South Central Kansas Medical Center has released its financial update for January, in concert with a Board of Trustees meeting Thursday.

Until Thursday, no financials had yet been provided to Ark City Daily Bytes for 2018. They were not included in a packet that was sent to the SCKMC Board of Trustees and the media Feb. 19, prior to the Feb. 22 meeting that was postponed one week due to icy weather.

SCKMC finished 2017 with an overall pretax loss of $2.5 million across all of its operations, while the final loss was $177,715 after $2.33 million in sales tax revenues was added to the equation.

Although this was an improvement over 2016’s final loss of $1.552 million, it still was a disappointment to city officials who hoped to end 2017 in the black after a promising start that included the launch of the profitable Senior Health Unit and a lab outreach program that initially was poised to generate more than $1 million in revenue — only to see most of that paid back to insurers who refused to support the program.

It is still very early in the year, but early trends indicate that SCKMC could possibly be in for more of the same disappointing news in 2018.

January losses

The January numbers indicate SCKMC, the Senior Health Unit and Winfield Medical Arts (WMA) all are losing money one month into this year.

SCKMC showed an overall loss of $89,669 in January, although that amount is down from January 2017, when the hospital reported a loss of $192,431. January tax revenues of $179,790, which are down $15,000 from this time last year, brought the hospital into the black, at $90,121.

Comparing the numbers year over year shows an increase across the board in operating expenses. The other main difference is the loss of the lab outreach income.

The report also shows that the Senior Health Unit lost more than $7,000 in January. Since its inception, this department only has showed a loss one other time, in the third quarter of 2017. In a year-over-year comparison, the same unit generated $84,488 in the first month of 2017.

Finally, WMA showed a loss of $123,143 in January. This follows its end-of-year loss of $174,747 at the conclusion of 2017.

The Winfield clinic was purchased by SCKMC midway through 2017, so there is no year-to-year comparison. However, WMA has not shown a profit on the books since it was purchased, despite assurances to the City Commission that it would be profitable.

The January loss was “adjusted” down by about $20,000 to account for a $9,569 payment from South Central Kansas Clinic (SCKC) to WMA, as well as projected increased reimbursement down the line as the Winfield clinic completes the process of becoming a Rural Health Clinic.

SCKC finally breaks even

There is one positive in the January financials, however.

The only major unit making money for SCKMC in January was SCKC, which cleared $70,178 in profit. Even after the $9,569 payment to WMA, SCKC generated $60,609 in adjusted income.

This represents a marked improvement over 2017, when the clinic only managed to make $6,817 and generally posted a loss in every month.

The clinic slowly has been inching closer to breaking even, though, as increased reimbursements from its own Rural Health Clinic designation have kicked in. This provides some hope that Winfield Medical Arts will display a similar turnaround in the year to come, as well.

In all, the first month of 2018 managed to show net profit for the entire SCKMC operation of just $29,840 — a total which includes the sales tax that was generated — and shows a decrease in adjusted net income of nearly $65,000 in a year-over-year comparison versus 2017.

It is worth noting that the half-cent sales tax will sunset March 31 of next year, which will reduce the amount of sales tax generated by one-third. If that loss of income were already in effect currently, January would have seen SCKMC post an overall net loss of about $30,000.

SCKMC financials at a glance

The following non-audited numbers are current as of Jan. 31, according to SCKMC Chief Financial Officer Holly Harper:

 SCKMC (Legacy Operation)Senior Health UnitSouth Central Kansas ClinicWinfield Medical ArtsTOTAL OPERATION
Total Gross Revenue$2,825,389 (2018) -
$2,875,973 (2017) =
$50,584 decrease
$431,069 (2018) -
$355,500 (2017) =
$75,569 increase
$222,680 (2018) -
$196,517 (2017) =
$26,163 increase
$226,573$3,705,711 (2018) -
$3,427,990 (2017) =
$277,721 increase
Deductions (bad debt, contractual costs and charity write-offs)$1,551,327 (2018) -
$1,514,503 (2017) =
$36,824 increase
$324,673 (2018) -
$163,530 (2017) =
$161,143 increase
$42,000 (2018) -
$66,000 (2017) =
$24,000 decrease
$108,200$2,026,200 (2018) -
$1,744,033 (2017) =
$282,167 increase
Total Operating Revenue (Total Gross Revenue minus Deductions)$1,334,233 (2018) -
$1,367,432 (2017) =
$33,199 decrease
$106,396 (2018) -
$191,968 (2017) =
$85,572 decrease
$180,680 (2018) -
$130,515 (2017) =
$50,165 increase
$118,617$1,739,925 (2018) -
$1,689,919 (2017) =
$50,006 increase
Total Operating Expenses (salaries, benefits, professional fees, supplies, repairs & maintenance, rent/lease, other purchased services, legal/audit fees, collection expense, advertising/physician recruitment, dues & subscriptions, training & travel, utilities, professional & liability insurance)$1,212,535 (2018) -
$1,330,281 (2017) =
$117,746 decrease
$103,400 (2018) -
$97,963 (2017) =
$5,437 increase
$110,846 (2018) -
$124,151 (2017) =
$13,305 decrease
$240,475$1,667,254 (2018) -
$1,552,395 (2017) =
$114,859 increase
Total Capital Costs (interest expenses and depreciation)$213,858 (2018) -
$233,066 (2017) =
$19,208 decrease
$10,314 (2018) -
$9,520 (2017) =
$794 increase
N/A$1,285$255,457 (2018) -
$242,586 (2017) =
$12,871 increase
Interest and Non-Operating Income$2,492 ('18) -
$3,484 ('17) =
$992 decrease
N/A$344 (2018) -
$450 (2017) =
$106 decrease
N/A$2,836 ('18) -
$3,934 ('17) =
$1,098 decrease
Excess Revenue Over Expenses a.k.a Gross Profit or Loss (Total Operating Revenue minus Total Operating Expenses minus Total Capital Costs plus Interest and Non-Operating Income)$89,669 loss (2018) -
$192,431 loss (2017) =
$102,762 upswing
$7,318 loss (2018) -
$84,488 gain (2017) =
$91,803 total decline
$70,178 gain (2018) -
$6,817 gain (2017) =
$63,361 gain in profit
$123,143 gross loss$149,950 loss (2018) -
$101,129 loss (2017) =
$48,821 total decline
Sales Tax Revenue (1.5 percent on all taxable sales in Arkansas City)$179,790 (2018) -
$194,982 (2017) =
$15,192 drop in taxes
N/AN/AN/A$179,790 (2018) -
$194,982 (2017) =
$15,192 drop in taxes
Hospital Net Income or Loss (Excess Revenue Over Expenses plus Sales Tax Revenue)$90,121 gain (2018) -
$2,551 gain (2017) =
$87,570 gain in profit
$7,318 loss (2018) -
$84,488 gain (2017) =
$91,803 total decline
$70,178 gain (2018) -
$6,817 gain (2017) =
$63,361 gain in profit
$123,143 net loss$29,840 profit (2018) -
$93,853 profit (2017) =
$64,012 total decline