Rice Memorial Hospital starts fiscal year strong
WILLMAR -- For the first time in at least five years, Rice Memorial Hospital has started its fiscal year by generating a profit.
In another financial development, the hospital has passed the $50 million mark in net assets, triggering a larger payment in lieu of taxes to the city of Willmar.
Hospital officials reported to the hospital board finance committee Wednesday that the Rice organization, which includes the city-owned hospital, Rice Care Center and Rice Home Medical, posted a net gain of just under $320,000 in January.
It's good news for the hospital, which has struggled in recent years with a sluggish financial start to the year.
"This is the first January we have made money in years," Bill Fenske, chief financial officer said.
He said hospital executives are "very, very pleased with how we've started out the year. We're not behind the eight-ball as we've been so many years before."
It also will be the first time the hospital's payment in lieu of taxes to the city will exceed a base amount that was negotiated five years ago.
The formula is set at a minimum of $200,000 and is pegged to a percentage of the hospital's net assets. As Rice's net assets increase, the payment, which takes the place of property taxes and goes into city coffers each year, also will go up.
Compared to a year ago, inpatient admissions were up significantly. Some of the increase came in surgeries, which were 6 percent more than budget and more than 10 percent higher than a year ago.
Although inpatient activity only accounts for one-third of Rice Hospital's overall volume, "it is still such a critical piece," Fenske said. "If inpatient census is at or above budget, we're going to have a good month."
The 2011 budget is based on an average daily census of 30 inpatients. Numbers in January were in the high 30s, however, and this trend has continued into February, Fenske said.
On Monday and Tuesday of this week, the census was more than 40 patients, he said. "Inpatient activity is just busy right now."
In spite of spending more on drugs, supplies and other costs that come with increased patient volume, Rice was able to hold operating expenses close to budget.
One cost that has been harder to control this winter: snow removal.
Frequent and heavy snows have resulted in a significantly higher bill for clearing parking lots and sidewalks, Fenske said.
"We don't have enough parking space on campus so we have to pile up the snow and then remove it in trucks," he said. "That gets to be a very expensive thing."