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St. John

St. John Medical Center in Longview.

Declining patient visits and less Medicaid reimbursements drove St. John Medical Center’s profits down $26 million in four years, according to recently released state financial reports.

St. John’s annual profits dipped to $1.9 million at the end of its fiscal year in June 2014, according to the Washington state Department of Health. In contrast, the hospital had record earnings of $27.7 million in June 2011, despite a relatively similar economic landscape in Cowlitz County.

St. John’s income from investments, however, rose to $15.1 million in 2014 from $9.6 million in 2013, helping keep the hospital’s operations afloat.

St. John Chief Executive Kirk Raboin said the hospital’s waning profit margin parallels national downward trends but doesn’t reflect the hospital’s current financial state.

“There was less money coming in, and we had to adjust to that,” Raboin said Thursday. “We’ve had financial challenges in the past. It isn’t new to us. This fiscal year we’re performing much better and are financially stronger.”

St. John and its parent company, PeaceHealth Medical System, experienced a grim 2013-2014 fiscal year that required PeaceHealth to cut $130 million from its budget and trim 340 jobs in Southwest Washington. St. John laid off 30 employees in August 2013 to help PeaceHealth save $23 million between its Vancouver and Longview hospitals.

Despite the cuts, St. John still lost $10.2 million in revenue from treating patients from 2013 to 2014. Of the patients at St. John, most were covered by Medicaid, which does not reimburse the hospital as much as traditional health insurance companies, Raboin said.

“The national trends for lower admissions, lower reimbursements and overall changes in health plans contribute to the things you’re seeing in year-over-year (finances),” Raboin said. “Health care across the nation is changing, and it’s on us to make sure we’re adjusting to those changes.”

Raboin said St. John started turning its finances around shortly after the 2014 fiscal year ended by changing the hospital’s focus toward more outpatient treatment rather than admitting patients. An estimate on what St. John could save on the outpatient model was not available.

“It’s a lower-cost environment,” Raboin said.

The hospital has not laid off any more employees to save money, Raboin said.

Overall, St. John is aiming to extend its care outside its walls to focus on preventative treatment.

“Through moving from the illness-phase treatments to wellness and prevention, we’re starting to move away from hospital centricity,” Raboin said. “We’re trying to understand how we can get out front of some of the health conditions we have in our community.”

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Contact Daily News reporter Lyxan Toledanes at 360-577-2586 or ltoledanes@tdn.com.

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