THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Sunday, December 18, 1994 TAG: 9412170289
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MARIE JOYCE, STAFF WRITER
LENGTH: Long : 131 lines
When the state examined the finances of local hospitals, it discovered that some of them needed to cut the fat, stop overextending themselves and get on a balanced diet of revenues and expenditures.
The just-released report by the Virginia Health Services Cost Review Council shows that nine of the region's 20 hospitals lost money on patient admissions last year. Two others broke even.
The Efficiency and Productivity report didn't pinpoint a single reason for the problems. Some hospitals were hurt financially because they care for many poor patients, but their operations also weren't as efficient as they could be, the council concluded.
Generally, hospitals need to lower their charges, cut their expenses, shorten the time people spend in the hospital and reduce staff, the Cost Review Council says.
They also should fill a greater percentage of their beds, make better use of their special equipment and keep more cash on hand to cover debt, it says.
The three least efficient hospitals - Norfolk Community, Portsmouth General and Newport News General - said the poverty of their clientele was the major cause of their troubles.
``We are going to look more inefficient than some of the other facilities that provide commercially insured care,'' said Lisa Hays, chief operating officer for Newport News General.
Newport News General and Norfolk Community had the region's highest proportion of patients on Medicaid, the government health program for the poor. Health care administrators say Medicaid reimbursements from the government generally don't cover the costs of care.
Those hospitals also happen to be the ones created to serve African Americans in the days when blacks couldn't get into other hospitals; they still serve a very high percentage of black patients, many from lower-income neighborhoods.
But the report cited some inefficiencies as well. Newport News General kept only a quarter of its beds full during the last fiscal year. It didn't make good use of its special equipment, kept patients in the hospital too long and made inefficient use of its staff compared with other hospitals, the report said. Portsmouth General and Norfolk Community had similar problems.
The hospital in the best financial condition, according to the report, was Sentara Leigh, which also had the lowest proportion of Medicaid care.
Often, however, there was no relationship between the number of Medicaid patients and a hospital's financial health. Sentara Norfolk General, which scored in the middle overall, serves a relatively large number of poor patients.
Hospital administrators, while arguing with some of the report's methods, said they have taken the results seriously. Many said they plan changes.
``We do feel this is an important thing,'' said Linda Thornhill, director of operations for Tidewater Health Care, the company that owns Portsmouth General and Virginia Beach General. ``We do need to show we can compete.''
Added Hays of Newport News General: ``We understand that we're not running a very lean operation out here.''
Several area hospitals already have plans under way to improve their efficiency:
Newport News General has developed a clinic and an education program to push its clients to use preventative medicine. That will reduce the expenses caused when people put off treatment until their illness has become serious, Hays said.
Norfolk Community has converted some of its beds from medical treatment to mental health care. That change has brought in more patients, said Phillip Brooks, Norfolk Community's president. If the report were based on the hospital's current numbers, ``we would come in near the top'' in efficiency, Brooks said.
Portsmouth General plans to make efficiency a top priority in the coming year, particularly reducing the average length of stay, said Douglas L. Johnson, president of Tidewater Health Care.
Sentara Leigh and DePaul Medical Center of Norfolk have eliminated management jobs in the past year.
Sentara Leigh's good performance on the ranking may say something about the financial health of chains. Sentara Health System did a good job making use of high-tech services like magnetic resonance imaging, partly because it could share equipment among its facilities, administrators said.
Riverside Health System of Newport News made the best showing in the report. All three of the concern's hospitals were rated among the top five most efficient. It's especially noteworthy since one of them, Riverside Tappahannock, was facing bankruptcy when the chain acquired it several years ago.
The report is aimed at businesses and health care organizations. It wasn't designed for the average consumer.
The Cost Review Council sized up hospitals' financial health by looking at capital costs, revenue, debt, staffing and other factors. The council considered how well the hospital allocated staff time and whether high-tech equipment was sitting idle.
Results were adjusted to account for the fact that some hospitals treat more seriously ill people, who stay in the hospital longer and require more intensive nursing.
But the report doesn't evaluate how well the hospitals take care of their patients - a fact that worries some local administrators. The council plans to add a quality rating in future reports.
Administrators at some local hospitals criticized the way parts of the report were developed.
Officials at DePaul, a Catholic hospital that runs a clinic for the uninsured, were shocked to find themselves near the bottom in ``community support'' - an area that's supposed to measure, among other things, how much free care the hospital dispenses. DePaul also scored low in Medicaid participation.
``Our mission is to serve the sick poor,'' said John Brindley, chief operating officer. Brindley said the hospital plans to look into how the results were calculated.
Others said ``community support'' didn't really do an adequate job of measuring all the ways a hospital may help the community.
Newport News General's admissions office is headed by a nurse with a degree in social work. Rather than just processing admissions, the department tries to refer patients to social programs. For instance, the hospital tries to find child care for a single mother who needs hospitalization.
``We don't have the luxury of simply meeting those individuals' medical needs,'' Hays said. ILLUSTRATION: Graphic
JOHN EARLE/Staff
PROFITS
THE BOTTOM LINE
EFFICIENCY RATINGS
SOURCE: Statistics supplied by the Virginia Health Services Cost
Review Council. Some figures, including averages and profits on
admissions, were generated by The Virginian-Pilot from the Cost
Review Council's report.\ [For complete graphic, please see
microfilm]
by CNB