The final fiscal-year numbers aren’t in yet, but unless the need for medical care drops sharply, El Camino Hospital’s finances are looking rosy – and not in a deeply red way.
In the April financial report presented to the board of directors June 8, the hospital’s seven entities collectively continue to perform over-budget, according to interim CFO Ned Borgstrom.
The Mountain View facility earned nearly $6.2 million – the Los Gatos campus, more than $1.2 million – for a year-to-date total of a little more than $34 million between the two hospitals and well over a projected year-to-date loss of $2.7 million.
With an expected year-to-date loss of nearly $4 million, Los Gatos’s income from July through April exceeded $10.6 million, approximately $3 million less than half of Mountain View’s operating income for the same period.
Including figures from the hospital’s foundation, CONCERN, Surgery Center, District and Silicon Valley Medical Development, El Camino’s income to date is $34.3 million, a 6.3 percent operating margin so far this fiscal year, which ends June 30.
It’s a turn in the right direction from 2010’s ending operating margin – 0.8 percent, according to numbers CEO Ken Graham presented at the same meeting. And while the 6.3 percent margin is far from the 10- and 11-plus percentages recorded in 2007 through 2009, Borgstrom’s report calculated April 2011’s margin alone at 13.6 percent.
While recovering from the previous year’s challenges, the hospital is not seeing the volumes it did less than two years ago, according to Cal James, El Camino’s chief of strategy and business development.
“Elective care is being deferred, and the general structure of the payers has changed,” James said. “There’s more Medicare, there’s less PPO and more patients are self-payers.”
Combined with health-care reform measures and a time of year that typically brings in less patients, James said hospitals across the country – particularly in the Bay Area – are experiencing the same plight.
“We’re in good company with all the other hospitals – we’re all trying to figure out what this means,” he said. “The feeling is that some of this volume is not going to come back.”
On the other hand, early detection and treatments for disease could also factor into flatlined growth. Measuring departments’ growth on a corporate scorecard, infusion-center and cyberknife/radiology oncology visits exceeded projections in this year’s first quarter, but inpatient cancer discharges were down nearly 18 percent of expected volume – driven by, James said, successful early-detection and treatment programs.
“This is actually an OK thing,” he said.
Health programs such as the South Asian Heart Center, the Chinese Health Initiative and El Camino services in Sunnyvale and Milpitas will help increase growth, he said.
And while the Mountain View campus held steady at approximately 5,000 patient discharges recorded each quarter from 2009 through 2011 (year to date), it’s Los Gatos that is climbing. From approximately 300 inpatient discharges recorded the first quarter after opening in July 2010, discharges have increased to more than 700, recorded at the end of March.
“The staff down there are doing a magnificent job,” James said.