Trios Health’s chief financial officer said he’s optimistic after patient numbers, revenue and net income broke records in March.
The Kennewick-based public hospital district has financially struggled for months, leading to layoffs and other actions to save money and improve its cash flow. While it’s too soon to call March’s numbers a trend, “it’s going in the right direction,” CFO Tony Sudduth said.
“We feel like we are turning the corner,” he said.
Vic Johnson, vice president of the district’s board, said Trios Health has made “amazing improvements” recently.
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“We have put the pedal to the metal and gotten more business, are busy revamping our revenue cycle,” Johnson told the Herald. “We are on a good run right now.”
Another board member, Rick Reil , described the March numbers as good news. But, he said, challenges lay ahead — from a traditionally slower summer season and a new required coding system expected to slow down billing, to the added expense of a new medical office building and ambulatory care center set to open this summer in Southridge.
“All those things are not red flags, but yellow flags. They’re showing that we can’t do business as we’ve done it and expect to survive. We need to be cautious,” he said.
Sudduth announced the March figures at last week’s board meeting. The district includes two hospitals, four urgent care centers and a network of physician practices.
In March, the district saw 30,890 patient visits, up about 7 percent over the same time last year. The district opened its second hospital, called Trios Southridge Hospital, last July.
Along with the increased patient volume in March, the district saw $16.2 million in net revenues, an all-time high. Its net income for the month was about $7.4 million, also a record.
The net income included $6 million from the sale of some water rights. Even without that one-time infusion, the net income would have been a record — far better than recent months, Sudduth said.
Since at least last May, the district’s monthly net income frequently has been in the red.
The district’s accounts payable balance, which is the amount owed for costs from utilities to services and supplies, was about $15.7 million in March, according to a financial report.
That was still several million above the target of $8 million to $10 million, although it also was an improvement over recent months. In January, the accounts payable balance was more than $19 million.
It’s now about $10 million, Sudduth said Friday.
And the district has a “cash cushion” of about $3 million, the most in some time, Sudduth told the Herald.
Officials have said several factors contributed to the district’s tight cash position, including rising expenses, decreased reimbursements and a delay in finalizing sales of several million dollars in assets, the water rights among them.
The cash crunch sent rumors swirling in the community, inspired worry among Trios staff and highlighted a division on the board of commissioners. Three board members — Reil, Kathy Davidson and Marv Kinney — advocated bringing in outside expertise, while the others said that wasn’t needed.
In late February, during a packed board meeting, CEO Glen Marshall announced an improvement plan that included layoffs — 23 management and clerical support positions eventually were cut — and other steps, such as eliminating non-essential service agreements, to help the bottom line.
Reil has said it seemed the plan was scrambled together under pressure and didn’t include enough input from department heads. While he’s cautiously optimistic about the March numbers, “We have a lot of work to do,” he told the Herald.
He pointed to the traditionally slower summer months, the upcoming coding system change and the opening this summer of Trios Care Center at Southridge, which will mean another sizable lease payment on top of about $800,000 a month the district pays for the new Southridge hospital.
“We’re digging ourselves out of a mess that could have been avoided” with more timely action, Reil said. “Where would we be if we hadn’t gotten into such a deep mess?”
Johnson also noted the upcoming coding system change and the slower summer months, though he said the district is in a stronger position as that time approaches. He expects the summer opening of the Southridge care center to bring further growth for the district, he told the Herald.
In a statement, Sudduth said, “Strong performance in February, a record-breaking month in March and solid volumes during April” have put the district on better financial footing.
“We must remain focused and stick to our plan,” he said.