Sweetwater County Hospital

ROCK SPRINGS — Memorial Hospital of Sweetwater County board of trustees and staff met at a workshop Thursday to consider the hospital’s finances, services and projects as work begins on the 2019-20 fiscal year budget.

The hospital’s main priority is to meet the healthcare needs of the community while maintaining a positive cash flow, “so we’re able to invest back into the facility,” MHSC Chief Executive Officer Irene Richardson said.

PAST, PRESENT AND FUTURE

The hospital addressed several areas during the workshop, including:

• A maintenance fund.

The hospital has set up a fund for “big ticket” maintenance projects such upgrades to its central plant.

There is currently $1.3 million in there, but it is likely to see an additional $3.6 million from the 2012 special purpose tax that voters approved that would go into the account.

Within the $3.6 million, $1.3 million of which would be from excess tax revenue, while the remaining $2.3 million is due to the hospital paying off its bonds early.

The goal is to eventually maintain a minimum balance of $7 million, a figure that is based off of MHSC Facilities Director Jim Horan’s estimates for high ranked maintenance projects.

Richardson said the hospital will be making a request to the county commissioners to allow the hospital to carryover any unused funds in the account.

• A sixth-cent tax project.

As part of the hospital’s new strategic plan, it is looking into making a request for a special purpose tax project for 2020, which could include modernizing its electronic health record system, making medical imaging and surgery suite renovations or other deferred maintenance projects.

It needs to be prepared by January 2020, then presented to the commissioners to consider. If it is approved, then it will be placed on the 2020 election ballot.

• Capital budget.

A capital budget needs to replenish capital needs, i.e. equipment, Richardson said.

The hospital budgeted $3 million, of which $1.029 million has been approved to be used.

• Standard and Poor’s rating.

The hospital wants to reach the Standard & Poor’s rating of BBB- by fiscal year 2020-21. It is currently at BB+.

An S&P Global Ratings issue credit rating is an opinion about the creditworthiness of an obligor with respect to a specific financial obligation, a class of financial obligations, or a financial program, according to the S&P website.

• Days cash on hand.

Through the first six months of fiscal year 2018-19, the hospital’s days of cash on hand is 119.6, which is up from 110.8 in June 2018.

Days cash on hand is the number of days that an organization can continue to pay its operating expenses, given the amount of cash available, according to AccountingTools, Inc.

The hospital’s goal is to get up to the S&P BBB- benchmark of 132 days, Richardson said.

• Operating margin.

MHSC’s operating margin is currently at 1.9 percent in fiscal year 2018-19, up from a negative tenth of a percent in fiscal year 2017-18. The goal is to be between 1 percent and 3 percent in 2019-20.

“We’d like to be realistic when we place this goal,” Richardson said.

An operating margin is a profitability ratio measuring revenue after covering operating and non-operating expenses of a business, according to the Corporate Finance Institute.

• Payer Mix.

The workshop looked at the hospital’s payer mix and reductions in its revenue.

A payer mix is a type of financial payment received by a medical practice, including Medicare, Medicaid, indemnity insurance, managed care and individual payments, according to Reference.com.

Every payer mix item went down except for Medicare, which increased by 5.4 percent.

There’s no control over Medicare. The best the hospital can do is to meet its guidelines; however, it can have a say in negotiations with insurance companies, Board Secretary Ed Tardoni said.

The hospital saw a decrease in gross revenue of 47.9 percent. Richardson said it is looking to bring the figure to 47 percent by the end of June.

• Physician recruitment and new services.

MHSC will be bringing on a new neurologist on July 1, Dr. Prachi Kale, as well as look into bringing in physicians in orthopedics, pediatrics, pulmonology and a hospitalist. It is also looking to have someone from the University of Utah Hospital send a dermatologist to offer their services once a month.

The hospital is also looking at adding aesthetics, such as leg vein treatments and Botox, to its repertoire.

The hospital budgets for all potential expenses, but it is conservative when it comes to revenues because of the unknown, Richardson said.

• The provider clinic.

The hospital has reduced its expenses at the clinic yet maintained its revenues, but “this is obviously a work in progress,” she said.

Some of its ongoing strategies include hosting quarterly meetings with providers to look at financial statements and discussing ideas, and looking into extending its hours and/or urgent care.

HELPFUL

Trustees said they were appreciative of the work staff did in getting information ready for Thursday’s workshop.

The opportunity to talk about goals was really helpful, Trustee Barbara Sowada said.

Vice President Taylor Jones said it was good to see where the hospital has been, where it is and where it is going.

TIMELINE

A tentative budget is due for the Sweetwater County Commission by the end of April, then a workshop with the hospital’s Finance and Audit Committee will take place in May. It could be followed by another board workshop.

The committee will then consider the budget, and if it is approved it will go to the board of trustees to look at in June. If the board approves it, then it would go into effect July 1.

Thursday “wasn’t the end of all the discussions, but it’s a really good start to the budget process,” Board Treasurer Marty Kelsey said.

(0) comments

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.