The Upper San Juan Health Service District Board of Directors (USJHSD) met in regular session Tuesday night and, among other things, reviewed its preliminary 2011 budget. While not exactly the stuff of legends, the document provides alluring insight into upcoming healthcare improvements that will greatly benefit the community.
Pagosa Mountain Hospital (PMH) CEO Brad Cochennet opened the budget discussion with a few preliminary comments, before entrusting the details to CFO Dennis Wilson.
Essentially, Cochennet explained how, during the last two years, the hospital attempted to incrementally add inpatient volume based on its previous year’s performance.
“This year,” he explained, “we are at the point where we feel like we can increase, if you will, the capacity of the hospital where inpatient volume is being grown based on services.”
With that, Cochennet referred to the budget, which began with a number of assumptions. For instance, the document read, “The average daily census for inpatients is forecast to increase from 1.3 to 2.5 and for swing beds from 0.8 to 1.5. This increase is due to new physician providers in the Rural Health Clinic (RHC), the addition of a hospitalist program, ultrasound services and improved staff capabilities.”
Continuing in terms of volumes, the budget stated that outpatient surgery, including cataract surgeries, colonoscopies and upper GI (gastrointestinal) procedures, will commence in 2011, with 272 cases anticipated. Further, more than a thousand ultrasound tests are expected in the coming year, based on likely referrals from RHC providers.
While the PMH lab has performed well beyond expectations from the start, its outpatient testing should increase by 30 percent in 2011, according to budget assumptions.
Recent additions to the RHC medical staff should show a 10-percent increase in radiology (x-ray, CT scanning and MRI) testing, as the clinic itself will see nearly 15,000 patients in 2011, compared to the 9,664 it will have seen by the end of 2010. To accommodate that volume, the clinic will average 4.7 physicians and physician “extenders” next year.
While the assumptions reflect 5- to 10-percent increases in other departments, such as ambulance and emergency room services, the above volumes, plus a January 4-percent price increase, will result in 2011 gross charges approaching $14.5 million, or $5 million more than this year.
Certainly, as revenues increase, so will expenses. Salaries, for instance, will climb as clinical, surgical and ultrasound staffing is either added or expanded. Hospital ER salaries will also rise, as its staff moves from contractual consultants to in-house board certified ER physicians and midlevel providers.
While the current economic downturn will result in a 5-percent drop in tax revenues (from the district mill levy), costs related to employee benefits and training, professional fees, purchased services, utilities, supplies, insurance and other factors will climb as more services are added.
Overall, the district’s projected income statement indicates 2011 inpatient revenues exceeding $2.6 million, or nearly double that of 2010. Total net patient revenues should approach $9.6 million, or $2.5 million more than this year’s likely sum.
Though total 2011 operating revenue less expenses shows a deficit exceeding $963,000, total non-operating income should top $2.6 million. Total non-operating expenses are projected at $1.29 million, leaving total revenue — less total expenses — of more than $437,000.
If all works according to plan, the district’s total liabilities and net assets should equal $15.45 million.
As required by law, attending district board members unanimously authorized release of the preliminary budget for public comment, Tuesday night. Therefore, notice soliciting public input at the next regular board meeting will be published in a forthcoming edition of The SUN. That meeting is scheduled for 7 p.m. Tuesday, Oct. 26.