State loan monies coming in October
-September 29,2023-
Kaweah Health has published financials for August showing a turnaround in the pattern of red ink that has threatened the future of the region’s largest medical center largely impacted by the pandemic.
Net Patient Revenue was up 1.1%, $543,000 higher than budget primarily due to higher than budgeted revenue in the Emergency Department, Subacute Hospital, Endoscopy Service Line, NICU/OB and their Radiology Modalities (CT, MRI, PET, Xray): Other revenue was $2.2 million over budget primarily due to grant funds recognized and higher than budgeted retail pharmacy revenue. Employee expenses were below budget.
Administrator Marc Mertz confirms “ August was positive and very encouraging. The higher volumes were certainly factors, but a lot of credit goes to our employees and the Medical Staff for their hard work on our financial improvement efforts during the last 12+ months. Last August we lost more than $7 million, primarily due to the high cost of contract/travel labor. Our teams have worked tirelessly since then to reduce costs and increase revenues, and this August we had a positive operating margin and a total excess margin/profit of more than $2.2 million.”
In other news Kaweah Health is expecting funding of the Distressed Hospital Loan monies -now approved at nearly $21 million – will be in hand in October. The hospital has an 18-month grace period followed by a 5-year repayment schedule unless the loans are forgiven in the future. The receipt of these funds will increase our cash on hand to nearly 100 days.
“We are optimistic that our positive trend will continue, but we are very concerned about the possibility of Governor Newsom signing SB 525 into law. We believe that this bill would have a devastating impact on hospitals across the state, including Kaweah Health, as well as harming local business who would be forced to increase salaries to compete for employees with hospitals.”
Senate Bill (SB) 525 (Durazo, D-Los Angeles) would increase the minimum wage for all workers in all health care settings — including all paid work occurring on hospital premises (for example, delivery drivers, repair workers, and ride share or medical transport workers) regardless of whether they are employed by an entity other than the hospital — to $25 an hour starting Jan. 1, 2024.