Losses continue piling up at Helen Ellis

After two profitable months, the Tarpon Springs hospital loses about $857,000 in April.

By KATHERINE GAZELLA

© St. Petersburg Times, published June 7, 2000

TARPON SPRINGS -- Helen Ellis Memorial Hospital lost about $857,000 in April, putting it on a course to lose more than expected this year.

Hospital administrators say the losses, which resulted from lower-than-expected admissions and a handful of expensive charity cases, would be stabilized if a proposed affiliation with University Community Hospital in Tampa goes through.

The hospital has lost about $1.4-million so far this fiscal year, hospital administrator Joseph Kiefer said. Officials originally expected to lose $1.2-million for the entire fiscal year, which ends Sept. 30.

"It's a disappointment," Kiefer said.

Helen Ellis administrators are working toward an affiliation with UCH, an arrangement designed to rescue the financially troubled Tarpon Springs hospital. Helen Ellis is mired in debt, has laid off workers and has faced the prospect of defaulting on its bonds.

If the takeover is approved, UCH would pay more than $20-million upfront toward retiring Helen Ellis' bonds. UCH officials predict the hospital will post profits shortly after the takeover.

The hospital was in the black in February and March. It posted profits of more than $367,000 in February and more than $25,000 in March.

But in April, expenses far exceeded revenues at the 168-bed hospital.

Admissions were lower than expected. Inpatient admissions for April were 7.3 percent under budget, and admissions year-to-date were 4.2 percent under budget. In addition, four patients who required care or whose insurance paid for only a small portion of their care cost the hospital $500,000, Kiefer said.

He said the hospital is losing market share in Tarpon Springs and Palm Harbor. In a letter to the mayor and city commissioners, he attributed the loss of market share to "negative publicity" about the hospital.

He said some patients have read newspaper stories about the hospital and assumed that the hospital was not in good shape.

"Some patients say if they have a choice, (they'd) rather not go to Helen Ellis," he said.

If city voters approve a lease that will allow UCH to take over Helen Ellis, Kiefer said, the hospital's financial situation will improve rapidly. Because UCH will move toward retiring the hospital's bonds, Helen Ellis no longer would have to pay $250,000 a month in interest and principal for its outstanding bonds, he said.

The Tarpon Springs Hospital Foundation, which operates Helen Ellis, already has signed an affiliation agreement with UCH. Under that agreement, UCH would take over the financially troubled hospital by becoming the sole member of the hospital foundation.

UCH would pay $20-million toward retiring Helen Ellis' bonds. An additional $3.4-million would come from a reserve fund that the foundation set aside to make debt payments. The remaining amount, about $4.2-million, would be loaned to Helen Ellis by UCH.

City officials currently are considering a lease proposal from UCH. Tarpon Springs residents will vote on the lease in a July 11 referendum.

Gerry Busch, the city's health care consultant, said the hospital needs to do more to aggressively attract people for outpatient services.

"The industry is changing, and you have to change with it," Busch said.

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