Bayfront exec touts hospital improvements in face of City Council grilling

Bayfront Health St. Petersburg is focused on better patient care and an expanded presence in the community, a top executive told the St. Petersburg City Council in delivering the hospital’s annual report.

Council members in turn pushed hard for that executive, Joseph Mullany, to address their concerns about financial and operational details for the hospital during nearly 90 minutes of discussion Thursday morning.

Their questions centered on recent layoffs, a reported operating loss, and the quality of patient care, among several topics.

Bayfront is the largest hospital in St. Petersburg with 480 beds. Because it leases city-owned land, the hospital is required to present an update once a year to the council.

Joseph Mullany is interim CEO of Bayfront Health St. Petersburg.

“Our mission is to make this a great hospital for this great city,” said Mullany, regional CEO of Bayfront Health, a seven-hospital system along the west coast of Florida that includes the St. Pete hospital. Mullany was interim CEO at Bayfront until the appointment last month of Sharon Hays to that job.

Hays is one of several new executives who will bring leadership stability to the hospital, Mullany said, addressing a concern the council raised earlier this year.

The hospital pays nearly $4.8 million in property taxes and sales taxes annually, Mullany said. It’s one of the largest employers in St. Petersburg, with an annual payroll of $83 million, and 1,839 employees as of July 1. Thirty-two people were laid off in July when their jobs were eliminated, Mullany said.

There’s “consternation” among the hospital team about future layoffs, Deputy Mayor Kanika Tomalin told Mullany, and she asked if more job cuts were coming.

“There is no plan in place, however I would not want to make a public statement that there would never be an action taken at a time in the future,” Mullany said. “Our total employment number has increased. There’s always angst in the health care system because things change quickly. Reimbursement changes quickly. We need to be more efficient to put quality at the bedside. That’s our commitment to you.”

Council members Amy Foster and Ed Montanari asked for explanations of financial reports that showed the hospital had an operating loss of $10 million and a total loss of $153 million in its most recent fiscal year.

The operating loss includes non-cash items such as amortization and depreciation, said Charlie Tyson, chief financial officer. The financial reports were prepared by the hospital’s corporate parent, Community Health Systems (NYSE: CYH), and don’t reflect Bayfront’s financial situation the way Mullany would explain it, Mullany said.

“So this balance sheet that was sent to us, you didn’t sign off on that?” Montanari asked.

“It’s not submitted us,” Mullany said. “It clearly represents Bayfront hospital … It just wasn’t submitted by our staff locally.”

“If you factor in depreciation, would the hospital be operating in the black?” Montanari asked.

“Yes, for 2018,” Tyson said.

Foster also questioned Bayfront’s reported charity care numbers.

In 2018, the hospital provided nearly $86 million in care without reimbursement to people whose income was 200 percent of the poverty level or lower, Mullany said. That was three times higher than competing hospitals, and up from $73 million in 2017 and $65 million in 2016.

A report from the Foundation for a Healthy St. Petersburg showed Largo Medical Center, Morton Plant Hospital and St. Anthony’s Hospital provided higher levels of charity care, Foster said.

Mullany said he was unfamiliar with that report, and that Bayfront has programs that serve a large number of charity care patients, such as trauma, obstetrics and residency programs.

Total uncompensated care, including discounts for uninsured and underinsured patients and debt that has to be written off, was $251 million last year, about 12.6 percent of total charges.

Uncompensated care is Bayfront’s biggest challenge, Mullany said.

The hospital has a one star rating, the lowest possible quality rating, from the Centers for Medicare and Medicaid. The ratings are based on data that is three years old, Mullany said, and don’t reflect the improvements Bayfront has made in readmission rates, patient safety and dozens of other key metrics.

Bayfront’s strategy going forward includes a continued focus on improved patient care, as well as increased patient access points, such as the freestanding emergency department that opened last year in Pinellas Park.

“We think our number of access points have been very limited. It was basically a hospital that had an emergency room and a medical office building next to it. We need to be out more in the community, making health care friendlier for the community and being more convenient for the community,” Mullany said.