Island Hospital is expected to increase revenue and expenses next year, as well as increase its number of staff members.

The hospital expects to bring in about $111,877,000 and spend $111,999,000. That’s a loss of about $123,000, hospital CFO Julie Stewart said.

The extra money will come from reserve funds. During 2020 and 2021, as the hospital dealt with the COVID-19 pandemic, it slowed down some services and stepped back on capital improvements. Now, as the hospital continues to live with the pandemic as it moves toward the end of its second year, it is time to start investing again in staff and capital projects, Stewart said.

COVID is still around, but it’s no longer the only focus, she said.

“We are reinvesting in our people as well as capital equipment at our hospital,” Stewart said.

Hospital CFO Elise Cutter agreed.

“As we look forward to 2022, we hopefully will be coming out of the COVID-19 pandemic,” she said. “We want our focus to be on our employees to really show them how thankful we are for them. We know how hard they have worked since the beginning of the pandemic in 2020, and we are grateful for every one of them.”

Wages and benefits are expected to go up by about 6% from 2021. The hospital is also increasing its number of staff members. Many open positions this year mean the hospital employs about 539 people this year. That number should jump up to 587 next year as positions are filled, Stewart said. The hospital is adding some positions, like extra employees in its call center to help with people calling for appointments and information.

The hospital is also rolling out a retention program that will cost the hospital but is worth it to show the employees that they are appreciated, Cutter said.

Island Hospital is investing almost $4 million back into its workforce.

The “Thankful for You” program will include shift incentive bonuses, market wage adjustments, doubled employee referral bonuses, cafeteria discounts, access to education credits and up to $2,500 in bonuses per employee, according to the hospital. The retention bonuses will be given out to each person in two payments, one in December and the other at the end of February, Cutter said.

Some things like cafeteria discounts seem small, but most employees eat at least one meal a day in the cafeteria, so the discount adds up financially both in savings for the employees and in income for the hospital, Cutter said.

The 2022 budget includes a projected increase of 13% in revenue over 2020 and a 3% increase over 2021.

Part of that is because of new and expanded services, including the new TeleICU program, a second physician in urology, an increase in general surgery and the inclusion of the Orcas Island Clinic. That clinic was open for part of 2021, but will be open for a full year next year, Stewart said.

Increases in expenses are coming partly from supplies and other costs, which are expected to go up between 3-5% next year.

The hospital also expects to spend about $2.8 million in capital improvements, which include routine equipment replacement (like IV pumps and poles and new beds for the ICU, acute care and labor and delivery), facility improvement (like new signage for the exterior) and information system improvement, such as the patient portal.

Of the $2.8 million, roughly $300,000 will come from the Island Hospital Foundation and $630,000 will come from tax revenue.

The rest will come from operating cash.

Also in 2022, the hospital is increasing its tax levy by the state-allowed 1% on property taxes. Because the assessed value of the entire district went up, the amount of money per $100,000 went down.

The cost to homeowners will be $76 per $100,000 in assessed property value, down from $81.24 per $100,000.

That will bring in an estimated $5.8 million next year, up from about $5.7 million in 2021.

The hospital itself is sustainable just by patient revenues, Cutter said. The tax money goes only to capital projects and debt service.

Without those projects, the hospital could not improve its facilities or replace aging equipment, Stewart said.

Of the $5.8 million that’s coming in, $2.6 million is from a bond tax levy dedicated just to paying back the bond taken out in the early 2000s to cover construction of a new hospital.

The expense fund levy should bring in about $3.25 million. Of that, $2.6 million will go toward debt service, and the other $663,000 will go toward capital funding.

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