ER-Forum Blog

Hospital and ER turn a $25 million loss into an $8 million gain.

In these challenging economic times for healthcare and emergency medicine, it's nice to report a story with a happy ending.  

One such story emanates from this week's Healthcare Financial Management Association's annual ANI conference in Las Vegas. As reported in healthcarefinancenews.com venerable Natividad Medical Center has announced that they've turned a $25 million loss into an $8 million gain in just four years.

Natividad, a 172-bed acute-care safety net medical center owned and operated by Monterey County, California has been a fixture in the community for more than 100 years. Over time, a series of poor management decisions had the hospital on the verge of closing in 2006.

Natividad CEO Harry Weis and his team took over the hospital in 2006, instituting team-building changes among staff, setting financial perimeters through data collection, renegotiating contracts with HMOs and receiving a $10 million private donation from the communities' doctors to launch the recovery. Since then, the hospital has not only recovered, but prospered.

Natividad's emergency department has focused on ways to save money instead of cutting more. Triage was improved so that emergency patients are now treated and sent home if they have low acuity illnesses, freeing up beds for those with more severe problems.

Thanks to the changes, patient wait times have gone from around four hours to roughly 30 minutes. Patient satisfaction spread by word of mouth and the ER has increased the volume of patients, with fewer leaving before being treated.

In addition, the emergency department's billing system and fee scale underwent an upgrade for the first time in 10 years, matching the fees to those of surrounding hospitals.

"We want to debunk the myth that public safety net hospitals can never make money," said Jeffrey Bass, MD, who was director of Natividad's emergency department during the turnaround. "We don't think we're a fluke. This is a model that can be reproduced over and over again."

Part of the overall recovery, according to Weis, has been due to changing the culture of the hospital from "what we're doing is good enough" to one focused on pride in performance. Nurses are made key members of the success team. Employees are held accountable for the first time in years. And poor performers were let go.

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