Revenue, expenses both up at Okanogan Douglas Hospital

Profit and expenses, how to increase profits and keep expenses in line, once again were a topic of discussion at the regular meeting of the Okanogan Douglas Hospital board Monday, Oct. 27.

Through Sept. 30 the hospital is showing a $230,069.97 profit for 2008, but the hospital lost $41,159.97 in September. Chief financial officer Jennifer Munson said inpatient revenue is about $43,000 over the budget projection for the year, but was about $12,000 under the monthly projection for September. Outpatient revenue has been strong all year and that continued in September; it was above the budget projection for the month by about $26,000 and is about $293,000 over the budget projection for the year.

But expenses are higher too, Munson said, and so are the contractual adjustments (the difference between the amount the hospital charges for a service and what it actually gets paid). Contractual adjustments are about $183,000 over the budget projection, Munson said. But they go up as revenue goes up, she said.

Hospital administrator Dale Polla said hospitals around the state, including Okanogan Douglas Hospital, are looking at ways to reduce the contractual adjustments; the last three or four years they've increased by about 9 percent, he said. But, Polla said, in his opinion the opportunities are limited.

A lot of expense comes from patients who come to the emergency room; the ER is a pretty expensive venue. Board member Bill Bayless said one way to address that might be an "urgent care" clinic in the hospital, where people who are sick but whose illnesses aren't emergencies could be treated.

Munson said diverting people from the ER would reduce revenue, but Polla said the hospital is losing some revenue anyway due to the relatively higher costs of ER treatment. He said he thinks the urgent care clinic could have some potential. Board member Dan Webster asked if the facility had enough room for room for one; Polla said there's some room, but he didn't know how much.

Part of the reason some expenses are higher than the budget projection is that some new programs weren't factored in, Munson said, including costs associated with the new rural health clinic in Mansfield and the new cardiopulmonary rehabilitation unit.

In other business, Bayless reported that the building for the Mansfield clinic should be delivered in early November, possibly as early as Nov. 6. State officials still must give final approval on the plans, but that process is coming along too, said Sandy Walter, the chief of operations. However, there's still no opening date.

Walter said expenses in the hospital's Medicare program will be audited in 2009 as part of the Medicare Recovery Audit Contractor program. That's a new program that is being expanded to all 50 states; Washington's turn comes next year. Auditors reviewing only Medicare program expenses will look both for overpayment and underpayment.