By Pat Hammert/Staff Writer

Parkview Hospital trustees last week bumped up the cost of doing business by 8 percent to $21 million as they approved a new hospital budget for the coming fiscal year.

The new budget comes as Parkview officials anticipate posting a net loss of $131,000 as the hospital ends its fiscal year on June 30.
The budget consists only of projections or assumptions of the costs to operate the hospital, said Administrator Lex Smith, from July 1 through June 30, 2007.

An “astonishing” trend, he said, is the revenues produced from outpatient services as opposed to that derived from admissions.

“Three years ago, it was 50 percent out-patient, 50 percent inpatient,” he said. Income from outpatient services will reach 58 percent of the total revenue. Smith said that could reach 60 percent as the hospital expands its outpatient specialty clinic For instance, an Oklahoma City-based orthopedic surgeon has been approved to begin clinics once a week.

More than $3.3 million more will flow through the hospital coffers next year. But with expenses and provisions for bad debts, the profit margin is projected at just under $50,000, he said.

The board also approved a 3.5 percent cost of living raise for the administrator which will add $4,200 to his $120,000 base annual salary. Other employees will have a 4 percent performance raise plugged into the budget that is dependent upon their individual evaluation.

Trustees will review whether Smith will receive an incentive bonus after the auditors provide end-of-year reports, said trustee Michael Compton, who serves on the hospital finance committee. Trustees last year set out guidelines for the incentive bonus which required a $100,000 profit margin as the hospital ends the year and a spike in the non-Medicare-Medicaid revenues.

Compton said it does not appear a bonus will be forthcoming. The hospital still continues to rely heavily on federal reimbursements through Medicare-Medicaid. Forty-one percent of the hospital income is Medicare, 21 percent Medicaid, 21 percent private insurance and 17 percent self-paying.

“Medicare and Medicaid patients make a huge impact on the hospital,” Smith said. The hospital’s contract with private payers such as Blue Cross, Champus, Indian Health Service, Oklahoma State and Education Insurance Group and First Health adjusts off a substantial amount of charges each year under the contracts, he said.

The hospital continues to “struggle” to find available funds for building renovations and upgrades in equipment, he said. A $1.2 million upgrade in the emergency room is being planned. Shortages of qualified personnel are ongoing, escalating the salary requirements for nurses, X-ray technicians, lab techs and physician assistants.

Smith said the hospital has been working in the Immigration and Naturalization Service to bring in a qualified lab technician from the Philippines.

Room rates will increase from $525 per day to $575 and selected ancillary rates will increase. Admissions were down slightly at 1,750 for the year, but births were up at the hospital for the 2005-2006 period. Average length of stay was down, surgeries were down and home health visits down. A new surgeon signed two months ago should increase use of the operating room, Smith said.

The public relations budget was cut by more than half. About $98,000 is plugged into the coming year’s budget for “community awareness.”
Last Friday Gov. Brad Henry signed House Bill 2842, called the Medicaid reform bill, designed to pump in $93 million to bolster federal funding to hospitals and doctors.

“The bad news is the Legislature hasn’t appropriated the funds for it,” Smith said. If funding is approved, that would mean $400,000 to $500,000 in additional reimbursements, he said.

The hospital should also realize upwards of $440,000 during the coming year in subsidies for its financially ailing ambulance service.

Although the Hinton and Geary ambulance subsidies to the hospital remain unchanged, trustees are expected to request an increase from both those property-tax funded emergency medical services districts.

For purposes of budget planning, Geary’s yearly subsidy was noted as an increase, from $24,000 to $40,000, and Hinton-Sugar Creek’s from $120,000 to $150,000. For the coming fiscal year, El Reno committed to an ambulance subsidy of $200,000 to $250,000 from city coffers.