Valley Health "Community Benefit" trend from 2004 - 2007

Did anyone read with much interest the pamphlet that Valley Health mailed out in the fall of 2008, THE BIG PICTURE,  2007 Benefit to the Community?

Valley Health described this trend as follows:

Valley Health gives back to the community in many ways.  Two important areas are charity care and bad debt allowances.  These two items grew 9.2% last year and up 19% over two years.  The health system’s total community contribution also includes losses from providing care to patients covered by two government programs: Medicare and Medicaid.  In 2007, Valley Health’s total community contribution topped $56 million, an increase of 18.3% over 2006 and a jump of nearly 47% since 2005.

Valley Health is also an important economic presence in the region, paying salaries to over 4,500 employees, and purchasing millions of dollars worth of goods and services from local vendors.  Looking at the big picture, Valley Health is proud to contribute to the health and vitality of the communities we serve.

	2005	2006	2007	06-07 Diff
Charity Care	14,263,146	17,285,000	18,902,225	9.4%
Other Means-Tested Programs	8,312,991	8,551,185	10,773,161	26%
Other Contributions	2,909,717	1,722,880	1,357,696	-21.2%
Bad Debt	16,314,400	16,105,313	17,569,553	8.1%
Medicare Shortfall (- is a gain)	-3,899,411	3,058,887	6,635,781	117%
Community Building Activities	267,303	693,253	832,910	20.1%
Total Community Benefit :	38,168,146	47,416,518	56,071,326	18.3%

For what Valley Health has done for the community from 2005 through 2007 is a reasonable and generous trend.  But when some more in-depth research was conducted, something much more epic took place in 2004.  The new revised Valley Community Benefit trend chart for years 2004 - 2007 below speaks for itself.


For the record, the question marks (???) below for 2004 and the profit for 2005, a request has been sent for an explanation and will be posted as soon as it's been received.

	2004	2005	2006	2007
Charity Care	21,600,000	14,263,146	17,285,000	18,902,225
Other Means-Tested Programs	???	8,312,991	8,551,185	10,773,161
Other Contributions	???	2,909,717	1,722,880	1,357,696
Bad Debt	???	16,314,400	16,105,313	17,569,553
Medicare Shortfall (- is a gain)	14,486,000	-3,899,411	3,058,887	6,635,781
Community Building Activities	???	267,303	693,253	832,910
Total Community Benefit :	59,000,000	38,168,146	47,416,518	56,071,326

Source:
-Valley Health's pamphlet, THE BIG PICTURE, 2007 Benefit to the Community

How is Shenandoah University operating financially over the last 3yrs when compared to other "private" USA-South and ODAC institutions?

This post is in concern of The Winchester Star’s article Shenandoah long-term debt at nearly $46.7million that was in print on September 15, 2008. This story may have illustrated to dark of a cloud on Shenandoah University’s financial position to the local community in the Shenandoah Valley regional area. After much in-depth research, the perception is that the sun is shining much brighter on SU’s financial future.

Bullets to support this position that SU is operating resourcefully over the last 3 years:

>Shenandoah University has averaged $7,150,758 in excess revenue (profit) for this period that ranks them #1 overall in 3-yr comparison to the other USA-South conference academic institutions. SU is ranked #9 out of 23 schools for profitability when the USA-South schools are combined with the 14 ODAC institutions.

>The Spirit of Shenandoah Campaign stood at $49,506,514 on June 30, 2008 that had a target of $65million. That target was surpassed when it was announced on July 17, 2009 @ $65,126,428. The distribution of the monies is described as follows:

• Capital Gifts: Goal - $29.5 million, Raised to Date - $18.3 million
• Endowment: Goal - $32.0 million, Raised to Date - $16.6 million
• Operational: Goal - $3.5 million, Raised to Date - $30.2 million

>Having debt is not always a negative position to be in as long as the institution is being profitable and Shenandoah University has done so over the last 3yrs.

