DOVER-FOXCROFT - The Hospital Administrative District 4 Board of Directors has approved a fiscal year 2009 operating budget for Mayo Regional Hospital and its associated physician practices. The budget forecasts strong revenue growth, led by increased activity in surgical services and physician office visits, and includes an increase in Mayo's employment level.
Mayo anticipates net operating revenue of $41.3 million in the coming year. After expenses of $40.1 million are factored, Mayo expects to generate operating income of $1,226,232, for a margin of 2.97%, 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 gross revenues are expected to increase by 10.5%, or nearly $6 million, due to a combination of greater use of hospital services and to rate changes.
Allen said Mayo's successful recruitment of new medical staff members, both in surgical services and primary care practices, is expected to drive patient volumes as access to care is increased. Operating room cases are budgeted to increase by over 19%, reflecting the impact of operating a full year with three orthopedic surgeons, the addition of an otolaryngologist, the replacement of a general surgeon and the replacement of two obstetrician/gynecologists. Physician office visits are predicted to rise 10.5% with an increase in physician availability at practices in Dover-Foxcroft, Dexter, Milo, Guilford and Corinna.
Mayo plans a general rate increase of 5% to all service areas, which is in line with historical rates that have resulted in a 10-year average increase of 3.7%.
"I am pleased that the outcome of our four-month budgeting process both responds to service area needs and again is attentive to managing costs," said Mayo CEO Ralph Gabarro.
Mayo's rate of net bad debt and charity care to be absorbed by the hospital will remain at 4.8% of overall hospital gross patient service revenue, or approximately $3 million. About half of that amount is due to availability of free care based on the patient' income and qualifying guidelines.
Mayo's work force next year, including hospital and physician office staff, is budgeted at 375 full-time equivalent (FTE) positions, an increase of 12 positions over the previous year. Total salaries and benefits at Mayo will reach $25,753,702, representing 64% of the overall expense budget.
HAD 4 directors on Sept. 17 also authorized a hospital capital equipment budget of over $2.2 million. The largest single item is $408,000 to purchase new digital mammography equipment for Mayo's Imaging Center for Women.
Other major capital purchases are for new patient monitoring equipment, information technology upgrades, modification of the hospital's front entrance, operating room equipment, a new ambulance, new patient beds and physical plant engineering needs.
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