Big loss seen as temporary for CMC
Coulee Medical Center turned in postive financial results for the often-gloomy month of December, a high spot on what has been a bumpy landscape for the hospital this year, and a consulting finance expert sees a smoother road ahead.
Its $192,243 gain for the month gleams compared to losses in recent months and a total loss for the year of a whopping $5.7 million, due mostly to a decision to stop spending huge amounts to upgrade its electronic health records system.
Even without that large cost showing up all at once instead of ammortized over a period of years, CMC ended the year about $1.7 million under its projected break-even ($11,001) net gain on $33.9 million in total patient revenue (before deductions for insurance deals).
So it’s noteworthy that Chris Bjornberg sees the enterprise in such a rosy light. The consulting small hospital financial specialist sees CMC as among those hospitals “most ready to take off.”
“It’s probably one of the best ones I’ve ever worked with in terms of growth potential,” said the Idaho-based accountant who has found a niche learning the intracies of accounting for hospitals with the federal “critical access hospital” designation.
Bjornberg noted the big loss would work for the hospital in gaining more money from Medicare than it otherwise would have when the federal government reconciles its “cost report,” as critical access facilities are reimbursed on a cost-plus basis.
That’s not to say everything is rosy. At the end of December, CMC was writing county warrants instead of its own checks and holding just 4.5 days of operating cash, compared to an industry average of about 52 days. Bjornberg said that is tied to a very long average collection time on accounts receivable (money it’s owed by patients), and management has made adjustments to address that.
Long term, though, the consultant who has been in the books for two months now sees a lot to like, including an engaged board intent on growth, a talented staff and other factors.
“These guys have a pretty good head on their shoulders,” he observed, because the hospital district commissioners demonstrate an ability to address the coming changes in healthcare.
He said he wouldn’t be surprised to see the enterprise boost its total revenue from that $33.9 million to more than $50 million in coming years.