New projects offer glimmer of fiscal hope for hospital

New projects offer glimmer of fiscal hope for hospital

Michele Ellson

Alameda Hospital is seeing a glimmer of financial hope as programs administrators set up to pull the hospital out of its fiscal slump are paying off more handsomely than expected.

Even with the new revenues, though, the hospital is continuing to experience monthly losses, and by the end of September the hospital had less than $1 million in cash at its disposal. The hospital took in $5.9 million in revenues and spent $6.6 million in September, not counting parcel tax revenues.

The Waters Edge nursing home contributed $403,952 to Alameda Hospital’s bottom line during the hospital’s first two months operating it, and Chief Executive Officer Deborah E. Stebbins told the hospital board at its meeting Wednesday that the nursing home generated $135,000 more than anticipated in October. Waters Edge is projected to add $1.3 million to the hospital’s bottom line this year.

A new wound care program set up at Marina Village brought in 173 visitors in September when 100 were expected, and brought in $10,000 in revenues in September. The hospital’s new orthopedic program opened for business on October 22.

Even with the new revenue, the hospital has continued to suffer losses, including a net operating loss of $190,000 in September and $672,229 so far this year. The hospital had cash or cash equivalents of $950,000 by the end of September or 4.7 days of cash on hand – about half the amount it had in August and a fraction of the nearly 19 days the hospital held at the June 30 close of its prior fiscal year – and its accounts payable topped $10 million, with the hospital taking an average of 149 days to pay its bills.

The hospital is also continuing to drift from financial targets spelled out in its loan deals with Bank of Alameda; at the end of September the hospital had $6.4 million in assets when the terms of its loans require the hospital to maintain $7.5 million in assets, and its liquidity continues to slip. The bank temporarily suspended the loan covenants, though the hospital is required to show it can meet them by the end of this year.

But audited financials for the fiscal year that ended June 30 showed the hospital’s losses weren’t as bad as originally believed. They showed the hospital lost a little less than $1.5 million last year when parcel tax funds were included, instead of the $1.9 million the hospital’s unaudited numbers showed.

Still, the hospital’s liabilities increased by nearly $3 million last year while assets went up by $1.2 million.

Systems and billing issues impacted the hospital’s balance sheet in September, the unaudited financials show, though the financials state that those issues have been addressed. The financials show the hospital’s assets increased by $803,000 from August.

Separately, the board approved a new contract with the union that represents its nursing, dietary and environmental science workers. The contract freezes wages in its first year and allows the union to seek changes in its second and third years. The contract, which was approved 5-0, will be in place until May 1, 2015.

The board also formalized its arrangement with the Alameda Hospital Foundation, unanimously approving an agreement with the foundation that states the relationship between the two entities.