Danbury Hospital boasted the top margin for revenues over expenses of any hospital in Connecticut in the 2009 fiscal year, even as it named Dr. John Murphy as CEO and announced an affiliation with New Milford Hospital.
Hospitals statewide improved their margins on a combined basis by 2.6 percent, after a 2008 fiscal year in which they produced a slight loss in their overall results. The Connecticut Office of Health Care Access cited an improving economy, the stock market turnaround, and tighter control of expenses as the main factors behind hospitals”™ turnaround.
Danbury Hospital led the state with an 8 percent margin according to OHCA, which is a division of the state Department of Public Health. OHCA plans to release specifics on the performances of individual hospitals in August.
Hospitals were coming off a year in which they produced a minus 0.8 percent margin in fiscal 2008, and improved their results despite decreases in patient volume and lengths of stays.
The preliminary report was released as Danbury Hospital announced the promotion of Murphy to CEO, and reached a formal agreement to affiliate with New Milford Hospital under a single board, likely by this fall. New Milford Hospital had the second worst operating margin in the state at negative 5.5 percent.
Danbury Hospital has about 370 beds, while New Milford Hospital has about 80 beds.
“We are encouraged by the response we have received from our community leaders and residents,” Murphy said, in a prepared statement announcing the affiliation.
A neurologist, Murphy becomes the first physician to lead the hospital in its 125-year history. Murphy was chairman of the board for four years before joining the hospital administration a year and a half ago as executive vice president under previous CEO Frank Kelly.
All six of Fairfield County”™s hospitals had positive margins in fiscal 2009, with Norwalk Hospital and Stamford Hospital joining Danbury Hospital in the top 10 statewide.
The decline of the stock market contributed to fewer charitable donations, a reduction of hospital reserves and turned non-operating gains to losses, according to the American Hospital Association.
“Hospitals, physicians and other providers will lose hundreds of billions of dollars in revenue under the new changes to nation”™s health care system,” said Murphy. “As a result, we must find ways to provide high quality care while reducing costs. This is a challenge that will require the close partnership of the medical staff, management team and the community.”
One of Murphy”™s first orders of business was deciding whether to formally contest a $6,300 fine levied by the U.S. Occupational Safety and Health Administration, following an investigation into a series of attacks by patients in multiple wards, including the shooting this year of a nurse, who survived.
“This citation points to the need for the hospital to develop a comprehensive, continuous and effective program that will proactively evaluate, identify, prevent and minimize situations and conditions that place workers in harm”™s way,” said Marthe Kent, OSHA”™s New England regional administrator.
Longer term, Murphy inherits plans for Danbury Hospital”™s largest construction project ever ”“ a proposed tower designed to offer patients state-of-the-art care in a more private, family-friendly setting. This past spring, the Danbury Hospital Biomedical Research Center opened, and the hospital”™s medical education program expanded with the addition of a new surgical residency program.
The hospital has also launched HealthLink, a $10 million initiative over the next several years to provide the information technology infrastructure that will allow physicians and other medical care providers to share information, even as the state works on plans for a broader health information exchange.
