The economic downturn and a decrease in healthcare providers left Texas County Memorial Hospital with a negative bottom line of $72,841 in 2008, the board of trustees and administration heard at last week’s monthly board meeting.
Stephanie Weis, senior manager at BKD, LLP of Springfield, and David Taylor, manager at BKD, presented the annual audit report.
“You should be pleased and proud of the results of your 2008 audit,” Weis told hospital board members. “This has been a trying year, but your staff has worked very hard to manage costs despite decreasing revenues.”
“Close to breakeven is the new profit in hospitals these days,” Taylor said, noting that many hospitals experienced much larger losses than TCMH last year.
Taylor explained that many hospitals lost money in investments combined with an increase in bad debt and charity care in the past year.
“You have kept your money in local banks, so you have experienced no losses,” Taylor said. “It’s something to be thankful for.”
TCMH still has “a strong cash position” with 129 days cash on hand versus the rural Missouri hospital average of 86 days.
Looking at the hospital’s assets and liabilities Taylor noted that TCMH was still “extremely strong.”
“You could write a check for your remaining bonds and still have $5 million in the bank,” he said. “Not many hospitals could do that.”
Adding to the hospital’s financial stability – 77 percent of hospital assets are owned free and clear – the balance sheet also remains strong due to continued investment in capital.
“TCMH is very active in replacing capital and keeping capital up-to-date,” Taylor said. The average age of the TCMH facility is 7.9 years. The rural Missouri hospital average is 8.1 years.
“You have a good cushion to help you ride out tough times,” Weis explained. “Not many hospitals have that luxury.”
Medicare and Medicaid, the largest payer groups at TCMH, generated more than $15 million in revenue for the county hospital.
“That money would not come into this community without the hospital being here,” Weis said.
In comparing TCMH to other rural Missouri hospitals, it was noted that TCMH continues to provide a wage and benefit package to employees that is competitive with the rural Missouri average.
In 2008, the average salary expense at TCMH per full-time equivalent personnel was $42,389. The rural Missouri average is $44,986.
Weis explained that there are many “fixed costs” to healthcare.
“There is an expectation that the loss for healthcare would be larger with the current tough times,” she said. However, the cost per patient discharge actually went down from $4,835 in 2007 to $4,662 in 2008.
The average length of patient stays in 2008 also went down to 3.85 from 4.40 in 2007, but the acuity of patients remained about the same at 3.27 in 2008 from 3.49 in 2007.
“These numbers show that you are treating patients in a more efficient manner,” Weis said.
Taylor explained that nursing and other professional service costs at TCMH rose 1.5 percent last year, and hospital administrative costs dropped last year.
“This shows that your hospital’s management team does a good job of managing expenses,” he said. “To hold expenses even or even to decrease them is remarkable.”
Uncompensated care rose again at TCMH to about $4.8 million in 2008 up from $4.6 million in 2007. This number is a reflection at the local level of the numbers of patients who are uninsured and unable to pay for their healthcare.
“I would encourage you to continue to collect on bad debt,” Weis said. “Your community needs to remember that your hospital is not funded by taxes.”
Following the annual audit, gross revenue for the hospital in 2008 was about $53 million with a negative excess of revenues over expenses of $72,841.
BKD sends an audit team to TCMH each March, spending about a week pouring over hospital financial information from the previous year. The firm takes about a month to complete the audit information, including income expense statement, balance sheets, statement of cash flows and other information that comprises the 27-page financial report document, which was presented at the April board meeting.
BKD uses historical TCMH data and data from other healthcare facilities for comparison purposes during the audit. BKD also has access to the latest information regarding hospital payers, which helps the firm reach concrete numbers in the final audit report.
“Words cannot express how appreciative I am to the administrative team and all of hospital managers for the job they did managing expenses in 2008,” said Wes Murray, chief executive officer at the hospital. “2008 was not a great year, but compared to many hospitals, we didn’t fair too badly. For that, I’m extremely grateful.”
Also at the meeting, Omanez Fockler, chairperson of the TCMH board of trustees, administered the oath of office to Mark Hampton, a current board member that was elected in April to serve a five-year term on the TCMH board of trustees.
Hospital board members agreed that board officers for the 2009-’10 year will remain the same. Fockler will serve as chairperson, Janet Wiseman will serve as vice chairperson and Jane Kirkman will serve as secretary.
In other business, Murray reported that the Missouri Department of Health and Senior Services arrived at TCMH in early April for an Emergency Medical Treatment and Active Labor Act (EMTALA) investigation involving a possible violation by TCMH.
“We are treating this investigation very seriously and taking appropriate steps,” Murray said.
Following the investigation, DHSS will prepare a report and make a recommendation to the Center for Medicare and Medicaid Services (CMS). TCMH is anticipating a letter from CMS.
“We have already made systems changes and held mandatory EMTALA training for all employees,” Murray said. “A strong plan of action is being prepared to present to CMS upon receipt of their letter.”
Linda Pamperien, chief financial officer, presented the monthly financial report. The hospital had a negative bottom line of $63,016 for March, with a negative year-to-date balance of $191,175.
“I expect the next couple of months to be rough, but there is a light at the end of the tunnel,” Pamperien said, noting that the need for healthcare providers in the hospital system would be eased over the next few months.
Dr. Eugene Honeywell, family practice physician at the TCMH Family Clinic in Licking, will return to work this month. Dr. Russell Huq, family practice physician, will begin working at the TCMH Medical Complex in Houston in September. Dr. John Paulson, family practice physician, will begin working at the TCMH Medical Complex in July 2010.
Murray reported that TCMH had also successfully recruited family nurse practitioner Brooke Fair of Willow Springs to work in the TCMH Medical Complex in the vacancy that will be created by the June departure of Debra Buckle, FNP.
TCMH advertised for and held public hearings in Wright County and Mountain Grove regarding the proposed addition of TCMH ambulance service in Mountain Grove. The ambulance service has received letters of endorsement from the Wright County commissioners and the Mountain Grove City Council for the TCMH service.
The letters will be sent to the state in accordance with state emergency medical service statutes. TCMH will wait for state approval of the ambulance service.
“We have the plans in place for the combined clinic and ambulance base,” Murray said. “I hope that we are soon able to get bids for the project and move forward.”
Present at the meeting were Murray; Pamperien; Weis; Taylor; Doretta Todd-Willis, chief nursing officer; Joleen Senter Durham, director of public relations; Charles Mueller, MD, chief of staff; Anita Kuhn, controller; Kay Walker, human resources director; and board members Fockler, Hampton, Wiseman and Kirkwood. Board member Mark Forbes was not present.
The next meeting of the TCMH board of trustees is noon Tuesday, May 26, in the downstairs meeting room of the hospital.