Halfway through the fiscal year, hospital budget brings hope

A nearly $21,000 Johnson County Healthcare Center profit might not seem like much – especially since CEO Sean McCallister had budgeted for over $45,000 in profit by this point.

But when you consider that the healthcare center had already accumulated a $459,437 net loss by this point in fiscal 2019, the $20,734 profit realized during the first half of fiscal year 2020 looks all the more impressive, according to McCallister.

“Keep in mind that six months into the fiscal year last year, we were losing almost $500,000,” McCallister said. “So to be making a nearly $21,000 profit this year is pretty impressive … $21,000 is a small margin, but it is a margin, and we’ll take what we can get.”

The positive budget figures are the result of a lot of hard work on the part of the healthcare center staff, McCallister said. His team has been looking for inefficiencies and ways to turn the healthcare center’s financial situation around, he said.

The healthcare center has implemented numerous changes in recent months – from phasing out a chemotherapy program that lost $508,000 during the last two fiscal years to “right-sizing” departments that had been overstaffed in the past, McCallister said. McCallister also reevaluated the healthcare center’s cost report process, which will lead to a major payout of as much as $1 million from Medicare in a lump payment that will be received later this year.

“After all our work, we are starting to see positive impacts,” McCallister said. “I foresee that we will continue to see these impacts in the coming months. Our leadership team has been doing a nice job in managing our expenses and cost structure.”

Gross patient revenue has increased by over $1 million year to year, McCallister said. During the first six months of fiscal 2019, the healthcare center collected $14.8 million in gross patient revenue. During the first six months of fiscal 2020, the center collected $15.9 million. McCallister attributed the increase in revenue to price increases that were implemented at the start of the fiscal year.

Gross patient revenue at the hospital increased by $922,000 year to year, with the Family Medical Center seeing a $106,000 increase and the Amie Holt Care Center seeing a $72,000 increase.

While operating expenses are slightly higher than they were during the first six months of fiscal 2019, McCallister said, he hopes that they will continue to decrease in the coming months as his various money-saving changes make an impact. Expenses topped $11.6 million during the fist six months of fiscal 2020 – up from $11.5 million during the first six months of fiscal 2020.

The largest increase in expenses is the supplies line item, which is over $597,000 higher than it was during the first six months of fiscal 2019, McCallister said. Most of that increase is due to the dollars that the healthcare center spent on chemotherapy drugs. With the chemotherapy program phasing out by the end of March, McCallister said, he hoped to see expenses even out.

Deductions from revenue continue to be an ongoing issue for the healthcare center. Deductions topped $5.6 million during the first six months of fiscal 2020 – up from $4.9 million during the first six months of fiscal 2019.

The healthcare center treats all patients regardless of their ability to pay or have their expenses covered by Medicaid, Medicare or private insurance. Expenses that are deemed uncollectable within 180 days are written off and, thus, deducted from revenue.

McCallister is working to find a solution to the high accounts receivable balance, which is the money owed to the hospital by its customers. Reducing the receivables could lead to a lower number of write-offs, McCallister said.

Stephen Dow covers a variety of beats for the Buffalo Bulletin including the Johnson County Commissioners and JCSD #1. Stephen is a Billings native who joined the Bulletin in 2016.

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