Hospital Authority makes budget cuts
The current economic downturn is forcing Memorial Hospital and Manor to make some hard decisions and take some unprecedented cost-saving steps.
At the March meeting of the authority held Tuesday, board members took a look at the proposed 2011 budget projecting an $840,796 loss, and didn’t like it.
Instead, the board heeded the recommendation of the finance committee and administration to approve a baseline budget that will eliminate employee salary increases or adjustments, for an estimated savings of $687,816, and will also reduce the staff by an average of 10 full-time equivalency positions in the coming year, for another projected savings of $152,980.
This also led the board to cancel the planned 50th birthday celebration for the community that would have been held on the hospital lawn April 18.
An employee picnic will still be held in May, but no employee jackets will be given out this year.
Saying “We must set priorities,” Memorial Hospital and Manor President and CEO Jim Peak said the hospital will have to make cuts wherever and whenever possible until the economy picks up. “Some areas have critical personnel that will have to be replaced, but cuts will need to be made in areas that do not affect patient care,” he added.
Finance Committee Chairperson Glennie Bench said she recommended the 2011 budget be reviewed on a quarterly basis and necessary adjustments made as they go through the year.
Bench also summarized the financial key indicators for February. While the hospital continues to report a net income loss each month, February’s figure of a minus $196,688 was somewhat improved over January’s minus $237,315. Bench added that it is hoped these losses can be somewhat offset by an estimated $1.5 million by the end of March when the hospital expects to receive reimbursements due from the upper payment limit from Medicaid and from the indigent care fund.
Two capital equipment purchases were brought to the attention of the board.
A portable X-ray machine that will allow physicians to visualize a patient’s bones and surrounding tissues without having to move the patient, will be purchased at a cost of $36,000. The new AMX battery operated unit comes with a 12-month warranty, with an additional annual warranty for all parts and labor for $5,553.92. This purchase was approved.
The hospital’s clinical laboratory is equipped with two chemistry analyzers and one immunoassay analyzer that perform a number of general chemistry tests, such as blood glucose tests and lipid profiles.
Based on current volumes, annual expenses of service agreements and reagents related to the three instruments, are calculated to be $302,848. Following the expiration of the lease, ownership of the two newer instruments passed to the hospital, resulting in an estimated drop in total related expenses to $237,294. However, this expense is expected to increase in December 2010, when the supplying company Beckman Coulter will no longer support the 12-year-old analyzer and a replacement will be required. Various options will be evaluated, but at this time the recommendation to secure the lower pricing and execute service agreements on the existing instruments was approved by the board.
In other business, the authority approved the reappointment of Draffin and Tucker, CPA firm of Albany; local attorneys Tom Conger and George Floyd; the law firm of Alston and Bird for employment issues, and the firm of Langley and Lee for litigation purposes.
Authority members Johnny Grimsley, Charles Tyson and Dr. Charles Walker were appointed by board chairman Joe Livingston to serve as the nominating committee for officers beginning with the new board year commencing April 1.
Music therapy program coming soon
Director of Nursing Cynthia Vickers announced she has received information that a new three-year music therapy program will be coming to the hospital, courtesy of Tallahassee Memorial Hospital.
The Tallahassee hospital received a grant that incorporated taking the program to a small hospital.
She described the program as being beneficial to ease patients especially in labor, pediatric, pre-operative and geriatric departments.
There is no cost to the Bainbridge hospital, as it will be overseen by staff of the Tallahassee Memorial Hospital.
No date has been given as to when this program will begin.
In the CEO update, Peak announced the hospital employees team participated in the recent Relay for Life and raised $3,500 through a series of bake sales, auctions, etc. The team received two awards, one for raising the most money by a business and second, the most money raised by a team.
Hospital associations give input on state budget
Peak elaborated on a proposed joint board meeting to be conducted the Georgia Association of Hospitals and the Alliance for Community Hospitals to discuss five alternate proposals for helping the state budget shortfall.
Those five suggestions are: 1) to increase the tobacco tax, 2) obtain voluntary donations from hospitals, 3) impose a 1.6 percent sick tax on hospital’s net patient revenues, 4) elimination of sales tax exemption for hospitals, or 5) make a 10.25 percent cut in Medicaid reimbursements received from the state.
Peak said the GAH strongly supports and favors the tobacco tax issue, saying it alone would balance the budget while eliminating the need to furlough teachers, as is now being done.
Peak pointed out the other four options would obviously be detrimental to small hospital financial operations.