LeVeau coming back; two OB/GYN specialists to join PVHC

Focusing on improving the bottom line and increasing reserves, Powell Valley Healthcare’s budget for fiscal year 2012 forecasts total revenues of $59.7 million and expenses of $42.8 million.

However, another $17.9 million also is deducted from total estimated revenues — $14.8 million to cover discounts and allowances for Medicare, Medicaid and insurance companies, $2.2 million for bad debt and $965,300 for charity care — reducing net income for the organization to $575,000 for the fiscal year, which began July 1.

The Powell Valley Healthcare board approved the budget, prepared by PVHC Chief Financial Officer Calvin Carey, during the board’s June 27 meeting.

The budget provides a 4 percent pay increase for employees, and it restores retirement plan contributions for Powell Valley Healthcare employees. Those contributions were curtailed temporarily earlier this year when the PVHC budget dipped into the red.

In addition, health insurance premium rates are estimated to increase 10 percent in FY 2012.

The budget also sets aside $1 million for purchasing an electronic medical records system, also known as a health information system.

A decision on which health information system to purchase is expected soon, with implementation likely by this fall. Two systems currently are under consideration, both offered as secondary licenses through hospitals in Billings. Paul Cardwell, PVHC chief executive officer, told the board going that route has several advantages, including a large price discount for a premium health information system.

On the revenue side, the budget adds an average price rate increase of 3 percent for most hospital and physician services, Calvin said.

The PVHC board previously approved a 3 percent increase at The Heartland; rate increases at other facilities were expected to follow.

Cash on hand for Powell Valley Healthcare at the end of the 2012 fiscal year is expected to total $5.52 million, equivalent to 48.8 days of operating expenses. If that forecast holds true, cash reserves would increase by the equivalent of nearly eight days of operating expenses from the nearly 41 days at the end of fiscal year 2011 on June 30 — but it would still fall seven days short of the 56 days of operating expenses on hand on June 30, 2010.

The board’s goal for cash on hand is 60 days.

While expenses also were lower than original estimates, it wasn’t enough to keep the budget in the black. Preliminary figures showed the fiscal year would end with a net loss of $124,674.

Carey said some of the revenue losses during FY 2011 likely were caused by the departure of Dr. Charles Bennett, Powell Valley Healthcare’s only obstetrician, and by Dr. Paul LeVeau’s decision to leave Powell to work at the Veterans Affairs Medical Center in Billings.

However, both of those situations are about to reverse. Cardwell told the board LeVeau plans to come back to Powell Valley Healthcare soon, and two obstetricians have signed on to practice here as well.

Cardwell said LeVeau wasn’t happy working for the VA, and his family situation has changed to make it easier for him to practice in Powell, so he will come back to Powell Valley Healthcare by the middle of August.

Dr. Roger Brecheen, who provided gynecology services at Powell Valley Healthcare after Bennett left, has signed a contract with Powell Valley Healthcare and will move his OB/GYN practice from Jackson to Powell. He plans to begin his practice here on July 31.

In addition, Dr. Karla Wagner of Lander, also an OB/GYN specialist, has agreed to move her practice here as well. She plans to begin caring for patients in Powell in early September, Cardwell said.

While optimistic that those additions will improve Powell Valley Healthcare’s revenues, Carey said the FY 2012 budget is conservative, based on last year’s figures.

He noted in the budget packet that physician volumes were projected to decrease by 33 percent for fiscal year 2011 over fiscal year 2010; the budget just approved forecasts a 4 percent increase from FY ‘11 figures.

Carey included in the budget packet a list of requests for new equipment, furnishings, building maintenance and updates totaling $2.8 million.

But, he explained, “Acquisition of capital assets by PVHC will be limited in FY 2012, with the focus on continued development of information systems and some facility related projects. Powell Hospital District will continue to provide funding for many of the other medical equipment acquisitions as well as maintenance and development of facility resources.”

The Powell Hospital District budget is separate from Powell Valley Healthcare’s. The district budget centers on medical campus buildings, which are owned by the district, a public entity, and leased by Powell Valley Healthcare. The PVHC capital request list will be prioritized and presented to the Powell Hospital District Board during its budget hearing on Monday, July 25.

The district budget will be the subject of a future story in the Powell Tribune.