Health care board OKs budget
BY AMELIA HARPER
Friday, July 13, 2018
Shawn Hartley, the new vice president and CFO of Nash UNC Health Care, presented a budget for fiscal year 2019 with a more than $25 million loss that was approved Thursday by the hospital’s board of commissioners.
The budgeted loss is pretty much in line with the projections for the end of fiscal year 2018, once they are calculated. Those losses in operating income are expected to be $25,392,000.
“These next 12 months are going to be a hard financial 12 months for the organization. But we do about $225 million a year net in services so that is a pretty big ship to turn around,” Lee Isley, president and CEO of Nash UNC Health Care, told the Telegram in an interview in June.
The budget picture looks a little better when non-operating income, such as investments, comes into play. With $7,596,000 in non-operating income, the projections for 2018 are an expected net income loss of $17,419,000. In 2019, projected investment income of more than $9 million should bring the loss of net income down to $15,815,000, Hartley explained to the board.
Another major factor affecting the net income at this time is the cost of installing a new financial medical records system called Epic. The program, which is set to launch in September, added $4 million to 2018 budget expenses and will add another $9 million to the 2019 budget.
“The cost of Epic is affecting our bottom line for a couple of years, but these are things we feel are going to drive our ability to improve our financials and help us serve our community,” Isley said. “The board has decided to invest in the Epic software so we will have better communications with the UNC system and other systems. But that investment will obscure some of the improvements we have made this year with our financials.”
Hartley told board members the new budget had been through many “ideations.”
“This is an extremely conservative soft budget,” Hartley said. “It is really a worse-case scenario.”
In a later interview, Hartley said he hopes the presentation of a more realistic budget would change the conversation at future board meetings.
“I think we will begin to do better and we can begin presenting good news to the board instead of bad news,” Hartley said.
Hartley said area residents should be assured that the hospital is still on safe financial ground.
“At the end of the 2018 fiscal year, we should still have about 380 days of cash on hand. That means, even without income, we could operate for 380 days. At the end of 2019, even with projected losses, we should still have about 370 days of cash on hand,” Hartley said.
Both Hartley and Isley said they expect the ship to turn around in a couple of years.
“We should start to see the fruit of our labor in 2020,” Isley said. “We will plant the seeds and tend the garden in 2019 and we will harvest in 2020.”
Staff writer Corey Davis contributed to this report.