ARMC approves June finances with deficit

ALPENA – Alpena Regional Medical Center Finance Committee approved its June finances with revenues dropping a little short for the last month of the fiscal year. Operations for the month ran a deficit of $275,717, compared to a planned excess of $277,083, and when non-operating revenue is added, the net deficit is $244,297.

“Our outpatient volumes are pretty steady,” George Smart, vice president of finance and information systems, said. “Inpatient revenue was down, and we did have a shift, a reduction in Blue Cross while we had an increase in Medicaid.”

Smart said he wants to look into the specifics of the expanded Medicaid to see if the Affordable Care Act has made a difference in revenue.

“I want to find out whether or not that increase is tied to the expanded Obamacare that was implemented in April,” Smart said. “It’s something I would like to do more follow-up on.”

The net operating revenue came within 1.6 percent of the plan, and year-to-date is running 1.4 percent of plan, which is very close to budget.

“We continue to incur overages on the professional service expenses as well as the drug costs. The drug costs specifically are tied into medical oncology services, the drugs that are used for medical oncology are a higher cost drug, and with an increased volume and lack of 340(b), that contributed to that drug cost going up,” Smart said. “Where we made the gain, where we made our bottom line, was on cost containment. We were 3.2 percent below budget on total expenses for the year.”

Smart said the hospital is heading in the right direction, and that in year to year comparisons, the numbers are consistent as far as operating margin and our total margin.

Auditors will be working at the hospital around the end of the month, and the final report should be ready in September.

Nicole Grulke can be reached via email at or by phone at 358-5687. Follow Nicole on Twitter @ng_alpenanews.