MV Hospital closes the year $1.5M in black
Surplus driven by hike in operating revenue
The Martha's Vineyard Hospital ended its fiscal year on March 31 with a record $1.5 million profit on operations, more than doubling last year's income, despite continuing financial pressure on the affiliated Windemere Nursing and Rehabilitation Center.
The good news was bolstered by the most recent results of a patient satisfaction survey that placed the hospital in the top ranks when measured against 881 hospitals surveyed by Press Ganey Associates, a national firm headquartered in South Bend, Indiana specializing in quality care measurement and the improvement of health-care institutions.
"All things considered, it truly is the most remarkable year in the history of the hospital," said Tim Sweet of West Tisbury, vice chairman of the hospital board. "I do not know what you could compare it to if you go back and look."
Tim Walsh, hospital chief executive officer, presented the patient survey results and consolidated draft financial statements including Windemere, which ended its fiscal year on Dec. 31, and the hospital at a meeting of the hospital board on Saturday.
Mr. Walsh attributed the healthy numbers to renewed confidence in the hospital on the part of Islanders and the Island's aging population, which has increased demand for hospital services.
"The volumes have really expanded significantly over last year," said Mr. Walsh. "I think it is renewed confidence in the hospital and the changing demographics of the Island."
Although Windemere ended 2005 with a meager $3,958 profit, hospital leaders considered any profit a victory of sorts in an industry where simply staying afloat is a challenge.
In the 2003 fiscal year, Windemere lost approximately $200,000. In 2004, the Island's nursing home ended the year with its first-ever gain, in the amount of $62,755.
In total, the hospital and Windemere recorded a profit before gifts and other income of $1,574,090, an increase of $859,104 over the previous year. When combined with other income and gifts, the consolidated bottom line was $3,539,583.
The Press Ganey report was based on the results of questionnaires given or mailed to every patient treated at the hospital. The report measures three categories of service: inpatient services; emergency services; and ambulatory surgical services.
The survey provides an overall score and a percentile ranking based on the results of surveys conducted in hundreds of other small and large hospitals.
Ranked against all other hospitals, the emergency department ranked in the 99th percentile; ambulatory surgery 83; and inpatient services 91.
Mr. Walsh said the patient survey results are as important as the strong financial performance. "The numbers are not any good if we are not giving people the service that they want," he said.
The hospital needs strong numbers and renewed confidence as it enters the summer fundraising season. The board is in the midst of a $42 million capital campaign to finance construction of a new hospital facility it intends to build on the current site, pending regulatory approval by the Martha's Vineyard Commission.
John Ferguson, chairman of the hospital board and president and chief executive officer of Hackensack University Medical Center in New Jersey, credited the strong performance to the leadership of Mr. Walsh and the performance of the staff. "Tim, along with our physicians, nurses and employee staff, have worked together as a team, and their efforts have been outstanding," said Mr. Ferguson, a seasonal West Tisbury resident.
Mr. Sweet, steering committee chairman, said it had been a "red letter year" in the history of the hospital. "Never in the history of the hospital have we attained the level of surplus that we are at right now," he said. "Never has the hospital been as in good a shape; never has the operating cash been as high; and never have we had $33 million in commitments from the community already in place to go forward."
Mr. Sweet said that hospital officials are continually concerned that profitability not come at the expense of quality of care or the personal service that patients have come to expect. He said the survey results showed that patient care is matching the numbers. "All in all, just watching the transformation, I think everyone should be pleased both inside and outside the institution."
Ms. Sweet also met over the holiday weekend with the members of the steering committee who are leading the new building capital campaign. He said the hospital is three quarters of the way to it goal of $42 million as it enters a critical summer fundraising season. "That is the very good news," he said. "The very bad news is that we have $10 million to go, and we have this summer to do it in."
But, Mr. Sweet added confidently, "We just couldn't be at a better time and more prepared to build a new hospital," he said. "We are not building it to fix a damaged operation or a hospital that is not working; we are building it to expand on the great success we have had in the last 10 years in rebuilding the hospital." He added that a new facility is no longer debatable but "absolutely a necessity."
The current state of the hospital facility was reflected in the patient survey results that consistently gave low marks to the buildings. For example, while the overall inpatient survey report ranked the hospital at the 91st percentile, that number was reduced by a room ranking that placed the hospital in the 30th percentile when measured against the 345 other hospitals in the group.
Mr. Walsh said management uses the surveys and reads the patient comments to get a sense of areas that need attention. "If you look at enough of them, it helps you get a sense of what is wrong and what works well," he said. "It is a tool that can help improve quality."
"The facility is what is dragging us down," said Mr. Walsh. "But overall we are still coming out with great scores."
By the numbers
According to the draft consolidated report prepared by the auditing firm of Feeley and Driscoll for the years ended March 31, 2006 and 2005:
Net patient service revenue was $41,712,852 compared to $36,046,691 one year ago.
Total revenues increased from $37,932,089 to $44,362,649.
Total salaries and wages were $19,852,133.
Net income from operations was $1,574,090 compared to $714,986 the previous year.
Unrestricted gifts and bequests totaled $983,416, a drop over the previous year attributed to fundraising and a single large gift received in 2005.
Free care cost the hospital $2,870,742, compared with $2,107,000 last year, a jump attributable to an increase in the number of people seeking care without the means to pay.
The hospital received $523,718 in state uncompensated care pool revenue.
The number of patients provided free care represented 3.97 percent of all patients served, as opposed to 3.57 percent last year.