Tougher, leaner Health Alliance shows strength in quarter, losses down to $2M
Cambridge Health Alliance has some good financial news for a change: It’s doing much better than expected for the past three months.
The health care system, the state’s second-largest provider of care to poor and uninsured patients, ended the quarter with a loss of a little over $2 million, while it was projected to lose $10.1 million for the period, according to a performance report presented to trustees Tuesday.
The main reason for the big improvement was a surge in the number of patients seeing doctors in outpatient clinics and better-than-expected reimbursements and collections for those visits, the report said. Those two factors accounted for $5.2 million in unexpected profit.
“We have been successful in recruiting new providers and have seen modest growth in the total number of patients assigned to our primary care panels. This improved access to care has resulted in higher outpatient activities within primary care and other specialty services,” Alliance spokesman David Cecere said in an email.
The system also spent $3.6 million less than expected on payroll and other costs, the report said.
The Alliance has lost money on health care operations since at least 2008 as it contended with low reimbursement from Medicaid and private insurers, dwindling state aid for treating uninsured patients and shrinking volume. It lost $17.7 million in the 2013-14 fiscal year that ended June 30, but had expected to lose more than $28 million until unexpected one-time revenues reduced the red ink.
The system operates Cambridge Hospital, Somerville Hospital and Whidden Memorial Hospital in Everett as well as 15 primary care offices in Cambridge, Somerville, Revere and Malden.
This year’s budget projects a loss of $19.8 million and depends on 8 percent higher volume with only 1 percent increase in staff. Alliance leaders streamlined procedures to make it easier for patients to get appointments, and set productivity goals for primary care doctors for the first time. Focusing on outpatient psychiatry, managers made changes such as encouraging group therapy to increase the number of patients seen by each staff member.
Although performance for the first quarter of this year exceeded budget goals overall, some areas fell short. Inpatient volume, especially in psychiatry, was lower than expected, the report said. The number of outpatient psychiatry visits also didn’t meet projections.
Cecere said psychiatry volume, both inpatient and outpatient, “has been improving each month, and outpatient volume is nearly 8 percent above the same period last year.” Managers expect “improved performance,” he said. “Psychiatry is an important component of our mission, and we are committed to its ongoing improvement,” he said.
Outpatient volume overall may not show such a stunning performance compared with budgeted goals as the year continues, Cecere said. That’s because the budget projects growth in volume during the year, he said.
