During a meeting of the Upper San Juan Health Service District Board of Directors Tuesday night, Director of Finance Gene Kaberline reported that Pagosa Mountain Hospital (PMH) will end 2009 “in the black.”
“This is the first time ever,” board member Jim Knoll responded. “We ought to break out the champagne.”
While a review of the hospital’s October Income Statement shows total expenses outpacing total revenue by nearly $318,000 for the month, it also reflects year-to-date total revenue exceeding expenses by more than $846,000. Meanwhile, Kaberline reported that November numbers will show some improvement over October, while December should be better yet.
Though in-patient revenues have lagged well behind predictions all year, out-patient income has actually exceeded budget estimates by more than $1.2 million through October. As the hospital has seen throughout its nearly two-year history, the emergency room (ER) and, more particularly, the laboratory (lab) have continually out-performed expectations, while a line item termed “other” accounted for the second highest total in out-patient revenue, thus far.
As Kaberline explained, “other” out-patient revenue includes pharmaceutical sales and radiological diagnostics such as CT-scans, x-rays and MRI.
To complement low in-patient income, but somewhat higher than expected total patient revenue, total operating expenses were 13 percent under budget in October and 8 percent below those forecast year to date.
In the meantime, even as hospital non-operating income (tax revenue, grants, donations and other) slumped in October, it has surpassed year-to-date expectations by more than $574,000. Too, its first 10 months of non-operating expenses — including depreciation, amortization and interest — have been 6 percent less than anticipated.
A steady increase in operating cash, coupled with active collections resulting in fewer net days in accounts receivable, have also improved the hospital’s bottom line. Enough so, in fact, that Kaberline said PMH has now set aside a $750,000 reserve, which will help see it through to late March, when another round of tax (mill levy) revenue is expected.
As a safety net, the board voted to renew an annual $300,000 line of credit Tuesday night, but, in light of favorable 11-month revenues, district officials doubt it’ll be necessary.
On a precautionary note, however, district finance committee member J.R. Ford warned board members that mill levy revenues will fall in 2011, as county real estate valuations reflect the current market downturn. As a result, he said, some statewide local governments and special districts are already discounting anticipated future tax revenues by between 20 and 30 percent. Ford recommended the district keep an eye on 2010 revenues and plan for 2011 accordingly.
While the district board refrained from cracking a cork Tuesday night, board chair Neal Townsend insisted most opportunities for celebration are typically quite brief. For now, though, Pagosa Mountain Hospital is operating in the black.