Altru reports tough 2013
Three months after Altru Health System announced it was tightening its belt in the midst of financial challenges, the full picture of last year's struggles is becoming a bit clearer. Grand Forks' dominant health care provider and one of the area'...
Three months after Altru Health System announced it was tightening its belt in the midst of financial challenges, the full picture of last year’s struggles is becoming a bit clearer.
Grand Forks’ dominant health care provider and one of the area’s largest employers released fourth quarter financial results last week. Those showed an operating loss of $2.4 million for the year, compared with net income of $13.8 million in 2012.
“That needs to be positive in the long run,” Altru Chief Financial Officer Dwight Thompson said.
Altru officials said in October that they were examining open positions more carefully before filling them, exploring combined responsibilities and cutting pay for its top leadership through the end of the year. Dennis Reisnour, Altru’s chief planning executive, said Tuesday they have not had to resort to layoffs, and have no plans for any.
“What we’re saying internally is we need to be nimble to changes in the industry as they happen,” Thompson said.
Altru officials have pointed to changes in health care law that has resulted in lower Medicare reimbursements, which is the largest share of its revenue, and fewer patients being treated on an inpatient status.
Still, Altru added 13 doctors in 2013, according to Thompson’s financial report, the same amount it added in 2012 and 2011 each. And they cared for more patients, he said.
“We continue to be optimistic about growth and delivering care,” Thompson said.
Altru isn’t alone in its financial challenges.
Analysis by the Moody’s Corp. projected a negative outlook for nonprofit hospitals like Altru in 2014 because it expects expenses to grow faster than revenues.
Revenue growth will slow, Moody’s said, partly because of an effective 1.3 percent Medicare payment reduction, fewer inpatient admissions “and the ongoing shift in care toward outpatient settings, where (insurance) reimbursements are lower.”
Inpatient admissions at Altru fell by 1,066 in 2013 compared with the previous year, and outpatient admissions grew by 17,479. Revenue grew by less than 1 percent to $455.2 million, while operating expenses grew 4.5 percent to $457.6 million.
The hospital had $10.8 million in realized investments for 2013, according to the report.
“The health care industry has proven resilient when an organization’s senior leadership responds with quick and decisive actions, but ultimately few organizations are completely immune to environmental pressures,” a Standard & Poor’s report from October stated. Hiring at hospitals nationwide slowed during 2013, according to federal data.
Despite the gloomy predictions from analysts, Altru officials were upbeat about the future. Altru’s new inpatient rehabilitation unit will open up on its new South Washington Street campus in late March, according to Thompson’s report.
“There’s no question that financial results are an important piece of what we do, but we can’t lose sight of all the good things that are happening around here either,” Reisnour said. “We’ve got to fix (the finances), but we feel like we’re on our way.”