Alvin C. Rodack of Ohio, an executive committee member of the independent Treasury Institute for Higher Education, said university administrators typically work within debt policies that govern under what circumstances they would borrow money. “Using debt is sometimes a good way to allow you not to use all of your cash at once,” Rodack said. “Most universities do go about borrowing, so it is a good idea to have resources. It’s also a good idea to know your financial strength.”

>Shenandoah University currently has 66.357 acres along with improvements in the City of Winchester with a tax exempt value of $72,156,100 and within Frederick County, land/improvements of 71.9 acres with tax exempt value of $5,792,200 as of September 23, 2009.

>Shenandoah University had to cap their enrollment for the fall of 2009

>Shenandoah University Endowment Assets (millions) position over the last 4yrs:

• 07-08: 534 Shenandoah University VA 48,631 – 49,201 - (1.2%)
• 06-07: 532 Shenandoah University VA 49,201 – 44,742 - 10.0%
• 05-06: 513 Shenandoah University VA 44,742 – 42,274 - 5.8%
• 03-04: 514 Shenandoah University VA 38,723 – 32,881 - 17.8%
  

The table below ranks both the Old Dominion Athletic Conference (ODAC) and USA-South Athletic Conference teams by their Excess of Revenue/Deficit (Profit/Loss) that is determined by Total Revenue minus Total Expenses for FY-End 06, 07 and 08.  

"ODAC"	FY-End 08	FY-End 07	FY-End 06	3yr Average
Washington & Lee Univ	127,122,545	$184,900,353	$32,403,488	$114,808,795	1
Catholic University	17,144,707	$34,124,688	$14,707,336	$21,992,244	2
Hampden-Sydney College	$15,100,566	$20,520,812	$11,220,193	$15,613,857	3
Hollins University	$6,090,656	$20,172,258	$3,552,187	$9,938,367	4
Lynchburg College	$1,305,666	$16,248,180	$7,301,474	$8,285,107	5
Randolph Macon College	$11,871,616	$10,759,294	$1,565,145	$8,065,352	6
Randolph (Lynchburg)	$22,788,833	($534,322)	N/A	$7,418,170	7
Roanoke College	$11,770,073	$5,546,326	$4,603,201	$7,306,533	8
Emory & Henry College	$11,674,536	$2,897,077	$4,002,542	$6,191,385	9
Bridgewater College	$5,259,354	$5,523,589	$4,033,675	$4,938,873	10
Sweet Briar Collge	$776,662	$8,644,811	$5,174,999	$4,865,491	11
Virginia Wesleyan	$843,581	$8,122,205	$5,136,017	$4,700,601	12
Guilford College	$4,415,276	$2,916,097	$6,341,848	$4,557,740	13
Eastern Mennonite Univ	1,259,114	$1,915,154	$2,757,827	$1,977,365	14
"USA-South"	FY-End 08	FY-End 07	FY-End 06	3yr Average
Shenandoah University	$4,255,497	$4,159,960	$13,036,816	$7,150,758	1
Methodist University	$3,394,648	$2,496,031	$6,015,602	$3,968,760	2
Meredith Colllege	$6,182,729	$4,270,422	$615,245	$3,689,465	3
Peace College	$1,529,533	$4,311,910	$2,589,098	$2,810,180	4
Ferrum College	($782,769)	$4,950,783	$2,705,238	$2,291,084	5
Averett University	$2,420,671	$1,550,497	$140,505	$1,370,558	6
North Carolina Wesleyan	$1,180,390	($1,749,764)	$3,617,732	$1,016,119	7
Greensboro College	($666,870)	$1,556,330	$1,449,848	$779,769	8
Mary Baldwin College	$811,197	($3,162,211)	($3,788,668)	($2,046,561)	9

Sources:

