Clark County hospitals show signs of recovery

Hospitals in Clark County, many of them in financial intensive care since the recession, are showing signs of recovery.

According to annual statistics reported to the Nevada Department of Health and Human Services, the cumulative operating loss for the valley’s 13 general hospitals ran $28.8 million.

While still a loss, that’s nearly two-thirds less red ink than in 2010. When excluding the results from University Medical Center of Southern Nevada, which chronically posts big losses because of high levels of indigent care and patients covered by the low-paying Medicaid program, the rest of the hospitals showed operating earnings of $43.5 million, more than double the $16.5 million the previous year.

Because the 2011 report did not include UMC’s fourth quarter, the 2010 numbers were adjusted to allow comparison.

By another measure, each patient produced an operating loss of $116.13 last year, a sharp drop from the $372.60 the year earlier, while the number of hospitals suffering losses dropped to five from eight.

"I think hospitals emphasizing quality, cost effectiveness and efficiency have started to see better margins," said Dr. Sherif Abdou, CEO of Healthcare Partners of Nevada, the area’s largest clinic.

The average cost of treating a patient rose just 1.9 percent last year to $11,255, as hospitals have sought ways to save money on everything from staffing levels to the price of bandages. Abdou said the continuing national debate over health care finance has made patients more interested in saving money in hopes of holding down their premiums, rather than complaining about being prematurely discharged as they might have in the past.

Abdou also cited an upswing in people seeking medical care. During the depth of the recession, many put off treatment after losing health insurance.

But the recovery has been uneven, said Dr. Howard Baron, the president of the Clark County Medical Society.

"I don’t think we are seeing a big positive trend yet,” Baron said. "Many practices are still mired in bad debt" as they try to collect from patients with little or no coverage.

Both patient totals and the number of days of treatment dropped last year, while the facility occupancy rate rose slightly as some hospitals cut costs by mothballing beds.

No hospital managers could be reached for comment.

A new problem has emerged recently as Medicaid and Medicare changed reimbursement systems, causing snarls even for doctors that reworked their office computers to conform. At UMC, county chief financial officer George Stevens reported two weeks ago, this has meant outstanding bills sent to Medicaid have ballooned to $55 million, up from $15 million a year ago.

The on-going losses continued last year at both Southern Hills Hospital and Medical Center and the San Martin campus of St. Rose Dominican Hospitals. They were built within sight of each other in the southwest corner of the valley in anticipation of a prolonged housing boom. As construction largely stepped during the recession, they have seen nonstop losses.

Sunrise Hospital and Medical Center swung back to the plus side for the first time since 2006 with an operating income of $6.9 million compared to a 2010 loss of $11.4 million. As newer hospitals or wings opened in outlying areas, more patients migrated to them while Sunrise experienced a rising proportion of patients using Medicaid, which pays only about 55 percent of actual costs, and people with no coverage at all. Management then undertook cost reductions and marketing initiatives, such as boosting its visibility in northern and western Arizona, to turn around the slump.

The St. Rose Siena campus continued to generate the largest operating income of any of the area’s hospitals.

Meanwhile, the gap continued to grow between the total bill a hospital sends out and the amount it collects after discounts and deductions. Last year, the average bill ran $65,976 but resulted on in only $11,357 of cash in the bank, or 17.2 cents on the dollar. In 2010, the ratio was 18.5 cents.

Contact reporter Tim O’Reiley at toreiley@reviewjournal.com or 702-387-5290.