Hospital budget limits rate hikes

Thursday, June 17, 2004

An increasing number of patients means that Community Hospital will be able to hold down rate hikes for the next fiscal year.

It's simple economics. An increase in the number of medical staff members at Community Hospital in-creases the number of people served.

An increase in the number of people served increases the revenues. Increased revenue means operating costs are spread out among more customers, which in turn means the rising cost of overhead is lower for each patient. In the end, it means the hospital won't have to rely so much on rate increases to stay in the black as it has in previous years.

The 2005 budget, which covers the fiscal year of July 1, 2004 to June 30, 2005, projects excess of revenues over expenses of $669,653, $120,555 less than fiscal year 2004. The new budget was approved by board of directors on May 16.

Troy Bruntz, chief financial officer at CMH, explained that the decrease is due to prior-year retroactive settlements of $428,100 that the hospital received from Medicare in 2004.

If that payment had not been received, the excess of revenue over expense for 2005 would have exceeded the 2004 total by $307,545.

According to a report prepared by Bruntz, the expected growth in services contained in the budget is due mostly to additional medical staff members at the hospital during 2004.

"Growth in services helps the hospital remain competitive in our region by relying less on rate increases," he wrote.

Bruntz said the increase in the level of care given to patients will also increase revenues due to changes in the Medicare Prescription Drug, Improvement and Modernization Act.

The hospital is looking for even better revenue in the 2005-06 fiscal year when it becomes part of the federal governments demonstration project for cost-based reimbursement on Medicare covered inpatient services.

The new budget projects a 9.5 percent increase in expenses primarily due to an increase in employee salaries and training. The budget also includes funds for the hospitals future strategic initiatives.

According to Gary Bieganski, Community Hospital President, the hospital continues to do well with patient satisfaction surveys, rating 95-100 percent for its care.