Based on preliminary budget assumptions for 2011, Adams Memorial Hospital (AMH) expects to be about a half million dollars in the black at the end of the year.
Adams Health Network (AHN) Executive Director Marvin L. Baird told members of the AHN board of trustees Wednesday night at their monthly meeting, "I feel very comfortable with the budget we're going to show you."
That budget projects net revenue of $50,556,320 with expenses of $49,992,907 for a balance of $563,413 in the black.
Baird and AHN Chief Financial Officer Dane Wheeler explained to the trustees that hospital department heads and administration officials have approached the budget differently this year in trying to project needs for the coming year and that has greatly helped the hospital.
Baird said the hospital is doing a better job at managing supply costs and that figure is expected to be $350,000 less in 2011 than in 2010.
"That estimate is feasible given materials management's focus on cost reduction and reducing department inventories," Baird noted. "It is a fine line to balance between reducing costs and how it affects patient care. Patient care will always come first."
Revenue estimates still are somewhat unknown, however, with the state government recently announcing that Medicaid reimbursements are going to be cut starting July 1. At this time, only payments for Home Health care have been identified by the state as being reduced and Wheeler said it is hopeful that "the best case scenario is that Medicare and Medicaid payments remain unchanged for 2011."
A new trend in payments has been noted at the hospital as self-pay patients are now the second largest payor. Medicare remains the largest reimbursement agency for the hospital and while the hospital said self-pay patients may increase in 2011, other payors should remain level.
Baird said the budget expects utilization for in-patient and out-patient services to be unchanged in 2011, with the possible exception of the laboratory and the therapy departments (physical, speech, and occupational) seeing a one to three percent hike. County support for the Emergency Medical Services will remain flat at $407,000 (part of that amount goes toward an ambulance replacement fund), but payments from the County Economic Development Income Tax (CEDIT) which help pay the interest on the bond issue that funded the new hospital will be down approximately $300,000.
Employees will see their wages increase about two percent, but the hospital is seeing an 11 percent hike in the insurance premium package from Physician's Health Plan (PHP). Worker's Compensation costs are projected to be flat for 2011 with other insurance costs projected to rise two percent.
Other increases in expenses include an anticipated 11 percent jump in utility costs, with water and sewage seen as the main culprit for that hike; education costs to bring staff into compliance with new requirements; and a one percent upward bill for overall depreciation.
Baird and Wheeler reported to the trustees that to date in 2010, the hospital has a plus balance of $440,433, a figure that was buoyed by a $121,641 excess in November. AHN took in $4,223,827 in total operating revenue in November and spent $4,192,354. An additional $90,167 in rental and interest income brought the month up to the $121,641 figure.
For the year to date, the $440,433 black figures looks especially good when compared to November of 2009 that was nearly $1.5 million in the red. The first 11 months of 2010 show $45,288,604 in total operating revenue, $1,410,765 in interest and rent, and $46,258,937 in expenses.