Three “extraordinary items” had a big, negative impact on the bottom line of Three Rivers Health in December, but there are encouraging signs that suggest a better year in 2009.

Financial reports for December, reviewed Thursday (January 29th) during the January meeting of the Three Rivers Health Authority Board, showed a net loss for the month of more than $772,000 ($772,344).  Combined with other losses during the year, the net loss for 2008 totaled just over $3 million ($3,085,616).

Matt Chambers, President and CEO of Three Rivers Health, outlined the trio of factors that impacted the hospital’s finance performance in December:

•    An unbudgeted expense of $96,000 for consultants required by the banks
•    An expense of $110,000 after Registered Nurses represented by the Michigan Nurses Association turned down a proposal by the hospital to not make fixed contributions to their retirement plan in 2008
•    And a $220,000 charge resulting from a drop in the LIBOR rate associated with financing for the new hospital entrance in 2004.

These items – totaling around $426,000 – contributed to a larger-than-expected loss in December and pushed the net loss for 2008 past the $3 million mark.  Chamber said that, because of the three items, “We didn’t get to see the effect that all of our hard work has done over the course of December.”

Steve Andrews, Vice-President of Finance, distributed a summary comparing income from various sources in 2007 and 2008 and said, “Probably the biggest impact is the shift from less commercial and Blue Cross to more Medicaid and, predominantly, it’s been on the outpatient side.”  Andrews said, “Basically, we lost $875,000 because of that shift and another $672,000 on the emergency room so the payer shift alone impacted our bottom line about $1.6 million.  Then you throw in the case mix, about $2.2 million.”

Chambers said, “I think the important thing here to remember is that, here in St. Joseph County, one in five people are on Medicaid so that’s a dramatic change.”  He noted a four-point shift over the last 18 months with a lengthy strike at American Axle & Manufacturing as a factor.  And he said, “When there’s a dramatic shift like that, the impact to the bottom line can be topsy turvy.”

Chambers also outlined a number of factors that leave him feeling optimistic about the prospects for Three Rivers Health in 2009:

•    The new contract with ECI – Emergency Consultants, Inc. – to staff the emergency room beginning on April 1st
•    The addition of a new general/vascular surgeon due to begin work in mid-April
•    The opening of mammogram services to walk-ins
•    The extension of lab hours into the evening, something being looked into at this point
•    The expansion of OB and midwife services into Centreville, the addition of seven Amish patients, and potential expansion of OB services into Cass County
•    The possibility of “packaging some women’s services”
•    The exploration of ways to “package” the hospital’s sleep disorders lab differently
•    The potential for a minimum of $2 million for the hospital’s information system from the stimulus package now under consideration in Congress
•    And the potential for growth of the rehab unit, particularly in view of 17 admissions this month and recent action by the Veterans Administration to agree to contract with hospitals outside the V-A system for specific services.

Chambers said, “I am very optimistic about 2009.  I am really excited about the new opportunities and what we’re seeing.”

To hear an interview with Matt Chambers (11:29) regarding the subject matter of this story, an interview conducted by Bruce Snook of the River Country Journal, click here.