In an effort to beat a possible market shift, the Phelps County Regional Medical Center Finance Committee advised its Board of Trustees on Wednesday it would soon send out Requests for Proposals to a number of financial institutions to secure financing for the hospital’s five-year Capital Improvement Plan.

   By securing $45 million of financing for capital improvements before the end of the year, the hospital’s Finance Committee hopes to garner interest rates as low as five percent, both for a 25-year, $30 million bond issue and five-year, $15 million capital leases.

   Phelps County Regional Medical Center (PCRMC) has been weighing various options for financing the 2009-2013 Capital Budget the past few months.

   Although a final recommendation to the board of what improvements should actually be included in the plan eventually will be sorted out by a committee scheduled to meet in August, some of the projects suggested have included a plan to privatize all patient rooms, add a new patient tower, upgrade inpatient and outpatient imaging equipment and add a new lobby.

   Aside from asking for proposals, the Finance Committee also will need board approval before it adopts a new, five-year capital budget.

   The committee previously presented the board with a number of budget models, and the most recent model, presented Wednesday, itemized a total capital budget of $108 million: $30 million for a new patient tower, private rooms and lobby; $18 million for upgrading imaging equipment; $50 million for overall replacement capital (excluding imaging); $10 million for other unidentified new projects and technologies.

   Additionally, the new capital budget model included an additional assumption: “Opportunities are identified and strategies are implemented to improve financial performance (e.g. increased revenues, decreased expenses) to assure that losses from operations do not occur.”

   Chief Financial and Operating Officer Jerry Paule explained that the hospital would need to begin focusing on this objective as soon as 2009 or 2010.

   One staffer present at the meeting commented that he would be concerned about a possible downsizing of nurses.

   Paule explained that a decrease in staffing was not planned and the directive only implied that the hospital needed to look for opportunities to be more efficient.

   In a related presentation, the Finance Committee apprised the board of the hospital’s financial statements for June.

   Overall, the net loss for June was $949,000, which was under budget by $1.28 million.  June was the largest one-month loss in PCRMC history, Paule said.

   “In the short-term, 95 percent of our costs are fixed,” explained Paule.  “So, if you have a sudden spike up, or decrease, you just can’t react fast enough on the expense side.”

   Additionally, the market was bad, and PCRMC’s nonoperating investment loss totaled $478,000.  Moreover, the inpatient census for June was the lowest it’s been for more than 10 years.

   Paule said part of the reason for the slow month may be because of vacations.

   Although net patient revenues for June totaled $11.294 million, and under budget by $1.057 million, the year-to-date, net patient revenues total $74.767 million, and under budget by only $146,000.

   The PCRMC Board of Trustees also listened to a presentation by PCRMC Attorney Charles Lathrop, of Lathrop & Gage, who discussed health-care laws.

   Lathrop updated the board on the county, state and federal laws concerning hospital governments and how they relate to managing relationships between the hospital and physicians.