Whidbey’s hospital district looks like it will remain firmly in the black next year, despite a few costly projects.
Chief Financial Officer Paul Rogers gave a presentation of WhidbeyHealth’s proposed budget last week and the board is expected to adopt it Thursday.
The hospital district’s budget surplus is currently $1.6 million, with 11.8 days cash on hand. Under the proposed budget, the projected surplus at the end of 2025 will be $1.7 million.
This is good news for the district following Moody’s Ratings decision early this year to downgrade the hospital’s bond rating based on liquidity challenges.
WhidbeyHealth’s annual budget is about $340 million. The revenue picture is complex and involves property tax levies, private insurance, Medicare and Medicaid, grants and fees for service.
Rogers explained that the 2025 budget is based on a list of assumptions. The hospital expects to receive an additional $3.3 million from the Emergency Medical Services levy. Average wage increases are just 2%, plus employee health insurance costs are bigger than ever. The hospital hopes to save money by replacing about 20% of the contracted labor with hospital employees.
The hospital capital projects planned for next year will cost over $5.5 million.
“I wouldn’t necessarily call this a wish list. These are truly needs,” Rogers said. “I am confident that we can purchase $5.57 million worth of capital next year and grow our days cash on hand.”
The largest project is replacing the aging HVAC system in the operating rooms. In the OR, the air system doesn’t just heat and cool the rooms, but maintains humidity levels and needed airflow, according to a hospital spokesperson.
The new HVAC system is expected to cost $3.8 million, but the hospital received a $2.5 million grant from the FDA for the project. The hospital expects the operating rooms to be down for about three weeks next year, which will reduce revenues from surgeries.
Conor O’Brien, hospital spokesperson, said the project will probably happen during the summer.
“As we move towards that date, we’re looking into solutions that would continue to allow us to have certain procedures remain available, such as Cesarian Section births, while coordinating with other facilities for any trauma cases that may present themselves during the project period,” he wrote in an email.
The hospital is also planning on implementing a $1 million phone system to replace the current troubled system. Board members emphasized that fixing the phones will go a long ways toward improving customer service.
Plus, a $1.3 million software upgrade will track patient files and medical needs. The IV pumps will be replaced, which will cost about $250,000.
