Friday, March 5, 2004 | 11:33 a.m.
San Francisco-based Catholic Healthcare West, owner of two St. Rose Dominican Hospitals in Henderson, reported excess of revenue over expenses, or margin, of $79.9 million for the second quarter of fiscal year 2004 ended Dec. 31 vs. a loss of $8.7 million in the year-earlier quarter.
Total assets at Dec. 31 were $5.58 billion, up from $5.43 billion one year earlier.
Revenue of $1.4 billion was up from $1.235 billion in the year-ago quarter.
Catholic Healthcare West operates as a non-profit organization, but reports its financial performance because it has publicly held debt.
The substantial increase in assets was attributed to an increase in investments, patient volume and premium revenue per patient day, which is the number of days a patient occupies a bed, said Bill Baird assistant treasurer for CHW.
Analysts say the company is doing well and could have its credit rating upgraded. Currently, CHW has a BBB rating with a positive outlook by Standard and Poor's, which is an investment grade credit rating, said Jamie Cortez, associate with Standard and Poor's.
"The numbers continue to look pretty good," Cortez said.
Collectively, patient admissions for the 41 hospitals in Arizona, California and Nevada increased 4 percent to 181,315 patients in the second quarter, compared with 174,264 a year ago.
Patient admissions at the Siena and Rose de Lima campuses of St. Rose Dominican Hospital in Henderson have been holding steady and some patients continue to be diverted to other hospitals because there are not enough beds available, St. Rose spokeswoman Shauna Walch said.
The Siena Campus has 214 beds and the Rose de Lima Campus has 138 beds.
During the second quarter of fiscal year 2004, the Siena Campus had 3,672 admitted patients and the Rose de Lima Campus had 1,939 patients, compared with 3,084 patients at Siena and 1,940 at Rose de Lima in the year-ago quarter. The Siena Campus added 67 beds during the second quarter of fiscal year 2004, enabling more patient admissions.
Although St. Rose's admissions are doing well, they could be hurt in the coming months with the opening of Universal Health Services Inc.-owned Spring Valley Hospital Medical Center and HCA Inc.-owned Southern Hills and Medical Center.
Existing Las Vegas-area hospitals have reported declines in admissions because of the increased competition, but the hospitals say the declines are temporary because of the rapid growth in Clark County.
St. Rose did not disclose its financial situation for the second quarter, but the latest net income reported to the state Division of Health Care Financing and Policy reported Siena posted a net profit of $15.6 million for the year ended June 30, while Rose de Lima posted a net loss of $736,414 for the same period.
Net operating revenue, which excludes investments and medical office buildings, was $15.2 million for Siena and a loss of $3.8 million for Rose de Lima.
The Rose de Lima Campus posted the loss because CHW changed its accounting policies and shortened the length of time before an account is determined to be bad debt, which hit the campus hard, said Renato Baciarelli, president of the Rose de Lima Campus.
He said his campus also has a different financial situation because the types of services and patients differ from Siena, which provides more critical care.
"When people see numbers like that they wonder about the hospital's viability," Baciarelli said. "There's no question the Rose de Lima Campus is a necessary part of the St. Rose Dominican Hospital system. It is a viable part of that, especially as we move forward with our third hospital."
Like other hospital operators nationwide, CHW reported an increase in doubtful accounts, which rose to 7.8 percent in the second quarter from 6.5 percent a year earlier.
CHW's board of directors has approved projected capital expenditures of $4.8 billion for this fiscal year through fiscal year 2013. Among the capital projects is a $137 million hospital in southwest Las Vegas on Warm Springs Road between Buffalo Drive and Durango Road. St. Rose Dominican Hospital -- San Martin Campus broke ground Feb. 10 and will offer 110 private rooms when it opens, which is scheduled for April 2006.
Baird said the Las Vegas market is a growth market and a place where CHW would like to extend its mission.
Cortez said while he couldn't speak to whether the hospital should be built, "an organization such as Catholic Healthcare West, they're not going to build a hospital in an area that they're going to lose money."
A new hospital is also under construction in fast-growing Gilbert, Ariz., a suburb of Phoenix.
Other changes CHW is undertaking locally include the sale of three medical office buildings on the St. Rose Dominican Hospital -- Rose de Lima Campus. The medical buildings are part of a portfolio of 22 buildings in Arizona, California and Nevada being sold in phases that will generate between $110 million and $125 million once the deal closes escrow.
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