EDMONDS – Although losses for Stevens Hospital and its affiliated businesses in 2004 likely hit $1.75 million, officials are predicting this is the year they’ll break even.
If so, it could signal the reversal of a general trend of financial losses for the taxpayer-supported hospital, which hit $4.7 million in 2000.
The hospital lost money in 2001, made $1 million in 2002, and lost money again in 2003.
“We can see we’re improving,” said Dr. John Todd, chief executive. “Certainly we aren’t fully recovered. … There will be ups and downs. It won’t be a steady, linear course.”
The exact amount of last year’s loss has not yet been finalized by auditors. However, the $1.75 million figure is expected to be very close to the final number, said Gary Wangsmo, the hospital’s chief financial officer.
If so, it would mean a reduction of $700,000 over the 2003 operating loss of $2.45 million.
“We ended the year with a bottom line better than projected,” he said. Last year, officials had predicted the operating loss would be $2 million.
As the hospital becomes stronger financially, it can consider spending money for new equipment and other upgrades to the hospital, he said. “When you run such steep losses, you really can’t afford to do that.”
The goal, he said, is to make the hospital and its businesses financially stable and “show the community we have turned the place around financially.”
Hospital finances have been a major focus of the hospital since Todd took over as the hospital’s chief executive last year. In January, he was named interim chief, replacing former top executive Steve McCary, who was fired by the board in January.
McCary’s severance package will pay him $1.18 million over seven years and $921,049 in deferred retirement compensation.
Todd was permanently appointed chief executive in June. He is being paid $300,000 a year and will receive an additional $50,000 if he stays until June 2006.
Wellspring Partners Ltd., a consulting firm that specializes in helping hospitals with financial turnarounds, was hired in May to advise the hospital administration and board on cost cutting and other financial matters.
The firm has been at work for six months and implemented $898,000 in savings so far, said John Tiscornia, who leads the consulting team.
To cut costs, the hospital has reduced the number of temporary nursing employees and renegotiated contracts with employment agencies.
The changes took effect in October. From then to mid-February, the changes have saved the hospital $157,000 over the prior year, Wangsmo said.
Stevens has worked to speed up the time it takes patients to register. In January, 71 percent of patients were registered in 10 minutes or less, Tiscornia said.
Administrators will begin long-term planning and a facilities evaluation in the second half of the year, Todd said.
The five- to seven-year plan is expected to take about six months to complete, Wangsmo said.
Community members will be asked to work on those committees, said Fred Langer, board president.
“We’re trying to make it more of a dialogue with the community,” he added.
Reporter Sharon Salyer: 425-339-3486 or salyer@heraldnet.com.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
