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March finances at NRMC: a tale of highs and lows
By Johannes Brann
The reports at Monday’s Finance Committee meeting at Nevada Regional Medical Center were reminiscent of the opening words of Charles Dickens’ 1859 novel, “Tale of Two Cities.”
“It was the best of times, it was the worst of times, … it was the spring of hope, it was the winter of despair, … in short, the period was so far like the present period.”
The best of times begins with the Long Term Care Unit, consisting of Moore-Few and Barone Alzheimer Care Centers.
Said LTC director, Steve Branstetter, “Overall, March was a good month. Both facilities made a profit which together totaled $58,788. Each facility has few empty beds and for the year, the facilities have had a net gain of $190,509.”
Yes, it was the best of times as the hospital reported its billed charges. For March, this totaled $8.77 million, which may well be the highest amount ever billed for a single month in NRMC history.
Even though typical flu and respiratory ailment season is over, the number of acute care patients in the hospital and those in the Behavioral Health Unit were substantially above where they were a year ago. In addition, the number of outpatient visits, clinic visits, surgeries and deliveries were all significantly over March 2016.
The use of electronic health records has the potential to save a lot of money. To encourage individual healthcare providers and hospitals to make the switch, the Center for Medicare and Medicaid Services provides financial incentives as successive goals are met, for the meaningful use of such records.
The best of times continued in March as CMS announced NRMC would receive just under $267,000 for having met current goals for electronic records.
Yet March was the worst of times as it was discovered a sizable number of those March hospital patients do not have health insurance and so a portion of the $8.77 million may not be collectable.
With those who do have Medicare, Medicaid or private insurance, payments which used to be received in 30 to 60 days are too often paid anywhere from 90 to 180 days even though the hospital has to pay its bills in a timely fashion.
The worst of times continued in March as NRMC, which self-insures employee and family member health insurance, had three claims each over $50,000. Normally, a month has four weekly claim runs but last month had five.
All together, a month which had high patient volumes had a bottom line loss of $120,000.
“An important point that seems to get lost,” concluded Leeper, “is that you cannot evaluate this hospital’s financial situation by looking at any one month and then extrapolate it times twelve. Just look at where we were not that long ago.”
In June 2014, NRMC had a net 12-month loss of just over $8 million. One year later the level of loss had been cut 90 percent to just under $800,000. But the 2016 audited statement of operations shows a net loss of just over 3 million dollars.
Paired with the red ink is a depletion of hospital cash reserves. The covenant for the bonds which financed previous hospital construction require’s the hospital to maintain cash reserves equal to 70 days of operations. This was done to ensure bond payments could be made.
At the end of the last fiscal year, in June 2016, the number of bond cash days stood at 75.5. As of the end of March, 2017, that number had dropped to 15.5.
Separate from the meeting, Chief Financial Officer, Mike Harbor, noted, “Bond cash days is a special measurement which really doesn’t tell the whole story about the hospital’s finances or even our cash position.”
To illustrate this, Harbor provided committee members with a statement of cash flows showing the hospital had $413,915 in cash at the start of March but ended the month with a cash balance of $1,006.062. Seventy bond cash days is about $8 million.
As Harbor noted in his report, “This includes the reclassification of the Lovinger property capital lease from being a current to a long-term liability.”
Suite number two in the building at 627 S. Ash is now the Primary Care Clinic, a rural health clinic.
“For a patient we serve at the hospital or at one of our other clinics we are reimbursed at a rate of $81.35 but for patients seen for the exact same thing at our Primary Care Clinic, because it has the rural health clinic designation, we are reimbursed at a rate of $137.10,” said Leeper. This is one of the twelve sources of additional income we’ve identified as part of our turn around plan.”
Besides a nice bottom line for the month, Branstetter’s Long Term Care report contained other positive news.
While overall, the hospital’s cash position has deteriorated, the Long Term Care unit has over 200 days cash on hand.
“Both Moore-Few and Barone are showing their age and we are in the process of rehabbing both facilities,” said Branstetter.
His report for Barone detailed tuck pointing to be completed by the end of April, and all new windows later in the year. Moore-Few’s north television room has new furniture and blinds.
Later in the year, both facilities will receive new lifts, a whirlpool, tables, doors and various nursing needs. Next fiscal year’s budget may include better lighting and more outlets for rooms at Moore-Few.
As stated in Leeper’s monthly written report, “This month shows that being busier does not in itself ensure a predictable measure of improved performance but it is clear that being busier – taking care of our patients – is why we are here.”
The hospital CEO wanted to make it clear he views the people who receive NRMC services, not as dollars to be billed but as people whose health and lives matter.
Such a view recalls these words from “Tale of Two Cities” by Dickens, “A wonderful fact to reflect upon, that every human creature is constituted to be that profound secret and mystery to every other.”
With determination in his voice, Leeper said, “And Nevada Regional Medical Center will be here. We will be here and we will provide the quality care the people of this area need and deserve.”