By PETER HUSSMANN
Two years ago, Skiff Medical Center was bleeding badly. A year ago its financial condition was not much better. But now, after undertaking some new procedures, the city-owned hospital is much improved and appears well on the mend.
Those are some of the findings that can be found in Skiff's recently filed audit report of its financial condition for the fiscal year ended June 30, 2011.
At the end of the 2009 fiscal year, Skiff reported that expenses topped revenues by $3.39 million. The loss in the following fiscal year was not much better at $3.16 million.
But by the end of the latest fiscal year, those losses were cut dramatically. The Newton hospital reported $862,000 in expenses over revenues before contributions, which if added drops the loss to $692,000 for the year.
In a hospital management analysis included as part of the audit conducted by Seim Johnson of Omaha, Skiff officials attribute much of the financial turnaround to a strategic plan it adopted two years ago aimed at improving its "long term vitality."
Specifically, Skiff's strategic plan focuses on five points:
- Put people first by fostering a culture of ownership focused on our core values, a shared hopefulness on the part of each caregiver, and a desire to make Skiff the best possible place to work and provide patient care.
- Remain a full-service hospital but evaluate individual services for potential growth or replacement based on environmental trends, community needs, and financial performance.
- Enhance physician and public confidence by improving our ability to care for higher acuity patients; developing more advanced diagnostic capabilities, introducing new out-patient based therapeutic services and specialties; and ensuring physician inclusion in our decision making process.
- Improve the effectiveness and efficiency of our operations through the implementation of measurement tools and the use of national best practices, thus creating a sense of urgency throughout Skiff in regards to the importance of being the best at what we do.
- Be intentional in telling the Skiff story to the community and focus our efforts on increasing physician referrals, building good will, and increasing awareness about our service offerings.
"We believe that continuing implementation of this plan which focuses on creating a culture of ownership, growing volumes, and increasing efficiency of operations will place the hospital in a good position for long term vitality," the management analysis of the audit states.
The management analysis also makes note of the savings realized by the reduction in force initiative undertaken at the hospital in November of 2009. Since the end of the 2009 fiscal year, employment levels at Skiff have dropped by 72 full time positions, to 283 at the end of the latest fiscal year, resulting in a total aggregate reduction in hospital employed salaries of $3.3 million.
The hospital's management analysis also discusses local economy. Though the number of jobs in the county dropped 30 percent between 2000 and 2010, largely due to the closure of Maytag, the population levels have remained nearly steady. Data from the 2010 Census show a population decline of just 2 percent (350 residents) from population levels a decade ago.
"A late 2010 economic analysis by Iowa State University indicated that the primary impact of the departure of Maytag, and the subsequent nation-wide recession, was a shift in the location of jobs out of Newton without a corresponding change in population," the analysis states. "Essentially, Newton has made the transition to bedroom community status. Newton and Jasper County are now essentially operating as a far-flung eastern suburb of Des Moines."
The report also makes note of some new local industries, like wind energy companies TPI Composities and Trinity Structural Towers, the growth of existing employers like Caleris and Springboard Engineering, and the advent of new firms like box company Walter G. Anderson and tour bus company Hawkeye Stages. The Iowa Speedway also adds to the local economy, the report states. Negatively, however, Iowa Telecom's sale to Windstream resulted in the loss of 150 local jobs.
" As the local economy continues to improve, these trends are having an amplified impact on the hospital," the report states.
The report notes that Skiff's entrance into the Rural Community Hospital Demonstration Program that provides cost-based reimbursement for in-patient services will provide Skiff with a degree of financial stability over the next five years as it works to continue with its strategic plans. In addition, its new digital radiology room, 128 slice CT scanner and Iowa's first digital broadband MRI "is most exciting as it will set Skiff apart as the leading rural hospital imaging center in the upper Midwest," the report states.
"It is clear that Fiscal Year 12 will be another challenging year, but positive steps are being taken and we have high hopes for the future," the report concludes.
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