What pushed BayCare’s revenue over $4 billion

BayCare Health Systems Inc., the largest not-for-profit healthcare provider in the Tampa Bay area, broke through the $4 billion mark  in operating revenue in 2018, following investments to increase access to care and improve the quality of care.

BayCare’s operating revenue was $4.16 billion for the year ended Dec. 31, up 5.7 percent from 2017. Operating income increased to $344.4 million, a 0.5 percent gain from a year earlier.

The financial boost came even though costs for labor and supplies increased and BayCare invested in technology initiatives such as HealthHubs that are similar to Apple stores, and a mobile app that lets patients access their medical health records at anytime from anywhere.

BayCare maintained its margins while increasing the percentage of revenue that it reinvests in the community, Tommy Inzina, BayCare’s president and CEO, told the St. Pete Catalyst.

“We invested $462 million at our cost to provide healthcare and other free services to people who didn’t have insurance or enough income to provide for their own healthcare. That is 11 percent of our revenue,” Inzina said. “A few years ago, the community benefit was in the low to mid 9 percent of revenue.”

Community benefit support and quality improvements have been key focuses for Inzina since he was named BayCare’s top executive in 2016.

The Clearwater-based healthcare system has 15 hospitals and hundreds of other medical facilities in Pinellas, Hillsborough, Pasco and Polk counties and is one of the biggest enterprises headquartered in the Tampa Bay area.

Quality is  the single most important thing the system does, Inzina said. Under his tenure, the system has staffed and revamped its structure to focus on quality. It’s also tied compensation to achieving quality benchmarks.

“If you affect quality and you are an operator or a clinician, last year, something like 60 percent of their compensation was based on improvements in quality,” Inzina said.

Inzina’s goal is for BayCare to be one of the 20 best large health systems in the nation in a ranking by IBM Watson Health. The system ranked No. 30 out of 115 large health systems last year, and Inzina hopes BayCare will move up when new rankings are released on Monday.

Three BayCare hospitals — Morton Plant in Clearwater, Mease Countryside in Safety Harbor and St. Joseph’s in Tampa  — were named to the IBM Watson Health Top 100 last month.

Janice Polo

“You don’t hear a lot about quality, because the  average consumer doesn’t understand how to assess clinical performance and I think they assume all hospitals are the same and all doctors are the same,” Inzina said. “Because we know they are not, we feel it’s our responsibility to make sure that our quality is at a really high level.”

The quality initiatives have driven volume increase in BayCare hospitals and gains in BayCare’s market share, said Janice Polo, chief financial officer. Total admissions were up 1.5 percent in 2015. Market share for the four counties BayCare serves, based on admissions and discharge data reported to the state, has increased to 36.5 percent, up 4 percentage points from four or five years ago.

Access to healthcare services also is a key factor, Polo said. The system has had telemedicine kiosks in several Publix Super Markets that provide immediate access in a private setting.

“At our imaging sites, we’ve expanded our hours and days to focus more around the customer, what’s convenient for them. Another area is  we continue to expand our urgent care footprint, creating access at the right level of care and at the right cost,” Polo said.

Construction projects are ongoing at several BayCare hospitals, including St. Joseph’s in Tampa where a new six-story tower will add 90 private rooms. Private rooms with hotel-like amenities are now an expectation for patients, especially those with high-deductible insurance plans who pay a lot out of pocket, Inzina said.

Mease Countryside Hospital is building a four-story tower that will include 104 private patient rooms, expanded women’s care and outpatient chemotherapy services.

Additional rooms are being added at St. Joseph’s Hospital North and St. Joseph’s Hospital South, both newer facilities that already have private rooms, but that are filled to capacity much of the time, Inzina said.

BayCare also added $8.2 million in operating revenue and about $2.2 million in profit last year, after spending $87.6 million in 2017 to buy four medical office buildings, according to an audited financial report. The buildings were on BayCare hospital campuses and largely occupied by BayCare staff, so it made sense to acquire them, Polo said.

BayCare also posted a gain of about $8 million after selling four outpatient retail pharmacies in its hospitals to Publix, which continues to operate them in the same locations.

“That was part of a broader relationship with Publix to look at us being their primary health care partner and Publix being BayCare’s primary pharmacy partner,” Inzina said. “We try to focus on our core competencies and others core competencies.”

Expenses also were up in 2018, with salary and wages up 5.8 percent and supplies up 6.7 percent, with cancer drugs accounting for a big chunk of that, the financial report said. BayCare also spent money to enhance its technology infrastructure.

Healthcare increasingly needs to focus on technology, Inzina said.

“Consumers are going to more and more want healthcare to feel more retail-like,” he said. “If you think about all you do in your personal life, it’s all done on mobile phones and tablets. You schedule appointments. You buy things. And while it will take some time, we think healthcare needs to move in that direction.”

BayCare has two HealthHubs in Largo and in Valrico, which features physician offices and more.

“There’s a feature in there called a tech deck. It’s similar to the Apple Store. There’s tables and devices, whether Fitbit and activity trackers. We sell some pretty cool scales and blood pressure devices. We help people do what they want to do to help monitor their health,” Inzina said.

There are no waiting rooms in the HealthHubs. After patients check in to a central registration area, they can hang out in the tech deck area before they go to an exam room.

BayCare’s mobile app links to the activity-tracking healthcare app on Apple phones. Apple’s electronic health record partners are Cerner, which BayCare also uses, as well as Epic and athenahealth.

“If you think about the number of seasonal residents we have who live here in the wintertime and up north in the summer, if their healthcare providers up north use Epic for example, they can link their medical record from Epic to the Apple app, they can link Cerner to that and then have access to all their medical records in multiple locations in one place,” Inzina said.