Whidbey General Hospital will have a balanced budge in 2004.
Although the $82 million hospital budget — approved Monday night by the hospital’s board of commissioners — plans for a 15-percent increase in patient revenues next year, hospital officials are still worried about increasing write offs.
Hospital chief financial officer Doug Bishop, said the hospital is bracing for an 18.5-percent increase in write offs next year, which is a consistent trend over the past several years.
“Write offs are the fastest growing expense,” Bishop said. One of the common write offs Whidbey General sees is any balance left over after the hospital receives its Medicare reimbursements. The hospital is budgeting to lose $37.8 million in write offs next year.
Bishop said the amount the hospital write offs can change from month to month and depend on the types of patients admitted at the hospital. Unpredictable write offs were part of the reason the hospital went through layoffs last summer when they came in higher than expected.
The hospital is expecting some relief as Medicare reimbursements are expected to increase as a result of the federal Prescription Drug Bill. Hospital CEO Scott Rhine said that Whidbey General Hospital expects a full inflationary increase for Medicare reimbursements. He said the hospital expects a $14,000 increase in 2004, $29,000 in 2005 and $45,000 in 2006.
To further improve reimbursements, Rhine said the administration is looking at designating the hospital a “critical access hospital.” He said the hospital is going to study the advantages and disadvantages of such a designation in the next several months. He didn’t have any specifics yet during the board meeting.
Despite the concern about write offs, the hospital is planning for a $2 million fund balance by the end of next year. That is a far cry from the $770,000 the hospital lost at the end of 2002, a loss that sparked the first of two rounds of layoffs.
Bishop attributed the change to the new services the hospital offering this year.
Throughout 2003, Whidbey General Hospital began offering services such as pulmonary rehabilitation, epidural anesthesia and echocardiology. Those new services, coupled with new physicians on the island, are budgeted to earn the hospital $411,000 next year.
Doug Bishop said the new services should account for an 11-percent increase in revenues while a 4-percent fee increase accounts for the remainder. One goal the hospital has is to achieve a 5-percent fund balance. The administration want money available to help maintain and update hospital facilities.
The hospital is expected to save an additional $217,000 in programs that were eliminated, including the dental clinic in Oak Harbor and the physical therapy services offered on South Whidbey.
