Audit shows hospital handling recession
By Laura Collins
Published in News on January 15, 2010 1:46 PM
Results from an audit of Wayne Memorial Hospital show increases in expenses and debt, but also an increase in revenue.
The annual audit, which was completed in November by LarsonAllen LLP, also reported that Wayne Health Corp.'s operating margin was up to 3.2 percent from 1.3 percent the year before. That means for every dollar the hospital bills, 3.2 percent is left over and goes toward capital improvements.
That is good news for Becky Craig, hospital vice president of finance and chief financial officer.
"It's the money left over at the end of the day that allows us to replace things," Ms. Craig said. "It's used for items that have a longer life than one year, hospital beds, MRI, computers."
Steve Stang of LarsonAllen LLP presented the findings of the audit to the hospital board Tuesday. Lang said the hospital's management team did a good job of "staying financially viable."
The audit findings suggest the hospital is on the right track, especially when compared to others of similar size, Ms. Craig said.
"We had a good year in terms of comparative community hospitals," she said. "That was the result of expense control."
Total expenses for the hospital were up 4.4 percent, from $187.8 million in 2008 to $196 million in 2009. Part of the hospital's total expenses is bad debt -- debt that is incurred by providing care that is not paid for, which was up from $18 million in 2008 to $21.9 million in 2009.
However revenue was also up 6.3 percent from $190.3 million in 2008 to $202.4 million in 2009.
The audit also showed that the hospital corporation's debt-to-equity ratio increased from 40.9 percent to 46.9 percent. The ratio is the measure of how much debt the corporation has compared to its net worth. The long-term debt is $64 million and the corporation's net worth is $76 million.
Ms. Craig said the hospital's net worth/asset balance fell in 2009 partially because of the fall of the stock market.
In other business, hospital board members re-elected Harold Brashear as chairman and William Broadaway as vice chairman. Both are one-year appointments.
Brashear said in the coming year he would like the board to continue focusing on responding to a "challenging economy" and providing "high level health care at a reasonable cost."