Cash flow at hospital still an issue

Jay County Hospital saw a negative cash flow of about $4.6 million from operational activities in the fiscal year that ended Sept. 30, hospital financial officer Don Michael told the board of trustees Wednesday.

Several “non-typical” items of income — some of them one-time adjustments — reduced the negative cash flow to about $2.7 million for the year just ended.

“We’ve been using cash at an accelerated rate the past two years,” Michael told the board.

Year-end figures are still unofficial. “They haven’t been audited (yet),” said Michael. “And every year there are audit adjustments.”

Unaudited figures show the hospital ending the year in the black by $1,255,270, but that number is distorted by a combination of “special revenues” and the impact of freezing the hospital’s defined benefit pension plan. 

Freezing the pension plan created a one-time adjustment on paper of $3,492,000, while the one-time “special revenues” amount to almost $2 million.

Without those two factors, the hospital’s books would have shown about $4 million in red ink for the year.

“We continue to struggle with our overall net operating loss,” said board member Bill Hinkle, who chairs the finance and provider operations committee.

Largely because of the ongoing financial challenges, the hospital is currently engaged in finalizing integration with IU Health, which is now expected to be complete by March of 2018.

Those talks were the subject of a joint executive session of the hospital board, Jay County Commissioners, and the Jay County Council immediately prior to the board’s regular meeting.

JCH chief executive officer reviewed September’s statistics for the board Wednesday, finding both good points and areas of continued concern.

“This was a good month for us in September” in terms of patient volume and admissions. “But we’re still behind where we were last year.”

He noted that there were more than 100 observation patients this year and there was continued good growth in out-patient surgery. But out-patient surgery, resulting in fewer admissions, also has a downside in terms of hospital revenues.

The hospital recorded 50 percent more infant births in the fiscal year, with 93 year to date.

In a bit of good news, board members reported that premiums for business and property insurance, including workers’ compensation, are going to be down about $6,000 to $247,728 per year. “Insurance is a major expense for us,” said board member Roger Locker.

Most of that decrease was the result of a drop in the workers’ compensation premium, which Hyatt attributed to safety-conscious employees.

“I’ve got to give our team members a lot of credit,” he said. “They work in a dangerous environment.”

Hyatt also told the board the medical staff has been giving serious review to the question of prescribing pain-killers that have become a factor in the nation’s opiod crisis. He credited Dr. Eric Betts for leading the way on peer review and the promotion of best practices.

“At a per capita rate, we are prescribing less controlled substances than our peers and the Indiana average,” said Hyatt. “Our medical staff is taking this issue extremely seriously.”

September saw 77 members of the Jay County Hospital Auxiliary provide 1,410.75 hours of volunteer support. The auxiliary is currently planning for its gift shop open house on Nov. 2 and 3 and the Celebration of Lights, set for Nov. 14 at 6:30 p.m.