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The Rolla Daily News - Rolla, MO
  • 'Downer month' but confidence remains high at PCRMC

  • There was no rosy financial report for July at Wednesday night's meeting of the Phelps County Regional Medical Center Board of Trustees.
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  • There was no rosy financial report for July at Wednesday night's meeting of the Phelps County Regional Medical Center Board of Trustees.
    "It was a downer month for volume," Edward Clayton, chief financial officer, told the board's finance committee, which met prior to the monthly board meeting.
    Admissions in July totaled 534, under budget by 51. Year-to-date admissions by July 31 totaled 3,984, under budget by 15 and under last year's year-to-date total by 76.
    Patient-days were 2,639 in July, 282 under budget. For the year so far, patient-days total 18,869, which is under budget by 1,106 and under last year's total for the same period by 1,457.
    Adjusted patient-days, which is patient-days adjusted to account for outpatient activity, totaled 7,690 in July, under budget by 850. Year-to-date adjusted patient-days of 50,401 were under budget by 3,899. They were also under last year's total for this time period by 2,679.
    "It's the slowest month we've had this year," Clayton said.
    That lack of patient volume had an effect on other figures:
    • July net operating revenue, $19,705,000, under budget by $863,000.
    • Year-to-date net operating revenue, $135,054,000, under budget by $5,093,000, but over last year by $7,314,000.
    Clayton said the hospital managers had cut expenses during the month in response to the drop in volume. Those actions resulted in total expenses for July that were under budget. Although expenses were $19,466,000, they were under budget by $967,000. Year to date, total expenses of $134,058,000 are under budget by $4,321,000. They're still over last year's expenses by $8,599,000.
    "It was a downer month overall," Clayton said.
    Board chairman Dr. John T. Park asked, "Does that reflect national trends?"
    Clayton said, "Yes, we're not isolated at all."
    There was good news in the financial report, though. Consider this:
    • Income from operations (revenue minus expenses) in July was $239,000, over budget by $104,000. It is good to be over budget on this line.
    • Non-operating revenue was $1,448,000 in July, way over the budget by $1,167,000. Clayton cautioned, though, that this made up for the drop in July of $800,000-plus. Moreover, the way the stock market has been performing in August, next month's report to the board might not be this good.
    • Net income for the month of July was $1,687,000, over budget by $1,271,000, thanks to the stock market.
    • Year to date, net income of $4,309,000 is over budget by $620,000.
    Still, year-to-date income from operations of $996,000 was under budget by $772,000 and under last year by $1,286,000.
    And year-to-date net income was under last year's figure by $716,000.
    "Through July, income from operations as a percentage of net operating revenues was 0.7 percent, compared to a budget of 1.3 percent and prior year of 1.8 percent," Clayton said. "Through July, net income as a percentage of total revenues was 3.1 percent, compared to a budget of 2.6 percent and prior year of 3.9 percent."
    Page 2 of 2 - Despite all that "downer" talk, Clayton said, "The balance sheet has never been stronger."
    Total cash and investments on July 31 was $91,213,000, a $4,097,000 increase from June 30, just a month before.
    Total debt at the end of July was $24,450,000, a $256,000 decrease from the month before.
    Cash and investments less debt results in a figure Clayton calls "the cushion," and that figure was $66,763,000 on July 31, up by $4,353,000 from June 30.
    "Five years ago our cushion was about $12 million," Clayton said.
    The hospital's total net patient receivables amounted to $91,213,000 July 31, a $4,097,000 increase from June 30.
    The worrisome note sounded in the finance committee was Dr. Park's quizzing of Clayton about financial trends.
    Clayton acknowledged that all of the gains showing on the balance sheet could be wiped out by the performance for the remainder of the year.
    And often what happens is the hospital makes gains during the first six months of the year, then revenue goes flat or the hospital loses during the last half of the year.
    "Hopefully, we can buck that trend," Clayton said.
    Clayton also noted that changes in federal reimbursement through Medicare payments have been cut, as well as other federal and state payments.
    "If you look at all the cuts, it's taken us from respectable income to where we struggle to break even," Clayton said.
    A big help to the bottom line this year has been the holding off of raises for hospital employees. Had raises been put into effect, the cost would have been about $250,000 per month.
    "Out bottom line would be gone," Clayton said.

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