Facing a budget deficit, a sluggish economy and a mandate to reduce the use of tax dollars, the board of governors of the Gov. Juan F. Luis Memorial Hospital approved an aggressive budget Saturday, a financial blueprint for the coming year that anticipates increasing revenues to narrow the gap.
The $88 million proposal for the 2012 fiscal year calls for increasing revenues from patient fees by 17.7 percent – from $55.7 million during the current fiscal year to $65.5 million in the 2012 fiscal year.
"Our growth is going to come from a growth of new revenues," said Jeff Nelson, the hospital’s chief executive officer, who presented the proposed budget at a special meeting of the board of directors Saturday. Those new revenues will come from, among other services, orthopedics and operating room services. He also said the hospital will be more successful at "fee capture," getting people to pay what they owe.
At the same time, Nelson said, the hospital will reduce the amount of tax revenue it receives from the government by almost 9 percent – from $23.9 million now to $21.8 million next year.
The resulting net operating revenues will increase 9.6 percent, from $80.6 million to $88.3 million.
On the expense side, Nelson said the hospital will hold the line on personnel costs. A total of $45 million was budgeted for salaries and wages ($33.5 million,) traveler and agency costs ($3.2 million) and employee benefits ($8.7 million) in the 2012 budget, the same figures in the current budget.
Professional fees and services will increase slightly, Nelson said, because the hospital anticipates using more doctors. Costs for supplies will also increase slightly, he added, because with greater use of the facilities, more supplies will be needed.
The result is a budget that anticipates a much smaller deficit than the current budget year. In fact, in the subtotal of operating expenses, the budget actually predicts a positive cash flow of $2.8 million for the 2012 fiscal year, compared to the current budget’s $8.9 million loss. After depreciation, amortization and interest income, the 2012 budget predicts a loss of $749,550, compared to a current year loss of $12.2 million.
The budget had to be approved by the board Saturday so that it can be submitted next week to the Senate.