Hospital updates public on fiscal year loss

Published 9:21 am Monday, March 21, 2022

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The Memorial Hospital Authority met for their monthly meeting Tuesday afternoon. One of the main areas of discussion was the budget, with the hospital’s fiscal year coming to a close this month, and the hospital slowly coming closer to a stable income loss.

Hospital CEO Jim Lambert and CFO David Paugh spoke with the Post-Searchlight about the budget and the various factors contributing to the change in trajectory. The operating income for this current fiscal year, as of Tuesday’s meeting, was roughly a $2.5 million loss, down from the previous fiscal year’s $2.9 million. (For clarification, the hospital’s fiscal year begins every April 1, and concludes on the following March 31.)

“Year to date, we’re at a loss of $2.5 million, but we had projected through this time, in our budget, about $2 million worse than that,” Paugh said.

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The expected losses the hospital had budgeted for this year were roughly $4.5 million

“The prior year was about $2.9 million, so we’re still ahead of the prior year, and the budget, but still an operating loss,” Lambert said.

According to Paugh, the effects of COVID had greatly impacted the previous year’s revenue and income. “When it first hit, in that first phase, we had folks who were reluctant to come. We actually closed down certain service lines here in the hospital setting just because of some of that,” Paugh said. “As a result, we saw dramatic declines in a lot of our volumes. Our physician practices were hit dramatically… folks were just unsure or anxious about going out in public and exposing themselves.”

This period of reluctance was during early to mid-2020, the start of the pandemic, and was the beginning of the 2021 fiscal year.

“So for that year we had some downturn, and then we kind of recovered from that and started stabilizing,” Lambert explained. “Then in July and August of last year, we got hit with a tremendous influx of COVID-related patients… There’s COVID in both FY21 and 22, 21 probably had more of a negative impact on us, and FY22 had somewhat of a positive end cap.”

According to Lambert, an operating loss in the range of $1million or less is viewed as sustainable. “We’re still about a million and a half dollars away from where we think we really need to be, long-term, for sustainability,” he said.

While still working toward that goal, there are still issues that rack up expenses, with a significant pay increase being made this last year due to staffing issues; this was to be competitive and make the hospital “an attractive place” for travel nurses to return and work.

“We think that a $1 million loss is something that is sustainable,” Lambert said. “We’re not in any jeopardy of closing, but just from a comfort level of being stewards of resources, we feel like that’s an appropriate level of operating loss, given our non-operating revenue we expect long-term.” However, sustainability does not mean the hospital is just surviving, he said. “That’s maintaining our care and resources, add services we need to, take care of our staff and do the things we need to do, that’s sustainability.”