Officials heartened by healthier financial trend for Hutcheson

Officials heartened by healthier financial trend for Hutcheson

January 12th, 2012 Mike O'Neal in Local Regional News

Even though it is "too early to tell" about its success over the long haul, Catoosa County Commission Chairman Keith Greene is heartened by progress shown by the management agreement between Hutcheson and Erlanger hospitals.

"A lot of effort is being directed toward making this partnership work," he said.

For more than a year, elected officials and hospital administrators have agreed that reviving Hutcheson Medical Center would require several critical components: money, a strategic plan and time.

The first two elements, money and a plan, were secured when HMC signed a management agreement with Erlanger Health System last spring. Effective since May 26, that agreement gives Hutcheson a $20 million line of credit, administrative expertise and a new name: Erlanger at Hutcheson.

While Hutcheson hospital's financial woes are the result of years of missteps and losses, Greene said it was only in "late 2010" that leaders in Catoosa, Dade and Walker counties were unaware of it being on the brink of insolvency.

"We didn't have the information to know we needed to step in," he said.

That crisis, Catoosa's second largest employer and only hospital being forced to close, has been averted and its fortunes may be taking a turn for the better, he said.

Though the Fort Oglethorpe-based hospital hemorrhaged cash through 2011, the flow of losses has slowed in recent months.

"We still need to give Erlanger the chance to help get doctors and patients back into Hutcheson," Greene said. "It has gotten better, and should improve in future."

That sentiment was supported by figures presented last Wednesday during the Hutcheson Medical Center board of directors' first meeting of 2012.

Denise Baker, controller for Hutcheson, reported that about one-third fewer acute care patients were admitted to the hospital during October and November, the first two months of the hospital's fiscal year, and about half as many surgeries were performed compared to the same period last year.

The hospital lost $879,000 in November, but that was an $86,000 improvement, as the budget projected a shortfall of $965,000 for the month.

While the hospital has shown continued losses during the first two months of this financial year, both revenue and patient census were improving, and preliminary figures for December indicate an upward trend.

"It just goes to show [that] when you have patients, you lose less money," board member David Ashburn said.

December's financial report should show higher numbers of babies delivered at the Women's Center, more outpatient services and an increase in surgeries, something that should continue to increase as a team from Dalton Surgical ramps up its service at Hutcheson.

Hutcheson Administrator Debbie Reeves offered more good news in reporting that the hospital has improved its overall quality of care and patient satisfaction in the July-September quarter.

During that period, 92 percent of patients said they were likely to recommend Hutcheson, compared to 67 percent in second quarter, and 89 percent ranked their quality of overall care as excellent, an increase from 77 percent the previous three-month period.

Reeves said the quality of care was at or above national benchmarks save for one - patient discharge instructions - and that is being corrected.

The need to replace signs damaged by April storms at Hutcheson clinics in Chickamauga and Trenton was discussed by the board. Permanent replacements were delayed while the hospital's new name was being decided, and new signs should soon be installed at all the hospital's facilities.

Other action taken Wednesday night involved renewing four contracts with doctors, approving contracts for computer software services and voting to have the board's officers maintain their current positions through 2012.

"We are six months into this new venture with Erlanger, and I think it would be better to leave everyone in place," board member William Cohen said when he made the motion.

While the hospital is moving forward in its efforts to regain financial health, Hutcheson has used about $6 million of its $20 million line of credit, less than some officials thought would have been needed at this point in time, but still a daunting number.

All hospitals, not just Hutcheson, have faced increased financial pressures and losses during the ongoing recession, particularly at public hospitals that provide a disproportionate amount of charitable services.

Erlanger reported losses of $6 million during the first five months of its fiscal year that began July 1 and asked employees to take 12 days off during December or January.

"We provide a substantial amount of indigent care," Baker said.

By postponing preventive care or early intervention, individuals with no insurance or those who must meet astronomical deductibles or co-pays are forced to resort to using emergency room services, some of the most costly provided by a medical facility.

Greene said it is not just Hutcheson or Erlanger that are feeling the pain of living during the longest-lasting recession since the Great Depression; it is everyone, and not just the indigent.

"People are watching all their expenditures," he said. "They are postponing elective surgeries and some are unwilling to visit doctors or hospitals because they cannot pay co-pays."

Lost jobs have meant many local families lost insurance. For some, federal subsidies for COBRA coverage have expired and they too are without medical insurance.

"As individuals lose jobs and insurance coverage there is a rise in the demand for indigent care," Greene said. "There are a lot of noninsured and underinsured in our county. If we were to let Hutcheson go under and lose that certificate of need [documentation that allows a hospital to operate], we'd be in a much worse situation."

Greene likened turning the hospital's fortunes around as similar to turning a supertanker; a lot of effort is required and changes in direction are incremental at first.

"When we stepped in there was a lot of financial liability out there. We are getting caught up with accounts and the patient census is on the rise," he said.

There is a general consensus that the partnership with Erlanger will allow Hutcheson to regain its financial footing and position as one of the area's prime providers of medical care.

Baker said that if recent trends continue the hospital should break-even financially by the end of this fiscal year.

"We are in the process of turning around, but it's in small steps," board Chairman Corky Jewell said.