By Pat Hammert/Staff Writer

As Parkview Hospital trustees met last week, about $53,000 was spent on equipment needs, the chief operating officer earned a bonus and plans were made for another in-house construction project.

An incentive bonus of $4,239 was approved for Lex Smith, hospital administrator. A bonus means Smith is meeting some of the objectives and goals of the board of trustees, said Dale Bynum, trustee chairman.

The bonus given was less than anticipated, he said. At June 30 when the hospital closed out the fiscal year, auditors had projected a bonus amounting to between $6,000 and $7,000 could be provided.

A large part of the bonus is calculated on that portion of profit above $100,000 each year, Bynum said. A recent audit showed the hospital cleared a $250,000 profit at June 30.

“His bonus is set up each year with a maximum of $20,000. It is paid partly on a bottom line (figure) but also on the ratio of private-pay versus Medicare patients,” Bynum said. “That ratio improved but not enough. That is the emphasis we wanted this year and in succeeding years — to get the hospital on a more private-pay basis.”

Bynum said in June the board gave Smith a vote of confidence by extending his contract to June 2008. He will maintain the same annual salary of $120,000 plus benefits. Smith last received a salary and car allowance boost in July 2002.

His salary was increased by $11,000 a year at that time. He also earns a yearly $12,000 car allowance.

Auditors said the hospital made a $253,000 profit in last year’s operations that ended June 30. That represents about a 2 percent profit margin. But officials cautioned the hospital has about $1 million in unmet capital equipment and facility improvement needs.

Not-for-profits such as Parkview strive to be at 5 percent profit margin, auditors say. A $20.4 million operating budget for this fiscal year is anticipated.

In hospital business last week, trustees heard a report from Jim Johnson, director of plant services, on renovation of the rehabilitation therapy department using in-house laborers at a cost of $23,000.

Trustees also approved the purchase of a blood gas analyzer for $11,285 and approved replacing a mailing system for $9,424 and $32,735 for a scanning and imaging system. Approval of an information system for the laboratory in the amount of $17,000 was postponed until they could make sure it is compatible with the hospital’s computer data system, Bynum said.

In June, a rate increase was initiated for rooms from $500 to $525 a day and an inflationary 5 percent increase in all other services except ambulance and home health. Employees also received a 3.5 percent increase in salary.

Profit-loss figures for emergency ambulance service and home health services remain in the red. An unsuccessful request for an ambulance service subsidy from the city was made last year and voters turned down an EMS 522 district.