Prior to the regular board meeting, the finance committee held a lengthy meeting—approaching 90 minutes—to discuss the financial condition being faced by the hospital.

Key indicators for the month of September continue to show expenses out-weighing net revenues.

September net revenue was $3,080,578, compared to $3,181,716 for August. Current year-to-date revenue figures are $18,254,050 compared to last year-to-date $18,737,365.

Expenses for September were $3,208,268 compared to August $3,375,192; with current year to date $19,998,309, compared to last year-to-date $18,956,279.

Income loss from operations for September was a minus $147,690. The August income loss was minus $193,476. Year-to-date income loss is $1,744,259.

Committee Chair Glennie Bench said, “As the finance committee for this board we cannot fail to react to the financial situation we have seen occur over the last 12 months.”

Human Resource Director Cathy Willis reported 10 employees have agreed to take early retirement packages. That is expected to be a savings of $459,944 over the next five years. The hospital is also under a hiring freeze.

The salary line item for September is $1,656,357, down from $1,704,124 of August. Year-to-date figures for salaries are $9,912,831 for 2008 compared to $9,463,558 for this time in 2007.

The question was raised if the personnel cuts would have an effect on services.

Hospital CEO Jim Peak responded that in most cases other personnel can absorb the duties, but there are a couple of cases that could impact services provided. However, he said they are obligated to maintain a certain level of nursing care.

Bench said the staff has already started to address the largest portion of the expense sheet—salaries—but she believes there are other expenses that can and should be reduced. She said she would be meeting with Finance Director Billy Walker to go over the expenses line by line.

Walker said there were some examples of the hospital finding sources for purchasing specific items, such as the arm bands used at admission, at reduced costs.

It was suggested by Bench to incorporate the employees into the process, as they often see opportunities for cost savings.

Board says yes to bonuses – no to turkeysAs part of the human resources report, Willis asked for approval to continue the policy observed over the years of awarding year-end bonuses to all employees with more than one year of service in the amount of $20 per year of service. Willis said allocation had been made in the annual budget at a cost of $75,140.

Board member Charles Tyson spoke up saying that with the hospital revenue being $1.5 million off from this time last year, it didn’t make sense to give bonuses.

“I’m all for giving bonuses, but this makes no sense,” he said.

Another board member, Mary Breedlove, said she understood what he was saying, but it was her opinion that it is a tough year for everyone and these people are counting on this money at this time of year.

“Let’s continue it this year and if necessary cut it next year,” she suggested.

Bench spoke up saying, “It’s the last thing you want to cut if we can save that amount somewhere else. Every single line item is on the table.”

Following much discussion, the finance committee finally recommended, and the board later approved, giving the employee bonuses this year.

Next, the committee voted against continuing the tradition of giving away about 650 holiday turkeys. In the past, turkeys have been given to volunteers and other community folks. It was decided to find another way to recognize those persons.

Willis also indicated overtime hours are down in September from August by 905 hours.

Peak was questioned as to how our hospital compares to what is happening with others of similar size. He answered that most he is aware of are going through the same procedures—reducing staffs and cutting losses.

He said as long as the government continues to cut Medicare and Medicaid reimbursements, the hospitals will continue to have problems.

“You cannot fix reimbursements. Seventy-two percent of Memorial Hospital’s business comes from federal reimbursement or uninsureds,” Peak explained.

Foundation CommitteeThe Foundation Committee reported it had met and approval has been given to move the Gala to the new Kirbo Regional Center at the college.

Several equipment items were submitted for purchase from Gala proceeds. Peak said the medical staff would make the final recommendation on the equipment purchases.