Full Board to Vote on the Budget at Monday's Meeting
The McDonough District Hospital Finance Committee voted unanimously Wednesday afternoon to recommend the hospital’s Fiscal Year 2027 budget to the MDH Board of Directors. The Board is expected to vote on the budget at their meeting Monday evening.
Alexis Vonholt and Terry Hostert presented the budget to the finance committee at its noontime meeting Wednesday. The FY27 budget outlines a total operating revenue of $100.6 million and total operating expenses at $106.2 million, for a loss of $5.6 million (compared to FY26 loss of $9.4 million). Favorable impacts to the FY27 budget totaling $3.4 million include expanding the orthopedic program, reducing the loss of the medical clinic by $1.1 million, reducing the Community Pharmacy's loss by halfa- million dollars and reducing the cost of the Monmouth Clinic by $128,000.
The budgeted FY27 revenue was calculated based on the FY26 actual annualized revenue multiplied by the state multiplier and annual price increase. The top five revenue-generating departments include the ER ($25.7M), CT ($22.8M), operating room ($19.5M), inpatient pharmacy ($16M) and chemistry ($8.8M). Patient revenue has also increased by 10.4 percent. With the recent addition of Dr. Jill Brody and Dr. Timothy Williams ophthalmology/optometry practice, McDonough Eye Care, additional patient revenue of $2.6 million is anticipated for FY27. Budgeted salaries and wages for 489.8 paid employees will increase by 5.2 percent.
Strategies to increase revenue at the Community Pharmacy include transitioning all hospital employees to the MDH Community Pharmacy to fill prescriptions; optimize opportunities for patients leaving the hospital to fill their prescription on site; work with area clinics to encourage patient use of the Community Pharmacy; and establish more long-term care contracts in the region. Other financial stability plans include reorganizing Health Services Building 2 to a Rural Health Clinic; move clinic services to the hospital; swing bed utilization; and hospital share designation. There are also numerous capital projects, from equipment needs to technology upgrades, necessary.
CFO Sherri Hitchcock also presented key highlights from the FY26 budget. Net operating revenue was down 4.7 percent year-over-year, and the operating margin was down from -6.35 percent to -12.86 percent year-over-year. Patient admissions also decreased by 25.9 percent. A $2 million distribution from the Fellheimer Trust increased non-operating revenue, and the new ophthalmology/ optometry acquisition contributing $600,000.
Other items on Monday's Board of Directors agenda were unavailable at press time.
