Hospital profits decline in Nevada, Clark County

Wednesday, May 5, 1999 | 10 a.m.

CARSON CITY -- Columbia/HCA Healthcare Corp.'s Sunrise Hospital and Medical Center in Las Vegas registered a 78.9 percent drop in its profits last year, while University Medical Center bounced out of the red for its best showing since 1993.

The state Division of Health Care Financing and Policy reported today hospital profits fell to $49.9 million statewide, down 7 percent. That's the lowest total profit figure for Nevada hospitals since 1994, when they dipped to $39.8 million.

Clark County hospitals, overall, recorded a 17.9 percent decline in profits to $41.7 million last year.

While Sunrise experienced an increase in patient admissions of 2.6 percent, its profits fell from $25.1 million in 1997 to $5.3 million in 1998. Sunrise has traditionally been the top money making hospital in Nevada.

But that honor this year went to Valley Hospital Medical Center, which posted $23.3 million in profits, up 12.4 percent from 1997.

Controversy has surrounded Sunrise in recent years. It and its parent company have been the target of state and federal billing investigations. There was labor unrest and the nurses voted to organize with a union.

Ann Lynch, communications director for Sunrise, said those troubles had no financial impact on the hospital. She said there are more people than ever coming to the hospital. The downturn in profits, she said, reflects the fact that more patients are covered by managed care. "The more people under managed care, the fewer dollars we get," she said. "The rates are more competitive."

"This also shows a commitment by Sunrise that rather than take profits, we put it back into the community." The hospital, Lynch said, is adding new services and renovating buildings, which has eaten into the profit picture.

Mountainview Hospital, which is also owned by Columbia, posted a strong performance with $3.1 million in profits, up from a $58,846 loss in the prior year.

While the financial picture for Sunrise dimmed, it brightened considerably for University Medical Center, the publicly owned hospital in Las Vegas.

William Hale, chief executive officer at University Medical Center, said this was the best year since he came to the hospital in 1993. "The biggest thing is the volume (of patients) increased." The report said admissions were up 8.8 percent for the year.

"We're seeing more paying patients because of our reputation," he said. University Medical, Hale said, still has the lowest billed charged per day per patient of any of the major hospitals in the state.

He said he was "surprised" at the figures in the report that his hospital was the second biggest money maker in Nevada. Traditionally, University Medical has either operated in the red or close to the break-even point.

University Medical still treats the largest volume of low income patients who are not covered by insurance.

The division reported Desert Springs Hospital, another major hospital in Las Vegas, showed a 35.9 percent decline in profits to $3.7 million, despite an increase of 7.3 percent in patient admissions.

Two other major hospitals in the state -- Washoe Medical Center and St. Mary's Regional Medical Center, both in Reno -- experienced good years. Washoe Medical Center turned a $4.3 million loss in 1997 to a $4.1 million profit in 1998. Profits at St. Mary's rose 187 percent to $4 million.

The major for-profit hospitals in Las Vegas and Reno have been under a price cap. Since 1991, they have been permitted to increase their prices by only a cost of living factor. But Gov. Kenny Guinn has decided not to extend that law that expires June 30.

Last year, the five hospitals under this cap -- Desert Springs, Sunrise, Valley, St. Mary's and Washoe Medical -- were permitted to raise prices by 2.7 percent.

The division said statewide, hospitals billed patients $3,874 per day but collected only an average $1,471. That totaled out to an average profit per patient per day of $46 across the state.

The report showed profits at small urban hospitals declined by 8.9 percent to $8.5 million.

Boulder City Hospital went from a profit of $845,419 in 1997 to a loss of $45,758 in 1998. But Lake Mead Hospital Medical Center in North Las Vegas rebounded from a $2.7 million loss in 1997 to a $2.7 million profit in 1998.

Summerlin Hospital Medical Center in Clark County, which is an affiliate of Valley, posted a $4.4 million loss, up from the $2.5 million in the red in 1997. Profits at St. Rose Dominican Hospital in Henderson nosedived to $2.3 million last year, down 32.8 percent.

The report showed the 10 hospitals in rural Nevada suffered a combined loss of $4.5 million, an increase of 4.7 percent. The only hospitals that made money in this group were Churchill Community Hospital in Fallon, which posted a $2.2 million profit and Elko General Hospital with $693,292 in net revenue.

Posting major losses in rural Nevada were Battle Mountain General Hospital at $1.7 million; Nye Regional Medical Center in Tonopah at $1.6 million and Pershing General Hospital in Lovelock at $1 million.