Out-patient services are vital to healthcare operations

As the healthcare industry changes, Delta Regional Medical Center is looking to identify opportunities for growth.

Scott Christensen, DRMC CEO, told the Washington County Board of Supervisors the first quarter for the hospital had a small positive bottom line.

“Health care is getting tougher and tougher and it is harder to turn a profit these days, especially in states like Mississippi, that did not expand medicaid,” Christensen said, noting earnings were approximately 8 percent. “Any time you see a profit, I consider it a home run.”

Christensen said continuing to maintain a strong balance sheet is challenging. Despite difficulties, DRMC operated at 131 days cash on hand, according to the financial report.

“That is very strong in healthcare,” Christensen said. “The key is to keep hammering on the fundamentals – low cost, high quality health care is the key. We must continue to be efficient and keep the financials right.”

Reviewing patient trends and finding opportunities is imperative to the hospital’s success, Christensen told supervisors.

“With the healthcare trends we are seeing – and it’s important that I continue to say – some of these are real concerns we are seeing in healthcare. Hopefully we can flip these into opportunities, such as outpatient trends, tests and labs, procedures, therapy, that fill the outpatient budget.”

Christensen said 60 percent of DRMC’s budget is out-patient and only 40 percent of DRMC revenue is contributed from in-patient.

“When you think about all the infrastructure that supports in-patient business, out-patient arena is new to administrators and hospitals. It is a different mind set and way of thinking about health care,” he said, noting DRMC must consider existing assets and how to shift current resources towards supporting out-patient services.

Trends show DRMC’s daily in-patient count at 87 the first quarter of this year, compared to 100 last year and approximately 110 two years ago.

“It is a trend that continues to decline,” Christensen said. “It is a trend we have been seeing across the country. However, the out patient trend is speeding up, and we need to view that as an opportunity to reallocate our assets.”

In addition to in-patient trends, Christensen said DRMC’s revenue adds motivation to move toward out patient services.

Of the types of payment received by DRMC, 80 percent comes from medicare and medicare, 10 percent from commercial insurance and 10 percent self-pay or no insurance.

“This is not unique to us. What we receive in medicare and medicaid, we are only able to recoup 80 percent of our cost. We hardly recover anything on self pay,” Christensen explained. “On 90 percent of our business, we lose money. Other hospitals who have more commercials business, are able to recoup more of their cost.”