This story by Nora Doyle-Burr was published in the Valley News on Sept. 3.
LEBANON — The health system comprising Dartmouth-Hitchcock Medical Center, four other hospitals and a visiting nurse association ended its fiscal year in June with a $69.9 million surplus, helped by growth in its pharmacy business and patient volume.
Dartmouth-Hitchcock Health’s operating revenue was just under $2.3 billion, according to a filing the Lebanon-based health care system made with bondholders last week. Operating expenses in 2019 totaled $2.23 billion, the filing said.
The surplus of almost $70 million improved from the $47.5 million operating margin D-HH reported last year and marks the third year of improvement following an operating loss of $12.2 million in fiscal year 2016.
“We’re obviously very pleased with our (fiscal year 2019) financial results,” D-H spokesman Rick Adams said in an email on Thursday.
The positive results are driven in part by a performance improvement plan at Cheshire Medical Center in Keene, N.H., one of the system’s member hospitals, that began in 2017, according to the filing. Also, all areas of operating revenue have grown, especially D-H’s contract and specialty pharmacy businesses, which grew $61.8 million or 41.5% compared with 2018.
D-H, according to its website, operates a pharmacy in DHMC for employees and patients, and also has a pharmacy in Centerra Park, with no restrictions on prescriptions, where the drive-thru is open 24 hours a day, 365 days a year.
DHMC’s specialty pharmacy within the medical center offers 24/7 customer support to people with complex medical conditions such as cancer, hepatitis and infertility, according to the website.
D-H’s pharmacy service has seen steady growth since the Centerra site opened in April 2018, Adams said in an email.
The revenue growth also is spurred by increases in patient visits. Across the system — which in addition to DHMC and Cheshire also includes New London Hospital, Mt. Ascutney Hospital and Health Center, Alice Peck Day Memorial Hospital, and Visiting Nurse and Hospice for Vermont and New Hampshire — discharges increased by 3.8% from the prior year.
The numbers of appointments and surgical cases also grew. Cheshire saw surgical cases increase by 5.7%, and DHMC saw surgical cases increase by 2.7% over the prior year.
DHMC also saw an increase in the case mix index, a measure of the complexity of cases a hospital sees, which had the effect of boosting revenue.
Expenses also have grown for the health system, including in the areas of compensation (including benefits), medical supplies and medications, and purchased services.
Increases in wages and benefits were spurred by more hiring needed to support the increases in appointments and surgeries, merit and market adjustment pay increases, as well as continuing to use traveling providers, increases in health plan enrollment and claims.
“We know there’s still work to be done, and maintaining this margin will continue to be a challenge in today’s health care environment, but we remain committed to continuing to improve our financial performance so that we can make the investments we need to care for an ever-aging population,” Adams said in his email.
The financial results come as the organization is looking to combine forces with GraniteOne Health, the system that includes Catholic Medical Center in Manchester. A filing with the New Hampshire Attorney General’s Office is expected this fall, Adams said.
In addition, D-HH has begun building a $59 million addition to its large outpatient clinic in Manchester, aiming to complete it in November 2020.
The 90,000-square-foot project at D-H’s campus east of downtown Manchester is slated to include six operating rooms, including some specifically for pediatric patients; an expanded laboratory, dedicated infusion space, imaging services and improvements to the on-site cafe.
A $130 million expansion at DHMC, which is slated to include 60 new inpatient beds, a new parking garage and additional rooms in the emergency department, is still in the planning stages. Construction is expected to begin next spring and to be completed in the summer of 2022, the filing said.
