The Upper San Juan Health Service District Board of Directors met in regular session Tuesday, with a new, streamlined Pagosa Mountain Hospital (PMH) financial report capturing the bulk of attention. Based on the information contain within, May was apparently another good month for the young facility.
With hope of providing a more comprehensible accounting of hospital finances, district financial committee chair Karl Irons presented board members with a series of notes, which highlighted certain items found in the balance sheet, income statement, performance trends document, accounts-receivable-aging page and monthly cash-projection page. Together, the five documents present a clear picture of where hospital finances are now, and where they might be in June and beyond.
While examining the balance sheet under Accounts Receivable, Irons pointed to the hospital construction account, which, by the end of May, held approximately $981,200, or about $231,000 more than the minimum amount set by the district. As restricted funds, that money can only be used for physical capital improvements.
Following the first five months of 2009, Operating Cash had fallen to $145,500 below budget, but the Bond Account held $47,000 more than necessary to cover both bond payments for the year, with the first payment due in July.
Meanwhile, Receivable Patient Revenue increased to $786,400 from $672,000 in April, the new total being roughly 20 percent of Gross Accounts Receivable, or $3.95 million. However, the gross amount is a discretionary figure based on initial billing amounts, before billing errors, contractual agreements with insurance companies, and non-collectible patient billing is considered. More clearly, Receivable Patient Revenue is an amount the hospital actually expects to collect after billing for all services.
According to the May 31 balance sheet, the total PMH Accounts Receivable to date, including net patient revenue, mill levy receipts and other receivables, totaled $1.3 million. When adding cash on hand (construction and bond funds, less operating loss), inventory, total fixed assets (land, furniture and equipment) and other assets, and comparing it to total liabilities (accounts payable, expenses, wages and benefits, deferred revenue and long-term liabilities), the hospital shows a net income of $68,905, year-to-date.
The May income statement shows a Total Patient Revenue of $905,666, marking only the second time a monthly total topped $900,000 in hospital history. After contractual allowances, the Net Patient Revenue stood at nearly $542,300, while operating expenses added up to $431,100. When comparing total revenue versus total expenses, however, the hospital was in the black by $181,500.
Even as in-patient trends continued below budget, the emergency room, lab, radiology and EMS (emergency medical services) all performed well, with the ER and lab far exceeding expectations. All in all, PMH enjoyed a small positive cash flow in May, while taking in $500,000 in cash from operations.
While Total Accounts Receivable jumped from $3.7 million to $3.95 million in May, most of it showed up in the 0-30 days column, suggesting a surge in new charges, rather than an inability to collect older accounts.
In the meantime, June cash projections suggest a slight dip in operating cash, though tax revenues (mill levy) will inject $165,700 into hospital coffers. That, with an estimated $445,700 in cash from operations should bring a total of more than $611,400 for the month.
Given reasonable assumptions coupled with some hard data, and a projected net cash flow in June exceeding $110,000, Pagosa Mountain Hospital should end 2009 with a projected year-end cash balance of $410,000.
As Irons said, the hospital is coming along fine and is on track to break even after its first three years. And that, after all, has been the goal since the facility’s inception.