Westerly Hospital rises up but not yet out of financial straits

Westerly - The Westerly Hospital heads into 2010 a stronger institution on both medical and financial fronts, but is bracing for a tough year because of the Rhode Island state budget crisis and the continuing recession, speakers at the hospital's annual meeting said.

Hospital officials reviewed the accomplishments of the past year and challenges of the new one during the annual meeting Thursday. The setting for this year was Venice Restaurant & Lounge instead of the usual venue, the hospital conference room, as a precaution because of the swine flu epidemic.

Brian Jordan, hospital spokesman, said the meeting had to be planned several weeks ago, when the virus was still spreading rapidly in the community and the hospital was seeing many patients with flu symptoms in its emergency room. Small containers of hand sanitizer were made available along with the annual reports and other paperwork given to meeting attendees.

During the meeting, attended by about 80 people, state Rep. Steven Constantino, D-Providence, said the need to close a $220 million state budget deficit could be turned into an opportunity to streamline state government, refocus state resources and revamp the state tax system in a way that secures a brighter future for the state.

"The best human resource program is a job," he said, referring to the state's 13 percent unemployment rate.

Constantino, chairman of the Finance Committee, also referred to the elimination in the newly revised state budget of funding to help community hospitals cover the cost of charity care. In the original budget, The Westerly Hospital was supposed to receive about $750,000 from the state to help pay for the $3.8 million in uncompensated care it provides, Jordan said.

In his remarks, hospital President Charles Kinney noted that the year-end operating loss for fiscal 2009 was $883,000, an improvement over the previous year's $1.098 million loss. Total revenues in fiscal 2009 were $85.6 million, up from $82 million, due to three factors: more favorable contracts with insurers who reimburse the hospital for patient care; the hiring of eight new physicians who in turn brought in new patients; and keeping a tight rein on expenses. The hospital's bond rating with Standard & Poors improved from negative to stable.

Kinney said the hospital must continue to dig itself out financially in 2010. It has ended the year with operating losses for the past several years, though they have been getting smaller.

This year's improvement came despite an increase in charity care and bad debt and a reduction in donations, Kinney noted.

In 2010, he said, the hospital needs to invest $4 million in a new computer system and electronic medical records system between the hospital and doctors' offices. He hopes to add six new physicians to the medical staff and to expand the hospital's role in community health programs.

By the end of 2010, the hospital hopes to open an urgent care, primary care and physical therapy center near the Route 2 rotary in North Stonington. It would also have laboratory and imaging services. The hospital plans to spend about $4 million to renovate a building at the site for the new center.

Jordan said the center would serve patients who currently come to the hospital from North Stonington, Stonington, Pawcatuck and Ledyard, and may attract some new patients. About 40 percent of the patients who seek care at the 125-bed hospital are from Connecticut, he noted.

An application for permission to open the new facility is pending with Connecticut hospital regulators.

Also noted during the meeting:

• Using donations, the hospital purchased 68 new state-of-the-art beds with mattresses that prevent pressure sores and frames designed to prevent falls. Some also include computers and audio equipment that plays key phrases in several languages and relaxation sounds.

• A 32-slice CT scanner was installed in the radiology department to provide more detailed, faster images than the old 16-slice scanner.

• The hospital is serving as a pilot site for a new Blue Cross Blue Shield "medical home" program that emphasizes preventive care and coordination of care by a primary care doctor.

• The Women's Health Initiative was begun with a $1.8 million investment in new imaging equipment, hiring of a women's health director and other actions.

• Board of Trustees Chairman Fred Allardyce is stepping down. Replacing him will be Bill McKendree.

j.benson@theday.com