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El Camino Hospital raked in more money than anticipated this fiscal year, ending with $65 million in extra cash — and hospital officials won’t have a problem finding ways to spend it.
Work on the hospital’s massive building projects, which were presented to the Mountain View City Council earlier this year, is expected to cost hundreds of millions of dollars. Between facilities upgrades and the shift to electronic medical records, the hospital’s bill for improvements is expected to reach $1.1 billion over the next decade.
Reversing a trend that kept the hospital’s costs to patients flat, El Camino will increase the prices of its services by 5 percent this year to better match the prices at neighboring hospitals, El Camino officials say. Over the last three years, the hospital has increased prices by less than 2 percent, while there have been 20 to 30 percent increases at Good Samaritan Hospital and Stanford Hospital, according to El Camino officials.
The price bump won’t necessarily affect patients’ co-payments, but Iftikhar Hussain, chief financial officer for the hospital, said it will depend on the individual insurance plan, so people should check with their insurance providers to make sure.
Construction plans, digital records
In February, hospital staff presented plans that would add a seven- to eight-story, 230,000-square-foot medical office building to the center of the El Camino campus.
To alleviate parking woes, the plans include a new parking structure near the proposed office building and expansion of an existing parking structure on the northwest end of the campus, creating 485 additional parking spaces.
At the June 16 El Camino Healthcare District board meeting, the board accepted plans that would commit $299 million to the upgrades, mostly for the new medical office building.
The hospital will pour $50 million into starting up a new electronic medical records system, called iCare, which would allow patients to check their medical test results, schedule appointments and refill prescriptions online. The total cost of the digital upgrade is expected to be $130 million, according to Hussain.
Lucrative spring
This year, the nonprofit hospital ended up over $10 million above its projected operating margin — what a for-profit business might call profit — thanks to a lucrative spring, particularly in March and April, when there was a rise in financially beneficial privately insured patients. Reimbursements from patients covered by Medicare and MediCal do not cover the hospital’s costs, Hussain said.
“We’ve had two incredibly good months,” Hussain said at a hospital board meeting last month. “We are now $11.5 million ahead of (our) target.”
El Camino Hospital’s Los Gatos campus continues to be a lucrative branch of the hospital, performing more outpatient services, which generate more revenue than inpatient services, according to hospital officials. Hussain said the Los Gatos campus does not have the same kind of inpatient services as the main campus in Mountain View, which has inpatient mental health, vascular and heart services that generate less money.
Despite ending the fiscal year on a high note, there’s a lot of financial pressure that is keeping hospital staff members from resting on their laurels. In an email, Hussain explained that reimbursement rates from Medicare and MediCal are going to stay flat, and insurance companies are under pressure by employers to reduce health care costs. What that means for the hospital is continued reduction of costs and a push to get more patients into the hospital each year.
Last year, district board member David Reeder told the Voice that small, independent community hospitals like El Camino need more patients to survive, and depend on increases in patient volumes. Part of that effort to stay solvent, he said, was building the additional campus in Los Gatos.
Board member Dennis Chiu cautioned the board that the comfortable $50 million to $60 million margin that the hospital has been running is projected to shrink in the coming years, which will affect the way the hospital negotiates with groups like insurance companies and labor groups.
“It definitely shows that our expense trends are going to meet our revenues, and that the large margins you’ve been seeing … just aren’t going to be there as we move forward,” Chiu said.
One area where expenses are holding steady is for CEO Tomi Ryba, who earns $800,300 a year and did not get a pay raise in the new budget, although her existing contract includes a performance incentive plan that has the potential to boost her salary by as much as 45 percent.
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Giovanni Battista Piranesi’s “Basilica and Temple of Neptune,” 1777, will be among the works visiting the Cantor from Sir John Soane’s Museum in London. Image courtesy of Sir John Soane’s Museum. -
In drawings like “Exterior of the Temple of Neptune from the North-East,” 1777, Giovanni Battista Piranesi seems intent on capturing the classical architecture in minute detail. Image courtesy of Sir John Soane’s Museum.
Many American hospitals and doctors game a tax-subsidized system to rake in and keep plenty of money. Yet. the USA is far down the list internationally in health care outcomes.
If they have so much money then why are taxpayers giving them $299 million this year through the healthcare district in addition to the huge bond we gave them to build new buildings ten years ago?
They are increasing their prices 5%? “El Camino will increase the prices of its services by 5 percent this year to better match the prices at neighboring hospitals” No doubt they are using PAMF as a model, their pricing is ridiculous, I avoid PAMF and EL Camino if at all possible. The Neiman Marcus of healthcare.
With zero child/adolescent psychiatric inpatient beds in all of Santa Clara County, I ask that the Board direct some of this “windfall” to providing some beds to treat the youth of our community who suffer from mental health issues.
Return the money to the property owners who are paying the bond interest.
Then, reduce prices for services to accurately reflect costs, let employees pay for their own health insurance, do not forgive anymore loans to employees and reduce the obscene salary of the CEO.
It is no wonder that our health insurance rates are so high.