Hospital seeks fiscal turnaround
A renovated parking lot and gleaming new lobby welcome visitors to Quincy Medical Center, while updated patient rooms beckon to be filled. Down the hall, new equipment boasts boasts the latest technology.
By all visible accounts, the hospital has done well since Steward Health Care System acquired it in 2011. Yet the numbers tell a different story.
According to the latest figures, Quincy Medical had a $14.5 million operating loss through the first three quarters of 2013, reflecting a downward trend over the past five years. Patient volume is also down, according to referral and revenue numbers.
“That can’t go on for much longer,” said Lisa Phillips, editor of health care mergers and acquisitions news for Irving Levin Associates Inc., a Connecticut-based industry source on hospital finances. “It doesn’t sound very good.”
Next month, it will be three years since Quincy Medical Center’s financial problems were exposed when the hospital missed debt payments. While the hospital hasn’t cleared all of its financial hurdles since then, a Steward spokeswoman says it is moving in the right direction.
“We’ve made considerable progress in terms of quality, but there remains work to be done in terms of making Quincy Medical Center financially sound in the long term,” Brooke Thurston, Steward’s vice president of media relations, said in a phone interview last week.
While there’s no shortage of items on the hospital’s to-do list, upgrading quality seems to have been checked off.
Last month, the state Department of Mental Health relicensed Quincy Medical Center’s psychiatric unit. The state performed a surprise inspection of the floor in May 2013 and closed the unit after finding squalid conditions.
While the licensing is part of a two-year licensing cycle, the renewal speaks to an overall endorsement of the hospital’s changes.
“DMH felt that significant and hopefully long-lasting changes have been made to the service,” Anna Chinappi, director of the office of communications and community engagement for the mental health department, said in an e-mail. “Some of the changes made, having been so successful, may be the model for other Steward inpatient services.”
New patient rooms and meeting areas have been coupled with new leadership, from the hospital’s president to its chief nursing officer to the chief of psychiatry, hospital staffers said.
Those leaders and others meet weekly to review programs and problems at all of Steward’s 11 hospital sites around the state.
At Quincy Medical Center, patients’ relatives have joined a family advisory council. Other patients are surveyed on their experience once they leave hospital beds.
According to a Steward spokeswoman, all of this is in addition to efforts to recruit high-quality physicians and bolster the hospital’s appearance with $15 million to $20 million in facility upgrades — part of a seven-year plan to invest in the hospital and turn around finances.
Hospital officials are hopeful the changes will mean positive experiences for patients, whose endorsements are needed to battle negative reports about the hospital over the past year.
In addition to the psychiatric unit problems, labor tensions with nurses sparked charges and countercharges on everything from staffing levels to patient care. The hospital’s finances have long been a bone of contention since Quincy Medical Center missed a debt payment in 2011 and filed for bankruptcy protection. It then was acquired by Steward and emerged from bankruptcy protecion in October of that year.
While patient volume may be bolstered by good word of mouth, the hospital will have to fight against a declining market.
According to Phillips, hospital visits are on a downward slope nationally, largely because of a general reluctance to pay higher hospital deductibles, but also because of the proliferation of urgent-care clinics and stand-alone facilities.
In Quincy, the problem has meant declining patient service revenue. Though figures for the full year were not available, only $56.6 million in revenue was collected through September in 2013, compared with $91.9 million to $102.4 million in each of the previous four full years.
According to Local 1199 of the Service Employees International Union, which represents health care workers at Quincy Medical, a decline in referrals from Granite Medical Group — one of Quincy's largest primary-care facilities — has contributed to the problem. The admissions from Granite dropped from 626 in the first six months of 2012 to 389 in the same period of 2013, union officials said.
Union officials say the cause is an agreement Granite struck with Beth Israel Deaconess Hospital-Milton in 2012, and if the trend continues, Quincy Medical Center could see its emergency facilities shut down.
Yet hospital officials have begun to combat the tide, reaching out to patients and physicians to generate business, a spokeswoman said.
Quincy officials have also been in talks with Granite on gaining back referrals.
“The conversations we’re having with Quincy are certainly a pretext to having physicians be comfortable with referrals to the medical center,” said Granite’s chief operating officer, Robert Calway, adding that referrals stopped due to a fractured relationship with the hospital as well as patient requests to go elsewhere.
Quincy Medical Center is also advocating for higher reimbursements from government programs, cuts that have eaten away at the hospital’s bottom line.
About two-thirds of Quincy Medical Center patients are covered by Medicaid or Medicare. Out of Steward’s 11 locations, Quincy Medical had the largest operating loss in the first nine months of 2013, followed by Merrimack Valley Hospital’s $7.4 million loss.
While the hospital still has work to do, the changes have been good news to City Councilor Doug Gutro, who said it is critical that a community hospital remain viable.
“We want this to work . . . [and the] communication we’ve had to date has been positive and affirmative,” Gutro said. “I feel over the last six months that they are making an effort to hopefully shore up their financial footing, improve the facilities, [and] create a harmonious relationship with the unions.”