AUBURN - Auburn Memorial Hospital is not going anywhere. It will be around to offer medical service for generations to come.

This was the message Tuesday during the first-ever State of the Hospital address.

During an optimistic hour-long presentation, AMH President and CEO Scott Berlucchi told members of the public and hospital officials despite recent hardships, the institution has a bright future.

The hospital is overcoming its past financial issues, which included numerous years of reported financial losses followed by Chapter 11 bankruptcy, Berlucchi said.

Over the last year, AMH reduced operating costs by $5 million and posted $1 million in financial gains. That was the first year to see gains since 2002, he said.

The cost-reduction was achieved because hospital officials have “right-sized” the business by cutting unneeded expenditures, according to Berlucchi. Health care is moving toward more of an outpatient model that AMH had yet to adopt, he said.

“Over the years, we had built an infrastructure to support a 300-bed facility,” Berlucchi said after the presentation.

Instead, AMH will operate as a 99-bed facility with a strong emphasis on outpatient diagnostics, he added.

Berlucchi said AMH's 2008 budget predicts a $2 million gain, though after a strong start to the year, he said he could realistically see more than $3 million. Because of the turnaround, Berlucchi predicted that the hospital would complete its Chapter 11 proceedings by June or July.

As the hospital moves forward, it will upgrade its facilities and expand its services to more specialized fields while conducting its business in a transparent manner, Berlucchi said. AMH has expanded its orthopedics staff to seven physicians, which is up from one since August, he said. The hospital is also looking to expand its bariatrics department by offering new procedures to treat obesity.

A new ear, nose and throat specialist will join AMH and the hospital will further develop its physical rehabilitation program. The psychiatric unit will become an in-house program, and the hospital plans to purchase MRI and PET/CT machines for its radiology department, Berlucchi said.

Such programs will increase the facility's profitability by attracting patients who would otherwise have to be treated at hospitals in larger markets, he said.

“Now that we are promoting these services, those people will all be coming back to us,” Berlucchi said.

The hospital's obstetrics department will remain open despite a recent recommendation by the Berger Commission to close the ward, an accomplishment Berlucchi attributed to the organization's diligence.

“I think we are the only hospital who has had a reversal of a Berger Commission recommendation in the state of New York,” he said.

Dave Smith, chairman of the hospital's board of trustees, said the address was needed because so many people in the community are concerned about the hospital's future. As things turn around, it is important for the hospital to be as open as possible to the community it serves, Smith said.

“When things aren't going as well as they should, you tend to keep your laundry inside of the house,” Smith said. “But the community has to be part of this hospital, and the community can't do that if we don't let them.”

Staff writer Christopher Caskey can be reached at 253-5311 ext. 282 or christopher.caskey@lee.net.

See the speech

To watch the State of the Hospital address, go to www.auburnpub.com