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SCKMC Reviews Growth Opportunities with Board

South Central Kansas Medical Center is taking a detailed look at their operations. Through their partnership with Revere Healthcare Solutions Inc. (RHS), the hospital has broken down the past ten-years of data to a departmental level.

February 16, 2018

Arkansas City, KS – South Central Kansas Medical Center is taking a detailed look at their operations. Through their partnership with Revere Healthcare Solutions Inc. (RHS), the hospital has broken down the past ten-years of data to a departmental level.

Carmine Di Palo, Chairman and CEO of RHS, provided a detailed presentation to the SCKMC Board of Trustees on February 6th.

“If you look at the numbers, and let the numbers tell you the story, then you are much more able to define what actions to take for the future. Obviously 2017 was a very hard year, as it was for the rest of the industry, but the reality is the problem started materializing in 2009. Gross patient revenues last year were more than twice what they were 10 years ago. However, the net patient revenues increased only $800,000,” Di Palo said.

Di Palo broke the organization down into three separate units: traditional services, such as surgery, emergency care, obstetrics, inpatient care, laboratory, radiology and all other ancillary units; primary care services, which include South Central Kansas Clinic, Winfield Medical Arts, and the newly formed Cowley HealthwoRX; and the Senior Healthcare Unit, which opened in January of 2017.

“The hospital has a very detailed accounting system by Holly. I rarely see such detailed analysis by department, very good depth of information.  The good news is the problems are very narrow and very specific areas of the operations,” Di Palo said.

The traditional services sector, excluding the lab outreach program, had a $1.7 million loss in 2017, while the primary care segment lost $250,000. In contrast the senior healthcare unit delivered approximately an $800,000 profit within its first year of operation.

“The traditional operations are collecting $46 for every $100 charged. In 2007 that number was $55, so you can understand that the headwinds that this operation is facing have nothing to do with managing the operations,” Di Palo said.

Hospital administrators believe that through this process they have identified the areas primed for the largest growth opportunities in 2018. ER, Nutritional Services, Telemedicine, Surgery, Obstetrics, and agency staffing all produced negative income in the previous year.

“The loss is represented by a very limited set of departments, and therefore the corrective measures are very limited in numbers. The target for the operations from a cash flow perspective is substantially to generate enough of a performance improvement to allow the hospital to be in a position to start paying to the city the obligations that the hospital incurred in 2016 before the sales tax,” Di Palo said.

A number of actions were identified within the traditional operations to offset the loss, including changes in cafeteria pricing, renegotiating vendor contracts, and renewed provider commitments. In addition, the move of additional physicians from the hospital campus to Winfield Medical Arts is estimated to increase patient volume and reimbursement within the primary care segment. And finally, 2018 will see an increased effort to promote the senior healthcare unit in order to continue to grow that particular segment.

Di Palo concluded his presentation to the Board by summing up the growth initiatives.

“Invest in your organization, invest in developing senior care and primary care, and always keep focusing on patient quality.”