MEDICAL CENTER CONSTRUCTION UPDATE
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PROGRESS REPORT AND PROPOSED BUDGET 10-11-16 LMS

The Lemhi County Commissioners gave their official approval of the 2017 budget proposed by the Steel Memorial Medical Center and presented October 11 by medical center officials. The board also heard an update on the hospital’s new construction project.

Chief Operating Officer Abner King reported construction is going well including the installation of a new helicopter pad. He said the estimated completion of construction should be around the end of January 2017 with patients being seen in the new clinic building by mid-February.

Commissioner John Jakovac noted the projected budget’s 47 percent increase for the clinic. Steele Memorial Chief Financial Officer Jim Peterson explained there are two new medical providers who started work in late August and that a mid-level psychiatric care provider is expected to be hired. Peterson said that with those three, the number of walk-in visits to the clinic is expected to increase by 7,000. There will also be an expansion of walk-in clinic hours. He said at present there is an average of 15 patients per day.

King said officials from this hospital have talked with the Poulson, Montana Hospital staff to get information on their walk-in clinic which opened four years ago. He said Poulson has statistics similar to Salmon in that it has a Rural health clinic designation and offers Emergency Room services to a similar number of patients. King said the expectation of a decline in emergency room visits in Poulson did not materialize with the addition of walk-in availability and there was no significant decline in family practices therefore; it appears the walk-in clinic filled a need that was formerly not being met in that community. He said the hope is that with a walk-in clinic if local people have an urgent need to see a physician the patient can be seen the day they call. King said less urgent needs, such as annual check-ups, will still be a two week wait.

This area’s aging population has also been taken into account in projections that extend five years into the future. Peterson said the best way to manage age related illnesses is to see a physician more frequently. Commissioner Ken Miner commented that based on this community’s demographics and shift to becoming a retirement community, increased medical services make the area more attractive to retirees.

Peterson said a lot of how the new clinic can be afforded has to do with what Medicare contributes to rural health care costs and to maintaining a certain level of productivity per provider. He said as long as present levels remain constant, what is received from Medicare will almost cover the new clinic’s annual payment. Peterson said that as a result of the present Medicare and Medicaid allowable cost-based reimbursement system, the whole community benefits. King added that the percentage paid will vary by the proportion of patients that are on Medicare. He said that based on the county population’s aging trend the expectation is that Medicare is going to increase over the coming years.

Overall, the hospital has expanded its medical staff by 35 percent. King said, “That’s two things. We’re increasing the amount of providers we have to see patients but we’re also going to increase, and the walk-in clinic is part of that strategy, the number of patients our providers can see every day.”

The complex budget includes separate sections on debt service rates and how the revenue bonds can be paid in ten years. A marked increase in projected expenditures is listed for the year 2019 when it will be time to replace the hospital’s Magnetic Resonance Imaging (MRI) machine which is expected to cost close to one million dollars.

The budget includes statistics on the average number of days a patient stays in the hospital, the total number of patient days, the number of surgeries performed along with the number of ER and clinic visits per year. The budget also includes revenue and expenditure statements as well as salary and benefit statements.

More specifically, the total patient revenue projected for 2017 is $43,004,075. That figure decreases to $26,583,041 after Medicare/Medicaid and insurance payer’s deductions. The hospital’s total operating expense is projected to be $25,923,792 leaving a net operating income of $659,248 and an overall net income of $830,127.

Peterson said the facility’s daily cash-on-hand figures should remain constant throughout the next five years. In the event something unexpected happens to the projections the hospital maintains 150 days’ worth of cash-on-hand which could be used to meet loan and bond payments.

Anyone interested in obtaining a copy of the 16 page budget document may contact Steele Memorial Medical Clinic Chief Financial Officer Jim Peterson at 756-5618.

Steele Memorial Hospital Board Secretary-Treasurer Kristin Troy and retired board chairman Dennis Lile were also in attendance at the commissioner’s meeting.


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