January 2017 through March 2017 quarter, it was the third ranked hospital (out of 102) in the state for lowest readmission rates.
“In the hospital world, readmission rate is a big, big thing,” Semrad said. “It’s hard to stay there, but I’ve challenged the medical staff to stay in the top 10.”
This is impacted by improved communications between the hospital and the clinics so that patients get the best post-hospital stay care possible, with healthcare providers following up to make sure that medicines are received and the patient is following orders that lead to improved long-term health.
“I brought back the nurse manager position,” Semrad said. “That person’s duties include managing care after discharge.”
Another report from the Georgia Department of Public Health shows that between July 2016 and June 2017 Jefferson Hospital had zero incidences of hospital acquired infections.
“That’s a big deal too,” Semrad said. “We do a really good job in infection prevention.”
In January the hospital will be announcing plans to expand services and throughout the year will be looking to add services that will attract and serve patients from a much wider area.
“We are holding on with our expenses,” Semrad said. “We are laser focused on doing a better job of collecting, concentrating on bringing in more money from outside the county and improving our revenue. And we’re able to grow local services through the generosity of the taxpayers.”