HOSPITAL LOSS $5.7 MILLION RECOVERY CRUCIAL TO COMMUNITY, OFFICIAL SAYS.

Byline: Karen Maeshiro Staff Writer

LANCASTER - Antelope Valley Hospital ended fiscal 2002-03 with an operating loss of more than $5.7 million, a turnaround from the $18.6 million budget surplus the previous year.

The operating loss was attributed to a 248 percent increase in professional fees for temporary nurses, attorneys and consultants; a 22.5 percent increase in employee pay and benefits, and a 17 percent increase in medical supply and drug costs, according to an annual audit.

``We will turn this around. We absolutely must,'' said Leon Choiniere, vice president for finance. ``We know we will come back because we have to provide care for this community. That's the business we're in.''

The hospital board two weeks ago directed administrators to look for a consultant to help the facility stem financial losses.

One result may be getting patients out of the hospital sooner, officials said.

The loss at the end of the past fiscal year in June was the hospital's first loss in eight years, and losses have continued every month since then.

The hospital reported net losses of more than $419,000 in July, $1.2 million in August, $2 million in September and nearly $1.4 million in October.

In the 12 months that ended June 30, the hospital took in $195 million, an 11 percent increase over the prior year, and spent more than $200 million, a 28 percent jump over the previous period, the audit showed.

The hospital spent $108.6 million on salaries, wages and employee benefits, compared with $88.6 million in the previous period.

Professional fees jumped from nearly $5 million to $17.3 million. Part of that increase was $6.7 million paid to companies that provide temporary nurses to deal with a nursing shortage, $2.7 million in legal fees, and $1.7 million in consulting fees, audit documents indicated.

The hospital experienced a hike in patient volume, with an increase in the average daily census of 24 patients a day, or about 10 percent, due to county-run High Desert Hospital's closing, auditors said.

Patients stayed longer on average at Antelope Valley Hospital than patients stayed at other hospitals in California - 4.5 days versus 3.75 days, audit noted.

``This is an issue we must deal with if we are going to turn this around within the next six months to a year,'' Choiniere said. ``It takes so long to get patients processed through the hospital. The process is so slowed down. We have to operate more efficiently and get them through quicker, according to Interqual criteria, ... nationally recognized criteria for determining whether a patient should be admitted and whether or not they should remain in the hospital.''

Reducing patients' length of stay in the hospital is critical, hospital director June Snow said.

``The reason it will help is because the way hospitals are reimbursed, they are capitated an X amount of dollars for a certain diagnosis,'' Snow said.

Employee pay and benefits increased in the hospital's campaign to retain and recruit hard-to-find workers, such as registered nurses.

In addition, the state Department of Health Services increased the standard ratio on nursing staff to patients, creating the need for additional staff, auditors said.

The hospital's net worth - the difference between its assets and liabilities - decreased from $127.7 million to $122.6 million.

Karen Maeshiro, [phone]

karen.maeshiro(at)dailynews.com