DOVER-FOXCROFT - For the second year in a row, there is no rate increase included in Mayo Regional Hospital's budget.
Hospital Administrative District 4 directors on Sept. 28 approved a fiscal year 2006 operating budget for Mayo Regional Hospital and its eight associated physician practices that anticipates net revenues of $31.8 million.
After expenses of $30.8 million are factored, Mayo expects to generate operating income of $1,020,817, for a margin of 3.2%, in the fiscal year that begins Oct. 1. Net income is reinvested back into the nonprofit community hospital to fund depreciation, acquire new equipment and develop new programs.
A projected rise in revenues is related to increased activity in the physician office area and in the hospital's outpatient services.
There is no overall increase in Mayo's rate structure for 2006.
"To go two years in a row without any rate increase is a tremendous accomplishment. I don't know of any other hospital in Maine who has done that," said Ralph Gabarro, Mayo's Chief Executive Officer. "We're very conscious of the cost of healthcare and are doing what we can to help lessen the impact on people in our service area."
Mayo's work force next year, including hospital and physician office staff, is budgeted at 321 full-time equivalent positions -- third largest in the Penquis region. Mayo has added a dozen positions for 2006 following the acquisition of the former Penquis Orthopaedics medical practice, the recruitment of a second specialist in obstetrics and gynecology, and its agreement to manage the Corinna Ambulance service.
Total salaries and benefits will account for nearly $18.9 million.
Chief Financial Officer Dennis Allen said the new budget anticipates relatively small volume increases in overall use of hospital services. The exception is in the physician office area, where visits to the various hospital-owned practices in Dover-Foxcroft, Dexter, Guilford, Milo and Corinna are expected to grow by 16.6% due to an increase in healthcare practitioners. The budget estimates an average daily census of 11.3 patients in the hospital. Outpatient revenue is expected to account for 74% of Mayo's budget.
HAD 4 directors also authorized a hospital capital equipment budget of $2,472,860, which includes funds for construction of a medical office building in Milo, and renovations to the oncology department at the hospital. Some of the larger items in the capital budget are for a telephone system upgrade, and equipment for the radiology, laboratory, operating room and information technology departments.
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