Hospital’s finances improving

Published 4:29 pm Friday, September 18, 2009

Memorial Hospital and Manor is still losing money, but apparently it is in better financial condition this year than it was last year, according to information presented to its authority board members’ Tuesday.

Chief Financial Officer Billy Walker reported net income for August 2009 was $101,323, compared to a loss in July 2009 of $235,869.

Year-to-date figures reflect a loss in net income of $622,171 in 2009 compared to a minus $1,146,296 in 2008.

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The annual year-end audit report was presented by Milton Jordan and Bert Bennett of Draffin & Tucker, CPAs. Generally speaking, it was their opinion that the hospital is in a better position financially this year than it was last year, and that it is generating enough cash flow to handle current debt and obligations.

Board Chairman Joe Livingston asked the accountants if there were any key or innovative practices being conducted by other hospitals that might be emulated here. The recommendations were made to think through the level of services offered and how the hospital gets paid for them, and above all else, continue to monitor expenses. Currently the hospital averages 32 patients per day, with 60 percent of the payments coming from Medicare and Medicaid.

Improvements to 50-year-old building

The hospital will observe its 50th anniversary next year, and further board discussion was held regarding possible modernization of the aging facility in order to offer additional procedures, especially in the surgical department.

When asked about the modernizing projects, Administration Jim Peak said that currently only necessary repairs are being made.

Two examples of those repairs, both of which were approved at the board meeting, go to improve the air handling system in the surgery unit. One will upgrade the medical gases at a cost of $78,403 and the other is to replace the duct work system of the main air fan at a cost of $58,820.

The board also approved purchase of a Vulcan Model 36 restaurant electric range at a cost of $5,016.49 to replace a range described as original equipment in dining services.

In a statement given to the press by Peak following the meeting, he agrees that although the hospital continues to lose money each year, the improved position may be due to several steps that have been taken to monitor the expenses. Some of the procedures implemented have been initiating a hiring freeze and reduction of staff, offering an early retirement plan, making the unfortunate decision to discontinue funding the school nursing program, and continuing to monitor costs by seeking and getting the best prices available on goods purchased.

Cost cutting continues as the finance committee at its meeting prior to the board meeting authorized an amendment to the budget reducing the percentage of employee salary increases to 3 percent, rather than the 5 percent increase previously budgeted.

In the administrator’s report, Peak said continued recruitment of new physicians is ongoing and announced that he, Dr. Aric Aldridge and Lynn Stabler will attend the annual physician recruitment fair in Atlanta this weekend.

They will join 30 to 50 other communities to make preliminary contacts with the 200-300 medical students and those completing a residency, who will be attending. The focus this year is to seek family practice and internal medicine practitioners. Even though very preliminary contacts are made now, it may be a few years’ wait for the physicians to complete their training, and the goal is to try to find physicians that will be a fit for our community.

“We want them to get to know the Southwest Georgia area and be sure they will be happy here,” said Peak.

Peak also announced that in August he was elected chairman of the Center for Rural Health for Georgia and has been nominated for chairman of the Georgia Alliance of Community Hospitals, with an election scheduled for October.

Property purchase discussed

The board went into closed session at the end of the meeting to discuss the purchase of real estate. When it came back into an open meeting, there was a decision not to purchase the subject property at this time, but rather to take an option in order to do due diligence on the property, identified as the building formerly occupied by the Department of Family and Children Services on Amelia Avenue.

During the due diligence period the hospital will continue to inspect and evaluate the building to see if it can be renovated to suit the hospital’s need for medical offices.

Asked how this would impact the proposed construction of a new building that has been on the drawing board for some time, Assistant Administrator Lee Harris said a comparison will be made between the costs involved in new construction and renovation of an existing building.

Following the meeting, Peak was asked what he thought the future was for Memorial Hospital and Manor, Peak replied it was uncertain.

“Hospitals our size are very dependent on federal and state government funding. When 60 percent comes from those sources, the changes President Obama is endorsing in Washington, D.C., will directly affect our survivability. That is what we have to react to. We will not be able to be everything to everybody.”