Business

Flu, heart caths, new knees boost Pardee revenue

By Bill Moss, Published: March 27, 2018

Eighteen months ago, at the close of its 2015-16 fiscal year, Pardee Hospital reported a $15 million loss. Last month, the hospital’s finance committee reported that January revenue of $62.4 million set a single month record for overall income and that Pardee and its physician practices had achieved a strong first half of the current fiscal year.

Pardee UNC Health Care’s new heart center, its new cancer center, urgent care clinics and a spike in flu cases all contributed to a financial resurgence. Pardee CEO Jay Kirby told the hospital Board of Directors in November 2016 that investments made in 2015 and 2016 would pay off in the months ahead.
Here is the Lightning’s interview with Kirby on the financial picture.

How has Pardee rebounded from the loss 18 months ago to much better financial position today?

“We are growing in a number of areas. Orthopedics. Southeastern Sports Medicine. We upgraded the operating room and increased access. Cardiac catheter volume is up 130 percent. We’ve always been strong there, and it’s good to see continued growth. We’ve had great growth in cardiology and then oncology. Our radiation oncology and medical oncologists are as busy as they’ve ever been. Those three service lines drive a lot of our business. We had a high-spike flu season, which increased our volumes in urgent care, in ER and throughout the house. We had days where we normally see 75 or 80 in our urgent care. We would see 120 to 125. It was a very steep spike this year, whereas in the past it was a long rainbow bell curve. Clearly, it’s a very busy time.”

In October 2016 Pardee started Pardee Cardiology Associates. How has that gone?

“Really, quite frankly being able to get folks into the cardiologist in 24 to 48 hours instead of having to wait four to six weeks has really helped us take off. … When we started this, we were doing about 80 caths a year. We’re on target this year to do 320. We’ve had patients show up in our ER that are having active heart attacks. During the daytime when we have Dr. Balcells and Dr. Das, we can move them straight from the ER directly into our cath lab and unblock it without having to have an ambulance ride.”

How is Pardee situated to serve new residents?

Jay Kirby “With so many people come here to retire, so many people living longer, you better do three things well in a community like this. You better have orthopedists to take care of their hips and their knees, you better have a cardiologist to deal with their cardiovascular system and you better have oncology because as we age the incidence and prevalence of cancer goes up as well. As our community grows and we expand schools and roundabouts and parkways and power plants, our hospital has to grow too.”

The hospital invested heavily in 2016 in Epic, the computer network, and Carolina Values, a UNC Health Care project. How did that work?

“UNC Health Care Pardee and all hospitals engaged a consultant to identify ways to cut duplication and waste, save money in buying supplies systemwide, share resources, combine back office functions. Carolina Values was a great investment in improving our operations. If you look at our revenue cycle, our days in AR (accounts receivable) is at an all-time low. Our gross revenue on a monthly basis is at an all-time high.”

After Pardee lost $15 million in the fiscal year 2015-16, you told the board that investment in Carolina Value, Epic, hiring new physicians would pay off in the long run. That might have sounded like spin at the time but you turned out to be right.

“I would say lucky. I would tell you there’s no special recipe. If you recruit highly qualified, well-trained doctors and give them the tools and resources and get out of the way, this is what you get. The success you’re seeing today, bringing physicians, such as radiation oncologists, vascular surgeons, general surgeons, expanding primary care, opening new urgent care, creating a cancer center that’s a destination, and then giving them tools such as Epic to talk together to manage care. It’s no secret sauce. We spent a lot of money in 2015, on Epic, on Carolina Value, on 24 new providers. What you’re seeing today is the fruit of those investments. I’m just fortunate that the board and the commissioners had the patience to go through that time but more importantly had the foresight to make those investments.”

You put a lot of emphasis on improving productivity at the urgent care centers.

“Used to be, not just Pardee, but hospitals across America had core competencies in how to run ERs. So hospitals relied on our ER group to run our urgent cares and they ran them — guest what? — just like an ERs. We don’t need to run them like ERs. We need to run them like physician practices that create a lot of increased efficiencies. We created a physician and P.A. model. (The medical personnel are) not all physicians and they’re not all ER physicians. The real benefit there is the fact that we will see 46,000 people in two urgent cares (in Hendersonville and Fletcher). That’s 46,000 people that might have ended up in our ER or someone else’s ER. We’re getting ready to open one up in Mills River (in June) and if that goes well we’ll be looking for other sites as well. Because people want accessible, affordable, convenient care and that’s what those urgent cares do.”

Any plans for the property Pardee bought across the road?

“No, we’re keeping our powder dry on that.”

Did Pardee see any patient revenue from the Mission-Blue Cross Blue Shield standoff?

“Sure, we saw a short-term blip. That was an unfortunate situation all the way around. … As unfortunate as it was for all involved, I do think it introduced Pardee to people as an alternative. I don’t believe people are coming here for their primary care. But it did bring some folks from Hendersonville to Pardee who would not have come in the past and I think we’ve held on to a little bit of that.”

Is the positive trend for revenue continuing?

“Average daily revenue continues to grow. In our community because we have the seasonality, our busiest time of year is this time of year, as people become more active, as people come back to Western North Carolina when they live other places. The second half of this year will be more profitable than the first half of this year.”

What’s the next big project?

Continued growth and development of our cardiovascular program. We want to be able to bring advanced care closer to not just Henderson County but to our region and that includes Transylvania, Polk and Rutherford counties and that means round-the-clock stent service where folks will not have to travel for care. We want to grow into our investment in those areas.

Do you see another wave of health care reform that will change the landscape again?

“Who knows what’s going to come out of Washington or Raleigh. But I can tell you that people are going to continue to get sick, people are going to continue to need care and Pardee hospital’s going to be there to provide it. Sixty-eight to 70 percent of the dollars we put in First Citizens Bank over there comes from the federal government.”

Anything else?

“Two things that are really exciting is we continue to expand access to primary care. Dr. (David) Ellis (chief medical officer) and his team have added four providers to Laurel Park, one to Etowah and more to Fletcher. Second, we’ve all heard that Wingate is going to expand their P.A. program, to 20 I think it is. We’re expanding our family practice residency with Blue Ridge Community Health Care up to five a year, so we’ll have 15. Pardee Surgical Associates is now training second and fourth year general surgery residents here through MAHEC and we’re also training four psychiatrists. So MAHEC, UNC, Wingate have all recognized that we’ve got quality medical staff, we’ve got great outcomes. This is where they’re bringing their students to train. We’re helping grow workforce. We’re a whole lot more than just a little hospital.”