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Last month, Children's announced that we met our 2007 financial goals. The hospital finished the fiscal year with an operational surplus of $47 million on total operating revenues of $1 billion.
The biggest reason for this success is increased volume—in inpatient discharges, outpatient visits and surgical procedures—at Longwood and our satellite locations. To recognize the hard work that led to this success, all employees received a bonus at the end of the fiscal year. "The combination of dedicated staff, effective contracting and a focus on providing efficient, high-quality care is what made it possible for Children's to pay such bonuses for the sixth straight year," says David Kirshner, senior vice president and chief financial officer.
In 2007, the hospital made significant investments in certain areas:
• We added staff, improved access to Children's care throughout Eastern Massachusetts and invested in quality and safety initiatives, such as the CHAMPS effort. We also expanded the number of beds to 377, including 11 beds in Waltham.
• We put significant funding in our employee training efforts, including management training, and in building the hospital as a workplace of choice by improving the affordability of benefits While this was certainly a terrific year, Sandra Fenwick, chief operating officer, anticipates more modest operating results in 2008, along with significant financial challenges (see sidebar at right). "When we look to the future, we're focusing on quality and cost to create the best value for our patients, families and the insurers. Insurers are not going to pay double digit increases for health care and we need to find innovative ways that don't compromise the quality of care to respond to the market." In 2008, she says that all our surplus from the prior year will be reinvested in our missions. Investments will focus on:
• Expansion of inpatient care capacity
• Completion of phase two development of the Waltham campus
• Program for Patient Safety and Quality initiatives
• Expansion of research space with the opening of the new floors in the Center for Life Sciences
• A new and expanded Devon Nicole House, our patient family housing
With the support of all employees, the hospital is well positioned to meet our 2008 financial goals.
Two crucial financial challenges Children's faces in 2008 and beyond:
Managing the rising cost of providing care in response to:
• The continued challenges in recruitment and retention of the best and brightest doctors, researchers, nurses and staff, as well as the need to invest in information technology and the increasing cost of medical and surgical supplies, pharmaceuticals and energy
Continuing to win fair reimbursement from government and private payers:
• State and federal reimbursement for Medicaid patients have not kept pace with medical inflation
• Because employers continue to be very sensitive to health insurance costs, private sector insurers in Massachusetts will continue to try to limit premium increases—which also means limiting payments to hospitals and doctors |
