By Ashly McGlone
FREMONT -- After a year marked by declining operating income and hundreds of job cuts, leaders of the Washington Township Health Care District are anticipating a more profitable year ahead.
Board members approved a 2013-14 budget last month that would leave the public agency with $11 million in operating profits, up from $8.4 million last year. The district, which operates Washington Hospital, was not on track to end the last fiscal year with a surplus until administrators eliminated nearly 200 employee positions midyear. The job cuts, many in direct patient care, saved the district $16 million, officials said in January.
"While there are no plans for additional staff reductions, Hospital leadership will always operate driven by our patient first ethic and will make decisions about structure and staff based on the Hospital's ability to best provide care to its patients," hospital spokesman Christopher Brown said in an email Thursday.
Helping the budget will be a $110 million increase in patient service revenue this year aided largely by 192 more catheterization lab procedures and 110 more surgery cases, hospital officials project. Most of the new surgeries are expected to be joint replacements, rising from 1,437 replacements to 1,507 in 2013-14.
But like other hospitals, Washington will have to grapple with new challenges brought by implementation of parts of the Affordable Care Act this year.
"For Washington Hospital, it has created a world that is going to be characterized by lower payment and outright take backs from our revenue (and) continued spending on unfunded mandates," district Chief Financial Officer Chris Henry told the board.
Decreased reimbursements will come on top of existing federal program shortfalls. The hospital provided nearly $136 million in services to Medi-Cal and Medicare patients last year that was not paid by the federal programs, Henry said.
Though the details of a new health care exchange system and the overall impact of the Affordable Care Act is not entirely clear, CEO Nancy Farber said community members will likely feel like the new system contains "broken promises."
"This isn't going to work out as advertised. There are going to be haves and have-nots, and there are going to be some distinct disadvantages to this," Farber said. She said the district's insurance counseling service will need to be beefed up and expanded to ensure district residents can navigate the system and know their options.
Making federally required changes to the hospital's medical coding systems this year will cost $13 million, including a $2.9 million upgrade to the district's newly launched $86 million electronic medical records system Epic.
Baby deliveries are expected to remain steady at 1,942 deliveries a year, as will emergency room visits at 52,696 and outpatient visits at 103,000.
Officials plan to spend $19.1 million on charity care this year, up $1 million from last year. The district also plans to move forward with plans to build a new parking structure and three-story critical care pavilion using taxpayer-funded bonds approved by district voters in 2004 and 2012.
Ashly McGlone covers San Leandro, San Lorenzo, San Ramon and the Washington Township Health Care District. Contact her at 510-293-2463. Follow her at Twitter.com/ashlyreports.