As patient volumes at Bartlett Regional Hospital have declined to 2009-2010 levels, the board and the management team have been working on the upcoming Fiscal Year (FY) 2013 budget. The board will look at a proposal next week that maintains staffing, but makes cuts in other areas and basically halts capital improvements not already underway.
The hospital’s Finance Committee met Tuesday night and held it’s budget discussion in executive session to hear management’s proposal. The proposal will be considered by the board at its next meeting at 5:15 p.m. on April 24 in the hospital's administrative board room.
“The budget is forecasting flat or lower service volumes in line with what we have experienced in FY 2012,” said interim Chief Executive Officer John Vowell in a statement that is being sent to employees. “The budget is also forecasting inflationary increases in our overall operating and supply costs. In terms of dollars, we are projecting net revenues of about $96.8 million and projecting expenses of the same amount, resulting in a projected margin of zero. To achieve that revenue, the proposed budget includes an average rate increase for services of 3 percent. Some prices will be decreased and others increased by more or less than that amount, but the net impact to our revenues will be a 3 percent increase. Again, we are reminded that we don’t offer services to collect fees, rather we collect fees so that we may provide service.”
Vowell said the proposal has a slight increase in full-time employees next year because the hospital is implementing Cerner — a mandated electronic medical records system.
“The budget allows us to maintain staffing levels while continuing to provide excellent care,” Vowell wrote.
Reductions in the budget will hit travel, outside education, employee relations (recognition rewards for quality service), consulting services and advertising, Vowell said. Department directors also will be asked to maintain their budget in line with volumes.
Vowell said the other part of the equation is that for many years the hospital has had a positive margin and been able to fund capital projects. Those will be limited to Cerner completion, set-aside funds for the Child and Adolescent Mental Health Unit and “a very limited amount for other purposes,” Vowell said.
The committee also heard from interim Chief Financial Officer Dennis Stillman about March’s financials.
Net revenues are still down below projections and operating expenses are right on track — which has been occurring most of the year. Basically the end of the month operating income was $24,000 — a positive balance, but not by much, Stillman said.
Stillman said patient days are 6 percent under budget, while the length of stay has actually increased. Staffing remains slightly higher than patient turnout.
“The length of stay has gone up, so we have more days,” Stillman said. “It’s a bigger problem than just the 2 percent. Our net margin is under budget by about 7 percent. ... We’re about the same place we’ve been. In April I’m probably more optimistic that we’ll have a positive bottom line, but it wont be very positive.”
Stillman said he expects the same volumes of patients from cruise ship passengers as in the past.
• Contact reporter Sarah Day at 523-2279 or at firstname.lastname@example.org.
• Editor's note: this article has been changed to correct the name of Bartlett Regional Hospital's Interim Chief Executive Officer John Vowell.