Skaggs suffers $4.5M FY07 loss

During the health center’s annual trustees meeting July 26, Erixon reported that while assets and revenues were up compared to fiscal 2006, the health system showed a net loss of $4.5 million for fiscal 2007, which runs May 1–April 30.

The annual report provided by auditor BKD of Springfield showed Skaggs having assets of $126.7 million for fiscal 2007, an increase from $123 million the year before. Net revenues for 2007 were $139.9 million, up from $126.5 million.

Erixon said much of the health center’s net loss can be attributed to its $8 million in bad debt from uninsured patient care during the last fiscal year. Skaggs’ self-pay debt rose to 9 percent in 2007 from 6.8 percent in 2006.

“It is such a heavy self-pay market. We get 15 cents on every dollar,” Erixon said. “We’re a community health provider. We take care of our community, but it is a great burden.”

Uninsured patient debt has not been a problem only for Skaggs.

“Bad debt is a function of every hospital,” Erixon said.

“It’s an issue striking other services.

The changes in Medicaid last year affected everyone. It threw 100,000 to 200,000 people off the Medicaid roll. It’s just a

difficult time. It’s (the same for) all the hospitals and health systems along the line.”

Leon Combs, starting his second year as chairman for the board of directors at Skaggs, agreed.

“We saw this coming,” Combs said. “Generally, it is extremely difficult for a regional medical facility, with the constant battle with getting Medicare payment reimbursement. The board is well pleased with Steve Erixon. He has taken on a difficult task.”

Combs said the hospital generated $1 million in cash reserves during the last fiscal year and hopes to break even in fiscal 2008. “We want to take that ($4.5 million net loss) to zero,” he said.

Skaggs’ plan for generating new revenue includes improving its patient market share. Officials estimate that a third of Taney County residents receive health care in Springfield.

“We want those patients to stay in their hometown,” Erixon said.

Since Erixon joined Skaggs on July 7, 2006, the hospital has added 30 new medical staff, including a dozen physicians in the past fiscal year. Skaggs acquired Branson Heart Center and opened its new Orthopedic-Neurological Services Center in May. It plans to finish construction on its cancer center in spring 2008.

Erixon said the health center is also looking at cost-cutting measures.

“We continue to look at our group-purchasing organization. We think there is some opportunity there,” he said. “We have a good handle on what our issues are. We have a very workable strategic plan for the next three years.”

Other highlights reported during the annual trustees meeting were:

• Three hundred auxiliary and other volunteers donated nearly 57,000 hours of time and $60,000 toward the purchase of equipment.

• The Skaggs Foundation donated $119,822 in equipment to the health center.

• Hospitals & Health Networks magazine named Skaggs among the top 25 Most Wired Small and Rural Hospitals in the nation and listed Skaggs among the nation’s top 25 Most Wireless Hospitals for a fifth consecutive year.

• Skaggs achieved HealthGrades’ 2007 Distinguished Hospital Award for Clinical Excellence for the second year in a row, ranking among the top 5 percent nationally in clinical excellence.