Clayton tells what went well and what went ‘not so well’
Although December's financial report was barren of good news, the year 2012 had much that went well for Phelps County Regional Medical Center's balance sheet and income statement, Chief Financial Officer Ed Clayton reported to the hospital board's Finance Committee Wednesday night.
Clayton presented 11 items in his report on 2012 highlights during the 5:30 p.m. committee meeting prior to the full board meeting.
He broke his report into two parts: what went well and what didn't go so well.
First, here's what went well:
There was solid growth in cash and investments. The hospital ended the year 2012 with $83.4 million in cash and investments, up by $6.6 million from the 2011 ending total.
"Cash is cash, cash is good," Clayton said, grinning.
Meanwhile, long-term debt was significantly reduced by $10 million. It was $37.6 million at the end of 2011, $27.6 million at the close of 2012.
The financial "cushion" increased. That's cash plus investment minus the debt. It totaled around $55 million at the end of 2012, up from about $39 million at the end of 2011.
Paying down debt is one thing and saving/investing money another. "To do both is not an easy feat," Clayton said.
n There was a decrease in the number of days in accounts receivable. The total was 44.1 days in 2012 and 47.6 in 2011. That decrease of 3.5 days has an impact of $1.6 million.
Non-operating revenue was way up from 2011, totaling $4.9 million in 2012. It had been just $800,000 in 2011, although it was $4 million in 2010.
Wage and salary costs were down by $1 million to $54.6 million in 2012.
"And there was a pay increase in 2012," Clayton said.
Now, here's what went "not so well," according to Clayton:
Inpatient volume was down, 99 average daily census in 2011, 92 in 2012. Inpatient surgeries dropped from 1,325 to 1,040.
Outpatient volume, though up overall, was down in key areas: emergency department, 37,542 in 2011 and 36,842 in 2012; medical oncology (chemotherapy), 4,586 in 2011 and 4,063 in 2012; radiation oncology, 6,689 in 2011, 6,211 in 2012; sleep lab, 1,312 in 2011, 977 in 2012.
n Bad debt increased as a percentage of net revenue: 12.5 percent in 2011, 13.3 percent in 2012. The hospital provided approximately $30 million in uncompensated care in 2012.
Income from operations was flat in 2012. It had been budgeted to be $3,805,000, but was just $153,000 in actual revenue.
December was a negative month, Clayton said in his report on the monthly financial highlights. Patient volume was 228 (budgeted 256) and average daily census was 86.
Income from operations was $17.5 million (budgeted $19.1 million).
Expenses were $19.1 million ($18.7 budgeted), so the month had a loss of $1.6 million.
The non-operating revenue helped a little, moving the loss to $1.3 million.
Clayton presented the board with other negative reports during the Finance Committee.
He updated the board on the "fiscal cliff" action by the U.S. Congress, nothing that "we are not out of the woods with sequestration."
Also, regarding other federal action on health care reimbursements to hospitals, Mediate inpatient coding changes that will take effect in October 2013 will have a $700,000 reduction in payments for each of the following four years, meaning a $2.8 million impact on PCRMC.