San Joaquin General Hospital posts improved margins but warns of denial, length‑of‑stay risks
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Summary
Hospital finance leaders reported improved operating results for fiscal year 2024–25 driven by coding improvements, supplemental dollars and operational gains, while flagging ongoing risks from payer denials, long inpatient stays and potential cuts to federal supplemental programs.
Sam Harland, presenting financial results for San Joaquin General Hospital, reported to the committee on Oct. 15 that emergency department visits and outpatient surgeries exceeded budget and prior year activity, while patient days and discharges were roughly level with prior year.
Harland said improvements in clinical documentation and coding have raised the hospital’s case mix index (CMI), increasing revenue capture. “Every one of those decimal points…every one of those decimal points represents hundreds of thousands of dollars,” he said, and credited the Clinical Documentation Improvement program for a steady increase that materially supported the hospital’s $28 million positive result for fiscal 2024–25 after actuarial pension adjustments.
Hospital leaders identified two primary ongoing operational risks: length of stay and payer denials. Harland described efforts to reduce average length of stay — a county target of 4.5 days versus current averages near 5.1 days — through strengthened case management and by creating post‑acute placement options tied to county initiatives such as the Be Well campus. He said prolonged stays are often driven by lack of post‑acute placement options, complex social needs and payer coverage limitations.
On denials, Harland said the hospital is planning organizational changes to pursue and resolve insurer denials more aggressively, including assigning a senior denials manager to reduce downstream revenue loss. He described denials as an industry‑wide problem and said the hospital had reduced denials by 7.8% from 2024 to 2025 through revenue cycle efforts.
Harland also summarized major capital and systems projects intended to improve operations and revenue cycle performance, including a time‑clock rollout (targeted go‑live January), computer‑assisted coding pilot (January), Workday financials migration (planned 2026), a high‑dollar inventory system (QSight) and a cost accounting system (StratEgaS) required by the state for supplemental funding calculations. He reported the hospital’s NICU census has risen substantially under new clinical leadership, improving margins for that service line.
On supplemental funding, Harland warned that the county’s large share of supplemental payments — including global payment program (GPP) and disproportionate share hospital (DSH) funding — faces uncertainty from federal and state policy changes. He said those buckets totaled hundreds of millions in budget assumptions and that changes could produce material impacts in future years.
Harland closed by noting improvements in accounts receivable days (about 69 AR days, a three‑year low) and by thanking revenue cycle staff for gains, while acknowledging continued uncertainty from legislative and federal actions that could reduce supplemental dollars in coming fiscal years.
