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Hospital revenues hold steady


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The number of patients who can’t afford to pay for the care they receive from area hospitals has been steady or rising, but those health care providers made money this year.

Revenues for Johnson Memorial Hospital and Franciscan St. Francis Health-Indianapolis are expected to be up this year compared with 2011, hospital leaders Larry Heydon and Jay Brehm said. Revenue at Community Hospital South in Indianapolis was unchanged from last year, president Tony Lennen said.

Johnson Memorial saw a dip in the number of patients who were admitted this year. But it made up for the lost income by keeping better track of the services patients received so it was being properly reimbursed by insurance companies and Medicare. The hospital also added several physicians to entice more people to come to the hospital and its facilities, hospital president Heydon said.

At a glance

Here is a look at what happened with local hospitals in 2012:

Johnson Memorial Hospital and Franciscan St. Francis Health-Indianapolis saw slight revenue increases, while Community Hospital South in Indianapolis saw revenue hold about steady. The factors:

Johnson Memorial saw a drop in the number of inpatients who were admitted but added four doctors who have increased the number of patients who get treatment from their facilities.

Franciscan St. Francis Health has been meeting with local physicians to pitch the services it offers for long-term chronic conditions such as diabetes so those doctors will consider referring more patients to the hospital.

All of the hospitals saw the number of patients who couldn’t afford to pay for treatment hold steady or rise. The greatest increase was at Community Hospital South, which saw the rate of uninsured patients rise about 20 percent.

What’s ahead: All three hospitals will watch to see how Indiana lawmakers decide to handle the state’s uninsured residents. Hospitals had been told a decrease in Medicare funding would be made up for by the number of patients who would have insurance under the Affordable Care Act. But this year the Supreme Court ruled expanding Medicare funding is optional for states.

Franciscan St. Francis Heath also has been trying to bring in more patients by networking with local physicians so they know about the services available for patients battling chronic diseases such as diabetes and congestive heart failure. That way doctors may send more of their patients who need testing, surgeries and other procedures to the hospital, said Brehm, regional chief financial officer.

Both Johnson Memorial and Franciscan St. Francis Health have been transferring medical records into an electronic database so that records can be sent to doctors’ offices more quickly and efficiently. That means more convenient and faster service for doctors and patients, Heydon and Brehm said.

“It doesn’t so much save on cost. The major objective is quality care is advanced,” Heydon said.

All of the hospitals regularly treat patients without insurance who can’t afford to pay their bills.

Community Hospital South saw the cost of treating uninsured patients go up by $5 million, Lennen said. The number of uninsured patients remained about the same or rose slightly for Johnson Memorial and Franciscan St. Francis Health, Heydon and Brehm said.

Effect of federal law

Heydon said the number of

uninsured patients isn’t dropping and periodically climbs because people who went months or years without medical treatment eventually decide they need to see a doctor and because the economy hasn’t fully recovered.

Community Hospital South made up for the increase in uninsured patients by reviewing expenses and staffing needs and reducing the number of vendors that provide supplies so that the hospital is able to negotiate better deals, Lennen said.

But Lennen isn’t sure what the hospital will do if the number of uninsured patients continues to rise.

“It’s just really trying to hold the line across the board,” he said.

The hospitals’ leaders also are anxious about what the Supreme Court will decide regarding the Affordable Care Act and what that will mean for revenues next year.

As part of the act, hospitals were told to expect less money for services and procedures for patients using Medicare. The reduction was supposed to be offset by an increase in the number of patients who would have health care coverage through insurance as well as Medicaid.

Originally, states were expected to expand their Medicaid programs or risk losing their federal funding. But earlier this year the Supreme Court ruled that expanding Medicaid was optional for states, and that they wouldn’t lose their federal funding if they decided not to.

So the hospitals must wait to see what the state will do about the number of uninsured residents, all three hospital leaders said.

But none of the hospitals needed to make cuts in 2012.

Neither Johnson Memorial nor Community Hospital South cut any programs or laid off employees this year.

Community and Johnson Memorial have partnered to open the Stones Crossing Health Pavilion in the Center Grove area. The $14 million project is expected to bring 75 to 100 health professional jobs in the next three to four years after it opens in the summer. The three-story medical center will offer outpatient services, including MRI, CT scans, mammography, X-rays, bone density testing, rehabilitation, and sports medicine and lab services.

Links with physicians

Franciscan St. Francis Health closed its Beech Grove hospital and continued with a plan to cut the overall number of employees. The plan was put in place two years ago and meant some employees were transferred and others who left the hospital weren’t replaced, but no one was laid off, Brehm said.

By the end of November, Johnson Memorial’s annual budget for inpatient revenue was about $52.2 million, but the hospital had received about $41.8 million so far in 2012. That means the hospital was short about $10.3 million it had planned to make from patient stays.

Heydon said the inpatient numbers are down largely because of advances in medical care.

“It’s just an overall trend in health care, the evolution of medicine,” he said.

To make up for the loss the hospital asked all employees to keep more detailed accounts of the health services that were being provided. That way, when the hospital is reimbursed by insurance companies or Medicare, it can be sure it’s receiving all of the payment it’s entitled to, Heydon said.

Johnson Memorial also added four physicians: two in obstetrics and gynecology, an orthopedic sports medicine surgeon and an anesthesiologist. All four began work over the summer and have attracted new patients to the hospital, Heydon said.

Lennen said Community Hospital South is considering adding doctors who provide primary care and obstetrics services. While the hospital needs to be conservative in the way it adds employees, increasing primary care and obstetrics offerings could mean more patients, he said.

Franciscan St. Francis Health also is trying to attract more patients by encouraging more local physicians to refer patients who need ongoing care to them for chronic conditions such as diabetes. When the hospital meets with these doctors, administrators explain how how their treatments for these illnesses can help patients avoid long-term hospital stays, Brehm said.

“Being more proactive as opposed to reactive in patient care,” he said.

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