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Operating loss, but asset to debt ratio improves in 2024
Despite some challenging headwinds, Ely-Bloomenson Community held its own financially over the last 12 months.
The hospital posted a net operating loss of $258,838 on just over $32.1 million in revenues in the last fiscal year, but overall the Ely Health and Hospital Foundation grew its assets and reduced its debt load.
Those were some of the key findings of an audit report delivered Monday, during the annual meeting of Health and Hospital Foundation members.
A small audience of roughly 20 people, nearly all hospital board members and staff, turned out for the session and heard the financial report delivered by Danny Schmidt of firm RSM.
Schmidt’s presentation was largely optimistic and indicated EBCH has “a very impressive” financial position.
“Right now it’s really challenging,” said Schmidt “Reimbursement rates on how health care organizations get reimbursed are not like a typical commercial for-profit enterprise. You can’t pass costs on to the consumer. With inflation and interest rates like we’ve had the last couple years it makes it a very challenging environment for health care organizations.”
The hospital operated at an essentially break-even margin in the fiscal year that ended Sept. 30, with the deficit amounting to less than one percent of total expenditures. A year ago, EBCH had an operating gain of just over $369,000 on total revenue of about $30.9 million.
Other financial movement in the last year was positive, with its liquidity measure improving.
At the end of fiscal year 2023, EBCH’s umbrella organization had $43.8 million in assets compared to $12.4 million in liabilities.
Those numbers improved this year, with assets now topping $46.3 million and liabilities at $10.9 million.
“You are seeing positive movement,” said Schmidt, a health care analyst for RSM, which is the fifth-largest accounting firm in the nation.
“Over time there’s been steady movement on the dial in a positive way,” said Schmidt.
The average age of hospital facilities is in good position, while EBCH is maintaining low debt-to-capitalization ratios, as well as 149 days of cash on hand.
“You have a solid balance sheet and a lot of leverage in an operating environment today when interest rates are much higher than they were two or three years ago,” said Schmidt. “Having lower leverage is key because you’re not paying as much interest to bond holders.”
Schmidt added that the Ely hospital’s debt is also low “when you compare to some of the other operators who are operating critical access hospitals.”
The overall gain for EBCH was attributed to non-operating income including investment income generated by investment assets.
Schmidt noted that “margins are very thin for health care organizations.”
“When you look at the challenges in this environment, it’s really challenging to make a margin,” said Schimdt. “When I evaluate the health care ecosystem in general, you see a lot of organizations in the red and who are struggling to find a way back to zero.”
He credited hospital leadership led by CEO Patti Banks for maintaining a positive financial picture.
“Patti’s team has done a fantastic job of navigating the financial complexities it takes to keep a hospital up and running and serving the community.”
Banks presented an assortment of data and statistics related to EBCH operations.
Inpatient days were nearly identical although there was a notable (184-224) increase in the number of patients admitted.
It was also a very busy year for the emergency room, with 3,776 visits this year, compared to 3,700 the year prior.
EBCH has taken steps to market itself as an option for surgical procedures, urging area residents to get care here rather than going to Virginia or Duluth.
Those efforts have paid off, with surgical procedures rising again to 629, up 12 from a year ago and an increase of 30 percent in comparison to 2014.
Radiology visits continued to jump, going from 4,170 three years ago to 8,524 last year to 9,316 in 2024.
EBCH reported a better than 10 percent increase in lab orders processed, although retail pharmacy fills dipped by about four percent.
The hospital continues to have a major impact as an economic driver in the community, with 122 personnel, about 109 full-time equivalents, resulting in payroll and benefits spending of nearly $14 million.
