Bon Secours Baltimore Health System has turned around its financial fortunes and is posting profits two years after receiving financial help from the state to prevent it from closing.
Executives said Friday that the organization is financially sound enough to start implementing a new strategic plan that it hopes will help improve health in the West Baltimore community it serves. CEO Samuel Ross said the plan would reduce emergency room visits and focus on preventive care and chronic disease management.
The system operates eight facilities, including a main hospital building on West Baltimore Street, a community support center, outpatient counseling programs and methadone programs.
"Despite the hospital's financial success, we have not improved the health of the community," Ross said at a news conference Friday to announce the strategic plan.
The Bon Secours system lost $15.1 million in 2007, its largest decline in a decade, which led to a one-year, $5 million bailout from the state. Bon Secours reported a $400,000 profit in fiscal year 2010 but showed a $1 million loss in fiscal year 2011 without state help. The system projects a $1.2 million profit in the next fiscal year.
Bon Secours has had difficulty remaining profitable in a neighborhood where most residents do not have insurance or are on Medicaid or Medicare. The government insurance programs reimburse at a lower rate than private companies.
Many of the hospital's patients wait until they are very sick before seeking medical care and often end up in the emergency room, where costs are higher, hospital officials said. The problem is worsened by the lack of primary care physicians in the area.
It is a problem that many urban hospitals face and one that has stirred debate about the way people pay for health services.
"There has been a lot of discussion about the fact that we have a health care system that is largely driven by fee-for-service medical care," said Paul Parker, acting director of the state's Center for Hospital Services. "People have said that is part of the problem of escalating health care costs."
Ross took over Bon Secours in Baltimore in 2007, implementing a plan to cut costs and improve the system's financial health. He replaced senior staff, improved billing and laid off more than 80 people from a staff of 900.
The Bon Secours system also developed new revenue sources, including taking part in a program under which it admits mental health patients on behalf of the state.
The state's rate-setting agency, the Maryland Health Services Cost Review Commission, increased its reimbursement to Bon Secours by 3 percent because the hospital is in an urban setting and serves low-income patients, boosting revenue by about $3 million a year.
By itself, the hospital posted a profit of $1.8 million in fiscal year 2010 and $1 million in fiscal 2011, according to the rate-setting commission.
Jerry Schmith, a deputy director at the rate-setting commission, applauded the financial turnaround at Bon Secours. "We're hoping it will allow them to provide better care, especially if it enables them to invest in capital needs," he said.
Ross said the Bon Secours initiative is in the planning stages, with broad goals of expanding programs and reducing readmissions, emergency room visits and deaths. The health system wants to play a bigger role in improving conditions in the neighborhood by helping to improve access to healthy foods, housing, jobs and primary care services.
The community group Operation Reach Out Southwest lists health as one of six core things it wants to see improved in the neighborhood, and its leaders said Bon Secours' plans fit in well.
"The hospital was the missing piece," said Joyce Smith, the group's president.