Yellow Pages
The economy, health care reform, Medicaid cuts and even the flu are all variables that make creating a 2010 hospital budget — let alone a long-term plan — a difficult task for administrators.
At Island Hospital, an additional challenge will be to make up as much as $1.2 million to boost a fund balance that is running low because of revenue cuts and fewer patients in 2009. The fund, which is needed for unforeseen events or emergencies, is at about $416,000 while the goal is to have $1.3 million available.
Despite this, Island Hospital Chief Financial Officer Peter Swanson, who is working on next year’s budget with hospital managers, said he foresees no layoffs at this point.
“We’ve had no staff reductions at this time. We asked some folks to take their vacations and added a couple furlough days,” he said. “We’ll be looking at those kind of options, possibly some attrition.”
The numbers match what was predicted by administrators in May, when the hospital implemented some cost-saving measures such as closing nonessential departments for mini-furloughs the day before or after a holiday.
“We have been able to control our expenses but our volumes have been down,” Swanson said.
Island Hospital is in a better position than Skagit Valley Hospital, which cut 35 full-time positions to cover a $12.7 million revenue shortfall this year.
“I think we’re in a positive situation that we don’t rely on patient volume to pay off our debts,” Swanson said. “Our construction was funded by a bond — the community really stepped up. Skagit is not quite in that situation.”
Swanson and the hospital’s department and clinic managers will brainstorm with CEO Vince Oliver this week.
“We’ll meet with Vince to look for ways to get the excess margin up,” Swanson said.
A key will be figuring out what is realistic for patient volumes.
A number of people are putting off elective surgery this year, and other procedures are also down because of physician vacancies. The hospital is filling these spots, and also is looking at bringing a third urologist to Anacortes, Swanson said.
“We just added a third surgeon and a new doctor at Fidalgo (Medical Associates),” he said. A new doctor was hired for the Sleep Center recently.
Despite the economy, Island Hospital still has not been swamped by charity cases, as has happened at other facilities in the region, he said. But more revenue reductions are expected, starting with state funding.
“We’re taking a cut in Medicaid reimbursements, probably about $100,000,” Swanson said.
And at this point it’s too soon to know how federal health care reform may impact the hospital.
“We don’t know how that’s going to help or hurt,” Swanson said.
