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Challenging Times for Milford Hospital

Frank Saba, CEO of Milford Regional Medical Center, Inc. makes a point at the corporation's annual meeting on January 24.

The past year has been a challenge for Milford Regional Medical Center, Inc. The ongoing bad economy and continuing healthcare reform were cited by the speakers at the corporation's annual meeting on January 24 as the primary reasons why the hospital ended fiscal 2010 with an operating revenue deficit and a significant drop in total income. "We have to hang on for what I expect to be a turbulent few years," said corporation CEO, Frank Saba.

According to the corporation's 2010 Report to the Community presented to board members, corporators and staff at the meeting, the operating revenue deficit for last year was $351,000. The deficit was offset by an infusion of a little over $1 million of non-operating revenue from the corporation's investments, leaving Milford Regional with $666,030 in total income for 2010. In 2009, the corporation earned $4.4 million in operating income with a bottom line of $4.8 million in profits.

While the corporation's operating revenues from 2009 to 2010 increased from $225 million to $231 million, expenses rose higher going from $220 million to $231 million. Some of largest increases were in salaries and wages, supplies/expenses and bad debt/free care. Part of the operating revenue shortfall resulted from decreased patient volume. Usage of the hospital for everything from inpatient stays and emergency room visits to day surgeries and VNA (visiting nurse) visits fell in 2010. The only aspect of usage that saw an increase was outpatient visits, which went from 248,974 to 260,332.

Saba noted Milford Regional's fiscal challenges are not unique; healthcare nationally is experiencing "an industry-wide decline." He said the hospital has cut costs by holding the line on salaries, renegotiating contracts including those with private insurers, and implementing "a small reduction in the labor force." This fall 19 part-time LPNs were cut and 23 vacant positions were eliminated.

"The cost cutting efforts will continue in 2011," said Saba, as both the state and the federal government work to contain medical costs by changing from the current fee for service structure. One proposal is a budgeted payment plan based on an integrated healthcare system. "Today's changes are similar to those resulting from Medicare's implementation in the 1960s," said Saba.

Saba noted Milford Regional is ahead of the curve on some of the new standards which reward defined outcomes, measure quality and support integrated healthcare. The Performance Improvement department was expanded in 2010 and an automated quality reporting system will be implemented in the future. Those changes will help the hospital improve its strong Pay for Performance (P4P) through which insurers pay for services based on clinical and patient satisfaction benchmarks. The hospital is also completing implementation of electronic medical records, well ahead of the statewide deadline of October 2012. In 2010 Computerized Provider Order Entry, which has physicians entering patient orders into the computer system.

According to Mark Skiba, MD, PhD, president of the Medical Staff, the hospital's technology will be further expand as patients of Tri-County Medical Associates, the corporation's physician practice group, will soon be able to make appointments, payments and check their medical records online. Skiba also reported that multi-disciplinary rounds are being implemented as a team of a physician, nurse, case manager and physical therapist work together to develop a care plan for each patient.

Despite the challenges of 2010, the year was a good one for the corporation with the hospital, staff, physicians and services receiving state and national recognition. The Milford Regional Healthcare Foundation also did well raising funds for the hospital.

Patient care remains a focus with the hospital adding brachytherapy, a radiation therapy, to its growing Cancer Center. Looking to the future Roger Calarese, chairman of the Board of Trustees, said the hospital is continuing to invest in technology, exploring the expansion of the Emergency Room, discussing renovating the fourth floor into single patient rooms and possibly expanding the Whitinsville campus. He added, "The decisions we make over the next few years will have a long range effect on the hospital and the community"

Saba echoed those sentiments, "Building a community health center that is patient centered guarantees the success of the hospital."


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