2019 Hospital Audit, Another Strong Year
As spring transitions to summer, and as June marks the halfway point in 2020, we have much to celebrate. Despite the challenges that COVID-19 has presented to our community and our organization, St. Vincent Health is steadily moving forward with new hospital construction, newly elected board members are seated, and we took delivery of our new ambulance. Not only that, last week our CPAs delivered their comprehensive annual audit report, showing that 2019 was a year of sustained financial strength and new milestones.
It’s exciting to share these good news items from the report:
- Net patient service revenue is up approximately $1.2 million, or 16%, in 2019, with $9.9 million in 2019 versus $8.7 million in 2018. We attribute this new revenue to increased inpatient days and the expansion of outpatient services including sleep studies and echocardiograms.
- The hospital billing office achieved an average of 39 Days in Accounts Receivable (AR) in 2019. This is the best average the hospital has seen in the recent past, and is far better than the industry standard that tops 60 days in AR.
- The hospital’s total margin dropped from 7.4% in 2018 to 5.9% in 2019, a sustainable and respectable margin. This slight decrease is due to both the debt issuance cost of $660,000 for new hospital financing and new equipment expenditures in 2019. When compared to critical access hospitals in the western United States, SVH is way ahead – and fairly equal to all Colorado hospitals with respect to margin.
- For the first time in years the hospital’s operating margin (profit without tax proceeds) went positive, and is at 1.7% (approx. $179,000). Though this is outstanding news and it shows strong management and fiscal practices, it may not be sustainable in 2020 with the effects of lower overall census due to COVID-19 and construction of the new hospital.
- Days cash on Hand remained steady at 44, year over year from 2018 to 2019. This isn’t surprising as we invest in our future; in 2019 an equipment fund for the new hospital was developed and that fund is now up to $1,000,000.
- In 2018 the hospital replaced depreciated equipment at the rate of 212%. In 2019 the rate was 76%. The decrease is due to planning for the new hospital and scheduling large equipment purchases for it; those purchases will take place this year and next.
The audit and the good news it contains certainly validate our recent motto: It’s a new day and St. Vincent is here to stay. Check leadvillehospital.org in the coming week for the full report. I urge you to spend some time reviewing it and to contact me with questions or comments.
Gary Campbell, CEO