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VAN DYKE -- Although its primary
mission is to foster the provision of health care services to the
community, the Comanche County Medical Center’s Board, spent most of
the time in its most recent meeting focused on financial matters.
The Board of Directors of the Comanche
County Consolidated Hospital District, CCMC’s governing body, held
its regular monthly meeting on Tuesday, January 27. Board president
Gale Easley conducted the meeting with members Joe Locke, Charles
Mazurek, Janna Morris and Billy Ray Evans participating. Karen Petty
was absent.
The Board first heard a brief Medical
Staff Report by Chief of Staff Dr. Dwayne Miller. Dr. Miller noted
that the Medical Staff has recommended the reappointment of Dr.
Richard W. Byrd to the Courtesy Medical Staff with the same
privileges he has had for years.
Since there were no issues to be
discussed, Chief Executive Officer Kevin Storey advised Easley that
a closed session was not required for action on the reappointment.
Charles Mazurek then offered a motion to approve the Medical Staff's
recommendation, Joe Locke seconded and the vote of approval was
unanimous.
Annual Audit Report
Michael Oatman, a partner in the Waco
Certified Public Accounting firm of Parrish, Moody & Fikes, was then
called upon to present the results of his firm's annual audit of the
hospital district. Oatman first displayed a map of Texas with the
100 plus hospital clients that his firm serves. He also briefly
discussed adverse hospital regulatory trends that his firm has
observed.
Oatman displayed a chart showing ten
comparative hospitals, all of which had suffered significant
earnings declines in their most recently completed fiscal years, and
eight of which were experiencing large losses produced by generally
flat revenues being overwhelmed by rapidly increasing costs.
The audit report presented was for the
District's fiscal year ending on June 30, 2008. It showed a net loss
of $432,079 in the 2008 fiscal year, increased from a loss of
$18,583 in 2007.
The District's unaudited financial
statements presented in a Board meeting last July showed a loss of
$1,022,000 for the 2008 fiscal year. At that same time management
indicated they expected a large and favorable adjustment to earnings
to be made when the annual cost report was completed.
Oatman noted that there were no
discrepancies, obstructions nor other worrisome audit problems
observed. He was complimentary of the state of the financial books
and records.
The audit report included a so-called
"clean opinion" which stated that the hospital's financial
statements "present fairly", in all material respects, the financial
position of the hospital district in conformity with generally
accepted accounting principles.
The only significant audit adjustment
made was a favorable change to earnings of $611,000 to reflect the
annual cost report settlement with Medicare and Medicaid.
Most larger hospitals are paid a
prospective fee for services performed for Medicare and Medicaid
patients and then, after the completion of the annual audit, a final
settlement is made based upon the actual costs of the services
performed. The cost report settlements can be either positive or
negative, depending upon whether the prospective payment rates under
or over reimburse the hospital's costs.
The audit report noted some of the more
significant challenges the hospital dealt with during the subject
fiscal year including the replacement of all senior management after
a brief period of interim managers, dealing with the loss of two
important medical staff members, the revamping of the physicians'
contracts, and the arrangement of financing and the purchase of new
financial information, laboratory analysis and medical imaging
systems.
Oatman noted that the hospital's cash
position at June 30 remained good and growing, although accounts
payable had also increased. Days in accounts receivable remained
good at 50, down from 66 and 58 in earlier years, lower than
industry norms.
He pointed out that personnel expenses,
general and administrative expenses and physicians expenses were all
higher than industry norms. Patient discharges decreased slightly
during the year. Patient revenue when compared to the average number
of full time staff is very low when compared to the industry, an
indication of too many people on staff and excess capacity when
compared to patient demand.
The separate internal controls letter,
which was not distributed at the meeting, was referred to as noting
no material weaknesses and that the hospital employed generally
appropriate internal accounting and procedural controls.
Oatman closed his remarks with cautions
about balancing personnel costs with available patient revenues and
discussing the generally difficult conditions in the credit and debt
markets at the current time. He also noted that there was much less
of a crisis atmosphere this year than during recent presentations.
Kevin Storey commented that he and
Chief Financial Officer Tom Letz had earlier estimated a $500,000
favorable cost report settlement, but were pleased that it was more
than $600,000.
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