TARPON SPRINGS — Helen Ellis Memorial Hospital is facing a $9-million budget shortfall this year, hospital administrators said Wednesday.
To offset the deficit, the hospital has discontinued its home health agency, eliminated some open positions and is working to generate alternative revenue sources, said hospital CEO Don Evans.
The hospital, which was taken over by Tampa's University Community Health in 2000 when it was on the verge of financial disaster, has continued to struggle since the partnership was formed.
But this year's shortfall is about $1-million less than last year's, Evans said.
"This is the beginning of a move back in the right direction," he said.
About $3-million of the deficit can be attributed to uncollected debt and charity cases, Evans said.
Another $3-million comes from depreciation estimates for equipment. That figure, which on paper lowers revenue, doesn't affect cash flow, Evans said.
Evans said he was optimistic the hospital could offset the shortfall by cultivating new revenue sources and cutting costs.
For example, the hospital is recruiting primary care physicians to draw more patients, and has upgraded its MRI software to provide breast scans and noninvasive magnetic resonance angiographies.
The hospital is in limbo in its quest to achieve a license to perform elective angioplasty procedures. But the license, if approved, would be the first step to gaining certification to perform open-heart surgeries. That capability could generate several million dollars in revenue a year, Evans said.
And plans for a nearby mixed-use development with medical office space should help bring specialists — and their patients — to the hospital.
The hospital also expects to save $1-million by eliminating open clerical and support staff positions. Evans could not provide the number of positions that would be eliminated, but said none directly affected patient care.
Two weeks ago, administrators decided to discontinue the hospital's home health agency, at a savings of about $400,000 a year.
Eighteen full-time staffers and five part-time staffers were laid off with the closing, though five full-timers were able to transfer to University Community Hospital in Tampa. Another five were offered other positions, but declined them, Evans said.
University Community Health, which operates three hospitals in Hillsborough County including University Community Hospital, paid $20-million, and gave Helen Ellis Memorial a $4-million loan in 2000 to retire its bonds. Before the agreement was reached, the hospital faced the prospect of defaulting on its bonds.
The outlook today is quite different, Evans said. The hospital doesn't owe creditors, no longer owes on those bonds and expects to see a turnaround next year, he said.
"Over the last couple of years, we've been putting a plan in place to reduce (our losses) significantly. We expect a financial loss next year, but we're very positive that we'll be a positive cash-flow hospital."
Evans cautioned that the shortfall was an estimation and could decrease once all financial reporting and auditing is completed.
Rita Farlow can be reached at [email protected] or (727) 445-4162.