Hospital district considers budget options

The board of trustees is currently considering two very different proposed budgets for Crook County Medical Services District’s next fiscal year. One includes the cost of renting the new Hulett Clinic, while the other does not.

Both versions of the budget include a deficit, which is not unusual, as federal funding is generally available to critical access hospitals as a reimbursement to help make up the difference. However, the loss to the district if it remains in the current building would be approximately $185,000, while the loss if the district agrees to lease space in Red Bluff Medical Center would be around $492,000.

It’s possible for the amount of federal funding to be adjusted when circumstances change, which compensates for times when the district faces a higher deficit. However, explained CEO Micki Lyons, this would require the district to justify the increase in expenditure; she said the clinic would need a “significant and consistent” increase in the number of patients it sees each day.

Chief Financial Officer Alayna Marten presented figures to explain the difference. The lease for the first year, during which the Crook County Medical Foundation will still be paying off the costs of construction, will be $1.25 per square foot, which comes to $5906.25 per month for the 4725 square feet in question.

The district would also be required to pay for community area maintenance, including propane, water, sewer, trash, insurance and maintenance, which Marten estimated at $1250 per month. Other costs would include housekeeping and a receptionist, plus an increase across the board for benefits, as well as costs for telephone, internet and electrical, which are paid separately by the tenant.

Marten told the board that she included a 4% revenue increase in the budget for both the Moorcroft and Hulett Clinics in anticipation that the district would hire another provider for the clinic; this would be shared between the two clinics. Lyons explained that this is because it a full-time provider cannot be justified, but it’s hard to find an employee who wants to work part-time.

Responding to a question from Trustee Sandy Neiman, Lyons said that the budget does not include potential income from leasing out the current clinic building. “It would help offset that other lease,” Neiman said.

“We didn’t realize that would ever be an option in this first year,” Lyons responded. Though it is now a possibility, it could be an issue finding someone to lease for that short a period without being able to change the interior in case the district decides to move back in after the one-year lease.

Neiman noted that she believes there are at least three potential buyers interested in the clinic, should the district decide to sell. Lyons stated that the district should definitely keep that on the radar for next year’s budget, when the one-year lease would be coming up for renewal.

The district has until May 31 to submit their preliminary budget to the county commissioners and until July 1 to submit the final budget to the state. Which of the two versions will be used remains unclear, as the district and foundation are still in discussions over leasing the new clinic.

Capital Expenditures

At Wednesday’s budget meeting, Lyons also presented a list of possible capital expenditures for the year, which had been crafted with input from senior district staff.

This included a structural analysis of the hospital to see where and how the facility could be refurbished or upgraded. Lyons ballparked $68,000 for this, noting that quotes are still being gathered and so she is “shooting high” on the cost for the purposes of budgeting.

Lyons also mentioned a piece of lab equipment on lease-purchase, which is coming up for renewal in September. The district has the choice to pay $20,000 to then own the equipment, or upgrade to a new lease-purchase for a newer model that has additional function.

The list also includes two new pieces of equipment for patient monitoring that would be placed in the ER, as “the ones we have now are at the acute care station” and it can be difficult to move them around, especially right now when there are disinfection protocols to consider due to COVID-19. Each piece would cost $30,000.

Lyons also suggested training equipment that provides high-tech simulations, allowing the district to bring more training in-house and increase the amount of staff training available. In theory, this would be cheaper than sending staff to external training, she said, while the equipment could be made available for a fee to other entities that might want to use it.

The final item on the list was a replacement truck for maintenance.

Non-capital expenditures meanwhile included new furniture to replace old desks, filing cabinets, bookshelves and so on. An estimate is in progress, she said, and the district will have an idea of the cost of its “wish list” after that.

The list also included a warm blanket for use in trauma cases, a training mannequin for delivering babies and a slit lamp for looking into eyes in the ER. The board asked to see firmer figures for these suggestions at this week’s regular meeting, once estimates have been completed.