Finances Improve at Windemere, Hospital
By JULIA WELLS
The Windemere Nursing Home and Rehabilitation Center ended the year
in the red once again, but senior managers said this week that the
$200,000 operating deficit is a big improvement over last year and a
step in a better direction for the Island's only nursing home.
Martha's Vineyard Hospital chief executive officer Tim Walsh
said yesterday that some hard-won rate relief from Medicaid played a big
role in cutting the numbers at Windemere this year.
"We have adjusted the rate structure; we're back on
track and we've gotten the loss down to something that is
manageable," he said.
SRC="http://www.mvgazette.com/news/2004/01/30/content/windemere_sm.jpg" The hospital CEO is also currently the acting administrator for
Windemere. The nursing home is an affiliate of the hospital; the two
institutions share the same campus.
Windemere, whose corporate name is WNR Inc., ended its fiscal year
on Dec. 31.
Total revenues at the nursing home were $4.8 million for the year
while total expenses were just over $5 million. Gifts of $68,000 will go
toward reducing the operating loss, leaving WNR with a $135,000
operating deficit for the year.
Mr. Walsh spent the better part of the year negotiating a new rate
structure with Medicaid that will add another $200,000 in revenue. The
nursing home has not actually received the reimbursement yet, but the
new rate structure is permanently in place, Mr. Walsh said.
"We don't have the cash, but the deal is done," he
said.
About 70 per cent of the revenues at Windemere come from Medicaid,
the state and federal insurance program for low-income residents.
Cash at Windemere is up - as of Dec. 31, cash on hand was
$339,000, up from $189,000 for the same period last year.
"It's a little more comfortable," Mr. Walsh said.
Windemere has lost money since it opened in 1994. In 1996 the
nursing home was forced to declare Chapter 7 bankruptcy when it
defaulted on an $8 million bond that was used to build the home. The
Windemere bankruptcy later led to a Chapter 11 bankruptcy for the
hospital.
The hospital came out of bankruptcy in 1998 after an emergency board
of trustees stepped in to turn around the crisis.
Following a complicated series of maneuvers and another period of
instability under a subsequent board of trustees, the hospital brought
the nursing home back under the wing of the hospital by retiring the
bond that had been used to build the home. The move meant fresh debt for
the hospital. The hospital is also now helping to carry Windemere by
subsidizing the dietary services it provides to the nursing home. The
annual cost of these services is about $300,000; Windemere currently
owes the hospital more than $1 million for dietary services from the
last three years, Mr. Walsh said.
Windemere is also currently operating without an administrator;
former administrator Philip Hickey left two weeks ago. Mr. Walsh said he
is working to secure an interim administrator to fill the gap while the
hospital searches for a permanent replacement. Meanwhile, Mr. Walsh, who
also has the credentials to run a nursing home, will serve as acting
administrator.
The hospital trustees are also the trustees for WNR.
On the hospital side of the ledger, business is booming. Financial
statements show that the hospital ended its third quarter with a healthy
revenue gain due to higher volumes across the board.
Through December business is up in acute care and also the emergency
room. Mr. Walsh said it looks like January will show the same picture.
"We've been pretty busy," he said.
He said some of the business is related to the flu outbreak that hit
hard around the holidays, but he said the hospital is also reaping the
benefit of a new skilled nursing program that is in place in the acute
care wing. The program allows Medicare patients to receive skilled
nursing services such as post-surgery care in the acute care section of
the hospital. Because of the way Medicare reimbursements work, patients
are ordinarily required to go elsewhere to receive skilled nursing care
after surgery - for example, a patient with a broken hip would be
required to move out of acute care into a rehabilitation facility for
the recuperative period following surgery. On the Vineyard these
patients can now remain in acute care for post-operative services;
patients who have surgery at another hospital can also return to the
Island and receive skilled nursing care at the Vineyard hospital.
The new skilled nursing program was made possible after the hospital
won designation as a critical access facility - a special
designation that allows the hospital to be reimbursed for actual costs.
Mr. Walsh said the skilled nursing program is better for patients and
better for hospital revenue, but he admitted that it has had an impact
on Windemere, which has seen a drop in this kind of business as a
result.
"We're working to try and streamline all of that,"
he said, adding:
"It's a nice program and it's really just starting
to get going. I think the patients are glad to have it - it makes
it easier for them."
Total operating revenues at the hospital through December were $23.5
million, some $491,000 over budget for the year and well ahead of the
$21.4 million in revenues for the same period last year.
Total expenses at the close of the third quarter were $22.3 million,
leaving the hospital with an operating gain of $1.1 million. Gifts stood
at $634,000 for the year, down from the previous year, but Mr. Walsh
said the true picture shows that gifts are way up because the hospital
did not do a summer fund drive this year. Gifts in the month of December
were significantly up - $213,000 compared with $42,000 the prior
year. December gifts can be mainly tracked to the annual appeal; Mr.
Walsh said January gifts look like they are also running well ahead of
last year.
Cash is also up on the hospital side; at the end of December the
hospital had $3.3 million in cash.
"This is the strongest it's been in a long time. Cash is
king. It helps to verify the numbers you are showing on the income
side," Mr. Walsh said.
The hospital fiscal year runs from April 1 through March 31. The
third quarter is traditionally a period of heavy losses for the
hospital, because it is the Island's quieter off-season.
Mr. Walsh said current projections calls for the hospital to end the
year with a modest operating gain of about $300,000. He said the real
aim is to end the year in the black on a consolidated basis (combining
the numbers for Windemere and the hospital).
"That has been our goal - to get the whole enterprise in
the black. And I am very optimistic now that we are going in the right
direction," Mr. Walsh said.
It all adds up to an auspicious start in the new year for the
Vineyard hospital, which is now deep in the design phase for a new
building to replace the badly ailing physical plant on Linton Lane in
Oak Bluffs.
The cost of the new hospital is expected to be $50 million. No
formal capital campaign plans have been unveiled yet.
Concluded Mr. Walsh:
"I think we have accomplished a lot, and we are at least
heading in the right direction now."
Comments
Comment policy »