Greenwood Leflore Hospital is still losing money but less of it, according to its recently completed audit.
“You’re definitely heading in a more favorable direction,” Kade Moody of the auditing firm Horne told the hospital board Tuesday as he presented the final financial figures for the fiscal year that ended Sept. 30.
According to the audited numbers, the hospital experienced last year an operating loss of almost $7 million. Although that was the fourth straight multimillion-dollar loss, it was 24% less than the nearly $9.2 million the publicly owned hospital lost the previous year.
All of the improvement came on the expense side, which was sliced 5%, from $125.4 million in 2018 to $112.3 million in 2019. That more than offset the 3.4% decline in operating revenue, from $116.3 million in 2018 to $112.3 million in 2019.
Moody said the Greenwood hospital is not alone in its financial struggles.
“It is not uncommon, as a matter of fact I will say it is very common, for hospitals in this environment to have margins and operations struggles similar to what you have,” he said.
Moody estimated that Horne audits 80% of the hospitals in Mississippi.
Greenwood Leflore Hospital ended the year with $24.4 million in cash on hand, or roughly enough to pay 79 days’ worth of bills. That compares to $26 million in 2018, or enough to pay 80 days of bills.
When asked by board Chairman Harris Powers Jr. what the target should be, Moody responded that “north of 100 days and you’re really good,” but that the Greenwood hospital’s cash cushion compares favorably with similar hospitals in the state.
Moody complimented Dawne Holmes, the hospital’s chief financial officer, and noted an improvement in the hospital’s collection efforts in the past year.
“Very few places have as conscientious an accounting department as you have,” Moody said.
Meanwhile, the current fiscal year is off to weak start, thanks to a significant decline in surgeries and admissions in November.
The hospital suffered a $1.5 million operating loss last month, compared to a profit of $13,000 in November 2018. Revenue dropped by almost $1.4 million, or 14.8%.
For the first two months of the fiscal year that began Oct. 1, the hospital has lost more than $1.7 million, compared to a loss of $328,000 the year before.
Holmes provided the board a statistical analysis that showed inpatient and outpatient surgeries combined were down 24% last month, and admissions were down 19%.
She said the hospital is also being hurt by the lower reimbursement rate paid for patients held for observation compared to those who are admitted into the hospital, even though the costs of caring for either category of patient are virtually the same.
Gary Marchand, the hospital’s interim CEO, said the “observation” designation is one mandated by law and there’s not much that hospitals can do but accept it.
“Government is bigger than we are, so we go by their rules,” he said.
The hospital board went into executive session for about 50 minutes to discuss several items, including physician contracts and clinic leases.
•Contact Tim Kalich at 581-7243 or tkalich@gwcommonwealth.com.
