NRMC, nursing homes experience increase in volume

Friday, August 22, 2014
Dana White, left, listens to Greg Shaw give his report at the Nevada Regional Medical Center Financial Strength Committee meeting Tuesday. Gloria Tucker/Daily Mail

Nevada Daily Mail

The average daily census for Nevada Medical Regional Center rose 20 percent for the month of July from last year's 26.5 to 31.6, while Moore-Few and Barone combined facilities' census rose 3 percent from last year's 108 to 112.

"We had a big month in July as far as volume goes," Chief Financial Officer Greg Shaw said at the NRMC finance committee meeting Tuesday. "That was probably our biggest month in two years or more as far as gross revenue generated. We ran about $7.8 million gross revenues for the month. I'm not going to say all of it is from the increase in volume. The cash collections came in at an average amount of $2.7 or $2.8 million. Not a bad month, but not a great month of collections."

Shaw said the volume was primarily driven by the behavioral health units in the hospital.

"Because of what happened, we actually had positive earnings before interest, depreciation and amortization," he added. "It's been months, a long time, since that's happened. We generated a positive 4.12 percent EBIDA. That's a good thing."

EBIDA is a measure of the earnings of a company before accounting for interest expense, depreciation and amortization. Depreciation refers to prorating a tangible asset's (physical property's) cost over that asset's life, i.e. machinery. Amortization, on the other hand, refers to spreading an intangible asset's (intellectual property's) cost over that asset's life, for example, contracts.

Despite the increase in volume and revenue, the hospital experienced a loss of $206,162 for the month, an increase in accounts receivable days (the average number of days it takes to collect the payments due) from 93 to 101 and 14 days decrease in cash from 68 to 54.

"If the benefits, supplies and repairs expenses had been more toward our expectations, we would have had a break even month in July," Shaw said. "It's a loss of $206,000 to start off the year, but that's a pretty low loss compared to what we've seen for the past several months. Now that we have a better handle on contractuals, we won't be getting hit with prior month adjustments."

Shaw attributed the increased AR days to the high revenue level and average cash collection, while he said the 14 day decline in cash was the result of paying down accounts payable (money owed by the hospital to its suppliers), the prepayment of insurance and maintenance contracts and the increase in cash expenses for benefits, supplies and repairs.

He said benefit expenses increased due to employee health insurance claims, and he will look into the rise in supply and repair costs.

"The supplies are still a little high at 14.1 percent of revenue," he said. "That would have added another $150,000 to our bottom line."

Chief Executive Officer Kevin Leeper agreed that supplies needed addressing.

"It's about $140,000 over this month," Leeper said. "I think we really need to look at some details there. It goes back to reporting problems and reliable data. We'll get there though, I promise you."

Dana White, of Patient Financial Services, said the departments' purchasing policy needs work.

"We need to change a mentality, too, along with reporting," White said. "People think, 'Oh, I might run out, so I need to have two or three on the shelf.' People get comfortable. It's easier just to order multiples rather than one."

Board member Bill Denman noted charity care had increased while bad debt (debt that can't be recovered) had decreased, which helps with bond calculations.

"We revised the charity care policy to make it a lot simpler," Shaw said. "It's pretty much a one page form. We've gotten a lot of positive feedback from patients that say they like the form and are more likely to fill it out. Our bad debt expense is about $250,000 less than last year."

In other business, Shaw discussed progress on completing this year's budget.

"We've got a starting point of almost a $6.4 million loss," he said. "We did budget some increases in the volume, especially since the hospitalist program is going to come online later on this year and we're going to have a year of senior behavioral health services. We should have about 5 percent increase in gross revenues which is all volume driven. I don't have last year's (overall) price increase built into (the budget) yet. We're also expecting to improve our revenue cycle. Medicaid is going to reduce its reimbursement next year, so those kind of offset each other. Meaningful Use money will be coming in around $1 million, compared to $600,000 last year. We have reduced expenses, which are budgeted to continue. We talked about supplies needing to come down. We have some contracts we will be looking at terminating this coming year."

He said at the moment, without knowing individual department budgets, the bottom line for the hospital will be a $2.5 million loss with a half a million dollars in cash on hand.

"That's not the final number; that's just where we're at to date," he said. "Once the departments turn their budgets in, we can tweak it a little more. We expect to see better numbers by the time the budget process is completed."

He said the plan is to take the budget before the board of directors for approval in September.

In other business, the committee approved a $1,800 agreement for a medical director of cardiac rehab and cardiopulmonary services, $29,900 agreement for diagnostic cardiology consultants EKG interpretations and property insurance renewal pending the quote for board of directors approval next week.

In the long-term care financial strength report, administrative officer Steve Branstetter said both facilities made profits, $56,000, with the increased volume.

"Our AR days went down 4.32 days," he said. "What we're seeing is an increase in 0 to 60 days to collect and a decrease in 61 to 120 days."

The committee agreed to recommend renewal of property, crime and inland marine insurance pending the quote to the board of directors.

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