The McDonough District Hospital's Board of Directors Finance Committee met Wednesday, with Brittany Doll providing a Revenue Cycle Steering Committee update and Chief Finance Officer (CFO) Sherri Hitchcock presenting July's financial report.
Doll shared that the 10-member committee is going through the hospital's financials to identify issues and opportunities for improvements. One such area she mentioned to the committee was patient registration and optimizing that process through improving education for employees, an audit of the process and additional insurance training as a few examples. Cash posting, reconciliation and collections are other improvement areas, as is increasing data analytics across the board.
'We are looking at optimizing what we have and what we can and streamlining processes,' Doll explained.
When asked for a timeline for action, Doll pointed out that the problems they're finding took years to create, and it will take more than three weeks to find solutions.
Hitchcock shared that the hospital's FY2027 net operating revenue increased 18.3 percent from the following year, and while operating expenses have increased by 12.7 percent, they're favorable to the budget by nearly 7 percent. The net income was also favorable to the budget, and the operating margin for July is positive by slightly more than .75 percent, which is 118.4 percent higher over last year, she added. The hospital's days cash on hand continues to decrease, she reported, with the current days cash coming in at 139.6 days, which is down 49 days from the prior year. The hospital's debt service coverage ratio continues to be below bond requirements, Hitchcock noted in her report.
The areas with the largest net income include CT, the emergency department, the operating room (which had its highest volume since October 2020), chemistry and general radiology. Prescriptions through the MDH Community Pharmacy have increased, and the revenue stream from the newly-acquired McDonough Eye Associates has also helped boost the hospital's revenue. While the hospital's salary expenses are also favorable to the budget for the month, professional fees and utilities have taken a bite out of the budget.
'We did have to tap into our safety reserve due to payroll at the beginning of July, but with the Employee Retention Credits (a refundable federal tax credit created by the CARES Act in 2020), we should not have to tap into that reserve again,' she added.
Committee member Todd Lester stated he was 'ecstatic' that the net income for July was positive, and Hitchcock shared that the numbers from last month are 'encouraging.'
'Even though we have a cash flow loss of $1.8 million, compared to last year we're doing much better,' she concluded.
