Patient volumes at WhidbeyHealth drive revenue jump

WhidbeyHealth has good financial news, largely due to an increase in the number of patients.

While hospital officials across the state and nation are scrambling to understand the impacts of potential cuts to Medicare and Medicaid, WhidbeyHealth has good financial news, largely due to an increase in the number of patients, according to hospital CEO Nathan Staggs.

“In health care, it’s a volume thing,” Staggs said in a recent interview. “Things are headed the right way, and they are improving month after month.”

The hospital district experienced a net surplus of $900,000 in the month of April, which exceeded the budget projection by 528%. At a hospital board meeting last month, CFO Paul Rogers said it was the first operating budget surplus he’s seen since coming to work at WhidbeyHealth.

In April, the hospital experienced an increase of 71% in patient days and the patient daily census. Staggs said the district has added 40 new providers in the last year, which means more patients can be seen. Still, he acknowledged that patients often wait too long to see a provider, which he said is a problem that officials are working on. Even more providers are being hired so that the district doesn’t have to rely on overtime and temporary providers as much.

In addition, the CEO said a new clearinghouse is doing a better job of collecting claims in a timely manner, which helps with the bottom line.

Staggs said the hospital district is somewhat insulated from changes in Medicare and Medicaid funding. As a designated Critical Access Hospital, WhidbeyHealth receives cost-based reimbursements in Medicare services; about half of the hospital’s patients are on Medicare.

The recently passed U.S. House bill would cut Medicaid spending by $723 billion, which has many hospitals across the nation reeling. Yet Staggs said that Medicaid patients make up just 13% of those served at WhidbeyHealth, which is significantly less than other hospitals in the nation. The Washington State Hospital Association reports that Medicaid funds 23% of inpatient care at hospitals in the state.

In April, the hospital only had 4.1 days of cash on hand at one point, which is a measurement of the number of days an institution can cover its costs without any additional revenue. It increased to 20 days on May 20 and is expected to jump to 35 days in November, Rogers told the board.

Yet there are challenges. The hospital operating rooms will be closed for three weeks this summer as the aging HVAC system is replaced. Rogers said the hospital will lose about $1.1 million from the closure.

“Even with that hit, we are looking at 30-days-plus cash on hand by the end of the year,” Rogers said at the meeting.

Patrick Banks, the regional health officer for Health Tech, warned the hospital board at the last meeting that the industry is facing headwinds.

“I hate to throw cold water on the room, but this is going to be a tough rest of the year for health care everywhere,” he said.

He said that tariffs against China are projected to inflate the cost of medical supplies and drug costs by 10%.

Staggs said he’s waiting to see how the state budget will affect the hospital. The Washington State Hospital Association estimated that tax hikes and cuts in the state budget will cost hospitals an estimated $200 million annually, according to a press release from state Sen. Ron Muzzall, a Republican from Oak Harbor.

“We need policies that actually support our health care providers, not punish them,” Muzzall said in a press release. “The Legislature must act before we see the collapse of more clinics, more departments, and eventually, entire hospitals.”