CAMC loses millions in January
CHARLESTON, W.Va. -- Charleston Area Medical Center lost $4.2 million in operational income in January, after the Elk River chemical leak and abnormally low temperatures cut into hospital admissions, the hospital's chief financial officer said Wednesday.
"January was an unusual month, in case you hadn't noticed," Larry Hudson told the hospital's board. "We had several events that affected our revenue stream for the month.
"We had two polar vortexes and water contamination issues, so we had these major events that resulted in fewer admissions, fewer outpatient visits, a longer length of stay, reduced revenue and increased expenses, all equating to a large budget shortfall," Hudson said.
CAMC had projected $185 million in target revenue for January and fell short of that mark by $15 million; Hudson said it had projected a $3.8 million gain in operational income and instead had a $4.2 million loss -- a disparity of roughly $8 million.
"Expenses for a hospital are relatively fixed; if you have extra volume, your expenses don't go up that much, and if your revenue goes down, expenses don't lower that much," he said. "We had a large contraction in our revenue, but not a large contraction in our expenses."
When a chemical leak into the Elk River on Jan. 9 contaminated the water supply for Charleston and surrounding counties, CAMC canceled all of its elective procedures for that day and rerouted patients to unaffected hospitals.
According to Hudson, the hospital's yearly net revenue averages nearly $1 billion, and despite the fiscal hits, CAMC should be able to recoup its losses in the coming months.
"One month does not make the year," Hudson said. "Overall, the month was certainly a challenge."
According to Hudson, the level of uncompensated care reported for January remained constant, despite the nearly 90,000 West Virginians who have enrolled in expanded Medicaid under the Affordable Care Act since Oct. 1. Expanded Medicaid coverage began on Jan. 1.
Overall, outpatient emergency-room visits were down 16 percent and admissions fell five percent. Inpatient procedures fell by five percent and outpatient procedures fell by 12 percent. Cases of open-heart surgery fell by 45 percent.
Board member Dr. Gina Busch said CAMC recently received the Distinguished Hospital Award for Clinical Excellence for 2014 from Healthgrades, which put CAMC in the top five percent of hospitals in the country in terms of low mortality and complication rates.
"It really is a tremendous recognition of everybody's hard work," CAMC President David Ramsey said.
The hospital will finalize its merger with CAMC-Teays Valley by the end of the week. The Putnam hospital has been operated by CAMC for the past seven years, but the board and CAMC-Teays Valley formally approved the merger in November. The hospital will file articles of merger on Friday, and the merger will be official March 1, according to Marshall McMullen, CAMC's general counsel.
"We're really excited to get to Friday at midnight," said Randy Hodges, CAMC-Teays Valley administrator. "After the vote was taken to merge by our board in November, there were all kinds of folks who stepped in, from legal, information services, HR, quality, finance, planning, marketing -- everyone has really stepped up, and it's pretty amazing that in three months we were able to put together a plan and implement it to make this happen."
The board also announced that it will enter a clinical partnership with Princeton Community Hospital to strengthen the relationship between the two hospitals, especially within the oncology and cardiology departments. Ramsey said the affiliation seems natural because the two hospitals often work closely together.
"With the ever-changing health-care landscape, the future of both organizations is stronger with a closer collaboration," Ramsey said. "We have always worked well with Princeton Community Hospital -- we are both community-based nonprofit institutions with similar missions."
The two hospitals plan to form clinical teams for cardiac care, oncology and quality care, and will meet regularly to identify potential collaborations and improvements for each agency. CAMC officials also hope to establish rural residency rotations at PCH.
Reach Lydia Nuzum at email@example.com or 304-348-5189.