Finance committee approves December financial statements; Cerner implementation and uncertain state payments weighed on cash

The finance committee voted to approve the hospital's December 2024 financial statements after hearing staff analysis of revenues, expenses and cash flow.

Keith Moran, the controller, told the committee the Cerner electronic health record implementation had driven material costs in the period. "The Cerner project so far this year has probably been about $3,000,000 of expenses related to the Cerner project," he said. Moran attributed increases in December expenses primarily to Cerner implementation costs (including contract labor and project-related salaries), higher contract labor expense and higher utilities.

Moran summarized operating variances: inpatient revenue was about $500,000 below last year while outpatient revenue was roughly $1,000,000 above last year; overall net revenue was down by about $400,000 compared with the prior year. On the expense side, Moran reported monthly expenses increased by roughly $3,200,000 compared with the prior year, with notable increases in contract labor (approximately $1,300,000), salaries (approximately $900,000 tied to project work), physician services (about $450,000) and utilities (about $300,000).

Committee members raised contract-labor concerns and asked for a breakout of vendors, amounts and end dates. Moran and other staff said they are vetting contract labor for potential savings and noted some contractors will complete work soon; staff committed to provide a vendor-level breakout and timelines for when contract costs will drop.

Cash and state funding: committee members observed the year-to-date performance was behind budget by roughly $18,000,000. Moran said a significant component of the shortfall was state funding the hospital expected but had not received; staff reported they had budgeted multiple payments (each about $2,500,000) from a state pool that remain uncertain while the state reconfigures its redistribution methodology. The controller said the hospital is tracking whether and when those funds will be released, noting a possible March update from the state but without a firm guarantee.

During balance-sheet discussion Moran said cash decreased in the month and described cash-flow movements. When asked about an appropriate cash target, he said, "In a perfect world, I'd have about 90 days of cash." Committee members sought clarification on current cash-on-hand and timing of potential state receipts.

The chair called for a motion to approve the December financial statements; the motion was seconded and passed with an "Aye" vote.

Ending: The committee approved the December financial statements and directed staff to provide a detailed breakout of contract labor costs and to continue tracking the state's reallocation of funds that may affect year-to-date variances.