University cruises while GRHS struggles

Thursday, June 26, 2014 9:31 PM
Last updated Friday, June 27, 2014 1:10 AM
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As they were back in April, Georgia Regents Health System is struggling to meet its financial goals but vowing to increase patient revenue while University Hospital is chugging along ahead of budget.

In separate meetings Thursday of the two health systems’ boards, Georgia Regents found itself at the end of May with a margin of $10 million with one month to go in its fiscal year, about $15.5 million behind budget and $5.5 million less than the prior year. University, on the other hand, was $3.4 million ahead of budget through May and $13.4 million ahead of last year at that point.

Both health systems were affected by the ice storm in February but “it didn’t slow us down,” said Dave Belkoski, the chief financial officer for University. “We’re still delivering.”

In fact, before taxes, depreciation and amortization, University generated nearly $33.7 million through the end of May. University’s boards voted to spend $8.6 million to replace its aged phone system and almost $600,000 to upgrade cell service within the health system. University CEO Jim Davis said when he was starting off in health care he installed that same phone system University is replacing in another hospital – in 1983.

Georgia Regents took a heavier blow from the bad weather in February but also from a poor job of moving patients through the hospital and $20 million more in supplies and other expenses than budgeted, even though salaries and wages were below budget by more than $4 million, said Chief Business Officer Tony Wagner.

“It has everything to do with the age of our facility, with the difficulties that we find in operating our facility,” he said. “That’s a big swing in expenses that we’ve got to try to mitigate for next year.”

Georgia Regents University President Ricardo Azziz, who is CEO of the health system, said net patient revenue is higher than last year and shows some signs of progress.

“It’s just not as high as we would like,” he said.

For its next fiscal year beginning July 1, the health system will be shooting for a lower margin but with “significant reinvestment” in clinical growth and patient care, Wagner said. That includes about $5 million more next year for nursing services, he said.

“We have to improve care at the bedside,” Wagner said.

It means cutting about $8.5 million in costs, which will be difficult, he said.

“We are a low-cost provider so the opportunities for us to drive down costs are not as great as they would be and a lot of that has already been driven out of the system,” Wagner said. “Nonetheless, we do hope to be able to drive lower costs.”

Next year’s budget will also be banking on higher admissions from cardiovascular, cancer, digestive health, neuroscience patients and admitting more patients to Children’s Hospital of Georgia, he said.

“We need to grow the children’s hospital,” Wagner said.

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Riverman1
79223
Points
Riverman1 06/27/14 - 04:50 am
4
1
New Hospital Plan

“It has everything to do with the age of our facility, with the difficulties that we find in operating our facility,” he said. “That’s a big swing in expenses that we’ve got to try to mitigate for next year.”

When you start hearing things like that, Azziz is priming the pump. A new hospital will fix their problems is the implication. You know where.

Esctab
802
Points
Esctab 06/27/14 - 10:08 am
2
1
Maybe tyranny is GRU's problem

Maybe Zwemer explained what the problem is at GRU in his letter to the editor about tyranny.. .

Tom Corwin
8831
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Tom Corwin 06/27/14 - 10:35 am
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Riverman

There have been various replacement hospital plans at MCG now GRU going back 15 years, long before Azziz got here. But he has complained about the age of the buildings on campus, not just the hospital, for a while now. The proposed Columbia County hospital, however, is not envisioned as a replacement hospital.

Riverman1
79223
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Riverman1 06/27/14 - 12:37 pm
1
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Yeah, I know, Tom, but the

Yeah, I know, Tom, but the future plans could be affected if the new hospital is in Columbia County and the success some think it will be. Kind of a long shot, but you never know. Why wouldn't you make it your flagship hospital as time goes on?

Tom Corwin
8831
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Tom Corwin 06/27/14 - 12:58 pm
1
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Riverman1

There are a number of reasons it would not work. The proposed hospital is tiny compared to the current hospital and even though the trend is for less inpatient care you would still need far more than 100 beds. You would need to add a dozen operating rooms, specialty labs, etc. etc. You would need to recreate the Ambulatory Care Center and the proposed MOB is nowhere near adequate. And then there is this undeniable fact: most of the faculty also teach or do research or both. And they are not driving a half-hour each way to do it. So you would have to recreate the downtown campus in some fashion and that would be incredibly expensive and waste the hundreds of millions spent just in the last several years on new buildings. So there is that.

Riverman1
79223
Points
Riverman1 06/27/14 - 01:23 pm
1
0
I wouldn't debate you because

I wouldn't debate you because there are a lot factors. One being if the hospital is even built in Columbia County. But if it is, it will be a huge money maker with fewer nonpaying patients. Things will drift out there to the money making one eventually. Also keep in mind, most of the faculty and physicians live in Columbia County. Let's check back in 20 years to see who's right.

Esctab
802
Points
Esctab 06/27/14 - 03:59 pm
2
0
Tom Corwin

Tom Corwin,
I understand the point I think you are trying to make in your responses to Riverman1; essentially I think you are saying that it is not rational for GRU to replace its current hospital with one in Columbia County because of the incredible cost and waste it would incur and so therefore, it can't and won't happen. However, I think the concern - given the pattern of decision making at GRU - is that just because something is incredibly expensive and wasteful doesn't mean that GRU won't try to do it. Rational decision making is in short supply at GRU.

Riverman1
79223
Points
Riverman1 06/27/14 - 06:48 pm
2
0
Sure Tom is right to a degree

Sure Tom is right to a degree, but realize as Columbia County grows with its wealthy population that pays for their medical care a Columbia County hospital will do nothing but get bigger. Here is the truth of such a shift. Funds will be diverted from East Richmond County GRU to Columbia County. There will be a fight over funding before it's over.

It all reminds me of the Athens medical school where it was first said it would only benefit MCG Augusta as an adjunct, but it slowly sunk in there's only so much money to go around and conflicts now arise over which school gets fully funded. There's only so much money to go around.

When the proposal for the Athens full medical school was first proposed, I immediately jumped on it in a negative way on the old Chronicle forum. I had seen what happened in South Carolina. Keep in mind, the Chronicle at first backed the Athens school until things sunk in.

Little Lamb
43821
Points
Little Lamb 06/27/14 - 07:08 pm
1
0
Rational

Esctab posted:

Rational decision making is in short supply at GRU.

I nominate this as comment of the month!

jwynn9154
39
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jwynn9154 06/27/14 - 09:31 pm
0
0
Tom is absolutely right - and so is Tony Wagner

The ColCo hospital envisioned by GRU would be a community-based facility, almost certainly with an open staff (not just GRU faculty), caring for patients whose degree of illness would be much less severe/intense than that of the patients at the 15th St. hospital. Two totally different animals.

Having said all that, the 15th St facility is OLD - Talmadge Wing opened in '56-'57, Sydenstricker Wing in mid-70s, medical office building, ICU tower and Childrens Hospital in the 90s. GRMC is the state's only state-owned academic medical center and should be the crown jewel of healthcare in Georgia. The current facilities are a real impediment to efficient and effective care.

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