- Winchester Star September 15, 2008, Shenandoah long-term debt at nearly $46.7million, http://winchesterstar.com/pages/view/Shenandoahdebt_article.html
- The Spirit of Shenandoah Campaign, http://www.spiritofshenandoah.org/Progress/progress.asp
- IRS Form 990 Line#18 for years FY-End 2006, 2007, 2008 (Non-profit's IRS 990's are open to public inspection)
- VAMAT – The Virginia Mass Appraisal Network, http://www.vamanet.com/info/home.jsp
- NACUBO, http://www.nacubo.org/Research/NACUBO_Endowment_Study/Public_NES_Tables_.html
- Shenandoah University, www.su.edu

Valley Health Selects McKesson Solution to Meet Changing Revenue Management Needs

I am not sure IF the local media outlets were aware of this or not?  But, I don’t recall reading about it, maybe I missed it?  Also, I was not able find anything in Valley Health's website as of today, October 2, 2009.

As a another concerned citizen within the community was very adamant that I understood that we’ll never see money exchange hands with donations from Valley Health, it’ll always be an in-kind donation … AND they cannot give the nurses a much needed pay-raise and pay their blue-collar (house-keeping) workers more respective wages?  Those individuals are the glue that holds the entire VH organization together along with the physician staff and for the VH officials not to make their wages more competitive is just a shame.

As a former employee shared with me, Valley Health will redo a perfectly fine floor just to add a little pretty design in it.  How about them resealing the entire parking lot?  I asked a nurse, what was wrong with parking lot?  She quickly replied, "I don’t know as it looked fine to me, but I can tell you one thing, we like to see some of the money that they spend around here go into our paychecks."  Why does Valley Health spend money on projects that do not seem justifiable to their employees?  Well the perception is that they make so money, they must spend it.  All one needs to do is review Valley Health's profits over recent years and you will be able to determine if that perception is true.

One could easily foresee this new revenue management system being two-fold, maybe it will stop Valley Health from taking individuals to court to garnish their wages and in some cases, forcing individuals into bankruptcy and to aid Valley Health getting more money up front.

Below is a copy of the official press release that appears on the McKesson website.

 

Valley Health Selects McKesson Solution to Meet Changing Revenue Management Needs

June 12, 2009

New system to enhance front-end of patient care experience

Valley Health System, based in Winchester, Va., has chosen McKesson’s Horizon Enterprise Revenue Management™ solution to help transform the front end of its revenue management cycle. The five-hospital health system plans to use the solution to streamline patient access, connect to key business partners and determine financial responsibility in advance of care delivery.

“About two years ago, we launched a clinical information technology transformation at Valley Health in an effort to address patient safety and improve care for patients,” said Joan Roscoe, vice president and chief information officer at Valley Health. “We realized, however, that patients were starting to have increased expectations on the financial side as well. They want to make more informed decisions about where they are going for health care services, and they want timely information about their financial obligations.”

Valley Health leaders recognized the need for a new enterprise revenue management model to adapt to changing realities, including the rise of consumer-directed healthcare. For example, Valley Health needed access management functions that would enable staff members to work with patients earlier in the cycle.

“With the new system, we will concentrate on process improvement on the front end of the patient experience with the registration, eligibility and scheduling,” Roscoe said. “Our goal is to have staff members collect co-pays, ask questions and talk with patients about their financial responsibilities up front. In doing so, we can better serve our patients and achieve cleaner claims and more accurate billing.”

With the implementation of Horizon Enterprise Revenue Management, Valley Health will move away from a financial system supported by a number of bolt-on technologies that require a large number of staff members to touch each claim. “We have a traditional patient accounting system, but because there are so many changes every year, we kept adding bolt-ons to the point that it has become disjointed and challenging to manage,” said Neal McKnight, corporate director of patient accounting. “With the new system, we have one centralized solution that is designed to work together with our clinical systems – making it possible to experience great efficiencies throughout the organization.”

With system deployment set to begin in 2010, Valley Health expects to realize a number of operational benefits once the solution is fully rolled out. Based on McKnight’s estimates, the number of patients scheduled through a centralized scheduling system should increase by 30 percent, creating greater staff efficiencies and better resource management. Finally, he expects to increase the number of clean claims by 20 percent while cutting paper use in half.

