CRMC remains a financially strong asset to community

Friday, June 04, 2021

Rural hospitals face challenges, but CRMC continues to grow

Healthcare nationwide is in a tumultuous position and hospitals – especially rural ones – are having to find ways to remain financially viable and grow at the same time.

Cookeville Regional Medical Center (CRMC) is doing all of that, right in the heart of the Upper Cumberland, creating jobs, putting money back into the community and providing care to make the community a healthy one.

“We are a self-supporting, fiscally responsible hospital that is celebrating 100 years of healthcare and looking toward the future,” said Paul Korth, CRMC CEO. “We have grown a great deal in that 100 years and we’re not stopping.”

CRMC is the largest hospital in the Upper Cumberland. It is one of only two stand-alone hospitals among the nine counties in the Upper Cumberland region that have hospitals and is unique in the fact that it employs physicians locally in a wide range of specialties eliminating the necessity to travel elsewhere for care. CRMC has no corporate or taxpayer backing, as it is a stand-alone, financially secure operation, which is unique for a rural hospital of its size.

“We are the corporate office,” Korth said. “We operate the medical center without any taxpayer funding. We manage the medical center in a very efficient manner.” 

In fact, Cookeville Regional pays to the city of Cookeville $700,000 each year in lieu of taxes. In the past 20 years, this has added over $15 million to Cookeville’s General Fund and has helped fund infrastructure improvements and keep property taxes the 10th lowest in Tennessee. No taxpayer money has ever been given to the medical center to support operations.

According to data from the Tennessee Hospital Association, CRMC generates a total economic impact of over $425 million in Putnam County alone and is responsible for 3,428 jobs.

There are about 2,450 employees at CRMC, including 185 physicians who offer expertise in a number of specialties. Total salary and benefits for this fiscal year came to $186 million.

In addition to the 2,450 direct jobs at CRMC, 978 indirect jobs are created through support operations and due to employee spending.

In addition to the $308 million in direct revenue at CRMC, $118 million in indirect revenue is generated through support operations due to employee spending. CRMC employees earn a competitive salary, which allows them to spend money locally helping fuel our economy. 

Said another way, for every two persons employed at CRMC, one additional job is created to support the medical center. Also, for every $300 generated by CRMC, another $100 is generated in the community. That is money spent specifically due to the presence of the hospital. 

The profits generated at CRMC are 100% reinvested in the medical center through technological advancements, operations and hiring of the best staff, including physicians, nurses and other team members. Without that reinvestment, CRMC is not a relevant, competitive or profitable facility. Economic studies show that CRMC attracts industry to our area and is a determining factor in new companies and jobs locating here.

Revenues are generated from admissions, emergency department visits, home health admissions, surgical cases, births and more.

“We track a lot of things each and every year,” Korth said. “We build the budget on admissions and how much outpatient volume is expected.”

Hospitals are unique in that they are the only healthcare providers required by law to deliver care regardless of the patient’s ability to pay, therefore, making the financial situation of hospitals unique.

The amount of bad debt from services rendered this year was around $27 million. Charity care averages over $5 million annually. In essence, this $32 million is a dividend given back to the community and the citizens that CRMC serves. Governments in some communities actually have to pay the hospital to care for those that are unable to pay. No taxpayer money has ever been given to CRMC.

Since 2010, 16 hospitals have been closed in the state. Thirteen of those are in rural areas. In the Upper Cumberland, Clay, Fentress, Jackson, Pickett and Van Buren counties do not have hospitals. The ones that do (with the exception of CRMC) report to entities based out of Gallatin, Nashville or Knoxville.

History of CRMC growth

In the past 8 years, net patient operating revenue has increased 29% while the income has increased 16%. 

This annual growth allows money to be continuously re-invested in capital expenditures for important expansions and new technology, such as operating room expansions, upgrading the heart procedure labs, and pediatric and nursery upgrades. CRMC continually re-invests toward fueling the mission of providing world-class healthcare close to home and positioning CRMC for the future.

Strategic Investments targeted for this coming fiscal year include an additional daVinci surgical robotic system, new mammography tracking system, new electronic medical records software for the emergency department, new patient beds, new nurse call system, new lighting and delivery tables for the labor and delivery operating rooms, along with a nuclear medicine scanner, which will all contribute to the continuum of care.

“Everything we do is to support our mission of helping to make our community healthier and provide top quality patient care close to home,” Korth said.