Clarifying what makes a tough budget

While Healdsburg District Hospital (HDH) appreciates the visibility the Healdsburg Tribune affords us, there were several errors and omissions from the article titled, “Hospital adopts tough budget” (Feb. 11, 2015). I would like to clarify a few of the points I feel may be misleading to both our community and our hospital staff. Some points may seem innocuous, but for those whose daily work revolves around the hospital and those who have lent financial support to our ongoing efforts, clarity is needed.
I feel it is important to understand the period for the hospital’s $2 million dollar improvement took place between 2013 and 2014. The hospital has been in the red for the past eight years, however with major shifts in policies and procedures, we anticipate a budget in 2016 that will be in the black.
Our interim CFO, John Parigi, approved a plan to stabilize patient use, which would give us a 1 percent increase in patient revenues. Total revenues should reflect an 8 percent increase, this can be attributed to better billing procedures, improved inventory control and improved staffing. Staffing reductions occurred in 2013. Today’s budget shows a stable workforce and an overall 6 percent increase in payroll expense.
In November 2013, the hospital had to borrow short-term money to meet financial commitments. It is true that our cash reserves are improving, it will actually take an additional three to five years to get to where we want to be. Our goal is to have 90 days of cash reserves, within three years.
Bringing HDH in line with current hospital trends and practices has meant developing a broader range of out-patient services. In the article, outpatient services were listed as being 30 percent greater than inpatient services. In reality, the number is closer to 150 percent greater revenues from outpatient services, which is in line with most hospitals, regardless of size.
This year, we are improving the facilities that house our outpatient services and increasing the number of primary care and specialty physicians working from the newly named Healdsburg Physicians Group clinic. Doctors  Paul Marguglio and Tony Veletto will be working together under the newly named HPG.
The hospital has currently replaced approximately 40 percent of our critical computer technology. Our goal is to create a purchasing plan that will allow us to continually upgrade to the latest technology.
Staying on task to meet our budget projections is key to our success. Our business plan was shared with senior leadership, our finance and budget committee and the Board of Directors. We have created a tough budget, it is a budget that can provide our hospital, our employees and our community with the resources to provide exceptional service, for years to come.
Nancy Schmid is currently the Healdsburg District Hospital CEO. She has spent more than 22 years working in hospital administration including CEO positions with several hospitals since 2007. Schmid holds a master’s degree in public administration from University of Utah and a master’s degree in health care administration from Brigham Young University.