Given the multimillion-dollar price tag associated with most information technology projects, many chief executive officers wonder where they'll get the money. This begs the question: How did Queens Health Network-a public organization no less-finance such large projects?
Administrators at Queens Health-a part of New York City Health and Hospitals Corp.-did it with a combination of federal and state grants and operating surpluses.
Queens Health Network includes 525-bed Elmhurst Hospital Center, 250-bed Queens Hospital Center and 21 outpatient clinics. During the past six years, the organization has spent $60 million on an electronic medical record, a picture archiving and communication system and voice recognition technology. It also has spent $3 million on robotics.
Much of the money has come from a grant. For the past five years, Queens Health has received $18 million annually from the Community Health Care Conversion Demonstration Project, which was designed to help hospitals manage the transition to Medicaid managed care, says Julius Wool, chief financial officer at Queens Health.
The remainder has come from operating surpluses. Even though Queens Health serves a poor and largely immigrant population of 2 million people, representing more than 100 nationalities, the system has had a positive net balance every year for the past five years. For example, it earned $33.4 million on revenue of $516.1 million for fiscal 2002, ended June 30.
Queens Health has done well financially because it has consistently made enough money on the inpatient side to more than cover losses on the outpatient side, Wool says. Unlike most hospitals, Queens Health's inpatient volume has grown every year. Last year, the system cared for about 41,700 inpatients. More than 90% of inpatients are enrolled in an insurance program, primarily Medicaid.
The outpatient side-where 40% of adults are uninsured-is a different story. "The ambulatory setting is a major loser on a per-unit basis," says Wool, who adds that Queens Health sees 1 million outpatients annually.
To stem the losses, Queens Health hired staff dedicated to enrolling patients in a variety of managed-care programs, such as Medicaid. "We have 60,000 managed-care covered lives at this point, compared with none five years ago," Wool says.
Queens Health has been particularly successful with a state-funded program, Child Health Plus B, which covers low-income children regardless of whether they are U.S. citizens.
That's been helpful to Queens Health because many of the patients in its service area are recent immigrants. They also are among the poorest: In 12 of the area's 18 ZIP codes, 12% to 27% of residents have incomes below the federal poverty level, while 15% to 31% live in households where English isn't spoken. Because of the network's aggressive enrollment efforts, about 90% of the children who see Queens Health physicians today are insured.
However, the years of surpluses may be ending because of New York state's current budget difficulties. "This year we are on budget, but we are spending every dollar we have. Next year is a big unknown," Wool says.