Everyday Heroes Save Lives and Jobs
The Joker. Catwoman. Lex Luthor. A hero is nothing without a good villain to test their mettle. For several years, GRMC’s scoundrel has come in the form of poor reimbursement. Our heroes have done a superb job of rebelling against the financial demons. In fact, in 2009, GRMC lost $938,000, a significant improvement from the $3.1 million loss in 2008.
Across the board, GRMC staff members sacrificed benefits and workdays through furloughs in order to retain jobs. Most staff members worked one less day every two weeks, or one less day a week for management and administration. Employees used that furlough day to volunteer with a variety of organizations in all the communities we call home, run for a city council seat, or raise money for a new aquatic center. Some employees have taken on part-time jobs to make ends meet.
“There is no doubt that the sacrifices made by GRMC employees contributed to the organization ending the year better financially than we had projected at the start of 2009.” - Jack Fritts, GRMC chief financial officer.
Moving Mountains
There is an old saying that it is easier to get an act of God than it is to get an act of Congress. When Congress acted this year, it helped avenge the wrong done to many of the nation’s hospitals for years. As a part of the Patient Protection and Affordable Care Act of 2010, the long-awaited fix to create a special payment category for tweener hospitals like GRMC is now law. Todd Linden, GRMC board members, hospital and community volunteer advocates, and most especially elected officials and their staff members made this happen. Senators Charles Grassley and Tom Harkin, Representatives Leonard Boswell and Bruce Braley fought for the little guys to get this accomplished. The anticipated direct benefit to GRMC will be a $750,000 payment annually for the next two years, beginning Oct. 1, 2010.
In general terms, this legislation will expand Medicaid to include an estimated 32 million people nationwide. Specific rules for the legislation are still being written and it will be some time before those details are available. We do know that the variation in Medicare payment based on where a hospital is located is an important part of the legislation that will also benefit GRMC. At this time, GRMC administration anticipates receiving a total of $240,000 by 2012 for this variation. Through this legislation, the Secretary for Health and Human Services is mandated to fix this wide variance in payment based on geography by 2012.
Economic Effects are Far-reaching
According to the Iowa Hospital Association, more than 1,300 jobs in Poweshiek County are directly related to healthcare services. Based on 2009 Bureau of Labor statistics, Poweshiek County has 9,410 employed residents, making more than one-fifth of the county's total employment directly linked to healthcare. A strong medical center is the center of the economy's healthcare sector. Specifically, GRMC generates 454 jobs that add $25.9 million to the Poweshiek County economy. This translates into $7.3 million on retail sales and $438,000 in state sales tax revenue. More than half of GRMC's employees live in Poweshiek County with the remaining 40 percent living in nearby counties. GRMC creates a strong economic impact on schools, businesses, and retail in the entire area.
GRMC is a nonprofit, non-tax supported regional medical center serving more than 40,000 residents in a seven-county area of east central Iowa. Supporting and maintaining such a facility demands strong financial management and exceptional support from individuals in the service area.
Total Operating Revenue | $72,764,275
The medical center’s sources of revenue include patient charges, grants, and miscellaneous items. In 2009, this is the total from all sources.
Total Deductions | $33,297,652
The medical center was not able to collect all of the patient revenue due to charity, bad debt, Medicare, Medicaid, and commercial insurance deductions.
$921,427 | Charity care is the uncollected revenue for care provided for those with little or no insurance who are unable to pay.
$1,143,577 | Bad debt is the uncollected amount of charges, deductibles, and co-payment obligations due from individuals who chose not to pay but did not qualify for charity.
$31,232,648 | Medicare, Medicaid, and commercial insurance deduction is the difference between charges and the pre-determined rates paid by payers. This amount is not billed to patients.
Total Net Revenue | $39,466,623
Net revenue is the amount remaining to operate the medical center after deductions are taken from revenue.
Total Expenses | $40,404,923
In order to care for patients, the medical center must incur expenses consisting of :
$23,539,683 | Staffing expenses of salaries, wages, and fringe benefits
$16,865,240 | Other expenses that include costs of supplies, interest, depreciation, and insurance
Total Operating Loss | $(938,300)
Operating loss is the next loss after expenses from healthcare operating activities. In 2009, the hospital experienced a loss from operations.
* This is a significant improvement from 2008 when the total operating loss for the year was $3,069,164. In fact, if we include non-operating sources of revenue (Contributions and Gain on Investments), GRMC had an overall profit of $468,714 for the year.
