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January ’19 Message from the CEO

Henry County Health Center | January 30th, 2019

Happy 2019 everyone! I hope the New Year has started off well for all of you.  At the time of writing this update, I believe we all are in amazement of how bitterly cold it is!  Then in just a few days it is going to be in the mid 50’s!


This month, I would like to provide you with an update on how the health center is doing financially this fiscal year. Over the last year, I have been working on communicating to our email newsletter subscribers and the public of the financial challenges the health center had last fiscal year.  The Board of Trustees and our leadership team this past year made some difficult decisions.  As a health center, we have seen improvements from last year.  At the January 2019 Board of Trustees meeting, administration reviewed with the trustees how the health center was doing for fiscal year 2019.


We have been working hard throughout the health center over the last year to decrease our operational costs as well as to implement opportunities for growth. We have seen a 54% improvement in our operating income statement performance this fiscal year as compared to last year.  This improvement has been the result of significant growth in the number of ambulatory surgeries at the health center along with an increase in the number of outpatient procedures.  At the same time, we have kept our operating expenses in check and thus, we are seeing an improved operating performance this year.  After the first six months this fiscal year, the health center has a negative ($655,000) operating margin, and a negative ($92,000) for a total margin.  Last fiscal year at this same time frame, the health center had a negative ($1.4 million) operating margin and negative ($575,000) total margin.   I am very thankful for the positive improvement from last year; however, I am concerned that even with the amount of growth the health center has had this year and with the changes we implemented, that we are still experiencing a negative operating and total margin on our income statement.  We are assessing how much more the health center and our operations will need to evolve to improve our financial performance throughout the fiscal year.


How are the rest of Iowa’s Critical Access Hospitals (CAH) doing? HCHC is not alone in feeling this impact.  Throughout the state, other Iowa Critical Access Hospitals (CAH) are having similar financial constraints.  On average, Iowa CAH have a negative operating margin.  Like the other CAH in Iowa, HCHC continues to be negatively impacted by the decline in payment due to Managed Care Medicaid in the state of Iowa as well as nearly 65% of the health center’s revenue coming from a governmental payer.


One of the items the health center and the Board of Trustees is looking at for this next fiscal year is to increase the tax levy support for the organization. In order to help improve the health center’s current financial position, the expectation of another cost increase from the IPERS program as required by the State of Iowa, and an increasing governmental payer mix, HCHC’s administration did recommend to the Board of Trustees at the January 2019 meeting a property tax levy increase for the health center from 1.61865 to 1.89651 for the following fiscal year.  This levy increase will provide the health center with an additional $245,000.  The increase on a home that is assessed at $100,000 would be approximately $16 a year.  The board of trustees will have a public hearing at 12 noon on February 19, 2019, and will then address the tax levy at that meeting for the upcoming fiscal year.


Thanks again for taking the time to read our e-newsletter. Please make sure to look at the current newsletter to review the different events that will be occurring here at the health center that you may find benefit from.  As always, I hope you find it informative and helpful for your health care.  If you should happen to have any questions, please feel free to contact Shelley Doak or myself and we will be happy to follow up with you.