Othello hospital approves budget

OTHELLO - Othello Community Hospital approved a $32 million operating budget, including an increase in cost for patient services in 2009.

Administrator Harry Geller said services will cost an average 8 percent more next year.

"That gives us an operating margin of about 4.5 percent," he said.

The industry standard is to have a 4 to 5 percent operating margin, Geller said.

Othello's margin leaves $800,000 in profit at the end of the year.

Geller said if Medicaid and Medicare reimbursed hospitals fairly, such drastic increases would be unnecessary. He said Medicaid and Medicare reimburse hospitals less than what it costs to treat patients.

"Because of that you raise your costs higher than you would otherwise have to," Geller said.

Without a profit, the hospital cannot replace aging equipment or upgrade technology, Geller said. In addition, inflation for health care is greater than for other services, and it is recently more difficult to borrow money, he said.

Major projects in the hospital's $1.5 million capital budget include a remodel of the nursery, the purchase of a chemistry analyzer, and software upgrades.

The biggest portion of the capital budget is for software upgrades.

Computer services are provided through Inland Northwest Health Services in Spokane, Geller said.

"They are going to upgrade their software in the next couple of years," he said.

When Inland upgrades its software, Othello Community Hospital will need to be at the same level, he said.

The hospital set aside $750,000 for the upgrades, although it is unknown what the cost will be, Geller said.

Software is $250,000, and installation could exceed the cost of software, Geller said.

He anticipated the upgrade could occur in 2009 or 2010.

In addition, the hospital allocated $160,000 for an upgrade to the hospital's nursery.

"We're not going to do that until we complete our master facility plan," Geller noted.

A consultant is going to look at hospital-wide space needs.

The hospital set aside $110,000 for a chemistry analyzer.