Memorial Hospital of Sweetwater Sees Successful Financial Year Despite COVID-19

Memorial Hospital of Sweetwater Sees Successful Financial Year Despite COVID-19

Elective surgeries at Memorial Hospital of Sweetwater County are canceled until further notice. SweetwaterNOW photo

ROCK SPRINGS — For the Memorial Hospital of Sweetwater County (MHSC), completing this year’s audit was challenging due to the COVID-19 Coronavirus pandemic.

Not only did COVID-19 impact the hospital’s budget, but it also impacted the way the audit itself was completed.

“The preliminary and actual audit were both done virtually. We typically have access to the auditors when they are onsite, so it was a little more structured this year,” Chief Financial Officer Tami Love said.

Advertisement - Story continues below...

CliftonLarsonAllen (CLA) Principal Darryn McGarvey said they tried to make the audit process feel like they were onsite by having daily checkins just like they would if they were onsite.

“It went smoothly, but we did miss seeing them onsite,” she said.

“We’ve been able to pull it off and the audit’s in really good shape,” McGarvey said.

The Audit

During a recent MHSC board meeting, trustees heard from CLA representatives about the audit. McGarvey said the hospital did not have any material weaknesses identified and as far as internal control and segregation of duties, they had no recommendations to make at this time.

CLA manager Daniel Deyle said the MHSC has continued to see nice growth since 2017 and has been relatively steady for its bottom line and the hospital has an $85.7 million net patient service revenue. While the hospital is showing a decrease of 3.2 percent in its operating margin, those numbers do not include the federal Caregiving, Assistance, Respite, Education and Service (CARES) act funding.

As for the 4.5 percent increase in costs, those can be attributed to additional funding needed to pay for personal protective equipment (PPE), employees wages and other supplies, Deyle said.

“We also saw an increase in our expenses. During the pandemic and the lower volumes, we made the decision to not furlough or lay off staff and have kept our employees working, albeit some have been transitioned temporarily into new roles, such as door monitoring and lab swabbing,” Love said.

One area Deyle pointed out was the hospital clinics’ operating losses for 2020.

“This is the area of the organization probably impacted the most by COVID-19,” Deyle said.

He encouraged the trustees to look at the four-year average, rather than just one specific year to get a better idea of how the hospital is doing.

This graph shows the hospital clinics’ operating losses over the last four years. CLA graph

“The biggest takeaway was the effect of the COVID-19 pandemic. In March, we were projecting to end the year with a healthy gain,” Love said. “When COVID-19 hit in mid-March, we started seeing a decline in revenue, as much as 25 percent.”

These decreases are attributed to the cancellation of elective surgeries to protect the hospital’s PPE supplies and decreased volumes in the emergency room, outpatient services and specialty clinics, Love said.

As for days of cash on hand, the hospital actually saw a huge increase, however, Deyle said this number is reflective of COVID-19 funding the hospital is receiving. He said the actual amount days of cash on hand is 136 days, which is almost identical to where the hospital was in 2019.

“Our days cash on hand continues to rise and we are well above all of our bond covenant required ratios,” Love said.

This graph shows how many days of cash on hand the hospital has with COVID-19 funding. The actual amount days of cash on hand is 136 days, which is almost identical to 2019. CLA graph

“It’s pretty clear that even with the COVID-19 impact, the hospital would have held its own,” Deyle said. “We’re happy to see that the hospital had a successful financial year.”

Moving Forward

“We have received CARES Act funds and have been approved for multiple State Loan and Investment Board grants for equipment and renovation projects to keep our patients and staff safe under the new CDC guidelines,” Love said. “We are also using these funds as reimbursement of the COVID-19 related expenses such as PPE, staff and testing expenses.”

Love said the hospital will continue to expand and grow its services to meet the community’s needs while remaining fiscally responsible.

“The effect of COVID-19 is unknown as we move into our next fiscal year. While we have seen some improvement, we are still not back to our pre-COVID volumes in some areas,” Love said. “We have taken the conservative approach when budgeting for next fiscal year and we are still unsure of how COVID will respond with our normal flu and pneumonia season.”

Love said the employees at the hospital are “cautiously optimistic” for the hospital’s financial future.

“With the help of the CARES Act funds, our balance sheet is strong and we will continue to increase our financial stability as we complete some construction projects,” Love said.