Looking back at the past fiscal year, it’s clear that we turned the corner on the transformation of Sonoma Valley Hospital. We can point to progress in almost every area where we needed to see improvement and met goals that were set when I arrived four years ago.
Today, SVH is a more stable organization with an enhanced ability to navigate this challenging period in health care. We have an upgraded facility, a stronger culture that is contributing to continuous improvements in quality and service, and an improving financial picture resulting from tighter management of expenses, increasing revenue and low debt.
Allow me to recap highlights of the past year.
Facility Improvements. Clearly, this was the high point of the year. We opened the doors to a new wing housing our modern Emergency Department and Surgery Center and more than 1,000 people from the community joined us in celebration. Thanks to the generosity of our community, we had the pledges to pay for the wing by the time it received its first patient.
We also saw the completion of extensive improvements and upgrades throughout the hospital, some of which were years in the planning. While some projects remain on our wish list, we are already in great shape to serve the next generation of Sonoma Valley residents.
Quality Improvements. Our quality scores and outcomes continued to improve and in recent months have been among the highest in the nation. Because of this, Medicare will reimburse SVH 1.5 percent more than the average payments, starting next month. Our re-admission rates are also lower than most hospitals in our area.
Quality of service results place us among the top 25 percent of hospitals nationally, and patient satisfaction scores remain high. Our Surgical Care Quality Outcome Measures meet and exceed national benchmarks, and our Hospital Acquired Infection Rate is lower than national benchmarks. Correlating with these results is the fact that our staff satisfaction scores remain high.
Financial Performance. We have worked diligently to bring our budget for this fiscal year in line with the reduced government reimbursement we expect in the coming year. This necessitated a $2 million reduction in expenses, bringing our current operating expenses budget for this year to just $50,000 more than it was in FY2012.
We also are implementing a new cost accounting system that will provide a much clearer look at expense/revenue ratios for all departments and services, and help us make better decisions that will lead to higher margins in some areas, such as surgery.
Service Adjustments. As with most hospitals, inpatient revenue continues to decline, although it seems to have stabilized recently. We are offsetting that with increased revenues from outpatient services that include regional expansion, such as our Home Health Care program, Healing At Home, which is now operating in three counties. We also are seeing an increase in the number of surgeries performed at the hospital.
Gross revenues have grown by $6 million to nearly $51 million since 2010. This year we also found a way to maintain OB services through the combined efforts of our physicians, nurses and administration to reduce expenses, and the restatement of government DSH funds.
National Recognition. The hospital received considerable national recognition during the past year, most notably being recognized as one of the 15 safest hospitals in the nation by Consumer Reports. The Leapfrog Group, a national health care initiative, gave SVH an A Rating Hospital Safety Score this year. Our Skilled Nursing Facility was one of only 77 nationally to receive a Silver Quality Award from the American Health Care Association, and our environmental practices were honored by Practice Greenhealth, a national organization.
Technology Improvements. Despite tight budgets, we continue to improve our technology. We completed implementation of the Electronic Health Record as part of Stage 1 Meaningful Use, receiving the $2.7 million incentive, and we currently lead most hospitals in the country in implementing Stage 2, which represents another $700,000 in reimbursement.
Community Service. We have improved the reputation of the hospital in the community through greatly expanded outreach, communications and community services. Working individually and with community partners, the hospital is implementing a number of health programs serving diverse groups in the community, from elementary school students to women and seniors. We are currently creating a disease reversal program that will address lifestyle-related health issues such as obesity.
Some of these community efforts contribute to revenue. Our Aches & Pains Clinic, for example, provides free community education and screenings for common musculoskeletal complaints and has proven successful in bringing new patients to hospital services.
While this new fiscal year brings its own challenges, I am confident that SVH has turned the corner and is well prepared to deal with them. We remain committed to providing our patients with the finest care and finding meaningful ways to improve the health of our community.
In good health,
Kelly
Kelly Mather
President and Chief Executive Officer
Sonoma Valley Hospital