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Trustees have approved a budget for Hardin Memorial Hospital they hope will allow the hospital to finish next fiscal year with positive revenue.
Predictions for the current fiscal year, which ends Sunday, show the hospital ending the year with a revenue loss of more than $3.2 million. That was after making more than $4.4 million the year before.
The budget for next fiscal year, beginning July 1, was presented Tuesday to the hospital’s board of trustees for approval. That proposal predicts revenue of $155,000.
Major changes in the budget compared to the current year include an increase in interest expense from about $361,000 in 2013 to about $1.3 million in 2014.
Savings are expected to come from decreased spending in purchased services and professional fees, as well as a 63 percent drop in interest expenses.
Hospital staff members expect to see a revenue increase of more than $10 million from professional services in the coming fiscal year.
Dennis Johnson, HMH president and chief executive officer, said the budget accounts for a 2 percent reduction in federal government-funded health care because of the sequester.
It also takes into account a projected increase in the number of Kentuckians expected to gain health care coverage under the Affordable Care Act, an estimated 350,000 state residents, Johnson said.
“Make no mistake,” he said. “That is the biggest unknown is this entire budget.”
The hospital only recovers about 80 percent of what it spends on care for Medicare and Medicaid patients, Johnson said. But this year’s budget was weighed down by significant bad debt from patients paying nothing — some of whom now will qualify for federal health-care coverage.
An increasing trend of patients getting insurance plans with deductibles as high as $5,000 also means the hospital is essentially dealing with more out-of-pocket payers, he said.
Trustee Doug Goodman voted against the budget. He said the hospital didn’t meet projections this year.
Accepting a budget for the coming year with such a low predicted revenue makes it likely the hospital budget will end in the negative again, Goodman said later.
“We had a fictional budget this year and I don’t believe in fictional budgets,” he said. “We didn’t meet our budget this year. We were short and we’ll probably be short next year.”
Trustees unanimously approved the purchase of two pieces of hospital equipment.
One is a multipurpose radiography/fluoroscopy system that costs $513,500 for the equipment and an annual service agreement of $53,066 from Siemens. The equipment would replace a 12-year-old model that has a limited range of usefulness because of expensive needed repairs.
It is used for procedures such as general radiography, fluoroscopy, interventional radiology and angiography.
The other is a Medtronic ENT navigation system for $176,400 from Medtronic Fusion.
The recent technology assists with cranial surgery. It allows for three-dimensional visualization, the combination of CT scans with GPS-like technology and the ability to avoid unintended brain tissue, nerves and other critical structures.
The hospital is currently using a demonstration version of the technology.
Amber Coulter can be reached at (270) 505-1746 or firstname.lastname@example.org.