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Bad debts eat QVMC profit

Hospital’s bad debt ratio is almost twice the industry average

Chuck Allen/editor@qvpr.com
Jan. 26, 2012

Bad debt continues to gnaw at the bottom line for Quincy Valley Medical Center.

For 2011, QVMC will write off about $1.2 million, which is over 10 percent of the revenue the medical center brought in last year, Dean Taplett, controller for the center told the hospital board during its meeting on Monday, Jan. 23.

He said the industry-wide average for hospitals is between 5 to 6 percent.

“If we were just at the state average, we would have shown a profit this year,” Taplett said.

Instead, the medical center will show an estimated loss of $352,749 for the year.

“It’s important that the folks of the community know we’re in a hole, but a big part of that is because we have to send $1.2 million to bad debt or charity care,” said board member Anthony Gonzalez.

The problem has been escalating in the past couple of years, it used to be that bad debt would fall short of or least equal the tax money the hospital district received, but that’s no longer the case, stated administrator Mehdi Merred, who was celebrating his sixth anniversary with the hospital.

“We received $1.041 million in taxes last year and we’re going to have bad debt of $1.2 million,” he said.

Taplett said some factors that contribute to such a high rate are the high percentage of residents in Quincy who do not have insurance and the transitory nature of many of the patients.

He added that the hospital is looking into addressing some of the recent billing problems which have drawn complaints from patients who are frustrated by a lack of streamlining and detail on the billing statements.

Taplett said the medical center is in discussions with a group out of Spokane called Health Resource Group. Taplett said HRG would solve about 90 percent of the problems with the billing system and the other 10 percent can be fixed in-house. He said it appeared that HRG would have a more efficient system that should save the medical center money.

The board encouraged Taplett and Merred to pursue an agreement with HRG and bring a proposal to them in February.

“Our community has spoken,” Gonzalez said. “We have listened to their concerns and you folks have stepped up to the plate.”

Until the billing-system changes are put in place, Gonzalez said he encourages customers who have questions or concerns about their billing to contact the hospital.

While the hospital showed a loss for the year, the December numbers were encouraging as QVMC posted a net profit of $54,037. QVMC is budgeting to have a profit of $266,328 for 2012.

In other hospital business:

• The cost-cutting wage freeze at the hospital extended to administrator Mehdi Merred, who did not receive a raise or other increased compensation on his contract for 2012.

• The QVMC dietary department prepared 40,000 meals last year and physical therapy had 3,700 patient visits in 2011.

“Those folks have been busy,” Gonzalez said.

• Gonzalez was appointed as president of the board of directors and board member Randy Zolman was named secretary.

• The Quincy Hospital Foundation has raised enough money in private donations and fund-raisers to pay for $5,000 in scholarships for hospital employees who are continuing their education, said Verna Teeter, of the foundation.