St. James In the News
February 05, 2010
Volume Down, Budget Up At St. James
Officers looking for slight profit in 2010
By Tim Trainor of The Montana Standard - 01/31/2010
Despite a down economy, declining patient counts and stalled national health care reform, St. James Healthcare managed to lose less money in 2009 than it did the year before. According to CEO Chuck Wright, the improved financial position of Butte's hospital was a product of streamlined departments, layoffs in December 2008, and the addition of profitable new specialists. Linda McGillen, the hospital's head of public relations, said "a new set of eyeballs" helped trim costs and avoid redundancies. Wright started as CEO in January 2009.
But challenges remain for the nonprofit. Chief Financial Officer Jay Doyle said some felt the health-care industry was "recession-proof," but that turned out not to be the case. "Some thought of it as a necessity," Doyle said. "That there is no option when it comes to health care, but we found out there is an element of option to it." The hospital saw a 3 percent decrease in patient numbers in 2009 from the year before, and other hospitals across the country saw similar declines.
The local dip is even more dramatic than it appears because St. James added new specialists last year, including vascular and orthopedic surgeons, neurologist, pediatrician and more. Those increased patient counts and profits, Doyle said. But costs of everything health-care-related continued to rise. Doyle said prices, from knee and hip replacements, drugs and other medical supplies continued to spike, some as much as 10 to 15 percent.
Wright, Doyle and the St. James management team, throughout 2009, kept close tabs on heath-care reform discussions on Capitol Hill. Wright said even they are unclear about what is currently in the bill and if it will ever pass. But they both agree that some sort of reform is necessary and that, especially in Montana, the more people who have insurance the better their bottom line. Doyle said a public option could help spark competition with private insurance companies.
In the last three years, the number of St. James patients that did not have health insurance increased from 9 percent to 15 percent. Last year, the number of "charity" cases, for which the hospital does not get paid, totaled $5.7 million. That increased from $4.2 million in 2008.
Wright hopes a health care reform bill would include provisions that even the playing field for hospitals that treat Medicare patients. He said hospitals in some states, including the political powers of Texas, California and New York, receive more money for the same procedures than do others. But that is all outside their control. Doyle said the hospital is continuing to tweak its inner workings. They want to expand their imaging department, especially the mammogram services. They would like to add more specialists, including an OB-GYN and a cardiologist. Wright said filling such positions is difficult. He noted that one of St. James' biggest challenges remains the recruitment of qualified physicians, a nationwide problem and one especially troublesome in rural areas.
The hospital did invest money in electronic medical records, which Doyle said will make it more efficient in the future. There were no major construction projects in 2009 and none are scheduled for the next year. Wright said he expects the economy to come back slowly from the recession, but said he hopes that the hospital could post a slight profit in 2010. "That's the goal," he said.
In 2008, before Wright was hired, St. James operated at a loss of more than $10 million. To finish the turnaround, St. James will need to increase in-patient numbers and secure more specialists — tough propositions in a slow economy.