Phoebe Board approves Fiscal Year 2020 budget

ALBANY — The board of directors of Phoebe Putney Memorial Hospital approved a proposed Fiscal Year 2020 operating and capital budget, which included an overview on the drivers of changes in health care.

The budget also includes a compensation and rate increase.

Brian Church, chief financial officer for Phoebe Putney Health System, said drivers include economic pressures, demands for better-coordinated and more cost-effective approaches to care delivery, new health plan products formed around narrow or preferred networks and movement toward value-based payment models.

Church said the payer mix of gross revenue for 2019 was 49.9% Medicare, 18.1% Medicaid, 11.2% Blue Cross Blue Shield, 13.7% commercial and 7.1% from no payer source. The admissions for FY 2019 at Phoebe are projected to be at 18,651, a figure budgeted to be at 18,712 in 2020.

The budget in 2020 also calls for 108,783 patient days, 2,171 deliveries, 12,431 surgeries and 75,025 emergency center visits.

Church said there has been increased financial pressure on retaining and recruiting a high-quality work force, nursing recruitment and retention challenges, drug cost increases, continued lost reimbursement due to a lack of Medicaid expansion, a shift in commercial payer reimbursement to “less costly” settings, government payment reductions, Medicare population growth, increased administrative burdens and costs, and annual inflationary increases for salaries, supplies and utilities.

The strategic initiatives for FY 2020 at Phoebe are a budget that includes an average 3% compensation increase based on merit and market adjustments in the second quarter, pursuit of a Level 2 trauma designation, expansion of an acute care floor for the full year, simulation lab, movement of recruiting in-house, international nursing as part of an effort to help with recruitment, specialty pharmacy and increasing the compliment of Phoebe Family Medicine Residency to eight slots per year.

“We are maxed out on the residency program budget,” Church said.

In addition, expansion of the orthopedic service line, rheumatology, dermatology, plastics, cardiovascular and general surgery, as well as marketing, Stay-in Market 365 and development of a new web-enabled access points for patients are among initiatives planned.

Church said the indigent and charity write-offs were $29.4 million for Dougherty, and a combined total of $15 million for Terrell, Lee, Worth and Mitchell counties.

An overall 3.25% charge increase — 3.67% for inpatient and 2.81% outpatient — is budgeted at Phoebe. Church said there is no increase in outpatient price-sensitive consumer areas, no increase in charges already higher than peer hospitals and adjustment of prices in areas where they are below market data for peer hospitals.

The goals of the charge increases are to fund merit and market adjustment pools for employees and partially fund cost increases from drugs, supplies and services. The combined annualized investment for the employee pool is $4.65 million, with $4 million based on merit and $650,000 from market adjustments.

The benefits for Phoebe employees were $76.528 million for FY 2019 annualized, a 15.9% increase from the prior year. In 2020, benefits are projected to be $77.944 million — reflecting a 1.8% increase from 2019.

Property taxes for FY 2020 are expected to be $951,303 in Dougherty County, $523,736 of which is the voluntary payment in lieu of taxes for Phoebe North.

“I would argue Phoebe Putney is one of the largest taxpayers in Dougherty County,” Church said, addressing criticism from the public that Phoebe does not pay property taxes.

Church said the budget risks include unplanned cuts in reimbursement, growth projections in key areas not obtained, a worsening nurse shortage, drug cost increases greater than planned and health insurance cost increases. For the year, $41.038 million is planned for capital expenditures — which is to include the building of a strategy plan, operating room renovations, simulation lab, a helipad addition to Phoebe’s main campus and pharmacy and elevator upgrades at Phoebe North.

Also at the meeting, Dr. Anie Uyoe from Phoebe Orthopedics gave the board an overview of a new procedure involving hip replacements performed from an anterior approach.

The next regularly scheduled board meeting is set for Sept. 11.

Staff Photo: Jennifer ParksStaff Photo: Jennifer Parks

Staff Photo: Jennifer Parks

Staff Photo: Jennifer Parks

Staff Photo: Jennifer Parks