Tyler Freeman, CFO of Jefferson Healthcare, presented a fiscal update to the Board of Commissioners meeting Wednesday.
Freeman said a previous comment by CMO Dr. R. Steven Butterfield, wondering about the hospital’s status in 2004, made him curious and led him to look up financial documents from 2004.
“I could quickly find one [a report]. It didn’t have all of the details on visits for the medical group, but at the time medical clinic gross revenue was about $6.9 million, so that’s definitely seen a lot of growth. Unfortunately, some of the things that were also in the 2004 report have also seen a lot of growth. I saw that the Medicaid and Medicare payer-mix percentage at the time was 58 percent in total, whereas our numbers in 2024 are coming in at 65 percent Medicare, 11 percent Medicaid, and 19.5 percent commercial.”
Freeman explained his use of the historical context is helpful in viewing the current financial report, particularly May’s data.
“That payer-mix percentage is what can help shed some light on what exactly is transpiring there with our financial results,” he said.
Freeman later explained that while the 2004 report didn’t have exact data on what percentage of payments were coming through commercial insurance groups, he says that it was likely much higher than it currently is, adding that 2018’s payer-mix percentage was 21.6 percent.
Explaining the difference Freeman said, “19.5 percent to 21.6 percent doesn’t seem like it should be a big difference, but we are paid so drastically different from our commercial-payers to our governmental-payers that every 0.5 percent drop in commercial payer-mix is about $500,000 off the bottom line.”
Chief Governance Officer Jill Buhler Rienstra reflected on potential reasons for the shift in payer-mix percentage. “When you mentioned about, especially Medicare, I think we talked about last time, Jefferson County is now officially the number two oldest county demographically in the country. I guess that helps to explain,” Buhler Rienstra said.
Overall, the report was positive, but Freeman dove into some areas currently challenging the health care provider.
“May operating stats, we’re pretty good. We’re still seeing some departments that are not meeting their volume expectations and most of those are related to potentially single-practice providers, vacation time — we’ve already noticed a little bit of bouncing up and down with visits and revenue based on vacation schedules — and we’ve also got some we’re we’ve got open positions for that department as well,” said Freeman, adding, “Oncology visits are down, infusion visits are down and that’s also having an impact on pharmacy meds dispensed. But overall, when you look at the details of those reports, some of our biggest clinics and locations are doing quite well even though there’s quite a bit of red when you look at those individual stat reports for May and June. Overall, May and June are in a decent spot”
Closing the report, Freeman shared with the Commission that Jefferson Healthcare is operating at an overall 4.4 percent operating margin.
