Bainbridge Hospital Authority deals with recent audit findings

Published 3:09 pm Friday, August 23, 2019

Bert Bennett of Draffin & Tucker, CPA, presented the annual audit of the finances of Memorial Hospital & Manor for fiscal year March 31, 2018 to 2019 to the Authority meeting Tuesday. The report states an ongoing concern with regard to financial difficulties, stating “Substantial doubt about the Authority’s Ability to Continue as a Going Concern,” the same as they did last year.

They did recognize a number of changes implemented by management that are expected to improve the situation.  Stating, “One of the most significant financial improvement steps the Authority put in place is related to the employee health plan. While it does not significantly change benefits to the employees and their families, the plan design change is expected to reduce the cost of benefits paid by approximately $1,000,000.” A rate increase is also being considered, as they have not been updated since 2017. That increase is projected to generate approximately $450,000 in additional net revenue for 2020.

The new wound care service that recently opened and the inpatient medical detox program both are expected to generate additional income in the current fiscal year.

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The Rural Hospital Tax Credit program has added approximately $500,000 from contributions so far in 2019, and the Authority continues to pursue donations under this program.

Bennett stated that the number one struggle he hears from hospitals today is the problems with self-insured health plans for their employees, to which CEO Jim Lambert said one thing that could help that some hospitals are doing is to create their own network.  He added, “But that is taking away choice,” meaning if the service is offered at Memorial Hospital, the employees must get the care there, or foot the bill themselves elsewhere.

Bennett commented, “I think you have opportunities here. The payers are not paying enough to cover your costs.” More detail about the modifications to the health plan were provided by Lambert in his monthly report. Last year claims exceeded the prior year totals by approximately $1.3 million. Changes include switching from Blue Cross as the network, and working to develop a new network. They have eliminated the deductibles and co-insurance for employees who choose Memorial Hospital & Manor and negotiated a contract with Tallahassee Memorial Hospital to cover those who choose TMH and their providers.

In his CEO report, Lambert stated that House Bill 321 requires hospitals to post their financial information on their website by October 1, when the general public can access the full audit report on their own.

Two capital expenditures were approved: A new lease on an Olympus CV190 Endoscopy System at a cost of $345,185.20 over a five-year period, or $5,738 per month. This replaces the Fujifilm Endoscopy system-operating lease scheduled to expire August 31. The current Fujifilm current total five-year cost, including service was $7,209.33 per month for a total five-year cost of $432,559.80.

The second item was approval of an emergency purchase of two sets of cataract instrumentation for $17,695.58. This is a corrective action required by an issue identified in a recent DNV survey in the operating room where it was recommended a long-term sterilization period be required instead of the shorter version that has been used successfully for years. This would slow Dr. Aldridge down significantly, and even though there have never been any infections reported, the decision was made to purchase two new sets, so that Dr. Aldridge does not have a longer wait between procedures.