Roosevelt General Hospital turns loss into small profit

Argen Duncan

Roosevelt General Hospital administrators attribute the hospital’s recent financial turnaround to growth and good business practices.

RGH has turned around a $1.3 million operating loss in 2009 to a $1,234 positive operating margin in 2010, CEO Larry Leaming said. The operating margin is the difference between the hospital’s income and operational costs.

“Basically, what we’re doing in the next decade is standing on the shoulders of the people who made (RGH) survive in the first decade,” Leaming said Thursday.

Chief Financial Officer Eva Stevens said business office employees try to work with the Medicaid, Medicare and insurance systems to get the maximum reimbursements.

RGH administrators also raised charges to increase payments from some insurance companies, while most patients continued to pay the same co-pays and deductibles, Stevens said. RGH is re-negotiating contracts with insurance companies as well.

Also, the Physicians Clinic’s Rural Health Clinic designation has increased revenue, because Medicare and Medicaid pay for the cost of care rather than providing a set amount for a given diagnosis that may cost more to treat, Stevens said.

Leaming said another big part of the turnaround was increased services.

“It’ll increase costs, but it also has the potential to increase revenues,” he said.

Most of the hospital’s costs are fixed, he said, so once it has enough patients to cover those charges, additional patients contribute more to revenue than to expenses. RGH is seeing more patients all the time, Leaming continued.

Stevens said she believed assertive recruiting of doctors brought in more inpatient and outpatient customers.

The hospital is also trying to keep its expenses low.

“You can put more money in the checking account, but if you write more checks, you don’t get anywhere, either,” Leaming said.

Stevens said RGH discontinued services that were losing money and available elsewhere in the area, and decreased the offering of other services to part time.

Leaming said RGH is close to the break-even point on operations, and as it has more money in the bottom line, it can invest in new doctors, services and expansion.

As for the future, “I’m an eternal optimist,” Leaming said.

He said he would fight to offer the best services possible.

Stevens said it’s uncertain how health care reform could affect hospital finances, the state is cutting Medicaid reimbursements due to a tight budget, and the Medicare program is under discussion at the federal level.

Still, Stevens said she was more optimistic about the hospital’s financial future than she had been in the 5 1/2 years she’d worked there, and pointed to positive indicators.

“This increased cash flow has allowed us to pay our bills in a more timely manner,” she said, adding that made more money available.

RGH is building a cash reserve for the first time in her employment there, Stevens said.