Hospital District over $1 million in the red

A lengthy discussion over the financial health of the hospital district took center stage at the most recent Adams County Public Hospital District No. 2 Board of Commissioners meeting on June 27.

The most recent financial statement showed that the hospital district has a year-to-date net loss of $1,051,212 compared to last year's year-to-date net loss of $395,970 through the end of May. In April and May alone this year, the net loss has been $623,737.

Outgoing CEO/CFO Gary Bostrom-who will be staying on part-time as the CFO-noted that the district has undergone quite the transition with its providers in the last several months, which he says can be attributed to some of the less-than-budgeted revenue figures. Dr. Timothy Bryant's hours have been reduced from three days per week to one day per week, while physician's assistant (PA-C) Rose Jones is no longer working full-time hours.

The district has added two new providers this year, PA-C Julie Shapiro and Dr. Anthony Anderson, but Bostrom said it was going to take a while for the revenue to come back up. The district is also in the process of bringing in a new nurse practitioner.

"Once you get these providers up and running, I think we're going to be doing a lot better than we have," Bostrom said.

Incoming East Adams Rural Healthcare CEO Corey Fedie, who started earlier this month, said he agreed with Bostrom and noted that there's always a delay with billing when new providers are brought on board. There's also a period of about 60-90 days at a minimum for the new providers to go through the required credentialing process. Bostrom estimates that it also takes about a year for new providers to develop a clientele base, but said Shapiro has been growing her base quickly since joining the district at the beginning of the year.

For 2019 thus far, the district's total operating revenue is $2,659,550, roughly two-thirds of what the district had budgeted for through the first five months of the year, which was $3,907,217. Swingbed Room revenue, $339,826, is roughly half of the $651,263 that the district had budgeted for, and ancillary outpatient services, $3,286,577, is nearly $400,000 under-budget so far.

Total operating expenses are in a much healthier position for the district, compared to total operating revenue. At $4,301,200 through May, the total operating expenses are below what was budgeted at this point, which was $4,417,558.

Salaries and wages are about $44,000 higher than what was budgeted, and purchased services are about $113,000 higher. However, the district has spent around $192,000 on supplies, which is almost $75,000 lower than what was budgeted for at this point. Bad debt expenses, which occur when a patient or other payer cannot or will not pay its portion of the bill, are just $59,429, significantly less than the budgeted $246,835.

In other financial news that was discussed at the meeting, Bostrom announced that the district had brought someone in to review revenue-generated tax payments that the district had made to the state going back to 2014, to see if the district was correct in their payments or not. The district sent the person's findings and analysis to the state, and Bostrom said that the district will be reimbursed about $197,000 from the state.

Of the $197,000, 40% will be paid to the person that the district hired to find the mistakes, leaving about $118,000 for the district to collect. The district had overpaid accounts payable taxes and business taxes, according to Bostrom. He explained that some vendors had taken taxes out that they shouldn't have in some cases, and in other cases the district had paid on their revenue inappropriately. The person will also be training staff on correcting the mistakes that had been made.

The Journal will have more coverage of Fedie, the recently hired CEO at EARH, in an upcoming issue.