When Adams Health Network (AHN) officials were trying to figure out the 2010 budget a year or so ago with crossed fingers they anticipated a nearly break-even year.
Given the fact that the bottom line from 2009 showed a deficit of $1,775,902, the 2010 projections were optimistic at best. But a new program that has done a better job at controlling expenses plus increased utilization of some AMH services showed the hospital with a balance of $660,378 in the black for the past year.
At the monthly meeting of the AHN board of trustees held Wednesday night, Chief Financial Officer Dane Wheeler and Executive Director Marvin L. Baird explained that while total operating revenue was about $1.2 million under last year ($49,367,707 to 2009's $50,636,639), the hospital was able to slash over $2.4 million in expenses from $52,618,173 to $50,212,801).
The difference between total operating revenue and expenses comes from the fact AHN took in $1,505,472 in interest and rental incomes during 2010, compared to a similar figure of $205,630 from 2010.
Nearly one-third of the expenses incurred by the hospital during 2010 were for ancillary services, to the tune of $16,886,783. The next leading cost was bad debt, at $8,069,454. Other expenses included employee benefits, $7,004,616; administration and general costs, $6,784,728, capital expenses, $6,071,598, routine services, $4,722,789, and general services $3,078,202.
Baird said history shows that when a new hospital is constructed, such as AMH was in 2005, it usually takes about five years to have a final balance in the black. But he cautioned that the $660,378 is roughly about one and a half percent. Wheeler also noted that if a large piece of capital equipment would fail unexpectedly and have to be replaced, that balance could quickly be used up.
Baird noted that admissions and utilization of AHN services held about the same, with an average of 38.62 patients per day at the hospital (including behavioral health, extended care, and critical access). While admissions to the hospital were up 17.4 percent from the previous month, the hospital saw a slight dip overall in the year, having 14 fewer admits, a 0.5 percent drop.
"We're actually pretty happy with that, given what is happening with most other hospitals our size in the area," Baird said. He added that admission drops of five per cent or so have not been uncommon in many facilities.
The hospital has gained a large number of patients through the orthopaedic program directed by surgeon Dr. David Coats. Baird said 2010 was Dr. Coats' first full year as an AHN employee and in-patient surgery cases zoomed 41.7 percent for the year (and 88.2 percent from the previous month) while out-patient procedures, which traditionally are the lion's share of surgeries done at the hospital, were up 5.2 percent.
Combined, all surgical cases increased 8.8 percent for the year.
Baird added that even though there were 703 fewer visits to the AMH emergency room last year (a drop of six percent), there were 3.2 percent more admissions, showing that the acuity level of illness and injury were greater in the patients seen by ER physicians.
Other out-patient services such as physical therapy, lab, x-ray, and respiratory therapy contributed to the AHN financial picture with a 2.2 percent increase in 2010. In addition, the AMH Stat Care division saw 385 patients in December for a 13.5 per day average and a slight profit for the month.