Rural Virginia hospital sees earnings nearly double after expanding specialty services

Carilion Stonewall Jackson Hospital in Lexington, Va., is looking to specialty services as it seeks to remain financially sustainable now and into the future.

The 25-bed critical access hospital, part of Roanoke, Va.-based Carilion Clinic, a $1.8 billion integrated health system, ended fiscal year 2018 with net income of $2.4 million, up 85 percent from $1.3 million reported a year prior.

Hospital Vice President Greg Madsen primarily attributed the boost to providing more specialty care options.

Previously, he said patients would have to travel to Roanoke for specialty care. But physicians with Carilion's orthopedic surgery department are now traveling to Stonewall Jackson.

"It's attracting physicians within our system to our local community," said Mr. Madsen. "Because we're a clinic model, so many of our physicians are employed by us. And I've been working with chairs of those departments to find ways for further doctors to provide care in Lexington."

As a result of these efforts, Jesse Stem, MD, who also practices at Carilion Roanoke (Va.) Memorial Hospital, performed Stonewall Jackson's first spine surgery in February 2018, according to The Roanoke Times.

The hospital also reportedly now has approval to do lithotripsies, a procedure to treat kidney and bladder stones, and another new surgeon will begin doing vascular surgery at the hospital later in 2019.

Mr. Madsen said Stonewall Jackson also is offering gynecological surgery again. The hospital closed its birthing center in 2010 due to low patient volume, according to the Times. Stonewall Jackson's last permanent OB-GYN also left when the birthing center closed.

Mr. Madsen confirmed the hospital added two Carilion gynecological surgeons to their rotation to work once a week in Lexington. This allows the hospital to perform procedures such as hysterectomies and hysteroscopies.

Mr. Madsen said efforts to provide more specialty care have been ongoing for years, but the organization has found some success recently with physicians being able to travel to Lexington and provide services locally.

"I think we've always seen positive [financial] results incrementally from the efforts, but I think we saw it in a more significant way this last fiscal year because we brought on new things like spine surgery, which is something new to Stonewall Jackson," said Mr. Madsen. "And we used to do [gynecological surgeries] then got out of it and have brought it back. So, it's like we're turning a whole new service line."

But he said the specialty care efforts are about a lot more than profitability. He noted that many rural hospitals have gone out of business in recent years. At Stonewall Jackson, he said the focus is on sound financial practices to ensure the organization remains financially stable and is able to continue providing care in the community it serves.

"It's not that we made money. It's important that we're a sustainable enterprise that can reinvest our earnings into our community. That's important. It's not money for money's sake. It's money to ensure that we have the equipment we need and the staff we need to best serve Lexington, Rockbridge [County] and Buena Vista," Va., said Mr. Madsen.

Regarding capital investments, the hospital has spent $145,638 on gynecological equipment and $327,500 on orthopedic equipment for the operating room. It also spent $500,000 on a new room for fluoroscopy, a medical imaging technique, and $330,000 on an advanced digital radiographic system.

Moving forward, Mr. Madsen said the hospital's efforts provide opportunity for "secondary market growth" by serving other communities outside of Lexington that don't offer the same specialty care options.

He told the Times the hospital also plans to continue focusing on the health needs of the Rockbridge County, Buena Vista and Lexington communities.


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