Comment
Rate
Hospital’s $65M tower dominates its budget
By JEREMY GOLDMEIER, News-Record Writer jgoldmeier@gillettenewsrecord.net
It’s the $65 million gorilla hanging over Campbell County Memorial Hospital’s 2010 budget: an ambitious expansion project that will plant a two-story medical tower and parking garage behind the current building.Hospital executive vice president Andy Fitzgerald says the project should drain about $17 million next year from the hospital’s cash reserves, which currently sit at about $84.6 million.
The real financial heartburn shouldn’t kick in until 2012, when the cumulative cash expense and debt absorbed on the project should begin to cramp the hospital’s bottom line. Fitzgerald anticipates the hospital assuming more than $30 million in debt to help pay for the three-year expansion. It will be the first debt the hospital has had on the books since 2002.
In the meantime, hospital administrators have focused their attention on completing the rest of the 2010 budget. The hospital finance committee will have one more pass at the budget on July 14, before the full hospital board has a look at it July 16.
None of the other preliminary budget numbers are as immediately bracing as that $65 million figure, but there are a few other projections worth noting.
As with last year, the hospital plans to increase patient rates by 9 percent. The hospital has long contended that its rates lag behind those of its regional competition. Successive rate increases over the past several fiscal years have sought to remedy that issue, including a 7 percent hike for 2008 and a 9 percent hike for 2009.
Meanwhile, for the first time in several years, the hospital expects to lose less money on operating costs from one year to the next. The hospital suffered an $8.57 million operating loss in 2009. In 2010, the hospital projects to lose just over $6 million. Fitzgerald attributes that bump to anticipated physician recruitment gains that will bring more revenue to the hospital.
“Last year we seemed to be focused on primary care recruitment,” Fitzgerald said. “This year, it seems like we’re bringing in more specialists.”
Charity care and bad debt, two of the main reasons why the hospital is operating at a loss in the first place, are expected to increase again in 2010.
Charity care describes the money lost when the hospital treats those who cannot afford to pay their bills. That figure should jump from about $4 million to $5 million.
Bad debt describes the money lost when patients duck their bills. That number should rise from $9 million to $10.8 million.
Those figures remain high because more than 15 percent of the hospital’s patients are designated as “self-pay,” a euphemism for “no insurance.” With the economy still on the ropes, the payment mix isn’t expected to improve.
“Employers are looking at reducing their costs, and one of the more substantial ones is health care for employees,” Fitzgerald said.
Besides the expansion plans, the hospital has a few other notable capital budget items on tap for 2010. Here is a rundown:
- $1.5 million for a complete revamp of the heating, ventilation and air conditioning systems at Pioneer Manor.
- $366,505 for 52 new copier machines.
- $184,332 for a new ultrasound system.
- $148,884 for an electronic bedside verification system for patient medications.
- $116,259 for new computer servers.
 |
 |
|
| Coal buried beneath new cemetery | New police radio system may cost over $1M |
Article Rating
Reader Comments
The following are comments from the readers. In no way do they represent the view of gillettenewsrecord.com.
Submit a Comment
We encourage your feedback and dialog, all comments will be reviewed by our Web staff before appearing on the Web site.
REGISTRATION IS FREE.
Registered users sign in here: |
Become a Registered User |
