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Amid cloudy forecast, Pardee outperforms budget

Pardee Hospital is facing the best of times and the worst of times.

The county-owned facility projects a potential loss of $54 million over the next 10 years, including a $94,000-a-month hit from Medicare cuts starting Friday. The loss of $5 million a year is a new projection based on sequestration cuts, lower reimbursement rates for federal insurance programs and continued high costs of indigent care, which budget planners had hoped would be covered by a Medicaid expansion covering poor and middle-class families.
Yet since Oct. 1 the hospital has posted the best operating margin it's had in the past 10 years, Finance Committee chairman Bill Smith told the Board of Directors on Wednesday.
The hospital showed across-the-board gains in revenue producers, trimmed costs and saw increases in its investment portfolio. Smith reported on the hospital finances for the fiscal year that started on Oct. 1, including the performance compared to budget and to the 2012 fiscal year:

  • Patient admissions were up 7 percent to budget and 8 percent over 2012.
  • Emergency room visits climbed by 2.2 percent over budget and 5 percent over last year.
  • Physician practice visits came in 1 percent over budget and 12.2 percent over last year.
  • Operating room services climbed 1.2 percent over budget and 4.6 percent over 2012.
  • Urgent care soared by 17.1 percent over budget and 24.3 percent over last year.

Net operating margin for the first third of the fiscal year was $1.3 million — $754,000 ahead of budget, a gain of 130 percent.

Counting investment income, Pardee recorded a net margin of $1.5 million, which was $343,000 ahead of budget, a 30 percent gain, and $1.5 million ahead of last year, when the hospital was at a break-even point.
The year-to-date numbers were boosted by strong gains in January statistics for all services except in-patient surgeries, which came in 15.8 percent under budget, and length of stay, which was 3.81 days instead of the 3.83 budgeted days. Gains were total inpatient days, up 10.9 percent to budget; patient admissions, up 10.9 percent; ER visits, up 3.3 percent; physician practice visits, up 2 percent; operating room cases, up 7.8 percent; outpatient surgeries, up 18.2 percent; and urgent care visits, up 7.7 percent.


The hospital, which receives no taxpayer support from Henderson County, finished the 2011-12 fiscal year with a 4 percent increase in operating revenue, a 3.9 percent increase in operating expense and a $1.1 million net operating margin, or eight-tenths of 1 percent.

Biltmore battleground
Underscoring the competitive battleground in health care delivery in the northern Henderson/south Buncombe area, the finance committee heard that Park Ridge Health had invited bids for a new primary care practice on Long Shoals Road. Mission hospital is also planning a primary care clinic in the Biltmore Park area.
"This may impact the Mission Pardee Health Campus and may require that Pardee revisit certain items," according to Finance Committee minutes.

Pardee has partnered with Mission in building the medical campus on the county line. Pardee has budgeted $4 million in capital costs for the project this year.
The committee also was told that the Asheville Citizen-Times planned to publish a story on hospital CEO salaries in Western North Carolina. Pardee had provided the information to the newspaper, Kirby said.