Staff Writer
University Hospital came through a tough financial year about $8 million below what it wanted to earn, and tougher times are probably ahead, officials said. That includes battling a proposed 1.6 percent "fee" on hospital revenues proposed by Georgia Gov. Sonny Perdue to help plug a hole in Medicaid funding and provide trauma system funding.
As it closed the books on last year during Thursday's monthly board meeting, University's income from operations was $12.8 million, well below the $20.4 million it had budgeted, for a return of 3.2 percent. But, considering the economy, other hospitals would be "jumping for joy" to have that kind of result, Chief Financial Officer Dave Belkoski said.
A return of "3.2 percent is still a strong indicator that we had a strong year overall," he said.
Combined with all of the services and community benefits provided last year, "it was a great year," said J. Larry Read, CEO of University Health Care System. The way forward is darker, however, they said.
"We're going to have a tougher time of it," Mr. Belkoski said.
Health care has "always been viewed as immune from the economy," Mr. Read said. "And that's not the case anymore."
While they will not be readjusting the budget for this year immediately, University will be watching expenses closely, particularly the $60 million or so it spends on supplies each year, Mr. Read said.
"Many hospitals are laying off people around the country, and we'll look at that last," he said. "We're going to look first of all at our supply costs; we're going to look at overtime. There are so many dollars to look at first."
One thing the hospital is not looking forward to is the proposed 1.6 percent fee, which would cost University $5 million to $6 million a year, about half its margin, Mr. Read said.
"We're going to go and fight that one," he said. "We think there are other opportunities" to plug the Medicaid gap.
Reach Tom Corwin at (706) 823-3213 or tom.corwin@augustachronicle.com.
INCOME SHORT OF GOAL
University Hospital ended its fiscal year Dec. 31 with income from operations of $12.8 million, well short of its goal of $20.4 million. Combined with a non-operating revenue loss of about $800,000 last year, the hospital made a little more than $12 million. In 2007, University had a record year-end surplus of $43.8 million, owing in part to more than $23 million in non-operating revenue from investments. In 2006, the year-end margin was $33 million.
