(Spirit Lake)– An audit report for the fiscal year ending June 30th, 2023, shows Lakes Regional Healthcare posted a net loss of nearly $71,000 in operations, a .01 negative margin. CEO and President Jason Harrington says while that may appear to be concerning, that it was a pretty common trend among healthcare facilities nationwide…
“If you look at the industry over the last year kind of coming off two years of covid, I think most, I can’t remember the figure, like 70 percent of hospitals in the country had a negative operating margins. We actually faired much better than the industry generally. We had an operating loss of .01 percent, about $70,000 as you made reference to, so. I think it was just a difficult year coming off two years of covid. The two previous years like many organizations or businesses had covid relief funds that helped to offset that and in 2023 there weren’t any of those available. So I think we feel fortunate to have had the financial performance we did, albeit a small operating loss.”
Harrington says he’s optimistic things are turning around in a positive direction…
“Our volumes for the last year were relatively flat and we’re seeing through the first six months that our volumes have picked up. We’ve actually seen in our drug expenses and some other inflationary expenses that our expenses are down just a little bit. We’re using less contracted labor which is quite expensive and was really happening fairly significantly throughout the industry. We had about $1.5 million in contracted labor last year, so. We’re starting to see the expense side of that come down slightly. The other, I think probably the negative for us being a county hospital is our ability to invest our cash reserves is really limited to government paper and CD’s and we expect interest rates to drop, and so our investment income in all likelihood will go down in the next year. So we hope to balance those two things out, but we’re optimistic into having seen the financials for the first six months for the fiscal year.”
Harrington says it was also challenging on another front…
“It was really kind of a challenging year from a staffing perspective. I’m thankful to our team for putting in the extra work. You know, in spite of the financials, we retained our five-star rating with CMS, so we’re very proud of that. So yeah, I’m optimistic to the future and think that FY ’24 will be, or actually FY ’25, actually, will be a more positive year.”
Other findings of the report show LRH had a net operating revenue of nearly $58 million, a 1.2% decrease from the prior year. Net non-operating revenues totaled $1.7 million. Operating expenses totaled $59.8 million, a 4.9 percent increase from the prior year.
