Howard University Hospital reported a $58 million loss in fiscal 2014, dragging Howard University into the red for the year, a university treasurer’s report shows.
Without the hospital, the university alone had generated a profit of $13 million for the fiscal year. With the hospital's $58 million loss, Howard University reported a $44 million loss for the year.
The hospital attributed the loss, in part, to lower-than-expected operating revenue of $245 million. That was about $5 million short of projections and was due to low patient service volumes at the hospital.
These numbers, for the year ending June 30, 2014, do not reflect changes made since Howard brought on hospital turnaround specialist Paladin Healthcare Capital in October.
Other sources of revenue fell as well. The hospital posted an 11 percent decline in clinical services revenue — which spans the hospital, faculty practice and dental clinic — to $210 million compared with $241 million in fiscal 2013. The hospital also saw a $13 million decline in federal appropriations, a $2 million decrease in public contributions and lower private contributions and operating investment income.
The hospital coupled that with higher-than-expected expenses, reporting $303 million in total expenses for fiscal 2014, $9 million above projections.
One reason for that increase, according to the hospital, was an increase in employment expenses, up 2 percent to $475 million by the end of fiscal 2014, compared with $467 million in 2013. That expense came partly from an increase in physicians. The hospital counted 40 physicians at the end of fiscal 2014, up 120 percent from 18 physicians in 2013.
It also increased its total staff 9 percent to 1,741 people, up from 1,600 in 2013. The number of residents at the hospital dipped 3 percent to 264 in 2014, compared with 272 in 2013.
I have requested comment from Howard University and will update this post when I hear from them.
Since Paladin Healthcare took over day-to-day operations, Howard University Hospital has announced some staff cuts, including nurse anesthetists, to help rightsize the facility.
Howard President Wayne Frederick also said in January the hospital has been focusing on fundamentals to improve the hospital's bottom line, such as proper physician documentation. Howard University Hospital and Paladin also announced an attempt to try to takeover District-owned United Medical Center.
Earlier this month, Howard made headlines for announcing it would freeze tuition for students and offer them money back for graduating in four years or less. That initiative is expected to start next fall.