“With continued financial pressure and impending healthcare reform, the ability to adapt to changing needs is more critical than ever,” said Loren Buysman, senior vice president and general manager, Revenue Cycle, McKesson Provider Technologies. “We are pleased to partner with progressive providers such as Valley Health to deliver a solution that will support their success in enterprise revenue management well into the future.”

 About Valley Health 
Valley Health is a non-profit regional healthcare system serving a population of 450,000 in northwest Virginia and eastern West Virginia. Valley Health includes five hospitals: Winchester Medical Center, a 411-bed regional referral center, Warren Memorial Hospital in Front Royal, VA, Shenandoah Memorial Hospital in Woodstock, VA, Page Memorial Hospital in Luray, VA, and Hampshire Memorial Hospital in Romney, WV. Valley Health also manages War Memorial Hospital in Berkeley Springs, WV, and operates Urgent Care and Quick Care centers, a regional medical transport service, durable medical equipment stores, and a retail pharmacy.


 About McKesson 
McKesson Corporation, currently ranked 15th on the FORTUNE 500, is a healthcare services and information technology company dedicated to helping its customers deliver high-quality healthcare by reducing costs, streamlining processes, and improving the quality and safety of patient care. McKesson has been in continuous operation for more than 175 years, making it the longest-operating company in healthcare today. Over the course of its history, McKesson has grown by providing pharmaceutical and medical-surgical supply management across the spectrum of care; healthcare information technology for hospitals, physicians, homecare and payors; hospital and retail pharmacy automation; and services for manufacturers and payors designed to improve outcomes for patients. For more information, visit http://www.mckesson.com
 

How "not-for-profit" Hospitals are suppose to operate

Not-for-profit hospitals (NFPs), have operated free from federal and state taxes because they have promised the government that they would operate as a charity provider of health care for the uninsured and that they would not engage in business "directly or indirectly, for the benefit of private interests." In reality, some NFPs do just the opposite:

• Charging their uninsured patients significantly more than those who have Insurance, Medicare or Medicaid;
  
• Pursuing the poor or uninsured relentlessly by aggressive and humiliating collection techniques;
  
• Rampantly violating federal and state prohibition against profiteering by "private interests, " through either "connected" board members and/or physicians whose for-profit businesses are formed and subsidized by the "tax-free" organization.
  

Certain NFPs, and their subsidiaries who employ the same business model, have amassed and hoarded billions of dollars in cash and marketable securities that otherwise would have been available to provide charity care to those who were contemplated by the tax exemption. Moreover, enormous property and revenues have been isolated from taxation, the effect of which has bestowed upon the NFPs greater liquidity than that possessed by most state and local governments.

Lawsuits have been filed against NFPs asking the Court simply to require the Defendants to honor their obligation to provide charity care to those who need it, and to cease the cronyism to favored board members or physicians whose businesses are being unlawfully subsidized by the perverse business practices summarized above.

Source: Not-For-Profit Hospitals Class Action Litigation Press Release

Endangered species?

Endangered Species?  "Not-For-Profit" hospitals face tax-exemption challenge:  How can you maintain your organization's tax exempt status?  One Way is to participate in the debate over how to measure charity care and community benefits

Healthcare Financial Management
September 2004
By Lisa Simonson Maiuro, Helen Schneider, Nicole Bellows

In February 2004, the Illinois Department of Revenue revoked the tax-exempt status of Provena Covenant Medical Center, a Catholic-affiliated not-for profit hospital in Urbana, because local tax authorities determined that it was not a charitable institution--a decision that the February 19 Wall Street Journal described as an "unusual move that is sending shock waves across the hospital industry." Not-for-profits across the country may be wondering, "Am I next?

For the remainder of this article, follow this link: 
http://findarticles.com/p/articles/mi_m3257/is_9_58/ai_n6210271 target="_blank"