EDMONDS — Stevens Hospital earned $5 million in overall surplus last year, the best financial report from the taxpayer-supported hospital in 14 years.
Last year’s surplus is another step in the hospital’s financial turnaround. It breaks its previous record, set in 1994, when income exceeded expenses by $3.1 million.
“This is huge, good news for the hospital and the community,” said Jack Kirkman, hospital spokesman.
The hospital’s financial downturn began in 1998, with losses of nearly $2.6 million and continued for seven out of the next eight years. Its biggest single year financial loss — $4.7 million — was in 2000.
The hospital’s financial struggles continued through 2005, when its overall losses hit nearly $900,000.
That trend began to change in 2006, when a $1.6 million surplus was posted; in 2007 it increased to $2.5 million.
Last year’s surplus shows the hospital’s financial condition is improving, “but we’re not exactly a robust, (financially) healthy institution yet,” said Rick Canning, chief financial officer.
The hospital, like nearly all businesses, is operating in a tougher economic climate this year, he said. The downturn in the economy has seen a drop off in patients at the same time the number of people coming to the hospital without health insurance is increasing, he said.
For example, 5.9 percent of patients were uninsured last year. This year, that number is expected to climb to about 7.25 percent, he said.
Michael Carter, the hospital’s chief executive, was hired in 2006 to try to help revive a hospital that had been bleeding money.
Longtime board member Fred Langer said Carter deserves credit, not only for the improvement in the hospital’s financial health, but improvements in patient satisfaction and employee morale.
Overall, the hospital will spend $155 million this year, up about $3 million from last year.
It plans to spend about $7.5 million on improvements, not quite double what was spent last year.
Canning said some of the improvements include:
Buying a new electronic medicine dispensing system.
Installing a new online medical record system for the emergency room, which should help reduce wait times for patients and provide information on how to care for themselves once they’re discharged.
Replacing about 80 beds, many of which are now about 18 years old.
Purchasing a new wireless communications system that will allow nurses in patient rooms to more easily consult with other hospital staff and summon medical help to the patient.
Property owners will contribute nearly $4 million in taxes to the hospital’s budget this year. A maintenance and operations levy will bring in $1.9 million and a bond levy will generate slightly more than $2 million, Canning said.
Hospital officials are still discussing the possibility of adding a new emergency room, Kirkman said. A decision on whether to go ahead with the project is expected by mid-year, he said.
A new emergency room would cost about $40 million. The hospital’s leaders for several years have considered taking that step, noting that its emergency room now treats about 42,000 patients a year, nearly twice the number the space was built for. The lingering question has been how to pay for it.
The hospital would either have to ask voters to approve a bond levy or seek out a business partnership with another medical organization.
Reporter Sharon Salyer: 425-339-3486 or salyer@heraldnet.com.
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