MCDH Finance Committee June 26th 2018

Changes in process to improve MCDH financial health!

Mendocino TV broadcast live the Mendocino Coast District Hospital (MCDH) June 26, 2018 Finance Committee, where in addition to the monthly and year to date financial information, the 2018/19 Budget Assumptions  and overall Budget were approved.  (The new Budget is included as a pdf below this article, which was missing from the MCDH Board Packet shared with the public.)

The following were pertinent issues relating to the rest of this fiscal year’s financials:

  • The actual Operating Loss for 11 months is 4.3 million dollars which is a 3.7 million dollar loss greater than budgeted.
  • Revenue up but so are expenses
  • Overall, revenue is about 1 million dollars short of projections and expenses are about 2 million dollars over budget.
    • Expenses are high from registry costs for locums, increased professional fees (especially for legal services) and increase costs in the Obstetrics & Emergency Departments.
    • There are issues with the way that Bad Debt and Charity Care are recorded and estimated.
    • There are many issues with billing and coding, especially with the Emergency Department as Emcare is responsible for handling that. So MCDH is going to change the Emcare contract and take it back in-house, expecting to improve revenue and collections next year.

Highlights for the new Fiscal Year include:

  • Improved collections & billing to make revenue cycle improvements.
  • Trying to hire permanent staff, to decrease unsustainable registry costs.
  • Examining revenue & expenses by Departments to identify and institute policies and procedures to improve services and the financial health of the organization.
    • He is currently assessing the NCFHC to identify improvements that will contribute to the bottom line, which cancelling the contract with Summit Pain Alliance may be a result of. (See 6/28/18 Board Report)
  • Bring employees benefits & wages more in line with industry standards.
  • Modest increases in Patient Revenues & Expenses will still result in a loss of 1.66 million dollars, which is better than the current year’s loss.
  • Significant increases in Non-Operating Revenues, especially the now secure Parcel Tax Revenue of 1.6 million dollars, may result in a $800,000 positive bottom line.
  • The Capital Budget is being evaluated, although there is only about 1 million dollars there, so items will be fixed only as necessary or funding is available.
    • Last year the more immediate Capital Budget weighed in at over 10 million dollars, so this is an ongoing concern that needs to be addressed.

It does appear that the new CFO Mike Ellis has some concrete ideas to improve the overall financial situation at MCDH, noting that current spending is unsustainable.  While the Parcel Tax will help, it may take more than 1 year to make the improvement necessary to be sustainable.

MCDH 2019 Budget001

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