Jay Horn and Steve Bruhmer of Denman and Company, LLP, Certified Public Accountants and Business Consultants, presented the financial report for Crawford County Memorial Hospital, fiscal year 2008, which ended June 30, to the hospital board of trustees during Monday night's meeting. Annually, a financial audit is conducted that examines balance sheets, statements of revenues and expenses, and changes in fund equity and cash flows. The results of the audit are used by the board of trustees in establishing budgets for the next fiscal year and to assess the budget of the current fiscal year.

According to Mike Collins, interim financial officer for the hospital, the 2008 audit showed that actual revenues and expenses were within $800 of the budgeted amounts.

Because of challenges collecting "bad debts," the hospital will continue to enhance efforts for accounts receivable and associated practices.

Collins offered this: CCMH is currently experiencing a backlog in coding in the medical records department resulting in accounts receivable being more than 80 days behind in billing versus an average of about 50 days for similarly sized hospitals. Additionally, to help address the collection issue, the board approved outsourcing self-pay collections to PmD for a trial period, a company that also offers this service to other local hospitals.

Mark Rinehardt, CEO and Administrator of the hospital, said, "The hospital is financially strong, the report hasn't changed anything" in reference to the proposed plans for hospital replacement. Horn commented during the meeting, "This is where you want to be in the opinion of the independent auditor."

The entire report and presentation is public information and can be accessed through the administration office at the hospital. A summary follows:

- Assets - Total assets have increased 6% since 2007, from $19,077,000 to $20,225,000. Contributing to this growth were increases in cash and investments as well as property and equipment. Cash and investments together totaled $8,449,000, reflecting an increase in current cash (from 530,000 in 2007 to 769,000 in 2008) and in board designated CDs (from $7,146,000 million in 2007 to $7,680,000 in 2008).

- Value of total property and equipment decreased by $529,585 to $6,009,700

- Revenue - 82% of gross revenues come from out patient services and totaled $28,277,000 million in 2008 an 8% increase from 2007.

- Net patient service revenue increased by 3%.

- The 2008 payor mix was 47% Medicare, 37% commercial insurance, 10% Medicaid, and 6% self-pay.

- Debt - Total long-term debt decreased by $465,151 to $586,013. "Bad debts," primarily composed of over-due payments for services, increased 91% in 2008 from $427,000 to $815,000.

- Expenses - Total expenses for 2008 were 9% higher than in 2007. Expenses increased from $15,613,000 to $17,083,000.

- The expense category with the largest percentage increase, 17% from 2007, was "other expenses" and included emergency and outpatient services such as contracted physician services, clinic expenses from increased volume and the addition of a new physician's assistant, fiscal and administrative services including legal fees approximately $150,000 of which were used to defend the new hospital construction project.

- Approximately 45% of the hospital's total expenses are for salaries, which showed a 4% increase.

- Financial Health - The debt coverage service ratio, the ratio of net operating income to debt payments, for CCMH is 5.2, well over the industry recommended 1.25. This figure may be used by lenders to evaluate a business entity seeking a loan.

- Total fund equity, the difference between assets and liabilities - an additional way to measure financial health, increased by 9% to $17,187,935.