CEO: Hospital finances sound
By BRYN STOLE Staff Writer
Greenwood Leflore Hospital is on sound financial footing despite a challenging operating environment for rural hospitals, according to its chief executive.
Jim Jackson, Greenwood Leflore Hospital’s CEO, spoke to the Leflore County Board of Supervisors about the hospital’s financial health Monday while seeking formal board approval to open a $7.5 million line of credit, which Jackson said would be used to help protect cash reserves and simplify equipment purchases.
The board voted unanimously in favor of the line of credit.
Jackson said the hospital is debt-free and has been building cash reserves after several years of operating at a loss.
In the hospital’s latest fiscal year, which ended Sept. 30, Jackson said the hospital finished in the black with a $1.4 million bottom line. A month into the current fiscal year, Jackson said, the hospital is already $200,000 in the black.
The new line of credit is to be used to protect cash reserves and allow the hospital to consolidate expensive equipment purchases into a single payment schedule, Jackson said. “It’s primarily for capital expenditures and reinvestment in the hospital.”
Jackson said the hospital has enough in cash reserves to cover up to about 120 of operations. Operating the hospital requires about $330,000 per day, he said.
The improved financial picture at the hospital comes despite some financial challenges, including some as a result of the Affordable Care Act (ACA) — also known as Obamacare — and Mississippi’s decision not to expand Medicaid.
Jackson said the ACA has “certainly affected revenue payments,” including tacking on fees and penalties for readmission of treated payments and cutting down on some Medicaid repayments.
The planned expansion of Medicaid to cover additional uninsured residents — including an estimated 300,000 in Mississippi — would have helped compensate hospitals for the cuts to other forms of revenue.
Opposition by Gov. Phil Bryant and the Republican majority in the Legislature led the state to reject $10 billion in federal funds to expand the program. Jackson said that decision has left a revenue gap for hospitals that affects the bottom line.
“The expansion of Medicaid was supposed to provide insurance to those who were previously uninsured,” Jackson told the board Monday. “That will continue to be a strain on this state as it continues to not consider expansion.”
Jackson said the hospital had also recently moved to restructure its employee retirement plans, freezing its defined-benefit pension plan and rolling out a new, 401(k)-style matching retirement plan.
The expense of the defined-benefit plan — in which the hospital guarantees monthly retirement payments to qualified employees — was beginning to strain the hospital’s finances, especially with new federal rules that require employers invest enough money to cover the full unfunded liability of any plan, Jackson said.
“The cost of that plan was growing at such a rate … that you just couldn’t financially sustain it,” Jackson said.
Although the hospital will continue to make pension payments to employees who have already qualified for the old plan, Jackson said other full-time employees will now be offered the chance to enroll in a 403(b) retirement plan, in which the hospital will match contributions to a retirement account.
In other business Monday:
• The board went into executive session to discuss a lawsuit against the county by the federal Department of Justice over a 2009 site inspection at the Leflore County Juvenile Detention Center. The board instructed Attorney Joyce Chiles to consult with a law firm before proceeding on the matter.
• County Road Manager Jerry Smith said his work crews were busy laying pipe to replace a collapsed culvert near Wildwood Gin. Smith said his crews have laid between 260 and 280 feet of pipe and hoped to wrap up work there today.
• Chiles reported that the county faces “virtually no risk” to its own funds with the recent bankruptcy of the Clint Williams Co., a company that operates a peanut buying point and warehouse in the Greenwood-Leflore Industrial Park. The company leases its facility from the county.
The company has not defaulted on any payments and will auction off its Greenwood operation next Monday, Chiles said. The proceeds from the sale should be sufficient to pay off the remainder of the lease; if not, Chiles said the county also holds an irrevocable letter of credit from the company.
• Contact Bryn Stole at 581-7235 or firstname.lastname@example.org.