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Hospital continues to adapt, expand in health care market

(Jan. 25, 2012) Atlantic General Hospital, the Berlin medical facility that provides the bulk of the resort area’s health care, gave a year-end report to Ocean City Council this week, noting that it continues to rank high in both technological improvements and everyday care, despite its extremely slim financial buffer.

The current turmoil of the health care market “continues to put pressure on our margin,” AGH President and CEO Michael Franklin told the council.

For the 2012 fiscal year, which ended this past June, the hospital billed $111,639,530 for services rendered. However, as is a constant variable in the industry, the hospital does not actually receive everything it charges for, given the frequency of re-assessment and adjustment done by insurance companies and particularly by Medicare.

What was actually garnered was $87,493,927 in revenue, according to Franklin’s report. The total cost to the hospital for the services it provided over the year was $87,083,904, leaving it with an operating margin of just $410,024. This is up, however, from 2011 when the hospital’s net was just $139,848.

But AGH has adapted, Franklin said, to the national health care crunch by establishing a new “Observation Unit” to eliminate excess costs. Whereas in the past, patients whose diagnosis was not immediately apparent were often admitted for a single day, the newly created “observation” status allows patients to remain at the hospital while tests are run to determine whether their condition warrants actual admission, or discharge.

This has resulted in a roughly 25 percent reduction in admission for FY12, down to 3,054 from 4,011 in FY11. But, according to Franklin, the hospital actually hosted about 9 percent more people this year.

“It appears that our admissions have gone down, while in reality our total number of what we call ‘patient experiences’ has increased significantly,” he said.

Reducing the congestion of being fully admitted for diagnostics has caused the average length of stay for admitted patients to rise, from 3.4 days in FY11 to 4.0 days in FY12.

The Emergency Room system has also been streamlined with additional triage space, resulting in 90 percent of ER patients being seen within 30 minutes, Franklin said.

AGH has also received a considerable amount of federal grant funding for the gains it has made in electronic records keeping. Under federal guidelines, records technology upgrades are measured in stages of “meaningful use.” Having achieved “stage 1” in the program, AGH has received more than $2 million in funding. According to Franklin, only 25 percent of hospitals nationwide have been able to do so, and AGH is one of only two on the Eastern Shore to have the status.

The hospital will continue its investment in records technology with the installation of “care.connection” terminals in patient rooms, which Franklin described as “like a giant IPad.”

The screens will not only be able to access records and test results, but will also integrate Web, phone, and TV access, reducing the number of electronic gadgets necessary in the hospital.

“When those type of distractions go away, it makes for a much nicer few days for those who have to stay with us,” Franklin said.

Nurses will also now be able to receive calls and information on portable units, meaning that they’ll “no longer be tied to the stations where the calls come in,” Franklin said.

The hospital will continue to concentrate on building comprehensive care facilities, centering on an intensive level of primary care known as the “medical home” model. This is particularly appealing to the elderly. Franklin said that 25 percent of the region’s population is 65 or older.

The hospital will also expand its coverage into southern Delaware.

“That’s a rapidly growing environment for retirees and the closest hospital where most of their emergency responses come to is our hospital,” Franklin said.

AGH also continues to be ranked first in the state in terms of common and preventable complications, with the lowest incidence rate of what the state refers to as “potentially preventable conditions” (PPCs). This has resulted in $438,422 in grant revenue.

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