Hospital sets $14 million budget

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By Tia Lynn Ivey Managing Editor

The Morgan Memorial Hospital Authority (MMHA) unanimously approved the Fiscal Year (FY) 2016 budget of $14.2 million dollars (after deductions) at the June 26 regular monthly meeting. “We have gone over this thing line by line and it is ready,” said MMHA member Sarah Burbach. “We are anticipating to only lose $4 dollars next year.” “We budgeted to break even during FY 2016,” said Kyle Wilkinson, chief finance officer for MMH.  According to Wilkinson, the FY 2016 budget increased its gross patient revenue by $76,000 from the FY 2015 budget. Wilkinson also reported that MMHA budgeted an increase in Deductions from Revenue of $225,000 and a decrease in Net Patient Revenue of $149,000.

Other Revenue is budgeted for a small decrease of $5,000. “On the Operating Expense side we budget for an increase of $635K during the year, mostly in Employee Benefits (employee health insurance cost) and Professional Fees (i.e. contract services of the hospital),” explained Wilkinson.  “As we move forward with the hospital project we will have some increase in our expenses.  Finally, we budgeted for an increase of Non-operating Revenues (Expenses) to increase by $413K.  This is largely based on the increase in County Contribution passed by the County Commissioners earlier this month.” Wilkinson is optimistic for the FY 2016 year, foreseeing growth and development for MMH. “For FY 2016, I expect MMH to do what has become our custom over the time I have been here, grow revenue while controlling expense.  As our partnership with Athens Regional Medical Center (ARMC) ramps up I expect our revenue to grow more.  FY 2016 should be an exciting year for MMH!

We look forward to tackling the HUD application process and beginning the construction of a new facility!” said Kyle Wilkinson, chief financial officer for MMH. The MMHA also reviewed the financials for the month of May at last week’s meeting. Wilkinson reported that MMH should finish the 2015 fiscal year strong.

According to Wilkinson, Morgan Memorial Hospital had a Net Income of $24,941 in May 2015 compared to a Net Income of $131,297 in April 2015.  “Though this represented a decrease of $106,356 from April 2015, the May 2015 Net Income brought our FY 2015 Net Income to $448,975.  I am happy with a black bottom line no matter how big or small!,” explained Wilkinson.  “In May 2015, we received the Final Disproportionate Share Hospital (“DSH”) payment of $267,885 from the Georgia Deptartment of Community Health…Usually, MMH will receive two DSH Payments during the year.

An Interim Payment (around January or February) and a Final Payment (around May or June).  These DSH payments represents the State of Georgia’s attempt to help subsidize healthcare facilities for the extraordinary amount of free care (i.e. Indigent or Charity Care) provided each year.” According to the MMHA, each fiscal year starts with the hospital in the hole between $1 million and $2 million because of unpaid medical bills. “It’s just something we have to deal with,” said Wilkinson.

“The way the law is written, we have to treat people who come to the emergency room, regardless of their ability to pay.” Wilkinson also noted the disparity between April and May financials had a lot to do with the Medicare program. “n April 2015, MMH received Medicare Lump Sum payments of $180,800 ($162,000 Swingbed and $26,800 Inpatient).  Each year the Medicare program will ‘settle’ up what they think will be owed at year-end, so as to not have a big payable on the annual Cost Report,” explained Wilkinson.  “Think of this like an estimated tax payment.  These lump sums received in April 2015 represent Medicare “settling up” with MMH on what Medicare thinks it will owe on the FY 2015 Cost Report computed after the year-end audit.

The Medicare Lump Sums received in April 2015 represent the majority of the difference in monthly Net Income from April to May 2015.” Despite the disparity, Wilkinson is encouraged by MMH’s current numbers. “June is typically a tough month for hospitals as the census usually decreases over the summer months,” began Wilkinson.  “However, as of May 31, 2015, MMH has an annual Net Income of $448,975, so we look to finish the fiscal year in great shape!” “MMH has had a great FY 2015 and many things have led us to that.  For example, we have seen an increase in patient volume seen by our hospitalist group.  Compared to FY 2014, we have seen a decrease in our annual health insurance costs.  These are just some examples of things we have seen during FY 2015.  Each year we try to be the best financial stewards possible by limiting expenses while growing revenue.

From the moment I began as CFO, I quickly realized our team does an outstanding job of controlling expenses.  The challenge we face is growing our revenue!  I am optimistic that as we enter our partnership with Athens Regional Medical Center (ARMC) and move into a new hospital building, we will finally have the capacity available to offer a wide variety of procedures that will grow revenue in the years to come.  I am very proud of how we have done this year financially and I look forward to having a wonderful year end audit!” said Wilkinson.

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