12/12/2017
JEFFERSON CITY, Mo--Missouri State Auditor Nicole Galloway released an audit of Pemiscot Memorial Health Systems in Hayti, located in southeast Missouri. The audit was a part of a series of reviews initiated by Auditor Galloway of county hospitals focusing on financial and operating best practices.
The audit reveals a rural hospital in a challenging financial condition. While the hospital board has taken efforts to stabilize hospital finances, continued reliance on debt and funding from federal and state programs, and significant amounts of unreimbursed and uncompensated care, leaves the hospital vulnerable.
"Missourians in rural communities rely on access to hospitals for emergency and life-saving treatments," Auditor Galloway said. "There is only one other hospital within a 25-mile radius and this is the largest employer in the county. The economic future of our state depends on thriving rural communities, which depends on financially viable rural healthcare."
The audit found the hospital has been operating at a deficit since at least 2013. At the close of 2016, the hospital had about $602,000 of cash on hand. Based on the operating costs that year, the cash balance would only cover the operating costs of the hospital for 6.4 days.
Unreimbursed and uncompensated care, which totaled nearly $4 million in 2016, and reliance on long-term debt have contributed to the hospital's financial struggles. The hospital has extended multiple loans and a line of credit past their maturity dates. Funding from federal and state programs accounted for 78 percent of hospital revenue in 2015. Reductions in this funding would threaten to further deteriorate the hospital's condition.
"Without question, the economics of rural healthcare in Missouri are challenging," Galloway said. "This is especially true in rural southeast Missouri, where we found per bed revenue generation was significantly lower than other hospitals in Missouri. Management must remain focused on seeking opportunities to maximize revenue and minimize risk."
The report found the hospital board does actively monitor the hospital's finances and has worked to increase revenues and decrease expenses. The report includes a recommendation to continue closely monitoring the financial condition of the hospital and review federal billing procedures to ensure the hospital can continue to provide critically needed healthcare services to citizens.
The Pemiscot Memorial Health Systems is overseen by a five-member board, which has pledged to address the concerns identified in the report. The hospital received an overall performance rating of good. A full audit report on Pemiscot Memorial Health Systems can be found online here.
The audit was conducted as part of Auditor Galloway's Rural Healthcare Audit Initiative, which includes a series of audits of rural acute care hospitals. The goal of the reviews is to identify key factors impacting facility finances, and offer solutions designed to improve business operations and bolster fiscal solvency. Earlier this year, audits were released of the Putnam County Memorial Hospital and Ray County Memorial Hospital.
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