Wellmont Achieves Impressive Results During Fiscal Year, Continuing Growth and Reducing Expenses
Nov. 1, 2017 | KINGSPORT, TENN.
Continued growth in service offerings to meet changing patient needs while expanding its presence, reducing expenses and securing appropriate reimbursement levels contributed to another successful financial year for Wellmont Health System.
“As we continue to face ongoing pressure on our finances from revised reimbursement formulas, our co-workers and physicians have performed tremendously with well-designed approaches to achieve strategic goals and provide exceptional care for our patients,” said Bart Hove, Wellmont’s president and CEO. “Their impressive work is enabling us to grow our revenues and support our organization through standardization, improved pricing and our use of products and purchased services.”
A major event for the health system in the fiscal year that ended June 30 was the addition of
Takoma Regional Hospital and
Takoma Medical Associates in January. Takoma Regional accounted for about 7 percent of Wellmont’s patient volumes, revenue and expenses in the fourth quarter and 3.5 percent for the year. Just as importantly, the health system and hospital shared best practices and refined a seamless system of care for patients on the west end of Wellmont’s service area while developing plans for a nursery renovation and the Epic electronic health record at Takoma Regional.
Because Takoma Regional was not a member of Wellmont for the entire fiscal year, its figures could not be included in year-to-year comparisons, though.
The recently completed audit of the organization’s finances showed Wellmont’s income from operations grew by 6.6 percent overall in fiscal 2017. This collective effort throughout Wellmont generated $13.5 million, which will allow the health system to continue investing in facilities, programs, equipment and services that will benefit the region.
Wellmont’s net patient service revenue rose by 5.9 percent, which equated to $49 million, due to increases in physician office visits and efforts to ensure correct classifications of patients for insurers.
Physician office visits increased by 16 percent, which included a 52 percent rise in urgent care center usage. The health system continued to grow in its use of
urgent care facilities by opening a new center in Gray and a second one in Bristol, Tennessee, during fiscal 2017. With its 12 urgent care facilities in the region,
Wellmont Medical Associates has created additional access points to build on the health system’s continuum of care.
Another factor in the growth in net patient service revenue is the considerable attention Wellmont leaders have placed on ensuring patients are appropriately classified when they are hospitalized. When someone is categorized as an observation patient instead of an inpatient, that generally means an insurer pays less and the patient pays more. Wellmont has enhanced its processes and documentation so a patient can be billed as an inpatient, when warranted.
In large measure because of these efforts, the number of observation patients decreased by 28 percent, and the number of inpatients climbed by 14 percent in fiscal 2017.
“The financial challenges we have experienced have caused us to sharpen our pencils further and explore ways we can serve our patients even more effectively,” said Todd Dougan, Wellmont’s executive vice president and chief financial officer. “Everyone in the organization is focused on ways we can achieve the best possible financial results, and it is not just in growing revenue. We have dedicated considerable energy to lowering our cost structure so we can allocate our resources more efficiently.”
Partnerships between the supply chain department and the rest of Wellmont contributed to savings in several facets of the organization. Wellmont has saved more than $2.5 million through better pricing achieved in commodities, custom packs and materials for a wide variety of medical procedures without sacrificing quality.
Using its expertise to develop beneficial solutions, the department has revamped the system’s printing platform, converted medical waste services, strengthened supply distribution methods and undertaken other initiatives that have saved the health system more than $3 million. By emphasizing the need for standardization, Wellmont has also removed more than 9,000 items from its purchasing roster.
“Sometimes, factors impact our costs beyond our control, but we have devised excellent techniques throughout the organization that are having measurable, positive effects on our financial performance,” Dougan said. “That is evident in the efforts by the supply chain and others in the organization. We have worked hard to develop a mindset of eliminating waste and creating additional value, and we are pleased our co-workers and physicians have moved enthusiastically in that direction.”
These gains have helped position Wellmont for success long term as the health system prepares to merge with Mountain States Health Alliance and create Ballad Health. Wellmont will play a major role in finding efficiencies that will enable Ballad Health to implement more than $300 million in service commitments for the region.
“Wellmont enters this merger from a position of strength – not only financially but also in recognizing the opportunities that are available by approaching health care from a different angle,” said Roger Leonard, chairman of Wellmont’s board of directors. “The headwinds of change in health care will require us to be even more agile as Ballad Health faces the future, but the results Wellmont attained in the most recent fiscal year, as well as the great financial work by Mountain States, show we will be up for the task.”