More physicians, expanded services, and a continued commitment to holding down costs and improving efficiency will lead to a strong financial position for Good Samaritan Hospital in 2014.
The hospital's board of governors Tuesday night approved a budget for next year that calls for a projected increase in revenue of almost 6 percent above this year with employees receiving a 2-percent pay increase and that more than $7 million to be set aside for free care in the community.
Chief financial officer Jerry Stump said the increase in revenue will be driven, in part, by a better than 7.5-percent rate increase but also by projected increases in admissions and patient services, such as the rehabilitation unit and the new wound-care clinic.
Rob McLin, the hospital's president and chief executive officer, said the goal for 2014 was to have an operating margin of just over 3.5 percent, a full percentage point below what had been projected for this year.
Through October, the hospital's 2013 operating margin is less than .6 percent with net income running better than $3 million below budget.
Stump pointed out that this year's budget had been “very aggressive” in terms of projected revenue, and that while the hospital had struggled to hit its monthly targets, the actual revenue levels had been fairly strong.
Only during February has the actual revenue not surpassed the 2012 levels; most months the actual revenue has been well above the budgeted amounts and at the end of October the total was nearly $13 million above 2012.
Officials point out that the hospital's 2013 financial picture would look better were it not for the increase in expenses, brought on in large part by expanding the staff and improving facilities. Adding physicians and facilities for them to see patients and provide care has increased operating costs for the year.
In 2014, those costs will have mostly been absorbed, leaving the hospital to benefit from the additional revenue.
Stump pointed to some concerns carrying over into 2014, particularly increasing bad debt resulting from those without insurance seeking care for which they won't be able to pay.
So far this year bad debt totals $14 million.
Stump said the hospital would be focusing next year on getting those who didn't have insurance enrolled in Medicaid or to acquire some type of coverage through the federal Affordable care Act.
The hospital looks to cut costs by $7 million but without cutting staff; the budget actually calls for increasing the workforce.
Stump said that while the rate increase was a little higher than what other comparable hospital's were instituting for next year, Good Samaritan would still remain “very, very competitive.”
He said a recent American Hospital Association survey found that Good Samaritan Hospital had the third lowest charges in the state.
McLin said the budget called for more that $8 million to be invested in capital improvements.
“Our focus will always be on the patient and providing the highest-quality care we can,” he said. “We're passionate about that, and I'm confident this budget will allow us to continue to provide that care.”