Baptist Again Tops $1 Billion in Patient Revenue

by Mark Friedman  on Monday, Oct. 2, 2006 12:00 am  

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For the second consecutive year, Baptist Health Medical Center in Little Rock was the only hospital in Arkansas to break the $1 billion mark for patient revenue.
The 665-bed hospital also reported an income of $12.7 million for its fiscal year that ended Dec. 31, 2005.
Arkansas Business ranked hospitals and medical centers by patient revenue based on information provided by the hospitals and annual Medicare cost reports, most of which are unaudited.
One of the most surprising items on this year's list is that the University of Arkansas for Medical Sciences reported a net income of $27.3 million, or about $10 million more than it did in its fiscal 2004. But it's really not an indication of the hospital's financial health, said Dan Riley, chief financial officer of UAMS Medical Center.
While the hospital had "good steady, marginal growth," it also received money from the state of Arkansas.
Without the state and other financial support such as investments, the net income from service to patients would be a more accurate financial picture of the hospital's condition, which in UAMS' case was a loss of $1.25 million.
It is still too soon to see what effect "any willing provider" legislation will have on Baptist Health's revenue. The legislation opened four more Pulaski County hospitals to customers of the state's dominant insurance carrier, Arkansas Blue Cross & Blue Shield, which had used Baptist Health as its in-network hospital in Little Rock.
The trend seems to be looking good for Baptist Health, though. It increased its revenue 7.1 percent over its 2004 number.
Baptist Health spokesman Mark Lowman said the hospital had seen an overall increase in patient admissions over the pre-AWP days.
"This increase is the result of sustaining patient loyalty and new patient growth as a result of four new insurance contracts," Lowman said in an e-mail statement.
Other hospitals have been gearing up for AWP, which requires health insurance companies to pay the same benefits to any doctor or hospital willing to accept the same payments as the in-network providers.
St. Vincent Health System recently announced a $40 million expansion of St. Vincent Infirmary Medical Center in Little Rock that will include a new and larger emergency facility and renovated patient rooms.
St. Vincent Infirmary Medical Center and St. Vincent Doctors Hospital reported $671.4 million for its fiscal year that ended June 30, 2005, which was up 7.5 percent from its 2004 patient revenue.
All Little Rock hospitals on this year's list saw an increase in patient revenue over the 2005 Arkansas Business list numbers.
What could hurt the hospitals' business, though, is an increasing number of patients who don't have health insurance or a high deductible that they can't pay, said Paul Cunningham, senior vice president of the Arkansas Hospital Association.
Also troubling to the hospitals is Medicaid reimbursement rates.
Medicaid, the joint federal-state program for low-income residents, pays hospitals the same as it did a decade ago, Cunningham said. Cunningham said Arkansas hospitals lost around $64 million in 2004 on Medicaid underpayments, according to an AHA study.
"Certainly that hasn't gotten any better [in 2005] because we're still under the same pay rates," he said.
Medicaid pays each hospital differently, but the rate for all hospitals is capped at $675 a day. But Cunningham said a stay in the hospital can range from $900 to $1,300 a day, or even more.
And the Medicaid payments aren't any better for outpatient care.
"We're still operating under an outpatient fee schedule for hospital services that was in place in 1992," Cunningham said.
An AHA study showed hospitals were getting paid about 44 percent of their outpatient costs through Medicaid.
"We hope that things will happen over the next six to 12 months that will improve that, but right now we're in a holding pattern," Cunningham said.
He said an application had been submitted to the federal Centers for Medicare & Medicaid Services asking to increase the per-day hospital reimbursement cap to $850 a day. Cunningham said he hoped the request was approved within the next three months.



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