Millions in debt, no rescue in sight

Doscher, Board at odds over cutting expenses

WINNSBORO – The harsh reality of Fairfield Memorial Hospital’s financial situation – millions of dollars in the red and no rescue forthcoming from Fairfield County Council – was the all-consuming topic of discussion during the Finance and Audit Committee meeting before the regular FMH Board meeting April 24.

Committee chairman Randy Bright attempted to tackle the issue head on by asking hospital administration to look for more ways to cut costs. “In light of our fast-approaching $3.4 million in vendor payables, and $5.3 million in additional long term liabilities, and that we are dropping revenue and we are dropping traffic (patient) census in our operations” … expenses are “something we can impact… instead of looking back, we can look forward.” Bright said.

“Also, the (Fairfield County) Council has committed to not giving us any extra money aside from the potential land sale,” he said.

During Council’s April 16 budget workshop, Council declined to budget either the $4,000,801 that the hospital requested for 2018-19 or the $1,043,000 recommended at the administration.

“So that being said, do you have any particular expense cuts you would like to propose?”  Bright asked hospital CEO Suzanne Doscher.

“We evaluate the entire budget constantly,” Doscher responded. “I had the impression that if we were on target with the (current) budget then it wasn’t the board’s decision to redo the financials – the budget – again.”

Bright agreed, but said “The only problem with that is, however, that budget through September is expected to lose a million six, and if we go all the way through December, then we are going to lose well over two million dollars.  We don’t have that kind of financing.

“And the real kicker is,” Bright continued, “the county council is not going to give us any more money. We need to start looking at even more expense savings or anything that gets us away from losing two million plus by the end of the year. Because we are not going be able to sustain that.”

Bright pointed out line items in the current hospital budget as examples of expenses that could be cut: “travel and education – we are going to shut down in December.  Do we really need this?  We have budgeted more than $12,000 (in the budget) for travel and education,” Bright said.

“We evaluate it every time,” Doscher responded.

“Give me an example, what do we have on the agenda for travel now…no seminars, no sessions for hospital staff in Greenville…” Bright persisted.  “Aren’t these things planned some time in advance?”

“I can’t keep up with other people’s schedules to tell you that right now. I don’t get into the weeds like that,” Doscher said.

Bright noted that hospital expenses are currently 80% of gross revenue versus 70% of gross revenue a year ago.  “It’s our balance in our revenues and expenses that has worsened and we have got to do more.”

However, His comments did not go over well with Doscher, who quickly defended the hospital’s fiscal management.  “We are running operations and we are managing the operations. If you want to rebase the budget again, we can do that.  But we have to run the operations.”

“Yeah, we were saying that right up to the point we got rid of – finally – three under-performing departments; that is my point. We did that way too late, two years too late.” Bright said.

“In your opinion but not in everybody’s opinion.” Doscher shot back.

“It was the opinion of the consultants.  No one wanted to get rid of them, we had to,” Bright said.

“So we are exactly where you started from,” board member William Turner added.  “I don’t know how we do expenses and such when we don’t have any money?  …How much did we spend last month? I don’t see how we have the doors open now.  But every day it’s money lost, money lost.  I don’t see how we can spend anything without approving every penny and I don’t know how you approve money you don’t have.  And we don’t have any money.  That’s how simple it is!”

“We are five million dollars in debt and we only have current assets of about 1.2 million dollars,” Bright added.

Bright and other committee members continued to press for more specific cuts to the hospital budget. “We should look at memberships,” Trustee Ron Smith suggested.

After discussion, the committee approved a motion to ask hospital administration to come back with more cuts.  At minimum, the categories of expenses for review would include dues, subscriptions, mileage, advertising, marketing, and hosting and participating in events except for the purposes of employee appreciation.

Bright said the hospital has “carte blanche” to make any cuts to the budget as long as patient care was not affected.

“And employee morale,” Fantry added.

March Financials

CFO Timothy Mitchell’s monthly financial briefing did have some good news – the month of March brought in extra revenue in the form of collections from the SC Department of Revenue of outstanding patient debt.  As a result, the hospital ended the month of March with $96,136 in revenue over expenses.   However, excluding bad debt recoveries and a premium refund, the hospital experienced operating losses of $241,777 for the month. For first six months of the current fiscal year (July through March, the hospital’s EBIDTA (earnings before interest, depreciation, taxes and amortization) was a negative $610,077.

Comments

  1. R. Gee says

    ‘I don’t get into the weeds like that’? Say what????? It appears the CEO of a failing business would, indeed, get into the weeds with a weedwhacker regardless of a budget to show good faith to the citizens of this county. I saw signs plastered in Winnsboro country roads last week advertising ‘FCH is here for you’. Who approved the cost of those silly signs and the person who installed them? It is bankrupt and shutting down and we are paying for signs? It would seem to me at this critical juncture that every cent that is being spent would be personally approved/denied by the CEO only if operational critical regardless of a budget. Training? Business/travel expenses? Does the CEO not understand shutting down? At this crazy point, I would shut the thing down TODAY which seems the on,y way to stop the bleeding and mismanagement. Thank you to Mr. Bright’s tenacity, objectivity, and wisdom!

  2. David R. Williams says

    Winnsboro like the hospital is on life support. No businesses, commerce and no interest from county gov’t to help. As the chair of the CTC ( Citizen Transportation Committee) I reached out to the state C.C.T. personal to help fund a I 77 ” WELCOME TO FAIRFIELD COUNTY THE LARGEST INDUSTRIAL COUNTY in SC” and was told that Citizen Transportation funds were not available for enhancement after 2013. This stopped any effort to assist the Fairfield County with C.T.C, funds to create a I 77 calling card. Chester County at I 77 and # 9 has a great shingle at their interchange. Why does Fairfield County, at Peach Rd not have a, WELCOME TO FAIRFIELD COUNTY? What do you think? Does Faifield need to attract commerce via I 77. There are 600+ acres at Peach Rd. Just my Thought. You go figure.

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