Skiff Medical Center officials are optimistic that Newton’s hospital — thanks to a little help from health care reform — has at least three years with additional aid to help the hospital get back to operating in the black.
Skiff President and CEO Steve Long said that already this year the hospital is showing improvement, posting smaller losses to this point in the fiscal year than it did in 2009.
Since July 1, Skiff is posting a total loss of $386,475, including investments, in 2010. Normally, a loss wouldn’t be good news, but that shortfall is significantly less than the loss Skiff posted last year during the same time frame — about $1.875 million, including investments. Additionally, Skiff has posted positive earnings in seven of the last nine months.
“We’ve made progress, but we’re not nearly where we’d like to be and not nearly where we will be in the end,” Long said. “But significant progress has been made.”
A re-audit of Skiff released last week by the State of Iowa made note of Skiff’s financial troubles over the last several years. The audit recommended the hospital continue finding efficiencies and attempting to increase patient volumes to right the ship, something Long plans to continue doing.
Already Skiff has significantly cut expenses. Thanks to the recent reorganization effort, Skiff is saving about $185,000 to $200,000 a month in salary and benefit expenses.
“We’ve been operating much more efficiently and keeping it that way,” Long said.
And several health care reform initiatives appear primed to impact Skiff’s bottom line in the immediate future, possibly offsetting losses while the hospital continues its plan to return to profitability.
“What we know is that we have a period of time here ... where we have additional money coming in that will offset those operating margin deficits that we’ve got,” Long said. “We have a period of time to get this thing figured out. And getting it figured out really means growing volume while at the same time becoming more efficient.”
The hospital will receive about $360,000 in a low volume adjustment reimbursement Another $100,000 payment could come at some point due to changes in how the government reimburses hospitals on a geographic basis, and a new “tweener” hospital reimbursement kicked in last October and should contribute an additional $45,000 per month for the hospital.
Perhaps the biggest boon is another $1.5 million in federal incentives for electronic record keeping anticipated after May 2011 — part of an estimated $3.5 million total for complying with federal mandates on electronic record-keeping. That money is part of the American Recovery and Reinvestment Act of 2009, which had about $17 billion earmarked to encourage hospitals to switch to electronic records keeping systems, something Skiff has already done. Skiff has to meet certain objectives and once it does, the hospital can submit an application and receive a check for $1.5 million, possibly as soon as next spring.
Long anticipated sending the application in possibly as soon as January.
The State of Iowa’s hospital assessment program will increase the rate at which Iowa hospitals are reimbursed for Medicaid patient care, too. Kicking off the program, Skiff will write a check in May 2011 for $276,000 and receive a check back for $564,000 — gaining $288,000 in the process. From that point on, Skiff will make quarterly contributions to the state and the receive higher reimbursement from the Fed for Medicaid care.
Finally, the hospital has applied for the rural hospital demonstration project and if accepted, that, too, could lead to higher reimbursement rates.
“Health care reform is going to be very good for us over the next two to three years, maybe even four years,” Long said.
While Skiff already has cut expenses, growing patient volume will be critical in the next three years.
Bringing in more patients would reverse a trend Skiff has seen over the last five years, where hospital admissions and radiology are trending down in patient volume and the emergency department remains flat.
Long wants to instill a “keep it local” mentality for health care.
“We are owned by the taxpayers, there’s no doubt about it, but we live and die on volume, which means we need people to use us,” he said. “Our message to the community is, ‘We want to be their hospital of choice.’”
Andy Karr can be contacted at 792-3121 ext. 434 or via e-mail at akarr@newtondailynews.com.