SPRINGFIELD — Mc-Kenzie-Willamette Medical Center saw its profit soar by almost 46 percent last year, to $15.4 million, according to its latest financial filings with the state, and hospital officials quietly are beginning to gear up for a possible expansion.
The 113-bed hospital has not publicly spelled out plans for an expansion, but Chief Executive Officer Maurine Cate said in the hospital’s spring community newsletter:
“Our most exciting announcement is that we’re beginning the planning process for a new hospital! The plan will take one year to complete and will involve input from our staff, physicians and the community. The new hospital will be both efficient and accessible. The best news: We’ll be staying in the same location where we have been serving the community since 1955."
More information about a possible expansion of McKenzie-Willamette — one of two for-profit hospitals in the state — will be shared as key decisions are made, hospital officials said.
“We are in the most preliminary stages of assessing the best way to serve our community into the future," Cate said. “Our planning for the future is ongoing as we monitor the evolving demographics and needs of the population."
Talk of an expansion comes after two years of steeply rising profits — Mc-Kenzie-Willamette’s 2010 profit more than doubled compared with 2009. That was the year that the hospital’s parent company, Tennessee-based Community Health Systems, bought out Cascade Health Solutions’ 20 percent stake in the hospital.
Community Health Systems is one of the largest publicly traded health care systems in the country. Mc-Kenzie-Willamette paid its parent company more than $2 million in management fees in each of the last two years.
McKenzie-Willamette was able to flex its financial muscle last year by boosting patient revenue, reducing bad debt, keeping a lid on salaries and benefits and increasing only slightly the charity care it provided patients who can’t pay their bills, according to the state filings.
McKenzie-Willamette is doing better financially than its nonprofit brethren in Oregon, but its profit isn’t out of line with other for-profit hospitals throughout the country, said Frank Morgan, an analyst who follows Community Health Systems for investment bank RBC Capital Markets.
“The fact that they’re producing a 10 percent (profit) margin would not seem to be high," he said. “There’s probably even more room for margin improvement there."