After three months of working a gap mitigation plan at Van Diest Medical Center, in an effort to stave off an anticipated $3 million loss, hospital officials said Tuesday night they are celebrating a significant improvement in the facility's financial performance.
In February, Interim Chief Executive Officer Lori Rathbun implemented the gap mitigation plan to minimize expected losses. At the time, Rathbun said the hospital was looking at various ways to cut and control losses. Staff overtime was one aspect cited. She said the goal would be to have overtime in the 2 percent range, and she added that in two pay periods, that figure had dropped from 4 percent to 2.6 percent. By hitting that 2 percent goal, the hospital would save $140,000 annually.
Chief Financial Officer Alice Heinrich told the Board of Trustees Tuesday night that the facility had an increase in revenue for April over the year-to-date average with gross patient revenues. Revenues increased to $109,914 per day as compared to the $94,961 per day average year-to-date through March.
Heinrichs said the turnaround could be attributed to the current administrative team and the work of the management team to implement a margin improvement plan.
"Expense management made a huge difference," she said. Several cost control factors put in place played a big part in the turnaround.
She added that overall inpatient days were 3.7 percent over the expected days and obstetrics days were 34.8 percent higher than expected. Outpatient visited were up 3.7 percent.
Heinrichs also said that administrative and charity care write-offs were down from the expected amount by $16,473 and $54,478, respectively.
Labor expenses were another avenue where VDMC saw savings. Total labor costs dropped for the month and year-to-date, and the full-time equivalents have declined from a high of 179.21 in December to 164.5 in April, according to Heinrichs.
She said the hospital's current operating cash on hand - the number of days the cash would fund the hospital - is at 132 days, up from 122 days last month, well above the Mercy Health Network benchmark of 60 days.
Rathbun and Board Chairman Carroll Ose congratulated the staff for their efforts.
In a related matter, the board approved the operating and capital budgets for fiscal year 2014-2015. Rathbun said the budget includes a 2.8 percent over all increase in prices. The operating budget provides for a loss from operations of $1.226 million. The total excess revenue over expense is $583,914 with a total margin of 2.7 percent.
The capital budget has a total of $1,613,532 for anticipated equipment purchases next year.
The trustees approved capital requests from the current budget of $448,798. The majority of that request was for a digital mammography unit which will have 3-D tomography technology and computer aided detection. Radiology Director Matt McKinney said the current equipment was nearing the end of its life and the 3-D component of the equipment will allow for greater detection of abnormalities and could help prevent return trips for followup mammograms.
A slate of officers and directors for the Van Diest Medical Center Foundation board was approved. Doug Follmann was elected chairman, while Kreg Foster will serve as vice chair. Joyce Gelhaus was elected secretary and Troy Hassebrock will serve as treasurer.
Directors Sherry Lambi and Hassebrock were re-elected to serve another four-year term of office.