DOVER-FOXCROFT - Hospital Administrative District 4 directors have approved a fiscal year 2008 operating budget for Mayo Regional Hospital and its eight associated physician practices. The budget is marked by strong outpatient revenue growth and an increase in Mayo’s employment level.
Mayo anticipates net operating revenue of $37.8 million. After expenses of $36.6 million are factored, Mayo expects to generate operating income of $1,213,660, for a margin of 3.2%, in the fiscal year beginning Oct. 1. Net income is reinvested back into the nonprofit community hospital to fund depreciation, acquire new equipment and develop new programs.
Chief Financial Officer Dennis Allen said total hospital gross revenues are anticipated to increase by 4.47% in the upcoming year. The increase is due to a combination of greater use of hospital services, and to rate changes.
Allen said most of the rise in Mayo’s revenues will come in the outpatient area, from increased activity in such departments as laboratory, emergency room and counseling services.
Outpatient services, which account for 62% of gross patient revenue, are expected to increase revenues by $1.7 million in 2008.
Solid growth is also projected in Mayo’s network of physician offices, which are located in Corinna, Dexter, Dover-Foxcroft, Guilford and Milo. Physician office visits are expected to exceed 51,000 during the year.
Mayo plans a 3.5% overall general rate increase at the start of the fiscal year. The hospital also expects to absorb bad debt and free care amounting to over $2.4 million, 4.2% of the overall hospital gross patient service revenue.
Mayo’s work force next year, including hospital and physician office staff, is budgeted at 362 full-time equivalent (FTE) positions, an increase of 12 positions over the previous year. Part of the employment increase is due to decreased reliance on temporary agency personnel.
Mayo’s employment level has grown from 291 to 362 FTEs since 2004, driven both by increased use of hospital-based services and expansions of the hospital’s physician office network and regional ambulance service. Total salaries and benefits at Mayo will reach $23,237,638 in 2008, representing 63.4% of operating expenses.
HAD 4 directors on Sept. 19 also authorized a hospital capital equipment budget of $2.1 million. Of that total, $446,000 is earmarked for the Emergency Medical Service for the purchase of one new ambulance and other equipment, and construction of a new ambulance base to serve the Dexter/Corinna region.
Other capital purchases include a new radiology room; information technology hardware and software upgrades, including patient bedside point-of-care and medication verification systems; operating room equipment; and repairs and maintenance projects to buildings on the Dover-Foxcroft campus.