River Region reports profits, lower expenses

Published 12:29 pm Friday, July 2, 2010

Lower spending and higher earnings during 2009 put River Region Medical Center on solid financial footing for the first time in its eight-year history, the facility’s CEO said Thursday.

Expenses for the year were down 13.1 percent from 2008 and the hospital’s EBITDA — a profitability metric referring to a company’s earnings before interest, taxes, depreciation and amortization — was up 133.9 percent for the year. The statistics, displayed on a bulletin board near the hospital’s ground-floor cafeteria, appeared to outpace the local hospital’s parent company for the year.

CEO Vance Reynolds touted themes such as commitment to quality care and controlling expenses in a written response for more information about the posted figures.

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River Region Health System operates most local medical care clinics and services in addition to the only hospital. It is a subsidiary of Tennessee-based Community Health Systems, the nation’s largest publicly traded hospital firm, which acquired River Region five years after the hospital on U.S. 61 North opened in February 2002.

Reynolds, in health care management for 12 years and in his second full year as River Region’s CEO, called several issues the hospital has faced “significant economic challenges,” such as a rising tide of uninsured patients, medical liability and instability in government programs geared to health care — and said the hospital had made no profit or lost money until last year’s financial gains.

“River Region — like all Mississippi hospitals — will continue to face significant challenges,” read part of Reynolds’ statement. “But, the commitment of our medical staff and employees has never been stronger and we are proud of their efforts to provide high-quality care for our patients. As the hospital has returned to sound financial condition, we continue to ensure that our care is available for patients who need us today — and that we will remain available to provide care in the future.”

Earnings sources and patient loads for individual hospitals aren’t required in financial filings by its parent company; only companywide statistics are mandatory. “Economic pressures” prompted River Region “to do everything possible to preserve jobs, improve efficiencies and maintain the highest levels of customer satisfaction,” Reynolds said, referring to a strengthening of “internal programs” without specifying what they were.

Collections lawsuits filed by the hospital against clients unable or unwilling to pay spiked by 670 percent between January and May, an increase the hospital has said stemmed from backed up and inefficiently processed “uncollectible accounts” in the health care network’s business office. Since June 1, only three have appeared in Warren County Court records.

CHS’ annual report in February detailed revised accounting methods to reflect in future updates a variety of uncollectible accounts, which the company indicates became heavier on the firm’s bottom line after it acquired several hospitals from Triad Hospitals in 2007.

CHS reported an 11.4 percent increase in its profits for 2009, to $243.1 million. Admissions at its 122 hospitals in 29 states went up 4 percent last year and showed a 3 percent jump in the first quarter of 2010, according to a quarterly report filed in April.

Net operating revenues for the parent company were $3.2 billion in the first quarter, up from $2.9 billion a year ago. Self-pay revenues, from those who paid for services on their own without insurance, made up 11.4 percent of CHS’ net operating revenues for the first quarter, down slightly from 11.6 percent a year ago. Charity care services relative to total net operating revenue was 4 percent for the year’s opening quarter, up a bit from 3.7 percent from 2009’s first quarter.

River Region was created from the merger of ParkView Regional Medical Center and Vicksburg Medical Center.