Quincy hospital finances improving
Luke Zarecor, an accountant for Quincy Valley Medical Center, goes over the results of the hospital’s 2021 financial audit during the commission meeting Tuesday.
CHERYL SCHWEIZER/COLUMBIA BASIN HERALD
Staff Writer | August 26, 2022 1:25 AM
QUINCY — Financially, 2021 was a good year for Quincy Valley Medical Center.
Luke Zarecor, of the Spokane Valley accounting firm DZA, said he attended the Aug. 22 board meeting in part to recognize the work done by hospital employees and board members.
“The reason I wanted to come in person this year, in particular, is to say congratulations for an amazing job,” Zarecor said. “Going back six, seven years ago when I first started here, your registered warrants were greater than your net patient service revenue in one year. And I did not know what the path forward was.”
Registered warrants are issued by junior taxing districts, like the hospital, when they don’t have enough cash on hand to pay their obligations. The junior taxing district borrows money from Grant County to pay its bills, then pays the money back with interest.
“This financial statement (for 2021) shows no registered warrants,” Zarecor said.
At the end of 2020, the hospital owed about $2.3 million in warrants.
The hospital finished 2021 with $5.1 million in the bank, compared to a loss of $2.15 million in 2020.
Zarecor said QVMC employees did a good job estimating how much the hospital would receive in payment for its services.
“That’s one of the biggest risk factors we see,” he said.
Quincy hospital has patients who use Medicare and Medicaid, as well as private insurance. Because of the way the system is structured, any hospital must estimate the amount of money it will actually receive.
“We didn’t have to make any adjustments. That tells me your finance team did a very good job estimating that amount, which is important because I’ve seen that be a big number change every now and then, which impacts the bottom line,” he said.
Hospital administrator Glenda Bishop said the district was required to pay some money back to the Medicare program. Zarecor said that’s actually a positive sign.
“This is going to sound really counterintuitive, but you want payables,” he said. “Medicare is a break-even program. They’re going to pay you the true cost of taking care of their beneficiaries, actually a little bit less than the true cost, not a dollar more.”
The Medicare program will reimburse a medical facility, QVMC in this case, throughout the year, based on what it has cost that facility to provide care in the past, Zarecor said. At the end of the year, Medicare officials do an analysis of the actual cost of caring for patients covered under the program. If costs were higher than the past average, Medicare pays the difference; if costs were lower, they take the money back. Medicare taking money back is called a payable.
“Ultimately, payables - especially if you know they’re coming, which you do - are good things. It means you’re operating more efficiently every year, and you’re going to be more financially healthy going forward,” he said.
The hospital’s revenue increased from about $7.9 million in 2021 to about $9.7 million in 2022. Zarecor attributed the increase to services QVMC has added over time, including a physical therapy department and treatment for sores that break the skin, called wound care.
Hospital officials have done a good job controlling costs, especially labor costs, he said.
Quincy resident Dave Dormaier asked about money QVMC received during the COVID-19 pandemic. He asked how the end of that funding would affect the hospital’s finances going forward.
Bishop said QVMC, after consulting with its attorneys and accountants, set up a separate account for the coronavirus relief funds. The rules on how the money could be spent were unclear, she said.
“That money was not used,” she said. “That money did not go towards paying off our warrants.”
Board chair Randy Zolman said the district still has the funds.
“We’re leaving that, basically, like a reserve account at this point,” Zolman said.
Cheryl Schweizer may be reached at email@example.com.