Hospital operating in the black, but still saddled with millions in debt
November 21, 2012
By Michele Mihalovich
The Snoqualmie Valley Hospital commission was tasked Nov. 7 with approving or rejecting the 2013 budget and a 1 percent property tax increase, but one commissioner had no intention of just rubber-stamping a tax increase.
The state allows governments to increase property tax annually by 1 percent, but commissioner David Speikers said he wasn’t comfortable with increasing taxes on citizens, especially since the hospital is showing a profit in its operating budget this year.
He said his neighbors and friends have been substantially affected by the downturned economy, and he knew some who haven’t been able to celebrate Christmas the past couple of years.
“I can’t in good conscience vote in support of this,” Speikers said, adding that the only way he would support the tax, which could bring in an additional $30,000, is if the money were applied to some of the hospital’s $33.4 million in debt.
The other four commissioners agreed to the funds going toward the debt, and the tax increase passed.
The commissioners also passed the proposed 2013 budget, which shows the hospital bringing in $24.7 million from patient revenue, $3.08 million in tax and miscellaneous revenue, and spending $26.5 million in operating expenses.
The hospital’s biggest expense in 2013 is salaries and benefits, accounting for $17.7 million of the budget, according to documents supplied by hospital CFO Steve Daniel.
In January, 15 jobs at the hospital were cut, which was expected to save about $750,000.
Board president Dick Jones told the Star after the meeting that two employees who were laid off were rehired in different positions.
The hospital also created a new position, a public information and communications officer, with an annual salary of nearly $80,000.
The hospital is also creating a new Senior Living program, with two full-time employees and accounting for $227,448 in salaries next year.
The 2013 budget also included a nearly across-the-board 1.04 percent salary increase for administrative and medical personnel.
The hospital’s coffers included a $14 million infusion this year when the Snoqualmie Tribe paid off the current hospital and property early. The tribe was expected to pay $29 million in May 2015.
Hospital Administrator Rodger McCollum said $5.9 million of the $14 million will go toward paying off the Leisure Time property, where officials had originally planned to build a new hospital.
Jay Rodne, the hospital’s attorney, said in a Nov. 8 email that they “anticipate a closing in 30-45 days. We are trying to negotiate the elimination of a profit sharing mechanism in exchange for additional interest. We are waiting to hear back from them.”
Grading and utility work are currently underway for the new $38.5 million hospital, expected to be completed in early 2014.
The hospital itself has experienced some positive trends in recent years, which is helping the operating budget stay slightly in the black.
According to hospital documents, inpatient visits increased by about 100 from 2011 to 2012. Lab requests and out patient visits increased, and are expected to stabilize next year with 5,990 visits.
Clinic visits decreased by 2,333 from 2011 to 2012, but is expected to increase slightly in 2013.
Emergency room visits have steadily decreased since 2009. This year is expected to see 3,299 visits, but officials anticipate 3,297 in 2013.
Net revenue from patients has been trending upward since 2011; however, charity care and bad debt is also steadily increasing. This year, the hospital incurred $1.7 million for charity care and bad debt, and expects $1.9 million next year.
Michele Mihalovich: 392-6434, ext. 246, or email@example.com.