Audit reveals $3 million loss in most recent fiscal year for Veterans Memorial Hospital due mainly to troubled billing history; Measures put in place making difference in current fiscal year
by Brianne Eilers
At its November 27 monthly meeting, the Veterans Memorial Hospital (VMH) Board of Trustees learned that the month of October ended on a positive financial note for the hospital, with a net income of $55,668, which translates to a 3.4% profit margin. Acute patient days volume for the month was up 10% while skilled patient days were up 41.7% in comparison to last year at this same time. Total surgeries were up 20.8% and most outpatient areas were up as well. Emergency room visits were down 11.4% and deliveries were down 16% in comparison to October 2017. Expenses were also down, 3.1%.
Year-to-date, the hospital is showing a net income of $183,698, which ends up being a 2.8% profit margin for the fiscal year. “We budgeted for a 1.5% profit margin,” VMH Administrator Mike Myers said, “So, we are ahead of schedule on that.” The number of days in Accounts Receivable is currently at 76.8, down significantly from the 104 days near the end of June this year.
While the financial statistics for the month were very positive, the results from the hospital’s most recent audit had some disheartening news. During the last fiscal year, the audit showed that VMH has lost around $3,376,232.
“It’s a significant amount of money,” Myers said. “We understand that, the board understands that, and we are working to get that addressed.”
Myers noted that there are several factors to that sizable loss, with a major factor being the problems with AthenaHealth and the billing software. “You could tell that when we switched over and went back to our own (billing system) in the first part of this current fiscal year, we had good results,” Myers said.
He pointed out that there were also some issues earlier in the year with the revenue cycle, but they have been working to address that as well.
Myers explained that they have addressed those issues by adding the night registration, additional staff for billing and re-vamping some of the coding processes. He pointed out that patient service revenue was down over $1.3 million. Myers pointed out that nationwide, inpatient revenue is down for many hospitals.
He also noted that the local area has lost three physicians and the revenue that they provided. “To the credit of the clinics - Mayo, Gundersen and Dr. McMullen, they have continued to support us, and we are very appreciative of that,” Myers said, adding, “Dr. Schwartz has also been a big supporter.”
Myers noted that the hospital has also initiated some expense reductions. He pointed out that approximately $750,000 of that loss is IPERS Liability. Myers noted that the staff has worked hard to come up with the processes that have been implemented.
“Our bottom line shows that we can generate revenue over expenses and we will have months where that won’t happen,” Myers said. “It’s cyclic.”
Myers further explained that October, November and December are generally good months to generate revenue, as many people have met their insurance deductibles for the year and are moving ahead with procedures in the operating room and outpatient services. Myers said that VMH will continue to work with Gundersen, Mayo and Dr. McMullen with strategic planning. VMH will also be looking at ways to help with recruitment of physicians for themselves and the clinics.
In other matters, VMH continues its mediation process with AthenaHealth. Myers noted that the hospital has officially sued AthenaHealth and Athena has also counter-sued.
The ambulance donated to the hospital from nurse anesthetist Mark Bishop’s family is in service. Myers said that while the vehicle “has some miles on it,” it is in overall very good shape. VMH is also re-mounting one of its existing ambulances at the cost of $87,000. “We will have two ambulances that have been upgraded,” Myers noted.
VMH is also moving ahead with the 340B Drug Program. Myers explained that VMH has completed the first two steps of the program and they are working with a consulting pharmacist from Washington County in Iowa. They will also be working with local pharmacies to implement this program.
The annual Veterans Memorial Health Care Foundation’s Christmas Fantasy was once again considered a success, but Myers noted that he did not have the final numbers at the time of this article. VMH has also begun work on its strategic planning.
