Rice ends another year in the black
WILLMAR -- Rice Memorial Hospital ended another year in the black, according to preliminary financial figures for 2009.
The city-owned hospital and its associated entities, the Rice Care Center and Rice Home Medical, earned a combined return of just under 1 percent on $92.6 million in net operating expenses. That translates into a profit of $684,000 for the year.
The official audit of the hospital's finances for 2009 will start on Monday. The auditor's report will be presented to the board of directors in April.
Preliminary figures were shared Friday with the hospital board finance committee.
It's a positive sign that Rice has remained profitable during difficult economic times for hospitals, said Bill Fenske, the chief financial officer at Rice.
"We're pleased," he said.
Rice made especially significant gains in its cash position, which grew from $9.6 million at the beginning of the year to $16.2 million by the end of 2009.
"That was a real plus in what we were able to accomplish this year," Fenske said. "That number is going to significantly increase as our profitability increases."
But the hospital still fell short of its goal of making at least a 1 percent profit for the year.
Rice Hospital itself also sustained a $250,000 operating loss last year, although income the hospital receives from investments and joint ventures helped boost its overall margin to a net of $270,000.
Patient volume dropped dramatically late in the year, Fenske said. During December, for instance, the average daily census was 26 patients, "and we had budgeted for 40," he said.
The result was an $80,000 loss for the month of December, even though revenue was ahead of budget.
"What that means is we have to do a lot more outpatient work to make up for less inpatient activity," Fenske said.
On the cost side, the hospital had to absorb extra expenses in December as well, including major repairs to an ambulance and the cost of bringing in locum tenens physicians to staff the emergency room.
Sixty to 70 percent of ER physician coverage is currently by temporary physicians, Fenske said. "That's very expensive."
Being able to hire a permanent doctor would help, said Mike Schramm, the hospital's chief executive. Rice is in the process of recruiting, "but it's coming slower than we would like," he said.
Hospital officials are optimistic that inpatient volume will creep back up this year. A new orthopedic surgeon is arriving in May, which should help boost the number of surgeries, Schramm said.
Now that four hospitalists are also on board, Rice plans to promote this service more aggressively among the region's physicians who might be likely to refer cases to Willmar. Hospitalists are doctors, nurse practitioner and physcian assistants who manage patients' treatment.