June was a bad month for Dallas County’s lone public hospital.
After all the patients were treated and the bills were added up, Parkland Memorial Hospital had a net loss of $5.3 million, its board of managers was told Wednesday.
Officials blamed the overrun on a surge in charity care and fewer births.
The hospital’s 805 births in June were 4 percent fewer than expected. Most are covered by Medicaid, an important source of Parkland’s income.
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The hospital also saw a drop in private-paying patients. That caused a $1.7 million revenue decline, said interim chief financial officer Ted Shaw.
But a greater culprit was Parkland’s increasing reliance on expensive contract labor, the hospital said.
Since 2011, Parkland has spent $32 million on traveling nurses and other outside contractors to fill its depleted ranks. It expects to spend an additional $8 million next year.
Temporary employees earn about 40 percent more than full-time Parkland workers. The hospital also must pay the staffing agency.
“This contract labor issue is killing us,” said board member Eddie Reeves, the budget and finance committee’s new chairman.
Parkland officials say a national nursing shortage makes temps more attractive. The hospital’s regulatory problems also make it a tougher place to work.
Parkland has been operating under federal oversight since it failed a series of inspections in 2011. The visits were triggered by stories in The Dallas Morning News that highlighted patient-safety issues.
Nursing supply
Ron Laxton, Parkland’s interim chief operating officer, said registered nurses, particularly those specializing in surgery and emergency care, are difficult to hire and retain.
Two years ago, the Centers for Medicare & Medicaid Services forced Parkland to add more nurses in its overcrowded emergency department and its troubled psychiatric unit.
The staffing job went to American Healthcare Services Association, which provides temps through 250 agencies nationwide.
Parkland also has outsourced about 75 jobs in medical coding and information technology, said Bob Smith, the hospital’s interim chief executive officer.
He said it was “not acceptable” for a tax-supported hospital to exceed its annual budget. He promised that the hospital’s top managers were working on the situation.
“This problem is going to get bigger when we get into the new hospital,” Reeves said.
By the end of June, Parkland’s spending exceeded its annual $1.3 billion budget by $8.2 million. Administrators noted they have three months to fix the bottom line before the fiscal year ends.
The spending excesses coincide with the hospital’s efforts to pass a final CMS inspection this summer.
The survey began in mid-June and could continue through August. It will determine whether Parkland can retain its annual government funding, which exceeds $400 million.
Last month’s $3.3 million in excess spending on staff salaries covered the cost of temps and supplemental nurses who work in multiple departments.
Overtime costs for other workers were another expensive component.
“It’s not OK, and we are working on it,” Smith said.
Cost of fixing problems
Parkland also is spending more money to upgrade hospital services. That includes fixing problems the government survey identified in June.
To fix the latest problems, Parkland is spending:
$963,264 to hire Morrison Healthcare Food Services to assess the hospital’s dietary department and ensure it complies with all laws though next year.
It also will pay the Atlanta-based company $400,000 for interim kitchen management and to oversee needed improvements through September.
$380,000 for Alpha Services Corp. to maintain proper sanitation levels in the kitchen for the next year. The company does business as Jani-King of Dallas.
Four workers and a supervisor will cost about $29,000 a month.
Another $557,720 for HealthStream Inc. to provide an online corporate-compliance training course through 2018.
The Nashville company’s original contract was for $1.4 million.
Date: 24 July 2013