These are difficult times in the United States and in our World. When unemployment rises and the housing market tanks, it affects us in the rural parts of our Country too. And in our case, on the Mendocino Coast, maybe it affects us more. We rely upon tourism in this charming and quaint seaside community. So when money is tight, there tends to be less travelling and less spending. Our hospital is struggling along with the rest of our community. This year we will end our fiscal year with a loss from operations for the first time in the past 4 years. That means that the income generated through our charges for medical services during the past 12 months was not sufficient to cover our expenses. In fact the shortfall was over $2 million. Our total budget at MCDH is $43 million. So the $2 million difference is very significant. The good news for MCDH is that during the past 12 months we have also had income from other means outside of our operations. In fact we received over $2 million in property tax income, charitable contributions, investment income and other contributions. The bottom line result is that we expect to end the fiscal year ended June 30, 2010 with a bottom line positive gain. That too is significant.
According to a recent California Hospital Association report, nearly 40% of all California hospitals are experiencing a bottom line loss (which puts us in the top 60% of hospitals in the State). And we are not alone when it comes to struggles from operating income. The average operating income for all California hospitals is a negative 0.5%. Beginning on July 1, 2010 we started a new fiscal year at MCDH. This year we are going to be under more pressure than ever before to perform. We have had to make some difficult choices and there are very likely to be more difficult choices ahead. For example, for the first time in 4 years we chose to raise our prices this year. Our prices are being raised 6% on average. However, we are not raising our prices in all areas. It is important that we continue to be the "hospital of choice" for the Mendocino Coast. So, in some areas where we have historically been high, we are actually decreasing our charges. We have also had to reduce expenses in some areas where it will not affect patient care. There will be more difficult choices to face in the months ahead.
I am thinking positively, however. Our patient volume and our revenues have risen in the past 6 months. We will be opening a new "state of the art" Diagnostic Imaging Center in January of 2011. The new center should help us to regain some business that has been lost over the years. Most importantly, we have a first class medical staff, nursing staff, clinical staff and support staff here. I am very confident that we will make the necessary adjustments and in the end, we will be stronger than we have ever been before. Thank you all for your continued support of our hospital!
