As it turned out, Kent Hospital’s operating loss was almost perfectly offset by Women & Infants Hospital’s profit: The latter finished fiscal 2007 with an $8.89 million gain from operations, while Kent, a fellow member of Care New England, lost $8.98 million.

Overall, system CEO John J. Hynes reported at Kent’s annual meeting, Dec. 12, Care New England ended the year with a $1.3 million loss from operations, which he called “somewhat better than expected” – though clearly not good.

“But, out of the ashes of 2007, I am confident that we will emerge on stronger financial footing,” Hynes said.

The fiscal year that ended Sept. 30 was rough on Kent and on Care New England as a whole, and they are not alone: While no other institution reported losses quite as large as Kent’s, other Rhode Island community hospitals had substantial losses as well.

Memorial Hospital of Rhode Island logged a $1.72 million loss from operations, largely to a longtime problem for the Pawtucket institution: fast-rising bad, or uncollectable, debt and demand for free care. Memorial’s allowance for bad debt, combined with free care already written off, amounted to $15.05 million, or nearly 10 percent of operating revenue.

The Westerly Hospital, for its part, had a $5.9 million operating loss for the year, President and CEO Charles S. Kinney reported at that institution’s annual meeting, also held Dec. 12. The hospital, which has been aggressively fundraising to help pay for continued investment in its facilities, equipment and information technology – it raised more than $1.1 million over the year – competes with neighbors in Connecticut, and that’s a constant source of frustration.

“Why should a physician in Pawcatuck, a stone’s throw from here, be paid up to 30 percent more in some cases than a physician in Westerly, for the same service or procedure?” Kinney asked.

Roger Williams Medical Center, meanwhile, deemed it a success to have cut its operating loss in half to $386, 449 in fiscal 2007, attributing the change to small increases in patient days and admissions and a 9.1-percent rise in emergency-room visits.

“In the past year, all inpatient nursing units, the emergency department, and home care all exceeded their target goals for patient satisfaction,” said President and CEO Kenneth H. Belcher. “This is especially encouraging, as I believe our continued success is directly linked to the delivery of high-quality care.”

Not all hospitals responded to inquiries, and Lifespan – which includes Rhode Island Hospital, Hasbro Children’s Hospital, The Miriam Hospital, Newport Hospital and Bradley Hospital – declined to provide any data until audited financial statements are completed.

But Edward J. Quinlan, president of the Hospital Association of Rhode Island, said information the group has received so far indicates a continuing pattern of losses.

“We’ve seen a pretty consistent trend line,” he said. “First we had one-third of our members with losses, then half, now three-quarters.”

The number of uninsured Rhode Islanders and the proliferation of high-deductible health plans continue to drive up bad debt, as bills go unpaid, while at the same time the number of patients eligible for free – or charity – care grows. There are also problems with how Medicaid programs reimburse the hospitals – an issue the community-hospitals task force is focusing on.

And at the federal level, Medicare payments are being cut. Quinlan estimated that in fiscal 2008, hospitals here would see reimbursements drop by $8 million to $10 million.

Kent’s large loss for fiscal 2007, which amounts to 3.7 percent of the hospital’s $241.8 million in revenue, and includes $8.6 million in uncompensated care, did not come as a surprise to Kent or Care New England leaders. (By the same token, neither did Women & Infants’ profit – as a teaching hospital with extensive specialty services, it has a stronger revenue stream.)

After a disastrous first quarter, during which Kent lost $6.2 million due to a combination of patient-volume decreases and high labor costs, among other factors, CEO Mark E. Crevier implemented an emergency cost-cutting plan to try to stem the losses.

Executives’ and staff physicians’ pay was cut by 8.5 percent, and senior managers’ pay by 4 percent. Scheduled pay increases for the staff were postponed by more than six months, merit pay raises were delayed, some jobs were eliminated, and a community outreach program and two outpatient offices were closed, all aiming to save $3.3 million.

And the hemorrhaging was mostly contained: Kent’s loss for the following nine months was just $2.7 million, Crevier noted in an interview. But knowing that wasn’t enough, the hospital and its corporate parent took on a comprehensive review of operations.

Some of the resulting changes should make a difference. Crevier noted that Kent is getting better at properly documenting and processing insurance claims before surgeries, for example, so there won’t be delays in payments, or entirely denied claims, due to missing information.

Other factors, however, are beyond Kent’s control. Crevier said free-standing medical facilities, diagnostic imaging centers and other competitors are luring patients away, just as they are for facilities such as the more financially robust Rhode Island Hospital.

Like other community hospitals in the state, Kent has sought to offset those losses by raising its own stature in the market. The hospital has a certificate-of-need application pending with the R.I. Department of Health to offer primary coronary angioplasty, which it hopes to start offering early next year. It has expanded its outpatient infusion center and sleep lab, both unique specialty programs, and it has invested in a mobile PET/CT scanning service.

Moreover, if only on a modest scale, Kent is becoming a teaching hospital. Working with the University of New England College of Osteopathic Medicine, the hospital is developing two residency programs: one in family practice and another in emergency medicine. The first residents are expected in July.

But Kent has even more at stake in the proposed merger of Care New England with Lifespan. As part of that plan, Kent’s ER would be upgraded to a Level II trauma center – not quite as advanced as Rhode Island Hospital’s, but far more sophisticated than any other ER in the state, and able to take on major responsibilities in the event of a large-scale emergency.

The two health care systems have not yet completed their application for state-level regulatory approval, but last week they did get clearance from the Federal Trade Commission, which reviewed the deal to ensure it wouldn’t break antitrust rules.

While that deal is pending, however, Crevier said he expects Kent’s situation to improve through continued work.

“It’s really a matter of ensuring that we continue to do the higher-end types of cases” and hold costs down, Crevier said. “Trying to run a community hospital and trying to be financially viable is not an easy situation.” •