Othello Hospital audit meets required procedures

Non-operating revenues helped Othello Community Hospital turn a profit in 2015. Patient revenues increased but so did expenses, according to information attached to the Washington Auditor’s Office report released Monday.

The hospital finished 2015 with a net financial position of $36,826,077, down from 2014, when OCH finished the year at $37,728,505. The audit report covered 2014 and 2015.

As for the audit, the hospital met all required procedures, it said. “Gross patient revenues improved fairly substantially from 2014 to 2015,” the report said.

“Gross patient revenue increased approximately $680,000, while outpatient revenue increased about $1.5 million. The increase in inpatient revenue came primarily in inpatient surgical services and inpatient acute care (including nursery boarding for newborn infants). The increase in outpatient revenue is largely attributable to substantial increases in outpatient surgical services and emergency care. There were also notable increases in outpatient radiology services and outpatient acute (observation) care.”

But even with increased patient revenue the hospital lost money, when only operating revenues and expenses are counted. The operating loss for 2015 was $2,355,415, compared to $105,231 in 2014.

The hospital had $1,452,987 in non-operating revenue, the report said.

“The district’s operating expenses increased overall by 5.84 percent from 2014 to 2015, in the amount of $930,000,” the report said. Employee salaries accounted for the largest percentage of the increase, about $390,000, and “purchased services,” which rose about $300,000. Supply costs rose about $120,000.

“The district incurred a deficit of revenues over expenses of $920,000 in 2015,” the report said. “That was a turnaround from the $1.36 million excess in revenue over expenses in 2014. While net patient revenues increased encouragingly in 2015, that increase was almost entirely offset by increased operating expenses. The turnaround from 2014 is most reflective of the decline in non-operating revenues, particularly the loss of Meaningful Use incentive payments.”

The “meaningful use” payments were designed “to assist hospitals and other medical care providers in upgrading their computer processes to make more meaningful use of patient care information,” the report said. It was a 3-year program.

Mark Bunch, OCH finance manager, said hospital officials are looking at different options to increase revenue. Those include some telemedicine services, including specialties like psychiatry. Hospital officials are also working with another local healthcare provider on a possible expansion of the hospital’s pediatric dentistry surgical services.