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The Upper San Juan Health Services District board met Tuesday night and, among other business, approved its draft 2014 budget.
The budget includes the implementation of three new services approved in 2013 — chemotherapy, women’s services (including mammography and dexa scan) and orthopedic surgery.
Orthopedic surgery is anticipated to begin in January 2014, while the other two new programs are expected to be in place in late 2013.
In presenting the budget to his fellow board members, Dennis Wilson spoke of the high number of variables and educated guesses used in determining the budget, including volumes for the new programs, provider fees and Medicare incentive payments to the hospital.
“This was definitely a very difficult budget to put together,” Wilson said.
Projected total net revenues for 2014 are at $18,536,139 for operations, with a net patient revenue of $16,669,144.
The projected net revenues for 2014 are an increase of 2013’s forecasted net revenues of $15,246,647.
The net patient revenue is an increase of $2,970,391 over 2013’s projection.
Grant income is forecasted at $863,134, a 3-percent increase from 2013’s projection.
Non-operating income is forecasted at $1,704,000, including $1,254,000 in tax revenue and $450,000 in donations.
Salaries and benefits account for $11,562,080 of the budget’s forecasted operating expenses of $19,935,579.
That number is a 24-percent increase over the 2013 budget, and includes 23 new FTEs (full time equivalents) that were either added part way through the current year or will be added in 2014.
Of those 23 new FTEs :
• 3.9 FTEs will result from bringing contracted services in-house, such as anesthesiology, imaging and medical records.
• 7.3 FTEs will be for new services, including an additional pharmacist.
• 4.5 FTEs will be added to the rural health clinic, with, “fairly significant growth anticipated” due to the influx of patients from now-retired Dr. Jim Pruitt’s practice.
• 2.6 FTEs are for administration and include a new chief operating officer, a human resources manager and a new addition to the IT department added partway through the current year.
The total revenue less expenses in the budget is $304,560 — a 34-percent increase over 2013’s forecast.
But while that amount is an increase over previous years, board member Neal Townsend expressed discontent with the bottom line, calling it, “thin.”
“It is thin, there’s no question it’s thin, board member Karl Irons said,” noting that the implementation of new programs required expenses that would not immediately mean profit.
Townsend asked, “Is there any room for a surprise?”
“Not a big one,” Irons responded. Irons said the budget was put together conservatively, though not as conservatively as the prior two had been.
Irons said the average cost per day to operate Pagosa Springs Medical Center in 2014 would be, “just north of” $51,000 per day. SUN calculations, though, show that number to be just above $54,600.
“We’re going to have another year of managing cash very carefully,” Irons said, adding that the board may again consider a line of credit in the middle of next year.
Board member Jerry Baker agreed that a line of credit was not out of the question, and Jan Miller added that having a line of credit may help the hospital obtain chemotherapy drugs from third-party vendors.
The draft budget was approved unanimously, meeting the statutory deadline of Oct. 15. Final budgets must be adopted by Dec. 15.
On the heels of approving the 2014 draft budget, Irons presented a finance committee report that bodes well for the hospital — 22 records were set in August.
Among those records set was gross patient revenue at $2.7 million, which bested PSMC’s previous high set in June by $630,000. Net patient revenue was at $1.75 million, besting the previous high set in July by $512,000.
In addition to revenue highs, the district’s operating expenses rang in $31,000 under budget for the month, with staffing shortages creating salary expenses that were nearly $100,000 below budget.
PSMC collected $1,228,000 in August, up from the 2013 average January through July of $1,070,000 per month.
Other records set included inpatient days (121, versus June’s high of 85), clinic visits (1,482, versus 1,468 in October 2012), and surgeries/operating room visits (74, versus 63 in November 2011).
The board and hospital staff discussed the reasoning behind the influx, including Dr. Jim Pruitt’s practice closing and that general surgeon Dr. Dave Shaeffer was gone for a portion of July, moving those surgeries to August.
Brad Cochennet, PSMC chief executive officer, noted that the numbers were nothing the center couldn’t repeat, but were, “a steady march up.”