Central Peninsula General Hospital Inc. is back in black, according to official reports released last week.
According to preliminary figures, the nonprofit organization that manages the Kenai Peninsula Borough-owned hospital posted a net profit of $2.04 million after closing out its fiscal year 2003 books with more than $78,000 in operating income.
This comes just one year after an independent audit reported a net loss of more than $372,000, which was reflected when the organization went over its operating budget by more than $2.4 million.
"Significant efforts were made by everyone to turn the hospital's 2002 loss into a profit," said hospital CEO David Gilbreath. "This was a real team effort. All of the hospital employees worked together to cut costs and control expenses a dollar at (a) time in all departments."
Those figures, however, still must be verified by an independent audit scheduled to be completed this fall. The borough has contracted Kenai accounting firm Mikunda, Cottrell and Co. to review the hospital's bookkeeping and verify CPGH Inc.'s accounting.
The key change in the hospital's finances came in the form of about $5.4 million in net operating revenue, as the hospital brought in $40.7 million in patient revenue minus $11.3 in allowances for Medicare, Medicaid and charity care. That's a 15-percent increase over 2002 patient revenue.
The fiscal gains outperformed Gilbreath's initial expectations for the year.
"I predict that the hospital will have a six-figure loss this (fiscal) year, at best," he said in a March Clarion story. "Next year, we will be in the black."
Chief Financial Officer Edward Burke said the hospital's turnaround came in spite of several significant added costs, including a 33.6-percent increase in employee health insurance costs, a 27-percent increase in worker's compensation insurance, and an 11-percent hike in liability insurance.
"Tighter controls on spending and department-by-department cost-cutting measures made a significant difference to the bottom line," said the CFO, who took the helm of the hospital's finances at the end of the 2002 fiscal year.
"I'm very pleased with the positive changes that were made over the past year."
The CPGH Inc. report showed where overall 2003 operating expenses fell under budget by more than a half of a percent, including a 29.7-percent savings in the "other professional fees" category that overspent by more than $1.2 million in 2002.
Contract labor, which Burke identified as a problem last year, was itemized in the 2003 report, showing expenditures of $781,088. This was more than twice the $353,061 budgeted for the year but a marked improvement over the $829,953 spent in 2002.
Hospital spokesperson Bonnie Nichols said the contract labor fees accounted for emergency physicians and traveling nurses that substitute for full-time staff, among other things.
In 2003, CPGH Inc. also saw a 14.5-percent salary increase over the previous recording year, including raises of between 2 and 13 percent in January for all nonunionized employees, and a three-year nurses contract inked in December that raised nurses' pay by 13 percent.
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