Hospital receives ‘clean’ audit

Auditors gave Weiser Memorial Hospital passing marks on the hospital’s financial statements.

 A summary of the audit was presented to hospital board members last Thursday by CPA Kevin Smith who gave the financial statements a “clean” opinion on the numbers. 

 Smith covered the financials and also provided data that showed how Weiser Memorial was doing in comparison to other Idaho critical access hospitals. 

 The audit also included the financial statements of the hospital foundation, which were previously done separately from the hospital.

 Smith noted positive trends in the hospital’s financials, including a 14 percent increase in net patient revenue year over year. The 2017 net patient revenue of $14.7 million increased to $16.9 million in 2018.

 While net patient revenue wentup, bad debt as a percentage of patient revenue went down, another positive sign. 

 The hospital recorded $1.7 million in bad debt in 2017, which was 11 percent of net patient revenue. The percentage dropped to 10 percent of patient revenue in 2018, even though the amount of bad debt was up slightly to $1.8 million, a result of better numbers on the revenue side.

 The hospital saw a better cash flow position year over year. The number of days with enough cash on hand to operate increased from 11 days in 2017 to 16.4 days in 2018. 

 The hospital lags the three other hospitals cited in the audit, which had from 121 days to 177 days worth of cash on hand.

 “Your trend is going in the right direction,” Smith said.

 The CPA said additional revenue is expected for the hospital as third-party payor settlements with Medicare and Medicaid regarding reimbursement from prior years are reopened and reviewed. The result is additional “found” money that the hospital can bill for that was not received in the initial payment.

 The appeals are expected to add at least $500,000 to the hospital’s net income and cash flow this year as they are processed over the next six months to a year.

 The hospital was paid faster in fiscal year 2018 than in 2017 by reducing the amount of time money owed to the hospital, such as patient bills, sits in accounts receivable, another positive trend, Smith said. 

 The number of days in accounts receivable dropped from 55.3 days in 2017 to 49 days in 2018. Simiar hospitals ranged from 45.8 days to 57 days.

 Smith said the hospital is doing good by keeping its salaries and benefits right where they are as a percentage of total operating expenses. The current percentage is below 50 percent, which is positive, he said. 

 Salaries and benefits at WMH as a percentage of total operating expenses crept up slightly from 48.7 percent in 2017 to 49.1 percent in 2018, but was still below 50 percent and similar to other hospitals in Idaho. 

 Comparative figures from other hospitals cited in the audit ranged from 45.1 percent on the low side to 53 percent on the high side.

 The operating margin at WMH was on the plus side at 2.1 percent for 2018, an increase from the minus 8.9 percent recorded in 2017. Operating margin is usually computed only with revenues and costs related to patient care. 

 Comparative data in the audit indicated that sampled hospitals had operating margins that ranged from minus 1.8 percent to 6.2 percent. 

 The total margin at WHS was 5 percent in 2018, an increase over the minus 3.7 percent posted in 2017.