Salary/professional fee expenses increase
Crawford County Memorial Hospital (CCMH) had budgeted for a $50,000 loss in July, but the actual loss for the month was $109,812, according to CCMH CFO Rachel Melby’s report to the hospital trustees on Monday evening.
She said CCMH anticipates losses in July and August, which are slow months for the hospital.
The hospital’s combined salary and professional fee (contract labor) expenses were up nearly $125,000 compared to last year, Melby said.
The ongoing pandemic has put a major strain on what was already a very significant nursing shortage.
“Our contract labor price, in some cases, has doubled,” she said. “Unfortunately, there’s no really easy solution to this problem right now. Like many hospitals, we’ll continue to look for creative ways to recruit and retain a very slim nursing market. Until the market right-sizes itself, I expect through the end of this year, and through next year as well, we’ll continue to see higher contract labor prices and we’ll continue to struggle, like all hospitals are, for nursing staff.”
The problem is nationwide, said CCMH President and CEO Erin Muck.
“If you want to be a travel nurse, you can make between $3,000 and $6,000 a week,” Muck said. “That is something no hospital can compete with. That’s more than a lot of physicians make.”
She noted that about 30% of Iowa’s registered nurse workforce is of retirement age.
“Working during COVID, and being one of the more at-risk groups, you’re seeing a ton of retirements, and we saw that here as well,” Muck said.
“We had retirements in OB and other departments, so you’re seeing that people retire a little sooner than they maybe normally would, and just getting out of nursing altogether.”
Others are getting out of the profession because they’re tired of dealing with COVID-19, she said.
Attracting and retaining nursing staff will continue to be a problem, she said.
Melby said the salary/contract labor expenses, along with the discontinuation of COVID grant funds, explain most of the July loss.
CCMH ended July with $17,794,220 cash on hand, which was a decrease of $1.1 million from the end of June.
She noted that CCMH expects a large decrease in cash in July due to a third payroll payout of about $780,000, and insurance payments of about $300,000; contract staffing expenses totaled about $124,000, she said.
The cash decrease was similar to the $968,000 decrease in July 2020, Melby said.
CCMH had 193 days of cash on hand at the end of July, which was down from 205 at the end of June, but above the hospital’s target of 180 days.
Melby said she would not continue to provide a 12-month rolling average of the hospital’s debt service coverage ratio because that number is unrealistically influenced by the funds the hospital received through governmental COVID relief programs.
She said she will provide a one-month snapshot of the debt service coverage ratio, which was 1.58% at the end of July, which was slightly lower than the hospital’s target of 1.6%.
“Even though it is below what we target, it is still well above our bond requirements of 1.25(%),” she said.