The Norman Transcript

February 28, 2013

Low interest rates mean big savings

By Joy Hampton
The Norman Transcript

NORMAN — The Norman Regional Health System board approved refinancing a 2002 bond issue at the February board meeting this week. Low interest rates in the current bond market mean hefty savings for the health system.

“This is an opportunity to save $3.4 million,” Chief Financial Officer Ken Hopkins said.

Norman Regional has aggressively pursued efficiency methods to improve quality of care while also saving money. The program seems to be working.

Patients surveyed on their experiences at the NRHS give high ratings to the overall feeling of quality of care compared to other area hospitals, Dr. Darrin Smith told NRHS board members.

Additionally, there has been a decline in the overall mortality rate. The health system looks at heart attack, heart failure and pneumonia mortality in particular and tracks mortality rates for 30 days.

“What we can look at is what happens within our walls,” Smith said.

There has also been a decline in readmissions, which is below the national average.

The board approved the annual Infection Prevention Plan that continues to be updated and improved.

“We had a very successful year, as far as influenza vaccinations,” Smith said.

Employees are required to get flu shots unless they have allergies or religious objections. The vaccinations prevent the spread of flu to patients.

The health system staff also has aggressively implemented a self-monitoring and peer-supported hand-washing campaign to prevent the spread of germs from room to room. This “Wash In, Wash Out” campaign has been heralded as a great success.

Net income is up: Hopkins reported that operating income in January improved by 52 percent over the previous month, primarily because of an increase in inpatient volumes.

“The resulting net income from operations of $ 1.2 million is more than $500,000 above the January 2013 budget,” Hopkins said. “Non-operating income was also above expectations, resulting in overall net income for the month of $3.25 million, which was $2.3 million above budget.”

Unfortunately, this increase is not enough to alleviate the previous downslide. Net income from operations for the year-to-date period that runs from July 1 through January lags behind last year’s performance by $7.5 million, and the Fiscal Year 2013 budget is down by $5.9 million.

The good news is that non-operating income continues to exceed last year’s by $6.5 million and the FY 13 budget by $3.7 million.

“Investments partially made up for operating being behind budget,” Hopkins said. “Consequently, total net income is $2.2 million below FY 13 expectations and about $1.1 million below FY 2012.”

January inpatient discharges increased by 93 cases — 6.2 percent — from December and were 88 cases — 5.8 percent — above the January budget, according to Hopkins’ report. January inpatient days increased by 799 days, or 12.3 percent, from December and were 951 days or 14.9 percent above the January budget.

The average daily census in January increased to 236 from 210 in December as a result of increased admissions and increased average length of stay.

Despite increased length of stay, Hopkins said expenses were down.

“That was a very remarkable accomplishment,” he said.

Hospital outpatient: Hospital outpatient visits were strong in January with a 9.3 increase over December numbers, but outpatient surgical cases in January decreased 108 cases, or 14.9 percent, from December and were 36 cases, or 5.5 percent, below budget projections.

Outpatient surgeries may be more popular in December when patients have met their deductibles, but budget predictions usually take those factors under consideration.

Year-to-date, outpatient surgical cases increased 2.9 percent compared to the same seven-month period last year, Hopkins said.

Financial performance: Hopkins reported that January net revenue of $29.2 million was slightly above budget and January expenses of $28.1 million were 1 percent below budget.

“January net income from operations of $1.2 million was $519,900 above budget,” he said. “January non-operating income of $2.1 million was $1.7 million above budget, due to stronger market values of investments.”

Hopkins reported that overall net income of $3.2 million for January was $2.3 million favorable to the budget.

Year-to-date: Year-to-date revenue and income were down, but so were expenses.

YTD net revenue of $193.1 million was $10.8 million, or 5.3 percent, below budget, and YTD expenses of $191.8 million were $4.9 million, or 2.5 percent, below budget. Other year-to-date numbers include:

· Net income from operations of $1.3 million was $5.9 million below budget.

· Non-operating income of $6.2 million was $3.7 million favorable to the budget, due to overall stronger market values of investments.

· Overall net income of $7.5 million was $2.3 million unfavorable to the budget.

Joy Hampton

366-3539

jhampton@

normantranscript.com

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