WINNSBORO – That Fairfield Memorial Hospital continues to make progress reducing expenses and shrinking operating losses, was the message presented to the Board’s Finance and Audit Committee during its May 22 meeting.
CFO Tim Mitchell stated that, since fiscal year 2014, FMH has reduced expenses by $8.3 million. However, this includes reducing expenditures by closing hospital departments – Blue Ridge Medical Center, home health and cardiac rehab – and eliminating the delivery of inpatient services which the hospital has not provided in many months. A source who asked not to be named said it was akin to losing 50 pounds by undergoing a double amputation.
The Voice asked FMH CEO Suzanne Doscher, via email, whether the hospital had done any analysis to show what portion of the $8.3 million in reduced cost was due to increased efficiencies in ongoing operations as opposed to the reduction in services. At press time, Doscher has not responded.
Also during the Finance and Audit Committee meeting, Committee Chair Randy Bright drove home the point that FMH administration is successfully finding efficiencies in administrative and overhead costs and to date had validated $232,000 in savings with more to come.
The hospital is using a computer program that creates spreadsheets to capture suggestions by hospital staff on how to save money and provides a means of documenting these savings.
During the meeting Bright waved the 36-page document, which was covered in his handwritten notes, and asked staff to continue to follow-up on the savings identified thus far.
“This goes back to when we approved a tracking mechanism to not only encourage interest in curbing unnecessary expenses but to also track and build on it,” he said.
He asked that the FMH administration continuously update and add to the document and to make sure “all the boxes are filled in” for expense savings and revenue enhancement suggestions. “It’s like a road map, it really works best if we do all parts of it.
“There are many good suggestions in here,” Bright said, and “by continuing to review and follow up, it will get us to our goal – it’s kind of a domino effect.”
In addition, the April financial report presented by Mitchell showed how the elimination of the biggest money-losing services is narrowing the gap between operating costs and income.
While the hospital continued to report an adjusted operating loss for the month of April of $228,458, this amount was less than the adjusted operating loss posted in March and a decrease of $192,483 in the operating loss reported April a year ago.
Once bad debt recoveries and the donation of $40,000 from the FMH Foundation were taken into account, the gap between revenues and expenses narrowed to only $12,654 in April.
Mitchell also reported that, after excluding certain items to maintain comparability of the data, the hospital’s expected deficit for the year is now $566,486, which is $266,828 less than the budgeted deficit.
However, Mitchell also pointed out that the hospital is continuing to have difficulty paying its creditors, the biggest of which are Cerner, which runs the FMH computer systems for patient records, billing, and finance, and the hospital bed tax which must be paid to the state. This is indicated, he said, by a statistic which shows that almost 75 percent of the hospital’s accounts payable is outstanding after 60 days.
This number was aggravated by the fact that Cerner and the hospital bed tax are invoiced quarterly, he said, and the bill for these was received this month.
“What we are doing, and doing very well, is keeping our current vendors reasonably happy,” with the exception of Cerner, he said.
Doscher also pointed out the $150,000 in restricted cash the Board allowed the hospital to take out to use for payroll and other operating costs has been paid back.
While the number of patients using the emergency room and associated revenues continued to decline, Mitchell also pointed out that the hospital is doing much better in collecting debts while managing to pay $1 million to vendors in the recent months. Bright credited this, in part, to “not luck, but due diligence” on the part of hospital administration and staff. He also highlighted that revenues are trending upward, again compared to the grim budget predictions developed last year.
However, Mitchell also gave the bad news that, in the big picture, the hospital has only 23 cents in current assets to cover every one dollar in current liabilities –“not a good situation.”
The committee also decided that the hospital’s 2019 budget will take into account “shut down” costs as well as the cost of operating the hospital at least through the end of the calendar year. The hospital’s current budget runs through September 30, 2018.
The full Board of Trustees meeting which followed the Finance and Audit Committee meeting lasted barely 30 minutes with no department reports other than the usual financial briefing. After that, the FMH Board went into executive session to discuss “proposed contractual and personnel matters.”
When the Board came out of executive session it voted unanimously to give an unpaid, one month leave of absence, beginning sometime in June, to Doscher. There was no other explanation concerning the leave.