Durham Regional Hospital is officially turning a profit this year for the first time in five years.
Official financial reports released Wednesday revealed the community hospital--which has been managed by the Duke University Health System since 1998--is more than $3 million in the black for the 2003 fiscal year, which ended June 30. The surplus comes after a half decade of budget struggles and deficits ranging from $16.9 million to $2 million and several years of uncertainty about Durham Regional's future.
"The community should celebrate this community hospital and the way this hospital has taken charge to enable it to stay open," said Kevin Sowers, acting chief executive officer of Durham Regional.
Officials credit strict adherence to a manageable budget and careful staff management as the driving factors of the hospital's success. Increased surgical volume has also enabled the year's growth, said Chief Financial Officer Mark Miller. A newly-opened bariatric services unit--which performs anti-obesity surgeries--and an unexpected increase in volume at the endoscopy unit--which is responsible for colonoscopies among other procedures--account for much of the revenue increase.
General surgical volume throughout the entire region is also up, Sowers said.
To overcome the $3.3 million shortfall that was initially projected for this year, Durham Regional secured $350,000 from Select Medical for leasing space within the hospital and received a $950,000 gift from the Durham County Hospital Corporation.
The success comes after four years of cost-cutting strategies led by Durham Regional's former CEO Richard Liekweg, who resigned in February to become CEO of the University of California at San Diego Medical Center. Durham Regional's most notable contractions were the shutdown of the Senior Health Center in Northgate mall and the Oakleigh Substance Abuse Treatment Center.
The hospital, however, still must improve to reach complete financial solvency. Industry officials said hospitals must yield approximately 3.5 percent profit of total expenditures in order to be fiscally stable. This year's profit is only about 1.8 percent of total expenditures, and next year's projected profit is only 0.7 percent of expected costs. Increased investment and chronic financial struggles with Medicare reimbursements and nursing staff account for next year's projected dip in revenue percentage.
"Obviously we always strive to do better and to be able to invest in the hospital," Miller said.
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