By Polly Keary, editor
Valley General Hospital lost $4.6 million last year.
That is a daunting shortfall.
But new CEO Eric Jensen said he thinks that the hospital could break even as early as next year, based on three eventualities.
“It’s like a three-legged stool to financial stability,” he said. “It includes passing the levy, the partnership with EvergreenHealth, and implementing a variety of strategies and tactics internally at VGH that will improve the way we operate.”
The affiliation with EvergreenHealth of Kirkland took place in December, and that alone will save Monroe’s hospital a lot of money.
“Through their group purchasing program they have negotiated outside group purchasing, and there are vendors that provide surgical implants such as joints, knees, and if you’re a large hospital with larger volume you can get a better price,” said Jensen.
He believes VGH can save $100,000 a year on implants alone, and $200,000 on other things bought with Evergreen’s buying power.
In the two months he’s been on the job, Jensen has scoured the books and procedures and has identified other ways to save, he said.
A switch in biomedical equipment maintenance companies will save $100,000 per year. Doing billing and other clerical tasks in-house as opposed to contracting them out could save another $300,000 annually.
Since the hospital closed its birthing unit two years ago, the hospital could cut back on some of its liability insurance, to the tune of $100,000 a year.
There are some employment changes that could result in savings, such as cutting back the house supervisor position, which is highly paid, to nights and weekends instead of round the clock, and trimming some positions to part time.
In all, Jensen thinks he’s identified about $2 million in savings.
And if the levy passes, that will bring in an additional $2.4 million annually. And that adds up nearly to what VGH lost last year.
“That’s why we think with the levy we can bring the hospital back to financially breaking even,” said Jensen.
The hospital could get a couple of fairly large one-time windfalls, too, he said.
A couple years ago, VGH halted implementation of a new medical records system due to budget concerns.
But now the hospital can actually come out ahead by putting the system in place.
“Now you can get incentive dollars from the government if you meet certain stages of implementation,” he said. “If by July 1 we hit stage one, that means $1.5 million to this hospital later this year.”
And in reviewing the books, the interim chief financial officer at the hospital discovered what looks like an error in how Medicare was reimbursed.
“We are going to be receiving $7-800,000 there, too,” he said.
Along with increasing the primary care and specialist base at the hospital, the savings and the levy could put VGH on much more firm footing, said Jensen.
“I believe this hospital can flourish,” he said.