Back in the Black
Rehoboth McKinley Christian Hospital shows a profit

By Bill Donovan
Staff Writer

GALLUP — After more than two years of struggling and the dismissal of its chief executive officer, Rehoboth McKinley Christian Hospital seems to have turned a big corner.

Tony Gonzales, treasurer of the hospital's board of directors, reported Wednesday that preliminary figures showed that in the past fiscal year, the hospital showed a profit of about $528,000.

That's compared to a $12.8 million loss the year before.

That loss cost David Baltzer his job as CEO and a major restructuring of the hospital. Chuck Wright was chosen to replace Baltzer, and that began several months of cost-cutting.

Looking at the figures for August, Gonzales said the board is now seeing the effects of the cost cutting. Revenue for July was about $500,000 less than expenses, but revenue for August was $1 million over expenses, which resulted in the $528,000 profit for the year.

That figure is still being referred to as preliminary because the hospital's books for the past year have still not been audited. It's possible, said Gonzales, that the auditors may decide to increase the bad debt or some other account to reduce that profit.

But Gonzales said he was pretty confident that the hospital, even after the audit, will come out in the black for the year.

The hospital's turnaround came about because patient revenue was up for the year $133.4 million compared to $127.6 million the year before. And that's with less patient days. And this increase came about without raising any of the rates.

Deb Mohesky, the hospital's chief financial officer, said the increase was due to the fact that the hospital was making about $125 more a patient day in billing. And the reason, she said, is that hospital staff is now billing for services that went unbilled for in the past.

Some of the cost cutting efforts have been reported in the past, including the laying off of several hospital personnel who were making salaries of $100,000 or more a year. But the spread sheet shows that the hospital spent less last year in almost every category than the year before.

The hospital isn't out of the woods yet.

The facility is still millions in debt and still having a hard time paying off vendors in a reasonable amount of time.

Mohesky reported that the hospital over the past year has been able to reduce the money it owes to vendors from about $7 million to $4.4 million. She also reported that the hospital, on most days, still has cash on hand to pay for only about two days of expenses.

"It's real tight," said Gonzales.

But everyone at Wednesday's board meeting appeared to be confident that the hospital has turned the corner and is on its way of getting back into good financial shape, even if it takes another year or two.

Gonzales said the preliminary budget that was set for this fiscal year predicts, with a little more cost cutting, that the hospital will show at this time in 2007 a profit of $1.2 million for this current fiscal year.