Washington County has a rare feather in its cap, a profitable community hospital.
Delta Regional Medical Center is in a positive cash-flow position for fiscal year 2019 according to CEO Scott Christensen’s remarks to the Washington County Board of Supervisors on Monday.
The hospital has shown about $2.5 million in positive cash flow despite $19.5 million in free health care through the end of May 2019. The annualized amount would be about $30 million dollars in unpaid health care for fiscal 2019.
The free care is bad debt and will be written off as uncollectible.
The cash flow position of the hospital will also be buoyed by debt-reduction efforts.
“In 2007, the hospital issued bonds of $37.7 million, for various projects as well as the purchase of King’s Daughters,” Christensen said via email. “We have been, of course, paying that note and it was down to $27 million. This debt was also backed or insured by HUD.”
The hospital issuance of revenue bonds through the county on July 31, along with hospital cash, brought the debt down to $15 million and reduced the amount of debt service for the year from $2.5 million to $1.2 million saving about $1.3 million in actual cash outlay for the year.
Refinancing the bonds removed the HUD requirements on the properties used as collateral for the loan.
The HUD requirements prevented the hospital management from using the buildings, such as King’s Daughters Hospital, in any form outside of those requirements without major government approval.
The plan, according to Christensen’s remarks at the meeting, are to move inpatient rehabilitation to the main campus. This would free up an entire floor at King’s Daughters and allow the hospital to operate this service in a much more efficient manner.