The summer months are typically tough financially for our system. Patients and providers take vacations, which impacts volumes. However, we’ve managed to get past those challenging months still exceeding budgeted expectations. July YTD financial statements show our performance is slightly ahead of budget and significantly improved upon 2017’s performance for the first seven months of the year. Volumes through July have generally been positive. Discharges are up 2 percent over prior year overall, with Haymarket Medical Center up an impressive 27 percent. Surgeries at the three acute care hospitals are up 6 percent over prior year and deliveries are up 2 percent over prior year. While the ER at Haymarket is showing growth in visits over prior year, total ER visits are down 2 percent. The cath lab at Prince William continues to grow at an incredible pace, up 21 percent over prior year.
Operating income is 7 percent better than budgeted overall. Entities that are exceeding budget are Haymarket Medical Center, Novant Health UVA Health System Culpeper Medical Center, the Cancer Center and the Imaging Center. Special recognition to the Cancer Center as it is exceeding budget by 106 percent through July. Prince William Medical Center, The Ambulatory Surgery Centers (ASCs) and Novant Medical Group (NMG) are behind budget through seven months. With summer behind us, we can expect volumes to start to increase as they traditionally do. We need to be ready for volume increases and continue to meet our financial targets.
Many of the largest payors, including Medicare and Anthem, have quality-based reimbursement models. Medicare’s Value-Based Purchasing program (VBP) and Anthem’s Quality Hospital Incentive Program (QHIP) tie a portion of the hospital’s reimbursement for services provided to the satisfaction of the patient. Obviously, if team members aren’t engaged, they are unlikely to provide a remarkable patient experience. Meanwhile, a highly engaged team member is more likely to provide a better experience for the patient. If the experience is less than desirable for the patient, the hospital will be penalized via lower reimbursement.
In addition to reduced reimbursement, when the patient experience is poor, the patient likely will go elsewhere for future care, further impacting the hospital’s financial performance. Health systems with the highest patient satisfaction are able to negotiate higher reimbursement with many of the commercial payors. It’s a fundamental economic principal of supply and demand. When consumers want the service being provided, they are willing to pay more for it.
Being engaged and providing an outstanding experience for our patients is the single most important thing any of us can do to ensure the financial viability of the system!