Board OKs TMH budget with decreased projected profits
• 2009 :$22,847,370 (Total revenue), $20,573,699 (Total expenses), $2,273,671 (Profit)
• 2008:$20,774,370 (Total revenue), $18,034,079 (Total expenses), $2,740,291 (Profit)
Craig A budget process that began in September 2008 ended Thursday night for The Memorial Hospital.
In a special meeting, the hospital board unanimously approved, 5-0, its 2009 budget.
The budget will now be submitted to the Moffat County Commission for final approval.
Tinneal Gerber, Moffat County budget analyst, said the commission would vote on the submitted budgets at its Jan. 20 meeting.
Barry Bergman, TMH chief financial officer, said the budget projects higher revenues this year than last, a not so easy feat given the current state of the national economy.
"I would say what's remarkable about this, is in the face of (an economic downturn) we are still going to project higher revenues than 2008," Bergman said.
The budget was built using a "conservative" approach, the CFO told the board Thursday.
Projected total revenue in 2009, according to the approved budget, is $22.8 million. A year ago, that figure was $20.7.
Hospital officials reached the total revenue figure by estimating $32.8 million this year in gross patient revenue, a figure that includes inpatient and outpatient charges. The budget also anticipates $11.6 million in deductions from contractual adjustments, charity care and bad debt.
That leaves an estimated $21.2 in net patient revenue. Add to that $1.6 million through budget items listed as other operating revenue, county support and other non-operating revenue, and the $22.8 revenue figure is reached.
However, while the budget projects higher revenues in 2009 than 2008, it also estimates more expenses.
The hospital projects expenses to increase by about $2.5 million in 2009 from 2008. Expenses are estimated at $20.5 million this year; last year they were budgeted at about $18 million.
Major expenses for the year include salaries and expenses ($8.3 million), supplies ($2.3 million), employee benefits ($1.8 million), purchased services ($1.3 million) and professional fees ($1.1 million).
Overall, the TMH budget projects a less profitable 2009.
The estimated profit is $2.2 million, according to the budget, down from 2008's $2.7 million projection.
Bergman explained the difference between this year's estimates and last year's.
"Both expenses and revenues are going to rise," he said, "but expenses are rising quicker than revenue."
Bergman said this year's budget was submitted later to Moffat County officials than last year because of other matters that took precedence.
Those included, the CFO said, finalizing a loan process for a new hospital through the federal Department of Housing and Urban Development, systems implementation, start-up of OB/GYN service and other activities.
This year, there was less than a month's delay in finalizing the budget compared to last year, he said. The county did receive a preliminary budget Dec. 1, 2008, and that budget closely resembled what was approved Thursday.
TMH is in the process of closing out 2008's financials.
It's unknown as of now how close actual year-end numbers will be to the 2008 budget projections, although Bergman said that as of the end of November, actual figures were within 1 percent of projections.