Hawaii Medical Centers hires financial specialist
The former St. Francis hospitals hope to see a profit in two years
The owners of the fledgling Hawaii Medical Centers have hired a medical-finance specialist to reverse money-losing operations inherited in the acquisition of the former St. Francis Medical Centers.
Calgary, Canada, hospital consultant Salim Hasham, HMC's chief implementation officer, is working under a one-year contract to find new internal revenue sources and restructure operations to further cut costs.
The financially-troubled Liliha and Ewa hospitals haven't seen profitability since CHA LLC (previously known as Cardiovascular Hospitals of America) and the 130-member Hawaii Physicians Group took over in January 2007. The company's initial restructuring led to layoffs of nearly 150 employees of a total 1,250-member work force.
HMC said Salim, previously managing director of Healthserv Inc. in Calgary, has worked with medical institutions in more than 30 countries over the past 20 years.
Hasham wouldn't say if further layoffs will be necessary, but acknowledged that the company is looking at all options to turn the corner to profitability within the next two years.
"We're very confident we will turn the corner," he said. "It's just a matter of how we do it and how quickly. We have a very specific target and operating plan to move it forward."
HMC expects to significantly reduce negative cash flow in the next two to three quarters, said Salim.
Among the ways HMC is working to rebuild its finances is rebalancing the type of referrals that come to the hospitals. For years, the majority of referrals have been patients with low-paying Medicare and Medicaid, and many severe cases that add to hospitals' financial burden by staying longer at the facilities, he said.
HMC has worked to reduce those types of referrals and is now seeking to increase higher-paying private insurance referrals from specialists and primary-care physicians by 20 percent to 25 percent over the next four months, he said. HMC didn't release average occupancy rates.
In addition, the company is spending between $4 million and $6 million on information-technology upgrades and renovations, including a new imaging center at the Hawaii Medical Center-West to generate new revenue.
HMC also is looking to lease about 70,000 square feet of space at the Hawaii Medical Center-East to a long-term care provider. The company says it expects that outsourcing skilled-nursing or assisted-living operations can improve the hospital's bottom line.
"We're certainly looking forward to generating significant amounts of cash through new sources of revenue," Hasham said. "We're on a steady path upwards."