The one-hour meeting among the hospital’s finance committee members was designed to allow the hospital’s administration to lay out some of the financial challenges for fiscal 2013 — and how to meet them. Financial specifics discussed Friday could change as hospital board members hammer out budget specifics during their public workshop Wednesday. That 5 p.m. meeting will be at the Munroe Regional Medical Center Auxiliary Conference Center, 1542 SW First Ave.
Munroe CEO Steve Purves and Richard Mutarelli, Munroe executive vice president and chief financial officer, laid out a potential budget with a preliminary $3 million loss during 2013. The loss would occur despite dipping into the hospital’s reserves for $15 million. The preliminary budget does not include likely revenues from the hospital’s Wall Street investments; during fiscal 2012, those investments generated $4.8 million.
Munroe’s preliminary operating budget is $316 million and includes $19 million in capital improvements and renovations.
Purves told committee members the budget he will offer during the workshop next week reflects the uncertainty of healthcare reimbursement by state government during the coming years, the uncertainty of the Patient Protection and Affordable Care (informally called Obamacare) before the November elections, and getting Munroe into a position to better provide patient services that will hopefully mean revenues for the Munroe in the future.
Some of the hospital’s financial uncertainty will come about due to Florida’s plan to use a hospital payment plan involving a Diagnostic Related Group scheme for Medicaid reimbursement in 2014. The plan involves paying a standardized price for a diagnosed illness rather than reimbursement for treatments. The unknown for Munroe is how much more the hospital will receive in addition to that because of its high levels of indigent and Medicaid patients.
Also driving the preliminary budget: the proposed purchase of an additional generator to supply the hospital with more power and air conditioning in case of a power outage. That could cost Munroe an estimated $2.4 million.
“I think it’s something we need to do,” Purves said. “These are some of the tough things we had to grapple with.”
Also in the works is a Level II neonatal care center that includes keeping new mothers and babies together in the same patient rooms. Those hospital renovations could cost between $4 million and $5 million, although that too would have to be approved next week.
The public hospital is owned by the state-sanctioned Marion County Hospital District and overseen by seven trustees who are appointed by the County Commission. The trustees currently lease the hospital to Munroe Regional Health System, Inc., which is overseen by a 13-member board, some of whose members also are district trustees.
Mutarelli said he expected an increase in the number of hospital inpatients during 2013 and growth among Munroe’s service lines.
Some of that growth will likely be due to the hospital’s new children’s emergency room and expansion into The Villages.
Mutarelli warned that Friday’s Finance Committee meeting was preliminary, with a likelihood of changing once board members look at it during their workshop.