Las Vegas area speciality hospitals continue to churn out profits

Just as they have for years, Las Vegas-area specialty hospitals continued to generate operating profits in 2012, even though their collective margins declined on higher revenues over 2011.

Numbers reported to the state’s Department of Health and Human Services show all 15 specialty hospitals had operating profits. Overall, they posted $311.6 million in revenues, a 3.2 percent gain from 2011.

Operating profit, however, dropped 22 percent to $45.2 million, as a range of expenses — including payroll, benefits and leases — increased. Also affecting the overall results was an unspecified $5.1 million charge at Healthsouth Rehabilitation Hospital of Henderson in the category of taxes, licenses and permits, a line item that normally amounts to less than $400,000 per year.

The specialty hospital umbrella covers a diverse group of institutions treating patients with psychiatric and addiction problems as well as those suffering physical ailments too serious to send home but not requiring full hospital care.

Although a relatively small niche of the medical industry — their 1,282 beds in Las Vegas represent about one-third of those at general hospitals — specialty hospitals produce much better financial results. The average profit per patient last year ran $2,745 for a rehabilitation facility and $1,664 at a psychiatric hospital, compared to just $352 at general hospitals.

Several intertwined reasons account for this, said consultant Scott Weiss, who has experience in specialty hospital management.

Unlike general hospitals, he says, specialty hospitals get to evaluate their patients prior to admission for both insurance coverage and the severity of the conditions. And none have emergency rooms, where general hospitals have a legal obligation to treat anyone who walks in.

“You can gauge the cost of care and try to balance it with the rate of reimbursement,” he explained.

As a result, specialty hospitals wrote off a mere $6.9 million for bad debt or charity care last year, compared to the massive $1.7 billion at general hospitals.

Specialty hospitals also get to view what is usually an extensive medical history of a patient, so there generally are few unknowns compared to a person entering an emergency room complaining of chest pains.

Furthermore, specialty hospitals do not need the extensive technology and high staffing levels of a general hospital because the patients are in stable condition, Weiss said.

Should any serious problems flare up, the patients can be transferred to a general hospital.

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