Share this article

print logo

New services propel ECMC to banner year for operations, finances

Erie County Medical Center's doctors and nurses had their busiest year in at least a decade in 2016, as everything from orthopedic surgeries to emergency room visits continued their recent growth trend at the Grider Street hospital.

Inpatient discharges were up nearly 3 percent between 2015 and 2016. General surgeries were up nearly 4 percent. And emergency visits were up 3 percent.

The rise in patient volume steadied the hospital's bottom line. It drove operating revenue up 7 percent, and operating income up by one-third, according to projections.

Top administrators say the surge in visits is driven by patients choosing to have procedures performed at the place long known as the hospital of last resort. The Medical Center has added and expanded service lines that have proven popular with patients, such as orthopedics, oncology and bariatric surgery.

"I think we've done a good job of promoting the institution so people understand what ECMC's about in its totality," said Thomas J. Quatroche Jr., ECMC's president and CEO. "It's not just emergency cases. There's many people who choose to come to ECMC for elective work."

ECMC's performance in 2016 continues a trend that started at least six years ago. But it is notable because the hospital started the year with an acting CEO, Quatroche, after ECMC's board forced out its previous top executive in a messy divorce at the end of 2015.

The growth presents challenges, too, because ECMC officials say the hospital's emergency department is filled to capacity most days. The hospital is planning a $45 million expansion.

And administrators at ECMC can only wait to see how Republicans' promised repeal of the Affordable Care Act will affect the Medical Center and hospitals across the country.

"My concern is what they're going to replace it with, and I don't think they've got it settled yet," said Sharon L. Hanson, chairwoman of ECMC's board of directors. "But it's not going to change how we take care of people."

ECMC is the region's Level 1 adult trauma center and a key safety-net hospital, serving patients with burns, gunshot wounds and mental-health issues. Many of its patients have no health insurance, not enough insurance or rely on Medicaid, the government-provided insurance, for coverage.

ECMC has long tried to shake off its image as the hospital that people go to only because they have to go to there.

Quatroche and Hanson said the uptick in visits stems from ECMC's success in selling the facility as a hospital of choice.

"It's partially being strategic around what we want to grow, and also being entrepreneurial enough to react to some of the market dynamics that are happening," Quatroche said.

The specialty areas that ECMC has focused on include orthopedics and joint surgeries; kidney and other transplants; head and neck oncology; and bariatric surgery, which helps patients lose weight by restricting how much food the stomach can hold.

The oncology and bariatric services are relatively new additions to the Medical Center. The investment in orthopedic services is a result of partnerships ECMC has with two practices, Excelsior Orthopedics and UBMD Orthopedics & Sports Medicine.

ECMC officials say the push to bring in new patients is paying off. In some cases, the rise in patient volume traces back at least six years.

Total inpatient discharges, which were 15,007 in 2010, rose to 18,375 in 2015 and to 18,882 in 2016, according to the hospital. That's a 26 percent increase over the six years. And emergency room visits rose from 58,090 in 2010 to 67,267 in 2015 and to 69,315 in 2016, or a 19 percent increase over the half-dozen years.

Between 2015 and 2016, total surgeries rose from 12,188 to 12,665, or 4 percent, and outpatient visits rose from 290,543 to 306,594, or 5.5 percent over the previous year.

ECMC officials said 2016 had the highest average volume, across all patient lines, going back at least to 2004, when ECMC was organized as a public benefit corporation.

Bringing in revenue from hip-replacement surgeries and weight-loss surgeries offsets the costs of treating trauma and other emergency room patients who are underinsured, officials said.

"I think it's the elective operations that made a big difference, because that in itself will help pay for those that cannot pay for themselves," Hanson said.

One measure that ECMC worked on lowering is average length of patient stay. That's because hospitals generally are reimbursed one flat rate, based on how sick a inpatient is, no matter how long the patient stays in the hospital. So it's in the hospital's interest to bring down the average length of stay, Quatroche said.

ECMC took steps to lower its average from eight days in 2015 to 7.5 days in 2016, working with community and social service organizations to find assistance for patients who were staying longer in the hospital for social, not medical, reasons, Quatroche said, and coordinating faster discharges of patients once they're ready to leave the hospital.

"We're continuing to look for more ways to be more efficient," Quatroche said.

The increases in patient volume boosted the hospital's revenue, but ECMC has tight operating margins because of the patient base it serves.

ECMC projects its operating revenue will rise by $39.5 million, to $592.6 million, in 2016. Operating expenses also soared last year, leaving the hospital with projected operating income of $1.2 million. That's about one-third higher than the $900,000 or so the hospital has averaged over the last several years.

But it's still a margin of just two-tenths of 1 percent. Kaleida Health, the region's largest hospital system, had an operating margin of 1.66 percent in 2015.

ECMC officials said just breaking even is an accomplishment considering its mission to provide care to people who have no insurance or insufficient coverage.

"We're always going to have tight margins," Hanson said. "We are a safety-net hospital."

When Quatroche started the year, he was acting CEO and ECMC board members were defending their decision to force out Richard Cleland, the former president and CEO, in November 2015.

Some observers in late 2015 and early 2016 worried about an unsettling period of transition for the hospital, Hanson recalled late last week.

But ECMC's board moved swiftly in January 2016 to appoint Quatroche as president and CEO of the hospital to stabilize the position.

One of the first projects Quatroche took on was planning for a new emergency department. ECMC officials said nearly eight in 10 inpatients come in through the emergency room, which last underwent a substantial renovation in the late 1990s. The hospital plans to build a replacement department next to the existing department.

ECMC is seeking to borrow money through Erie County to pay for the emergency room, other construction projects at the hospital and to refinance existing debt on its nursing home, a total of $200 million.

That request has stalled, though Quatroche and Hanson said they were optimistic county officials would reach agreement early in 2017.

Erie County Executive Mark C. Poloncarz has linked the borrowing to the payments the county is obligated to make to ECMC for the hospital's care of the poor and uninsured.

That care, Quatroche said, also is a consideration as hospital officials wait to see what Republicans in Congress and the Trump administration will replace the Affordable Care Act with.

More people have sought treatment at ECMC during the years the act has been law, using insurance they received through the exchanges created under the law or as part of the expansion of Medicaid, Quatroche said.

"I think the fact that more people are insured is driving volumes," he said.

Federal funding has supported much of that care, and officials don't know what will happen if the law is repealed or if that aid is cut back.

"It's only going to make our margins even tighter," Hanson said.

There are no comments - be the first to comment