Lawrence & Memorial Hospital Posts Profitable Year

Officials at  Lawrence & Memorial Hospital spoke happily of a stable financial situation Wednesday at the hospital's annual meeting.

Administrators and members of the hospital's Board of Directors spoke before an audience of incorporators and staff. Fred Conti, treasurer of the Board of Directors, said there was a 10.5 percent increase in revenue. Conti said that operating costs also increased, but that the net operating gain increased from two percent to four percent in the past year. Conti said this represents a net operating gain of approximately $12.6 million.

"This has been, I must say, a truly extraordinary year," said Ulysses Hammond, chairman of the Board of Directors.

Conti said the gain was a result of a number of factors, including an increase of inpatient surgeries and emergency room visits. He said there were also more acute cases, for which the hospital can charge more, and a low interest rate on variable interest debt. Hammond credited numerous departments for working together to create more efficiencies.

"If we wanted easy, we'd be in another field," said Hammond. "In fact, at Lawrence & Memorial we've found that the more difficult the challenge, the more our physicians, staff, and incorporators will rise to the occasion."

In addition, the hospital's investments recovered from a low point of $187 million in 2008, valuing about $214 million this year. Conti said the hospital spent $20 million in capital improvements in 2010, of which $11 million was on routine equipment additions. He said there will be an estimated $38 million in capital improvements in 2011.

Conti said the profit is important for updating features of the hospital and maintaining and improving the quality of care. He said an independent consulting group determined that a three percent operating margin is needed to accomplish this.

"Earning a strong margin is a financial mandate for the hospital," he said.

Other speakers at the meeting outlined other new additions to the hospital and its programs this year. Bruce Cummings, president and CEO of the hospital, said these include a clinical design unit to increase the response to patients and provide experience for new nurses, a new professional development center, and four-year contracts with two hospital unions. The hospital has also added new equipment to eliminate the need for manual lifting of patients as well as a K-9 unit for the security office. Cummings said there will continue to be challenges in future years, such as the increasing number of new physicians who expect to find employment in a hospital rather than go into private practice.

"These changes are going to take place regardless of which party is in power, or who hold the White House," he said. "They're really preordained."

Cummings said Lawrence & Memorial is looking to streamline processes over the course of a year or so to improve care and reduce costs. These goals include efforts to reduce falls, better organization of storage rooms, and the reduction of the number of forms used by nurses.

Hammond recalled that the hospital earned unconditional reaccreditation after a visit from the Joint Commission in June. He said the hospital has also been nationally recognized for its cardiac and stroke programs, as well as its mammogram and sleep center facilities. Hammond said that patient satisfaction at Lawrence and Memorial was in the fifth percentile nationally in 2005, and improved to the 87th percentile in 2010.

"That is a remarkable achievement, and like other things discussed tonight it did not happen overnight," he said.