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Queen’s expects
$10 million loss
The medical center blames
By Tim Ruel
lower federal reimbursements
Star-BulletinThe Queen's Medical Center expects to record a $10 million operating loss for the 2000 fiscal year ending this month, mainly from a steady decrease in reimbursements from the federal government and private health insurers.
Rix Maurer, Queen's vice president of finance, said today that the hospital expects to lose $7.5 million from falling Medicaid and Medicare reimbursements from the government this year, because of the Balanced Budget Act.
Next year, the decline in federal reimbursements to Queen's will increase to $9.3 million.
"That, I would say, is a very major issue," Maurer said.
He said the government plans to take $250 billion away from health care providers nationwide from 1998 through 2002.
The impact on Hawaii health providers alone will be $157 million over the same 5-year period, according to the Healthcare Association of Hawaii.
"A significant impact on the state of Hawaii," Maurer said.
Queen's lost $4 million in operating margins last year, down from a loss of $7.53 million in 1998, all attributable to the decline in reimbursements, Maurer said. Operating margin is calculated by subtracting operating costs from revenues.
Maurer said the 2000 loss increased from 1999 because the government changed its calculation for how much it will cut from reimbursements.
He added that year-2000 computer compliance also cost Queen's $2 million this year. Also, the nonprofit hospital's PremierHealth Plan lost $3 million and its Guam Memorial Health Plan ran into financial trouble, and became a $1.3 million write-off.
