LEBANON — Dartmouth-Hitchcock Health ended the first nine months of its fiscal year in the black, aided by federal stimulus payments, according to a recent filing with bondholders.
The Lebanon-based health system, which includes five Twin State hospitals and the Visiting Nurse and Hospice for Vermont and New Hampshire, had a positive operating margin of $37.3 million, or nearly 2%, on a total budget of $1.9 billion for the nine months ending March 31, the filing said.
“D-HH has continued on the road to fiscal recovery from this global pandemic,” wrote Dan Jantzen, D-HH’s CFO, in the May 26 filing.
Amid the pandemic, the health system reported an operating loss of $84 million in fiscal year 2020, which ended last June.
Credit for the positive performance so far for fiscal year 2021 goes largely to $48.1 million in federal CARES Act payments. But even without that money, the D-HH was nearly breakeven with a negative operating margin of 0.6%, said spokeswoman Audra Burns.
“We’re extremely proud of the efforts across the D-HH system to resume clinical operations in May 2020, after the postponement of some procedures and visits, and our ability to care for both COVID-19 and non-COVID-19 patients,” Burns said.
The improvement this year also has been bolstered by the continued expansion of D-HH’s contract and specialty pharmacy business and an improvement in net patient service revenue, a measurement of the health care services the system provided to patients, compared to the prior year.
The improvement in net patient service revenue is in spite of a spike in COVID-19 cases in the region during the late fall and winter months, which “dampened much of the advances previously made,” the filing said. Inpatient COVID-19 cases peaked in January before subsiding in February and March.
Overall, revenues were up $177.3 million, or 10%, over the same period last year when D-HH registered steep declines due to canceling elective procedures at the start of the COVID-19 pandemic in New England.
This year, the health system also saw growth in its investments in the nine months ending March 31, for gains of $157 million, or 22%.
On the expense side, D-HH saw costs climb $93.8 million, or 5%, over the same period last year. Compensation, medications and medical supplies were the primary drivers of that increase.
The entity within D-HH which includes Lebanon’s Dartmouth-Hitchcock Medical Center and practices in the southern part of New Hampshire drove expense increases. D-H’s total workforce costs, including salaries and employee benefits, were $38.3 million, or 4%, higher than the same period of last fiscal year. That included increased rates of pay, year over year, as well as premiums associated with temporary workers, often nurses, known as travelers.
Separately, recently released tax documents provide an insight into executive compensation at D-H during calendar year 2019. CEO Joanne Conroy earned a total compensation package of $1.4 million in 2019, which is still below what her predecessor Dr. James Weinstein earned in 2017, the year he left the leadership post in June.
Conroy’s 2019 compensation package included $1 million in base pay, as well as $184,500 in bonus and incentive payments, with the balance coming in the form of other reportable compensation, retirement and nontaxable benefits.
Weinstein’s 2017 pay package of $3.3 million included a base salary of $1.6 million. Burns, the D-H spokeswoman, said that Weinstein’s earnings that year included “bonus and deferred compensation payments, part of a standard clause for agreements with hospital executives.”
He made a total of $1.5 million with a base of $1.3 million in 2016.
“As is the case with most health care organizations, the Dartmouth-Hitchcock Board of Trustees is responsible for setting and reviewing executive compensation, in conformity with IRS regulations and established industry practice,” Burns said. “Final approval is granted by the D-H Board’s Talent Development and Compensation Committee with the benefit of advice from an independent compensation consultant.”
Three other D-H employees earned more than $1 million in 2019: Dr. Daniel Stewart, a Manchester-based dermatologist; Dr. Timothy Ryken, chief of neurosurgery at DHMC; and Dr. John Nigriny, a DHMC-based plastic surgeon.
Meanwhile, D-H opened its newly expanded Manchester ambulatory care clinic this winter, which cost $62.4 million. It is in the midst of construction of a $150 million five-story inpatient pavilion in Lebanon, which is expected to include 64 single-occupancy rooms and space for 64 more to be built out as needed, and open for patients in January 2023.
Also on the horizon for D-HH is a pending combination agreement with GraniteOne Health, which includes Manchester’s Catholic Medical Center. Now that New Hampshire Gov. Chris Sununu’s COVID-19 emergency order has ended, a 60-day clock is ticking for the state’s Attorney General’s Charitable Trust Unit to set a date for hearings and issue a report. The transaction also requires approval from federal regulators.
Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.
