Revenues flat, operating loss at EBCH
by Tom Coombe -
For the first time in several years, Ely-Bloomenson Community Hospital posted an operating loss.
In the fiscal year that ended Sept. 30, EBCH lost just over $106,000 and revenues were largely flat compared to the year before.
According to data presented at the hospital’s annual meeting of shareholders earlier this month, EBCH had revenue of $16,588,075, compared to expenditures of $16,694,09.
Outgoing hospital administrator John Fossum, who presented the report, noted that hospital revenue streams didn’t keep up with a rise in expenses in the preceding 12 months.
Revenue climbed by just 1.6 percent.
The deficit followed a series of modest gains the prevous four years, when EBCH posted operating revenue between $248,000 and $554,000 (see box).
Fossum, who has warned of challenges facing the Ely hospital given national changes in health care delivery as well as the local economy, noted the deficit but with little sense of alarm.
Despite the operating loss, EBCH retains a strong overall financial position, boasting a net worth of just under $20 million when factoring the assets of the hospital’s umbrella organization - the Ely-Bloomenson Community Hospital Fund.
Several years ago, hospital shareholders approved a restructuring of the hospital’s corporate set-up. It included a separation of the fund and hospital corporations to better protect local assets in the event a larger medical entity assumed operations of the hospital.
Fossum filled in for accountant Jim Spreitzer of Duluth and presented an array of statistics, including how Ely-Bloomenson compares with other hospitals around the state on various financial ratios.
Its 3.5 ratio of assets over liabilities presents quite favorably with other critical access hospitals in Minnesota, which average 2.7.
The hospital also has 165 days of cash on hand, well above the critical access average of 125 and up from 145 at the same time the year before.
Debt service ratios are within averages while the average age of the hospital plant is 15.2,
“What it means is the hospital is getting older and we have some investments we need to make in equipment,” said Fossum.
Fossum noted a continued decline in inpatient days that “very few people come into the hospital for an extended stay anymore,” and that Ely-Bloomenson needs to find ways to grow its revenue.
While inpatient days have fallen from 830 in 2013 to 651 this year, outpatient visits have jumped by about 25 percent in the same time period.
One potential avenue for financial growth is in surgical procedures, which have fallen by about one-third in four years.
Ely-Bloomenson hopes to reverse that trend with the hire of surgeon Robert Sevareid.
“Our hope is that the community rally behind Dr. Sevareid and we can provide more surgeries,” said Fossum.
Since closing the nursing home, Ely-Bloomenson has trimmed its workforce by more than half, with total workforce falling from 215 seven years ago to 96 today, and full-time equivalents falling from 172 to 86.9.
Fossum, who is set to retire in early-2018 after a 20-year stint, said Ely-Bloomenson made another major change this year by converting its medical records to the EPIC system used by clinic provider Essentia.
“It was an important step to put us on the same page with the doctors,” said Fossum. “About 95 percent of Minnesota patients now have medical records in the EPIC system.”
See graph in this week's Echo.
