AU Medical Center is still losing money for the year but has seen an improvement in recent months, according to the center’s finances.
The board of the medical center met Wednesday and approved the report from the board’s Finance Committee with very little discussion. The Financial Report handed out to the board shows a year-to-date loss of just over $3 million, as opposed to the $22.6 million it had budgeted, but a gain of $437,000 for the months of April and May. An analysis included in the report noted that net patient revenue was off by 5.2 percent, the center spent $2.6 million more on drugs and medical supplies than budgeted and had greater expenses for information technology and repairs and maintenance than expected.
Although not noted in the analysis, the center’s Operating Statement showed it received more than $900,000 less than budgeted in disproportionate share payments for treating a higher proportion of Medicaid patients, which was more than $4 million less than it received the previous year. Those losses were offset by $6 million less in labor costs and savings on depreciation and non-medical supplies, according to the analysis. The disproportionate share payments are difficult to calculate in advance because they cover all of the hospitals in the state and it is difficult to know where your hospitals stands relative to others in treating larger proportions of Medicaid patients, said CFO Greg Damron.
Part of the recent financial improvement is due to seasonal changes – the center always tends to do better in the latter part of its fiscal year – and to efforts to help rebuild a short-handed clinical staff, he said.
“Everybody’s working harder here to see more patients and that’s driving revenue and we’re keeping cost growth down, which has been our plan while we work on rebuilding the faculty numbers,” he said. In fact, the health system, which includes the university’s practice plans, will end the year with a surplus, he said.
Despite the fact that its new fiscal year will begin in less than two weeks on July 1, the board did not take up a budget for next fiscal year. Damron said it will continue with current spending plans while it takes a couple of more months to work with the new leaders of key components, including new Medical College of Georgia Dean David Hess and new AU Medical Associates CEO Julian Nussbaum.
They, along with medical center CEO Lee Ann Liska, have been working on greater integration between those entities, which could influence the direction of the budget, so the decision was made to give them more time, Damron said. A proposed budget could be presented at either the August or October meetings, he said.
“We’re definitely trending more positive,” Damron said after a “really rough spot” financially from fall through about February. “Everyone recognized what the issues were and have really worked hard to improve our trajectory.”
Reach Tom Corwin at (706) 823-3213 or firstname.lastname@example.org.