Beebe Healthcare may expand

By Kathy CanavanBeebe-in-fall

As the population of the Delaware beaches grows, Beebe Healthcare’s numbers and plans are growing, too. The hospital will likely announce plans for an expansion later this year, said President and CEO Jeffrey M. Fried.

While hospitals across the country are reporting flat or declining inpatient admissions, Beebe Healthcare reported that inpatient admissions rose 9 percent in fiscal 2014. Bayhealth reported growth of less than 1 percent. Christiana Care’s admissions fell 1.5 percent, according to its website.

Paul J. Pernice, chief financial officer at Beebe, said the population growth in Sussex County is one of the factors driving the increase. Population rose 25 percent between 2000 and 2010, and it is projected to rise another 15 percent by 2020. The median age in Sussex East, where Beebe is located, was 55.2 last year—the highest in the county and 16 years older than the state average.

“We started seeing a spike back in March of 2014. That was the first month it really seemed higher than normal, and it’s really been consistent since then,” Pernice said.

In December, the average daily census was 150 patients—39 more than the previous December.

“We had, historically, seen some peaks and valleys in our patient census, but, as our population has grown, we see fewer peaks and valleys, and we’re seeing more elevated numbers throughout the year,” said Fried.

Pernice said a shortage of primary-care physicians in the area is also driving the uptick in the census. “We do serve an aging population here, and we don’t have enough primary-care physicians in the area, so, by the time patients need to be seen, they’re sick.”

Another factor, in recent months, has been the early arrival of flu season.

Paul J. Pernice, Chief Financial Officer
Jeffrey M. Fried, President and CEO

The rise in admissions and careful management of resources has combined to produce higher operating income for the not-for-profit, community-based health-care system. Operating income rose from $3.37 million in June 2013 to $4.76 million in June 2014, despite the hospital spending $72.81 million on community-benefits items in 2014—unreimbursed Medicare and Medicaid costs, charity care, health promotion and wellness programs, sponsorships, and other services for the community.

“We do a lot toward managing our expenses,” Pernice said. “Our biggest cost is salaries and labor. What we’ve done is work with a consulting firm to develop a labor-management plan at the department level. Benchmarks have been developed and are reviewed monthly with each hospital department. We’re constantly looking for ways to improve utilization of resources.”

Beebe spent $124.54 million on salaries alone in the fiscal year ending June 2014—$14 million more than the previous year. As the hospital has increased its payroll, the local economy has grown to serve the new workers.

The hospital and its physicians have made more out-of-hospital care available through its Delmarva Health Network of 40 primary-care physicians, its three walk-in care centers in Georgetown, Millsboro and Millville, and its free Beebe Healthcare CAREs program, which follows patients who are high utilizers of inpatient and emergency-department services and have difficulty managing chronic health problems on their own.

Fried said a recent community-needs assessment showed the area would need 13 more primary-care physicians to meet population demands over the next three years—and that’s assuming no physicians are lost to retirement. He said Beebe is exploring hiring more primary-care physicians or offering financial assistance to doctors willing to recruit and employ primary-care physicians in the area.

He said the hospital will consider its options for expansion later this year, possibly near its Beebe Health Campus on Route 24 in Rehoboth or on its main campus in Lewes.

“Certainly, the area is growing, and that’s going to create demand, but we’re hoping to decrease the demand for inpatient beds and emergency department care by working with our primary-care doctors and other members of our care coordination team to reduce the demand for services,” said Fried.

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