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Efforts to improve revenues and reduce costs at Stanford Hospital and Clinics have resulted in lower-than-expected losses in the last fiscal year and a 2001-02 budget that officials say is far brighter than the scenarios envisioned a few months ago.
Although final numbers are still being computed for the 2001 fiscal year, which ended Aug. 31, officials put the hospital's losses at $28 million.
Last month, the hospital's board of directors approved a 2001-02 budget with operating expenses of roughly $741 million, with an expected loss of $9.8 million.
"Considering what we were facing, that gets us pretty close to reaching a break-even point," said Mike Peterson, interim president and CEO.
In April, officials announced that the hospital was poised to lose $40 million in the 2001 fiscal year if no actions were taken, and up to $85 million in fiscal year 2002. To avoid that, a leadership committee began meeting regularly to initiate cost-saving actions.
The actions included the closure of some programs as well as a decision to exit certain types of health plan contracts that did not adequately reimburse the hospital and Stanford physicians for the costs of care.
Achieving the budget targets will require efforts on two fronts, Peterson said. The first is aggressive action to improve patient volume in targeted areas. He noted that the hospital recently launched an effort, including advertising, to promote its cardiac services throughout the Bay Area.
