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Community posts healthy results, but short of expectations

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Community Health Network avoided the declines in patient volumes in 2013 that beset the three other major hospital systems operating in Indianapolis. Instead, Community’s challenge was that larger portions of its patients failed to pay their bills, according to publicly filed financial statements.

Those trends led Indianapolis-based Community to bring in more revenue and profit from operations last year. But its profit margins still fell significantly short of its executives' expectations.

Community, which operates eight hospitals and employs more than 500 physicians, earned operating profit of $54.1 million last year, a 13.5-percent increase over 2012. Revenue rose 5.8 percent, to nearly $1.8 billion.

Excluding differences between the two years on special payments from Medicare and Medicaid, as well as on different results from joint ventures and other investments Community does not control, the network would have seen profit nearly triple, to $37.4 million, up from $12.9 million the prior year.

That growth was driven by a 6.25-percent price increase and increased visits from patients across the board:

Inpatient admissions rose 4.6 percent, with a 10.5-percent increase in births.

Emergency room visits shot up 10.9 percent.

Productivity among employed physicians rose 16.6 percent based on a measure called work relative value units.

Imaging scans rose 13.9 percent.

Inpatient surgeries rose 8.8 percent. Outpatient surgeries inched up 0.4 percent.

But Community’s percentage of uncompensated care shot up. It spent $25.5 million more on charity care and $10.3 million more on bad debt.

Uncompensated care rose to equal 5.8 percent of gross patient revenue, up from 4.9 percent last year and a forecast of 4.7 percent.

Community officials have speculated that the closure of Franciscan St. Francis Health’s hospital in Beech Grove sent a large percentage of uninsured patients to Community Hospital East, which saw its percentage of self-pay patients spike to 9.9 percent, up from 7.5 percent the year before.

That increase in unpaid bills dampened Community’s profit margin from operations, which totaled 3.1 percent for the year. That was an improvement from 2.9 percent in 2012 but below Community’s planned 5 percent.

In 2013, Indiana University Health saw somewhat lower profits because of broad declines in patient visits, which were partially offset by price increases. Franciscan Alliance saw a large decrease in profit due to declines in patient visits and higher expenses.

IU Health, Franciscan and St. Vincent Health laid off roughly 900 employees last year. Community let go more than 150 workers.

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  • Profitable departments
    Community Hospital East executives always seem not mention that what is bringing the decline of east is that most of the more profitable departments have been shipping to the north Campus in the last 5 years. And east reduced their beds from 800 to around 75. That's got to put a dent in their profit margin. Most of the huge building at east is not even being used anymore. Hook Rehab is gone which filled up a large portion of the basement. Also no physical therapy either which was in the basement. These departments were shipped somewhere else making Community east appear not as successful. They also took away the doctors dining room too. East is a mere shadow of it's once bustling self. It's being neglected to death.

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  1. These liberals are out of control. They want to drive our economy into the ground and double and triple our electric bills. Sierra Club, stay out of Indy!

  2. These activist liberal judges have gotten out of control. Thankfully we have a sensible supreme court that overturns their absurd rulings!

  3. Maybe they shouldn't be throwing money at the IRL or whatever they call it now. Probably should save that money for actual operations.

  4. For you central Indiana folks that don't know what a good pizza is, Aurelio's will take care of that. There are some good pizza places in central Indiana but nothing like this!!!

  5. I am troubled with this whole string of comments as I am not sure anyone pointed out that many of the "high paying" positions have been eliminated identified by asterisks as of fiscal year 2012. That indicates to me that the hospitals are making responsible yet difficult decisions and eliminating heavy paying positions. To make this more problematic, we have created a society of "entitlement" where individuals believe they should receive free services at no cost to them. I have yet to get a house repair done at no cost nor have I taken my car that is out of warranty for repair for free repair expecting the government to pay for it even though it is the second largest investment one makes in their life besides purchasing a home. Yet, we continue to hear verbal and aggressive abuse from the consumer who expects free services and have to reward them as a result of HCAHPS surveys which we have no influence over as it is 3rd party required by CMS. Peel the onion and get to the root of the problem...you will find that society has created the problem and our current political landscape and not the people who were fortunate to lead healthcare in the right direction before becoming distorted. As a side note, I had a friend sit in an ED in Canada for nearly two days prior to being evaluated and then finally...3 months later got a CT of the head. You pay for what you get...

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