Hospital Board Approves the 2014 Capital and Operating Budgets

                The Texas County Memorial Hospital December board of trustees gave approval for the 2014 capital and operating budgets at their monthly meeting on Tuesday.

                “The capital and operating budgets are reflective of the many unknowns that are ahead of us as a hospital,” Wes Murray, chief executive officer, explained to the board. 

                The $708,954 capital budget is a 6.6 percent decrease from the 2012 capital budget.

               “Some of the big ticket items are repeats because we did not purchase them last year,” Linda Pamperien, TCMH chief financial officer, said.

               A new esophagogastroduodenoscopy (EGD or upper endoscopy) scope is budgeted for $35,904; it was budgeted for but was not purchased in 2013.  A ventilator for $29,390, a lab analyzer for $31,810 and an ambulance for $96,050 are part of this year’s capital budget.

                Electronic medical records items make up a large portion of capital expenditures.  Items totaling $177,917 will help TCMH meet the federal government’s “Meaningful Use Stage 2” requirements.  A $56,114 server will allow the hospital’s radiology department to send digital images at a faster speed for teleradiology reports.

                “Our managers are very conscientious about their department’s capital needs,” Pamperien said.  “They won’t purchase something unless they absolutely have to.”

                 Murray noted that in 2013 “a lot of new equipment” was purchased to outfit the hospital expansion which included new private patient rooms on a new medical surgical floor, a larger emergency department and a radiology suite.

                “We are very fortunate to have replaced many large items within the past year,” Murray said.

                 Board members also approved the 2014 operating budget that projects gross operating revenue of $66,111,752 and net operating revenue of $9,296.

                “We have an operational goal of breaking even this year,” Pamperien said.

                For 2013, Pamperien anticipates a 5.39 percent increase in hospital expenses in areas such as utilities and food costs.  Pamperien explained that the operating budget does not show any anticipated growth in hospital inpatient, outpatient or emergency room volumes.

                Pamperien explained that the operating budget also included an increase in contractual adjustments for hospital patients, a figure which is on the rise annually.  TCMH has begun paying interest on the new construction loan and will have additional depreciation expense due to the new construction, too.

               “We continue to operate very lean,” Pamperien said.  “But we are more fortunate than many other facilities.  Our accounts receivable and cash flow are very good.”

                 Pamperien noted that TCMH is waiting on funds from payor groups like Medicaid.  The federal insurance plan currently owes TCMH over $2 million for services provided over the past few years.  The hospital cannot receive the funds until the government is ready to release them.

                 Pamperien and Murray stressed that without Medicaid expansion in the state of Missouri, the costs of the Affordable Healthcare Act and cuts to Medicare and Medicaid reimbursement from sequestration continue to cost TCMH.  TCMH anticipates that each year the costs will grow.

                 Pamperien explained that hospital service departments would continue to receive scrutiny “to see if they are making money”.

                “We must press forward and do the best we can,” Omanez Fockler, chairperson of the TCMH board of trustees, said.  “We need to utilize every opportunity we have to get funds from anywhere.”

                Dr. Jim Perry, OD, board member, noted that healthcare utilization, including Medicare utilization, is slowing nationally. 

“It seems that there’s an extreme awareness of the cost of healthcare,” Perry said.

Murray presented data from the Missouri Hospital Association showing how payment cuts are affecting TCMH and will continue to affect the hospital in upcoming years if Medicaid expansion does not take place in the state.

“There are very important factors that are affecting the financial side of hospitals,” Murray said.  “It seems to be hitting us harder and more immediately than we anticipated.”

Dr. John Duff, CoxHealth representative, acknowledged that planning is difficult with the fluctuation in hospital volumes and the unknown future of healthcare reimbursement.

“Hospitals and physicians are trying to keep healthcare costs down,” Duff said, adding “And healthcare plans with high deductibles seem to discourage people from utilizing healthcare services.”

“The Missouri Hospital Association projects that TCMH will lose $6 million over the next five years if Medicaid is not expanded in the state,” Murray said.  “Other factors such as high deductibles can also adversely affect our bottom line when people choose to go without healthcare services.”

                Although emergency department volumes have been down, TCMH continues to look at ways to improve patient experience the emergency department.

                “Dr. Randall Qualls recently returned to work for us,” Murray reported.  Qualls left his full-time position in June, but came back to TCMH in early January.

                Doretta Todd-Willis, chief nursing officer, reported that the hospital’s application for a “level 3” stroke designation has been accepted.

                “With a stroke designation, the TCMH emergency department is recognized statewide as a place for potential stroke victims to receive emergency care,” Todd-Willis said.  “The treatment plan for stroke patients that come to our emergency department will be even faster and more streamlined so patients can get the treatment they need as quickly as possible.”

                Todd-Willis explained that the final steps for the stroke designation include a transfer agreement with CoxHealth in Springfield and a site visit by state inspector in April.

                Additionally, TCMH recently hired Carl “Chip” Lange, a physician’s assistant; he will provide patient care in the clinic and help out in the emergency department during peak times.

                “We cannot sustain an urgent care or fast-track in the ER right now,” Murray said, “But Chip can be called in during peak times to help alleviate some of the pressure and shorten wait times.”

                Lange grew up in the Ozarks and completed his final semester of physician assistant studies working under Dr. Schaun Flaim at TCMH.  He sought a permanent position at TCMH after completing his training.

                In the financial report, Pamperien reported that TCMH ended 2013 with 1,763 inpatient admissions—180 admissions less than 2012.  Sequestration, cuts related to the Affordable Care Act and the lack of Medicaid expansion in Missouri combined with a dip in inpatient, outpatient and emergency department volumes left TCMH with a year to date loss of $798,516.09. 

                “I always give a conservative financial report, so these numbers may be improved after our annual audit this spring,” Pamperien said.

                In December, TCMH collected $970,191 in funds from the federal government for reaching set levels of electronic medical records usage.  The federal funds helped offset losses for the year, but TCMH expects to post a financial loss for the year.

Present at the meeting were Murray; Pamperien; Duff; Todd-Willis; Joleen Senter Durham, public relations director; Dr. Schaun Flaim, chief of staff, and board members Fockler; Perry; Janet Wiseman and Russell Gaither.

Board member Mark Hampton was absent.

The next meeting of the TCMH board of trustees is Tue., Feb. 25 at 12 p.m. in the hospital board room.