Metro Health Hospital in Wyoming was one of seven hospitals in West Michigan that fully meet standards for maternity care. Photo via fb.com
The Metro Health executive board has approved a 5 percent rate increase, along with its hiring and capital-improvement plans for the new fiscal year.
The new $320 million net revenue budget went into effect on July 1, but Metro Chief Financial Officer Tim Susterich said that most patients will not see any difference from the rate increase. He also noted that it has been typical during the last several years for Metro to adopt a 5 percent increase with its budget.
“About 90 percent of our business is contracted business, either with a government agency such as Medicare or Medicaid, as well as large commercial insurers such as Priority Health and Blue Cross, which are contracted rates,” Susterich said. “So any price increase we have would not have any change, necessarily, in what the patient pays or in what the hospital gets paid. In fact, the 5 percent rate increase only has a cash impact of less than 1 percent of our net revenue.”
He added that in 2008 Metro launched its Metro Care program, which provides a 40 percent discount to patients who are uninsured or self-insured, so even those patients will not see the full increase. He noted that uninsured and self-insured patients make up less than 3 percent of the patient population at Metro.
The $320 million budget has a 1.5 percent operating margin. It also includes a $12.6 million capital budget.
Susterich said that the capital budget will be used both for a building going up this year on the main campus that will house physicians looking to take advantage of Metro’s services, as well as a new 80,000-square-foot building that will be completed in mid-December in Cascade. The new building, called Metro Health Park East, will house an outpatient surgery center.
“That is really to move some of our outpatient surgeries out of the way here at the hospital so that we can accommodate more inpatient services,” he said. “We are currently about 60 percent outpatient and 40 percent inpatient and we want to reverse that rate, so that is why we are moving some of the outpatient surgeries out of the way so that we can accommodate a large physician group that is interested in doing surgery here at Metro.”
Also included in the coming year’s plan is the addition of 80 new staff members, mostly clinicians.
“That really is related to continued volume growth that we are seeing,” he said. “Even though our inpatient volume is expected to stay relatively flat, we’ve historically seen anywhere between 5 to 8 percent growth in our outpatient areas.”
The hospital also is narrowing in on a strategic partnership, which it began pursuing earlier this year.
Susterich said that Metro is looking for a partner that can strengthen its balance sheet, shares a similar vision related to patient care, and will enhance the image of Metro. He noted that the hospital’s strong financial performance in 2013 has put it in a perfect position for seeking out this type of partnership.