The string of months indicating improvement in Greenwood Leflore Hospital’s finances ended in June when the hospital posted a loss of $1.5 million for the month, which was 62.6% worse than June of last year.
Subho Basu, interim chief executive officer, said the loss was due to a decline in gross patient revenue due to the impact of doctor vacations on an already too small staff. For the month, gross patient revenue was down $2.5 million, or 8.7%, compared with last June.
Patient revenue for the fiscal year is running behind by more than $3.6 million, or 1.3%. Compared to May’s figures, the gross patient revenue in June declined by more than $4.65 million.
“That’s definitely our concern,” Basu said, blaming it on “a shortage of physicians. ... When you do not have enough physicians, you have the problem.” The hospital in recent months has increased efforts to recruit specialists who can bring more patients into the hospital for treatment. In addition to needing more doctors, Basu said, some of the doctors on the staff took time off during June.
“I don’t think that’s the case,” said board member Freddie White-Johnson. “...You can have all the physicians. You could have a thousand physicians in this hospital but if we don’t have the patients. You know, we need to find a way to increase patient volume, increasing revenues.”
Basu said part of the hospital’s long-range plan is to increase patient volume through marketing the hospital’s services. Currently, the hospital has only one electronic billboard to reach potential customers; the board canceled print, television and radio advertising when it fired its marketing firm last year. A branding project by a Memphis design firm has yet to be presented to the board for consideration.
The larger problem, Basu said, is referral physicians who are directing patients to other facilities because Greenwood Leflore no longer provides certain services. He said he would present the board with a breakdown in the revenue produced by physicians.
Basu pointed out that cash and cash equivalents on hand at the hospital continued to improve in June, showing an increase of $130,815 from May to end the month at $23.5 million. That’s an increase since the beginning of the calendar year of $2.5 million.
The hospital continues to cut costs, according to Basu, through bargaining with suppliers and staff reduction. The hospital has cut $3.5 million in expenses over the first nine months of the fiscal year compared to 2018, and Basu predicted a total of $4.7 million for the entire year.
He warned: “If we try to go beyond that, we will be genuinely short-staffed or we will start getting inferior quality (items from suppliers).”
Inpatient revenue continued to lag behind outpatient revenue, following a trend reflective of the care demanded by insurance companies. Inpatient revenue for fiscal year to date 2019 stood at $92.3 million, compared to $94.6 million in the same period of 2018. Outpatient revenue for fiscal year to date 2019 was $174 million, compared with $175.3 million in 2018.
But the main problem is not enough money coming in to the hospital, he said. “We are missing the mark every month on our revenue,” he said. “... Cost is not a problem at this point.” Basu said the hospital needs $33 million in revenue every month in order to be profitable. In June, that figure was $26.5 million.
The monthly report was accepted by the board on a vote of 3-2, with White-Johnson and Emma Bell voting no. Both board members complained that hospital chief financial officer Dawne Holmes was not at the meeting to explain the financial statements, as she was sick.
“We’ll get with Dawne, because I have some questions about this I’m going to ask her, if that’s OK,” Bell said. Board chairman Harris F. Powers Jr. volunteered to meet with the members to go over the numbers.
• Contact Gavin Maliska at 581-7235 or gmaliska@gwcommonwealth.com.
