Local hospitals rebound

Las Vegas Valley hospitals came off the critical list in the first quarter. Rising bills for patients and tighter cost controls helped lead them to an overall operating profit in the three-month period.

According to numbers the hospitals furnish to the state, the valley's 13 hospitals collectively ran a
$1.3 million profit on
$757.2 million revenues. While the profit was thin and seven hospitals showed losses, the overall picture marked a sharp turnaround from the $32.6 million loss recorded one year ago.

Although once considered recession-proof because people get sick no matter what the economic cycle, the valley's hospitals have gone through a turbulent three years. Falling patient counts and payments, as people lost their health insurance and the state slashed Medicaid payments, led to a total loss of $232.2 million since 2008 after years when the industry thrived on a growing population.

But experts caution that the quarterly results can fluctuate widely. Last year, for example, Summerlin Hospital recorded
$12.6 million operating profit through three quarters, then
$37.3 million in the fourth.

The overall revenues rose 7 percent in the first quarter, putting the hospitals on track to become a $3-billion-a-year industry in the valley. Hospitals collected an average of only 18 cents out of every dollar they bill due to discounts included in private insurance contracts or imposed by government sources.

At the same time, the expenses grew only 2.2 percent, as hospital managers dealt with tighter payment rates through a variety of efficiency measures and job cuts.

"What we have seen is hospitals all across the valley responding to the reimbursement pressures," Sunrise Hospital Chief Financial Officer Lana Arad said. "Over the last three years, we have really stepped up the game on the cost side."

At the same time, she said, billings have risen partly because people enter the hospital in worse shape than in previous years, when unemployment was much lower and more people had health insurance and reliable incomes to cover co-payments.

In the first quarter, 48,000 patients entered a valley hospital, nearly 700 fewer than in 2010. But the average length of stay rose a fraction of a day, adding up to about 5,800 patient days.

Sunrise, Las Vegas' largest hospital, recorded a $4.2 million operating profit, the first since the first quarter of 2007. Between volume gains in its cardiac and neonatal intensive care units, marketing itself to Strip tourists and reining in expenses, Sunrise has started to reverse three years of heavy losses.

Also, said Arad, it helped that the state did not cut Medicaid rates this year as it has in the recent past. Because of its location in an inner-city neighborhood, about one-fourth of Sunrise's patient bills are covered by the government program to cover low-income people.

Even as hospitals show signs of recovery, other segments of the health care industry continue to struggle.

"There is still a lot of unemployment and still a lot of chasing people for unpaid bills," said Dr. Howard Baron, president of the Clark County Medical Society. "We are hopeful that practices will turn around, but we have not seen a tremendous difference so far.

Larry Preston, president of Professional Medical Consultants, said overdue balances remain high and the number of uninsured people continues to run at triple the level of a few years ago.

Contact reporter Tim O'Reiley at
toreiley@reviewjournal.com or 702-387-5290.