Hospital sitting pretty financially

Another front-pager!

By Janice Kurbjun
Times staff writer

The hospital is financially sound according to auditor Tom Dingus, whose presentation at Tuesday’s board meeting indicated positive trends in Memorial Hospital of Carbon County’s financial records.

He traveled to Rawlins from Spokane Valley, Wash., to discuss the analysis of the hospital’s journals as performed by his firm, Dingus, Zarecor and Associates. The firm specializes in accounting for rural hospitals in the northwest.

Memorial Hospital of Carbon County is in the unusual position of being virtually debt-free in both the long and short term, he said. Most other hospitals are unable to claim the same feat.
Hospital board member Judy Merrill said the method adopted to maintain these figures is to avoid paying high interest on new equipment investments.

She mentioned the hospital’s new MRI machine that was paid off early last year. It took the hospital five years to complete payments on the device, which is better than average, she said.
Dingus pointed out that the cash-in to cash-out ratio is at a good flow, indicating that the hospital is steadily reinvesting in its equipment and facilities. In short, the hospital administration has been keeping its facility up to date. Again, that is an area where the hospital excels above other rural hospitals.

One problem area that appeared in the analysis was a higher-than-average percentage of uncollected payments. However, Dingus said experience reveals that bad debts are increasing across the nation, with many individuals switching to higher deductibles with their health insurance. They then often refuse to pay after receiving care.

In an effort to combat losing revenue due to bad debt, the hospital relies on three collection agencies instead of just the Carbon County Collection Agency to pursue payment from individuals.

“They generally seek payment for three to four months before classifying it as bad debt,” Merrill said. With three agencies, “we can keep them in competition, and that has worked very well for us,” she said. Each agency receives a percentage of its own collections.

Dingus wanted the hospital to push toward 120 days of cash on hand — an item in the analysis that indicates how long the hospital can function without income. Currently, the hospital sits at 60 days with CDs in local banks for emergency purposes. Merrill said part of the problem is bad debt. “If we had all our bad debt collected,” she said, “we would be at the 120 number.”

According to the numbers, the hospital is in good financial shape. Charts revealed that pricing for care is increasing sufficiently. The age of the hospital sits at a median as compared to other hospitals and Memorial Hospital of Carbon County is generating income.