David R. Pitman's Column

As featured in The Compass, MedStar Harbor Hospital's weekly publication.

July 13, 2009

Fiscal Year 2009 (July 1, 2008 through June 30, 2009) was a year of economic challenges. We began the fiscal year with a declining stock market and increasing national unemployment. During the year, the HSCRC, which regulates the rates hospitals can charge, began implementing several programs that would impact our reimbursement - and therefore our financial bottom line. Later in the year, the state of Maryland reinstituted the Medicaid day limits to balance its budget by paying less for inpatient cases covered by Medicaid. And then in January, MedStar Harbor Hospital's volumes began to slip. All our leaders worked hard to identify efficiencies. As a result, we instituted several cost control measures to remain within budget. These included: tighter control on overtime; elimination of several programs, including the Adult Day Health Center; reduction of catering costs; reduction in marketing expenditures; requirement for management to utilize some of their available vacation time; and focus on length of stay.

Volumes rebounded in late March and April, several items were resolved in our favor, and our parent company MedStar Health is in solid financial standing. In very good news, we are now projected to end fiscal 2009 ahead of budget.

With all of the good news at year-end, I still have to raise the caution flag for Fiscal Year 2010. Our rate increase from the HSCRC will be much less then we received last year, and the opening of an OB inpatient unit at Baltimore Washington Medical Center may impact our OB volume. The economy and unemployment are still concerns. To address these challenges, we continue to look for efficiencies or profitable growth opportunities. Any ideas you may have would be appreciated. Please share them with me directly via interoffice mail or by email at david.pitman@medstar.net.

All in all, the future for MedStar Harbor Hospital and MedStar Health is bright. I look forward to working with our new president, Dennis W. Pullin, and the rest of the MedStar Harbor Hospital team to build a successful future for MedStar Harbor and the people we serve.

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