Editor, Commonwealth:
On Dec. 14, State Auditor Stacey Pickering’s office released a detailed report on the financial health of Mississippi’s 19 community-owned rural hospitals. Greenwood Leflore Hospital was one of six facilities graded as “poor” on their Financial Strength Index. The underlying accounting principles involved are complicated and extensive, but I would like to address the overall conclusions of the report as it regards Greenwood Leflore Hospital.
Our hospital has made significant strides in cost control and efficiency over the past few years, and we received an excellent survey result from The Joint Commission, an accrediting organization deemed by The Center for Medicare and Medicaid Services, this year. We are committed to serving our region with the best possible physicians, nursing staff, diagnostic services, inpatient facilities and clinics available. Recent declines in population and the lowered rates of reimbursement from both the private and the public insurance sectors have presented a serious challenge to our profitability, but we are striving every day to continue the tradition of high-quality medical care that has been a Greenwood Leflore Hospital trademark for more than a century. To that end, we are partnering with Vizient Solutions, one of America’s top health-care consulting firms, to find even more means of controlling costs without impacting services.
Several points in the state auditor’s report helped to explain our current situation. There are five other hospitals within a 45-minute drive of Greenwood, some of which provide services that duplicate ours. Charity care in 2016 amounted to $1.5 million in costs to GLH and write-offs due to nonpayment that year were more than $35 million. Our payer mix includes almost 69 percent from Medicare and Medicaid, and more than 16 percent of county residents under 65 have no insurance at all. These are demographic facts that we cannot alter, but they do impact our bottom line and must be addressed.
We can briefly summarize the four components of the auditor’s report and its assessment of GLH’s financial standing:
1. Profitability: The hospital’s profits have been trending downward for several years in spite of Fiscal Year 2017 cost cuts that yielded approximately $6 million in savings. Declining patient volumes have had an extremely negative impact on our revenue. Vizient’s consultants are working with the administration and hospital board to limit or reverse these trends.
2. Liquidity: Days of “cash on hand” is slightly less than the target value recommended by the auditor’s office, but we currently have cash to cover 111 days of operating expenses. With the suggestions that will be implemented with the Vizient group, this measure should continue to improve.
3. Financial Leverage/Debt Financing: Greenwood Leflore Hospital is in the rare and advantageous position of having no long-term debt obligations, which is rare for either public or private hospitals. We are currently financing two major physical plant/equipment updates with the refurbishment of elevator banks and the installation of a new linear accelerator for the Cancer Center. Future building projects will be considered, but the critical point is that we are not paying large, long-term interest payments as many other hospitals are doing.
4. Physical Facilities/Accumulated Depreciation: We certainly recognize that a portion of Greenwood Leflore Hospital’s physical plant is 65 years old, but the original 1952 hospital has seen several large additions and constant modernization of patient rooms, operating suites, technology and public areas. We are constantly refurbishing and updating our entire hospital to provide services that rival any in the state.
In summary, we will continue to study and evaluate the state auditor’s report and incorporate its findings into our plans for immediate and long-range improvements at Greenwood Leflore Hospital. We are proud of the excellent health care that we provide to Greenwood, Leflore County, the Delta and surrounding region. Challenges lie ahead, but we will never waiver on our commitment to providing the finest quality health care possible. Thank you for your support.
James H. Jackson Jr.
CEO
Greenwood Leflore Hospital
