Tulare Regional Medical Center (TRMC) is firmly back in the black.
The once financially beleaguered health care district announced that March’s revenue marks 12 straight profitable months in a row. The accomplishment comes as work continues on its once-stalled expansion project, a four-story tower that now stands partially completed, and in the wake of the opening of rural clinics in Tulare and Earlimart, and the reopening of its Lindsay Healthcare Center. A third new clinic is planned.
“This is a nice comfort level for me,” said Alan Germany, CFO and COO for HealthCare Conglomerate Associates (HCCA) which took over operation of the district’s facilities in January of last year.
TRMC’s numbers for March show a revenue of $6.4 million, a 23% gain over March of 2014, and expenses of $5.6 million, leaving an operating margin of $696,000, Germany said.
“For the last 12 months, it’s all been positive,” he said.
Germany credits more efficient administration, a reduction in labor costs and streamlining of purchasing for the turnaround. The year-to-year change amounts to $11 million of black ink for TRMC.
New rural clinics
TRMC is increasing its reach with new rural health care clinics. Its Lindsay Heathcare Center reopened in March, and the district opened two new clinics, one on West Street in Tulare and another in Earlimart, in April.
“It’s something the community there have been wanting for a long time,” said Dr. Benny Benzeevi, who manages TRMC for HCCA, of the Earlimart clinic. The clinic, which opened on April 23, is housed on the city’s elementary school campus, a move designed to make it more accessible to the area’s students and their families.
“They come to our hospital seeking better care,” said Sherrie Bell, chair of the TRMC board of directors and president of the Tulare Local Health Care District. “The priority will be the children.”
Expansion key to income
Still, there’s room for improvement in TRMC’s financial picture. The hospital served some 1,777 patients in its ER during March and is experiencing record high volume there at an average of 105 patients a day. Those numbers should increase and income with it, Germany said, once the expansion project is finished.
“We’re looking forward to when the tower is complete,” he said.
The original funding of $80 million for TRMC’s four-story tower, which will eventually include an ER three times the size of the current facility, a maternity ward, a series of five patient suites and a helipad, was secured by a bond measure passed by voters in 2011. That money has since run out, and an additional $40-50 million is needed to complete construction.
Currently, construction is continuing slowly on the tower, with TRMC funding building out-of-pocket. Since October, TRMC has spent some $1.8 million on the project, with $400,000 in expenses still outstanding. Recent efforts have focused on getting the tower “dried in” by completing roofing and exterior plastering.
“Next step is to bid fire sprinklers and drywall,” said Jack Stones, VP of construction for HCCA. “That’ll take us … to the final phase.”
Do-or-die deadline
How the remaining construction will be funded is still in question. At its meeting last month, the TRMC board approved going to voters sometime in the next year to request a parcel tax that would cost property owners $184 annually per parcel. While there are fears voters could reject the proposal, which would require a two-thirds majority to pass, Tulare will find itself without a hospital should the tower remain incomplete. State law enacted following the Northridge Earthquake of 1994, stringent new seismic standards for hospitals, and TRMC must be in compliance by 2030 or face closure. Bell, however, said the hospital’s new administration and stronger finances should reassure voters.
“We’re in a totally different world, different management, different construction company,” Bell said. “We need the community to support (construction of the tower). They have to or we have no hospital.”
Tower rescued
Bell credits Stones with keeping construction moving forward while new funding is secured, reevaluating the expansion and updating construction plans.
“He really did rescue the project,” she said.
Stones was able to combine the two sets of plans used to build the tower thus far, and has integrated more than 150 change orders. The white plastic wrap that once enclosed the tower is gone, replaced by the final plaster, and the roofing is complete, making the tower weatherproof and essentially completing its exterior.
“Everything is going very, very smooth,” Stones said, adding that the tower can be completed within a year once funding is in place.
Stones, a veteran of the construction industry, has made some changes to the tower plans. Most prominent is the addition of five patient suites, designed with additional living space that would allow for families to stay with ill loved ones. Those suites will be directly above the expanded emergency room on the tower’s north side. The changes, Stones said, came because of inadequacies in the original plans and an inefficient use of space.
“It all started with no restrooms on the fourth floor,” he said. “You have to have bathrooms.”