Annual Report 2007
Come Grow With Us

Above: Greg Wuerstle, Senior Vice President and Chief Financial Officer, just celebrated his 30-year anniversary at Grand View
	Annual Report 2007
	Letter from the Chairman
	Women’s & Children’s Services | Kristina’s Story
	Cancer Care | John’s Story
	Expanding Our Presence
	New Talent at Grand View Hospital
	Outpatient Centers
	Surgery | Pat’s Story
	Heart Health | Brad’s Story
	Financial Perspective
	Charity Care Policy
	Development
	Philanthropy
	Financials

Financial Perspective

HOSPITALS TODAY SEEM TO ACT MORE LIKE BUSINESSES THAN NON-PROFIT ORGANIZATIONS. WHY?
Like other charitable organizations, not-for-profit hospitals like Grand View exist for the benefit of the individuals we serve. Unlike traditional businesses, profit is not our motive. We are not owned by an individual, group or stockholders but by the community we serve. Grand View Hospital is governed by representatives of the community, our Board of Trustees, who contribute their time and effort to ensure we stay true to our charitable mission—to provide the communities we serve with quality, cost-effective health care. Not-for-profit hospitals are complex organizations. Our size alone sets us apart from most local not-for-profits. With about 1,900 employees, we are the largest employer in upper Bucks County.

Grand View had nearly 12,000 inpatient admissions and 174,000 outpatient visits in Fiscal Year 2007. We operate with an annual budget of more than $150 million. Health care is a highly regulated field, and our ability to make appropriate decisions affects the lives of a large number of people. Determining what services to provide in what manner can affect individual lives significantly.

HOW DOES GRAND VIEW MAKE SURE THAT IT REALIZES A POSITIVE MARGIN? HOW DOES THAT BENEFIT THE COMMUNITY?
We take seriously our role as stewards of Grand View Hospital. We owe it to our community to employ best business practices.

We know we must function efficiently and have a positive bottom line. The hospital needs a positive margin—meaning the amount of money we bring in must exceed the amount we pay out. For Fiscal Year 2007, Grand View is expected to experience a positive margin of 2.2 percent, which amounted to income from operations of approximately $3.2 million. Although impressive, let me put it into perspective by saying that amount would only run the hospital for approximately eight days.

We must invest wisely, making sure we carry an appropriate amount of debt. This protects our bond rating, so that the cost at which we can borrow money is relatively low. On the other hand, we must maintain our facilities and invest in technology. Last year alone, we spent about $4.5 million in routine capital expenditures to maintain our facilities and upgrade and improve our technology and information system. Also, we spent in excess of $4 million for state-of-the-art equipment at the new Outpatient Center at Sellersville. Furthermore, Grand View must offer competitive salaries to attract and retain capable staff.

To ensure a positive margin, we must offer and sometimes even promote services that cover their costs and then some. Doing so allows us to provide other services the community needs even if we lose money on them. By employing sound business practices, we are also able to offer services to those who have no way of compensating us for the total cost of their care. This includes people who have little or no insurance.

WHY ARE YOU BUILDING NEW FACILITIES IN THE COMMUNITY? WOULDN’T IT BE CHEAPER TO BUILD ONTO THE HOSPITAL?
You would think it would be less expensive to add onto the hospital, but that is not true. It is actually more expensive to build in a hospital than in an outpatient setting. The infrastructure and staffing required to properly care for acute-care patients is expensive. For example, it costs about $1,000 per square foot to expand emergency services space, but $200 per square foot to build doctors’ office space. Regulations further increase costs. As a result, it is financially advantageous to move non-emergency outpatient services like doctors’ offices, physical therapy, imaging and laboratory space outside the hospital setting.

Fortunately, it is more appealing for patients as well. By having health centers several miles from the hospital in different directions, we are more conveniently located near their homes. Building outpatient centers makes our patients happier and reduces our costs. It is a win-win solution to many of the growth challenges we face.