OCH Regional Medical Center’s tentative Fiscal Year 2015-2016 budget shows officials are more optimistic about the hospital’s short-term financial future.
The preliminary budget, as delivered to supervisors last week, plans for $2.77 million in excess of revenues over expenses, a significant increase from FY 2014-2015’s sub-$900,000 projection.
Projections since FY 2012-2013 have slipped until this year’s tentative increase, documents show.
Hospital officials expected $1.83 million in revenues in FY 2012-2013 and $1.39 million in FY 2013-2014. In FY 2014-2015, officials projected an $839,377.20 profit.
Administrators expect the hospital to take in a combined $196.17 million in operating revenues — gross patient revenues, other funding streams and an electronic health records incentive — in the fiscal year beginning Oct. 1. That figure is reduced to $71.99 million after accounting for almost $124 million in deductions.
Hospital expenses are expected to run right below $70 million next fiscal year. A $39 million line item for salaries and benefits accounts for the lion’s share of projected expenses.
The hospital is also expected to pay $1.65 million on bonds, leases and notes in the upcoming fiscal year.
As in previous years, its ambulance service is expected to operate in the red. Documents show the service will come up $391,634 short in the upcoming fiscal year.
Officials are expected to ask for a combined $292,000 in funding from Starkville, Oktibbeha County and Mississippi State University. If those requests are completely funded, the hospital would still need to find approximately $100,000 for the service to break even.
In FY 2014-2015’s projection, the hospital expected its ambulance service to operate approximately $411,000 in the red.
OCH’s operating revenues and expenses both increased about $5 million and about $4 million respectively from FY 2014-2015’s projection. Its most significant improvement, however, should come from turning around non-operating losses, documents show.
OCH previously expected a loss of $108,038.05 in non-operations — investment income, contributions and interest expense — for FY 2014-2015. Its newest projection, however, expects the hospital to come back into the black by $186,112.50.
The reversal should be attributed to an increase in investment income and a decrease in interest expense, the budget states.
OCH CFO Susan Russell said increases in overall in-patient services and more-profitable surgery types have helped improve the hospital’s revenue.
Adding services remains a priority for administrators, she said, and the hospital is expected to open a new wound care center this fall.
“The (emergency room) case load is up because a couple ERs have closed in the region. If you have an increase with in-patient days, it has far-reaching effects,” Russell said. “We’re always at opportunities to either improve care or offer new services. What I’ve seen with most of our departments are they’re either holding steady or seeing gains. We feel good about (the hospital’s financial position), especially when you compare us to where we were last year.”
Administrators previously tightened OCH’s financial belt in 2013 when they implemented reductions some employees’ pay and work hours.
Russell said department directors were given permission to restore some staff members back to 80-hour pay periods depending on their needs.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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