Profit surges at hospital seeking trauma subsidy

By PHIL GALEWITZ

Palm Beach Post Staff Writer

Tuesday, June 12, 2007

FORT PIERCE — Lawnwood Regional Medical Center & Heart Institute's profit leaped 73 percent last year, raising questions anew about why the hospital needs an annual $7 million stipend from St. Lucie County taxpayers to build a trauma facility.

But Lawnwood Regional officials say they've already invested the hospital's $14.4 million profit in renovating and expanding its emergency department and upgrading other areas of the hospital.
Chart:Hospital earnings

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They say the $7 million that the hospital seeks from county taxpayers will pay for specialists to staff the trauma facility.

The nearest trauma centers are now in West Palm Beach and Melbourne, and hospital officials say reducing delays in care will save lives.

Early voting started Monday in a St. Lucie County referendum on taxing the average homeowner about $57 a year.

The official voting day is June 26.

While opponents of the new tax say they wouldn't mind having a trauma center in the county, they think Lawnwood Regional and its parent company, HCA Inc., should be able to afford it without a public subsidy.

"I think a $14 million profit shows they could do this on their own without dipping into the pockets of county taxpayers," said Craig Mundt, a vocal opponent of the tax and member of the St. Lucie County Planning and Zoning Commission.

Nashville-based HCA, which owns 173 hospitals in the United States and Europe, had $25 billion in revenue last year when it was bought by a private equity firm.

Lawnwood Regional's 2006 profit was the highest of any of the 10 HCA or Tenet Healthcare Corp. hospitals in Palm Beach County and the Treasure Coast, according to audited financial statements from the Florida Agency for Health Care Administration.

HCA's 194-bed St. Lucie Medical Center in Port St. Lucie made a $14 million profit last year, down from $14.5 million in the prior year, AHCA records showed.

Most Palm Beach County hospitals saw profits drop last year, largely as a result of a drop in admissions caused by fewer visitors and snowbirds coming to the region.

Unlike Palm Beach County hospitals, St. Lucie County hospitals were little affected by Hurricane Wilma in October 2005.

That storm led to a downturn in tourism and visitors in Palm Beach County in 2006.

Both Lawnwood Regional and St. Lucie Medical saw admissions rise modestly last year, bucking the regional downturn, according to data from the Treasure Coast Health Council.

Lawnwood Regional spokeswoman Beth Williams said the hospital still needs community funds for the trauma center to be able to afford to pay doctors to be on call in the trauma center.

"There's no matching revenue source for that," Williams said.

The tax would be no more than 25 cents per $1,000 of taxable property value and could be less, depending on contracts signed with trauma surgeons.

The owner of a $250,000 house with the homestead exemption would pay a maximum tax of $56.25 a year.

Williams said the 341-bed Lawnwood Regional reinvests all of its profit into the facility by paying for new technology and making renovations.

She said in recent years the hospital has spent $12 million to triple the size of its emergency room, $4 million for a medical office building, $1 million for a new heart catheterization laboratory and more than $1 million for a new robotic surgery device.

"Overall we saw an increase in volume, and we run an efficient hospital," Williams said.

Lawnwood Regional's revenue rose 15 percent to $226.5 million in 2006, while the hospital held its labor expenses to a 5 percent increase.

St. Lucie Medical's revenue rose 6.5 percent to $136.8 million, even as its labor costs rose nearly 8 percent.

Personnel costs are hospitals' single biggest expense.