Hospital board of directors talks financials

’Tis the season for budget talks, and that’s exactly what the East Phillips County Hospital District Board of Directors did at its regular meeting Nov. 26.

The board approved the hospital’s budget for 2020, which was outlined by Chief Financial Officer Wes White last Tuesday evening.

The budget projects total income before expenses at $21,531,415, a 15% increase from the 2019 budget. Total expenses for 2020 are set at $21,171,415, also a 15% increase. Total net income is $360,000, which is very comparable to 2019’s budget of $363,753.

Projected beginning balance of cash, cash equivalents, restricted and short-term investments is $3,662,661 on Dec. 31, 2019. It’s budgeted to be $4,923,029 at the end of 2020 for a net increase in cash of $1,260,368.

An increase of 23 days cash on hand equal to cash operating expense of $54,799 per day is projected for 2020.

In White’s budget assumptions for 2020, total patient revenue is $34,182,279, including increases in physical therapy, occupational therapy, surgery department, surgeries in other departments, chemotherapy, utilization and chargemaster rates.

In terms of volume, MMH is budgeting for increases in surgery services, specialty clinic visits, eye care clinic visits, dental clinic visits, imaging services, laboratory tests, physical therapy and occupational therapy.

White also listed several projects the organization desires to complete in 2020:

1. Improve processes to achieve optimal utilization of the Athena system and other information systems.

2. Continue participation in the Caravan Accoutable Care Organization.

3. Utilize Adaptive Insights to improve financial reporting to management and improve financial performance.

4. Implement the biweekly departmental labor productivity system using the KRONOS payroll system.

5. Improve the accuracy of Medicare reimbursement calculations with interim cost reports.

6. Increase surgical services.

7. Implement chemotherapy services.

8. Implement mental health services.

9. Successfully pursue grant funding.

A special meeting was set for Tuesday, Dec. 10, at noon to approve the mill levy after the board receives the assessed valuation from Phillips County.

Operating days cash on hand continues to fall

A hot topic during the October financial report was the hospital’s noncompliance with the goal of 100 operating days cash on hand, calculated using 12 months of average operating expenses less depreciation.

Operating days cash on hand at the end of October was 77, which follows the trend of decline for the past several months.

At the end of June, operating days cash on hand was in compliance at 103 days. July dipped to 93, followed by 92 days in August and 78 days in September. (White said the September number was originally reported incorrectly due to a calculating error.)

White anticipates it will take at least three to six months to bring the operating days cash on hand back up to compliance.

“It goes away a lot faster than it comes back,” said board member Mike Woodhead.

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