Income positive after three years
Morgan Memorial’s net assets up $550,000-plus for FY12
By Stephanie Johns
Morgan Memorial Hospital (MMH) had its first positive bottom line in three years when fiscal year (FY) 2012, which ended June 30, 2012, showed a $552,000 change in net assets.
Terry Evans, chairman of the Morgan County Hospital Authority, voiced his appreciation for that outcome.
“Thank you to everyone at the hospital for a great year,” he said.
Vice Chairman Sarah Burbach thanked the Morgan County Commission for its financial support. In FY2012, the county contributed $600,000 to MMH.
“We wouldn’t have had good numbers without you,” she said.
Jimmie Richter Jr., CPA with Draffin & Tucker, an auditing firm out of Atlanta, provided details of the hospital’s audit.
He noted that the hospital showed a 4 percent increase in net revenues from FY2011 and a 3 percent decrease in total expenses, a $472,000 decrease from FY2011.
Total revenues for FY2012 are at $13.5 million. The hospital had to write off about $11 million, or 48 percent, of its gross revenue due to contractual adjustments and bad debts. Richter explained that “contractual adjustments” are the difference between what the hospital charges its patients and what it is actually paid.
He provided a comparison of three similar critical access hospitals, identified as A, B and C, in the report. He noted that MMH was “right in line” with the other three hospitals when it came to the number of patients, or “average daily census.”
Well over half – 59 percent – of the patients at MMH are covered by Medicare, which he said was consistent with the other hospitals.
One thing that varied among the hospitals, though: MMH has lower Medicare costs per day than the others, he said.
The hospital’s Medicare Transitional Care Unit (TCU) loses about $300 each day, a total loss on Medicare TCU patients of more than $1 million. The other three hospitals do not have TCUs.
For FY2012, MMH had almost $6.7 million in assets and $3.2 million in liabilities, for a total net assets valued at almost $3.5 million.
Richter pointed out that the hospital’s debt came down for FY2012 from $3.8 million in FY2011 to $3.2 million in FY2012. At 28 percent, MMH’s debt is lower than two of the other three hospitals, which stand at 65 and 67 percent.
It takes MMH about 64 days to collect payments, which Richter said was due to a change in computer systems at the hospital.
In all, a comparison of financial indicators such as days of operating cash on hand, days to collect payments and long-term debt to capitalization, MMH has a current ratio of 1.91.
“Anything over one for a rural hospital is pretty good,” he said.
Printed in the December 27, 2012 edition