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Whether it’s a case of careful planning or a multi-year run of good fortune, El Camino Hospital’s financial picture remains stronger than ever, more than $100 million stronger than expected over the last year.
The hospital’s finance team expected that the nonprofit would pull in just shy of $82 million in net income — or profit — for the 2017-18 year. But the latest estimates suggest that the hospital will post a net income more than double that amount and may end up closer to $187 million in profits, according to budget documents.
If the numbers hold — and early projections show they aren’t likely to change — it would be the best year El Camino Hospital has had to date, beating an already high bar set by the prior year. With strong increases in patient visits and a windfall from investments, there’s no question that the hospital is in great financial shape, said Iftikhar Hussain, the hospital’s chief financial officer.
The hospital’s profit, listed as net income, rose from $106.8 million in the 2015-16 year to $159.7 million in 2016-17.
A little under two-thirds of the $100 million windfall, $64 million, came from revenue fueled primarily by more patients coming to El Camino Hospital. The bad flu season meant more hospital visits to doctors and the emergency department, while substantial investments in oncology and heart and vascular services helped drive up patient visits seeking the specialized care, Hussain said.
“We built up the programs and expanded capacity, (and) added staffing that have attracted patients to our hospital, and that has really worked to our advantage,” he said.
The remaining roughly $37 million of the $100 million came from financial investments in a strong market through the end of 2017, which is one of the hospital’s more volatile sources of funding, Hussain said. In 2016, the hospital’s investment earnings sank to a little over $1 million, falling well below expectations, while this year it’s expected to add a total of $56.4 million to the hospital’s bottom line.
The hospital’s strong earnings are in contrast to comments by the hospital’s administrators and board of directors, who have said that the hospital faces a difficult financial future, requiring it to grow to stay competitive or risk insolvency. El Camino’s leadership used the concerns over an uncertain financial future as the rationale for buying its Los Gatos campus in 2009, along with more recent efforts to build clinics and buy land for future medical facilities in South San Jose.
Hussain told the Voice that the hospital’s tireless effort to grow is part of the reason the hospital is in such strong financial shape, and that failing to manage costs and improve the number of patients coming to El Camino can put the hospital in a tough spot.
“Our financial health is really tied to whether or not we can grow … whether you’re a stand-alone hospital or part of a system,” he said. “The concern is whether you can maintain that in the long term.”
For the coming year, hospital officials are budgeting for more conservative earnings — about $112 million — due to major investments in primary care clinics outside of the hospital itself, including one on Winchester Boulevard in San Jose. Hussain said the hospital is also pumping $9 million into what he called “strategic investments,” which means tightening up the costs of doing business, and a robust marketing campaign.
The hospital is also planning to increase the “list” price of services by 5 percent for the 2018-19 year, which amounts to about a 3 percent increase in costs paid by insurance companies based on the hospital’s commercial contracts, Hussain said. He called it a moderate increase along the lines of inflation, and said that the hospital has a financial assistance program for low-income and uninsured patients who might otherwise bear the brunt of the increase.
The hospital’s capital spending is shifting into high gear this fiscal year, with plans to wrap up $310 million in construction through June 2019. The vast majority of that spending, $250 million, will go toward finishing the Mountain View hospital campus upgrades, which include a large, seven-story medical office building in the center of the campus and a new behavioral health services building near the shell of the old main hospital.
They’re making 9 figure profits, buying a hospital outside the district, opening clinics outside the district. Can someone remind me why is tax money going to this hospital?
This is shameful. Meanwhile, they charge exorbitant fees and bill our insurance thus increasing our rates. And they forgive loans to employees and pay their health insurance.
Retire the bonds we pay for in our property bills.
The hospital pays for their employees health insurance? What? How dare..
I’m being sarcastic. I assume Robyn is also, because otherwise the comment is just funny.
Those last 2 commenters- if you have an issue with health insurance, then why don’t you apply for a job and work there as well. Shame on you two! Instead of praising the folks that work here, you shame them with your petty complaints.
Who else is complaining on here about health insurance being provided to these folks who are professional health providers and are deserving of these benefits? SMH!
Shame on this hospital!, Don’t send anyone you care about here!
I was sick for two months from eating fresh basil in the US. The infectious disease doctor finally figured out that I had a rare parasite. I was in El Camino twice. The first time I went to urgent care and was immediately sent by ambulance to the ER, which was not a good experience, but the second time was like a nightmare.
I had been sent by my doctor of 18 years for antibiotics and hydration. I stayed one day, and was treated so badly, both physically and mentally that I asked to speak to a social worker or patient advocate. I was told no and that I was being discharged.
I was denied food that I could eat (crackers) and drinks without sugar. My daughter couldn’t pick me up until that night, which the doctor said ok to, but the nurse said I had to leave immediately. I looked awful, having had lost 30 pounds in two months and being so incredibly sick, and I think they thought I was homeless, because I hadn’t brought a wallet and had no money for a taxi. My husband was out of town until the next day. They told me I had to leave in my pajamas (no bra) and that they would call security if I didn’t go on my own.
I was dumped like trash on the curb, too sick to stand up for more than a few moments.
The chief purpose of El Camino Hospital is to do what? Make money? How did the Hospital do in prolonging or improving the lives of patients? No record?