CEDAR FALLS — Delays opening the University of Iowa Stead Family Children’s Hospital stalled anticipated revenue, contributing to decreases in operating income compared with last year, figures show.
During a financial report to the Board of Regents meeting in Cedar Falls, UI Health Care Chief Financial Officer Ken Fisher said total UIHC revenue through April was $1.2 billion, about $61 million less than what was budgeted in anticipation of having additional operational expenses of opening a new children’s hospital.
That puts the hospital’s operating income through April at $20.3 million — or 55 percent below the budgeted $44.5 million and 74 percent behind the $77.6 million through the same period last year.
The hospital continues to report year-over-year volume increases in many categories, including in its average daily census, discharges, surgeries and total clinic visits — at a time of significant change in health care policy.
UIHC also is in the midst of a search for a leader. Jean Robillard, vice president for medical affairs of the $1.9 billion UI Health Care enterprise and dean of the Carver College of Medicine, plans to retire when a successor is found.
In February, the health care campus debuted its $360 million, 14-floor children’s hospital, adding 507,000 square feet to its capacity and 134 more patient beds. To operate the hospital, UI Health Care hired more than 220 full-time staffers — not including 50-plus pediatric physicians — some as early as last June.
The hospital was supposed to open Dec. 10, 2016, but postponed its debut. The Gazette reported that design changes contractor disputes, and cost overruns contributed to the delay.
“We brought on people anticipating the Children’s Hospital would be open (for staff) in October. Many of these 224 people were brought on and had to be trained for their new jobs,” Fisher said. “They would be ready to take care of patients in December. That didn’t happen as we anticipated … but you just don’t get rid of the people, but you also don’t have the revenue that was anticipated.”
Since the opening, UIHC Chief Executive Officer Ken Kates reported, the facility is “off to a great start.”
“We couldn’t be more pleased,” he said. “We also continue to receive wonderful feedback from the staff in the Children’s Hospital as well as patients and families.”
Administrators Wednesday also reported some positive news since raising concerns in April about an increase in denials from Medicaid managed care payers.
Robillard told the regents earlier this spring the hospital had seen its collection percentage fall from 34 percent in January to 31.3 percent in March — largely tied to Medicaid denials.
Jennifer Vermeer, assistant vice president for health policy and population health, told the board Wednesday that administrators have met with Department of Human Services and Medicaid leadership. The discussions have made some difference, although Vermeer said progress will take time.
In April, the hospital reported 119 payment issues involving managed care plans, totaling $12.5 million. As of May 30, according to Vermeer, the hospital has addressed 57 of those, decreasing the outstanding payments by $5.8 million.