Eide Bailly Forecasted Financial Statements available for the Critical Access Hospital
October 23, 2020
The Sublette County Rural Health Care District has put up a link to the report by Eide Bailly Forecasted Financial Statements for the Critical Access Hospital in Sublette County. Eide Bailly LLP is a regional certified public accounting (CPA) and business advisory firm. Click on this link to read the full document: Forecasted Financial Statements – Five years ending June 30, 2025, for Sublette County Rural Healthcare District.
The Sublette County Rural Health Care District is seeking government loans to finance the construction of a new critical access hospital (CAH) in Pinedale, Wyoming. In addition, the Sublette County Commissioners have committed to contributing up to $20 million to build a new senior assisted living facility in conjunction with the CAH. The assisted living center is forecast to cost around $18 million.
In the general election on November 3rd, Sublette County residents will be voting on whether or not to approve the proposal for the creation of a new special hospital district in the county and giving the go-ahead or nay voice on getting the loans for construction of the new critical access hospital and combined assisted living facility.
Highlights from the report:
- The Forecast was prepared in connection with the anticipated issuance of a $23,557,000 United States department of Agriculture (USDA) Direct Loan and a $5,889,000 USDA Guaranteed Loan. The Direct Loan is forecasted to carry an interest rate of 2.25% over a 35-year term and the Guaranteed Loan is forecasted to carry an interest rate of 5.50% over a 30-year term.
- The Rural Health Care District receives its funding from local and state sources and must comply with the requirements of these funding entities. If voters pass the proposal for a new special Hospital District on November 3rd, the District will transition from a Health Care District to a Hospital District, and will increase their taxation from operations from 2 mills to 3 mills for the fiscal year ending June 30, 2022. The Sublette Center, currently a non-profit corporation, will become a blended component of the new Hospital District.
- Construction of the new CAH would begin in April 2021 and be completed in October 2022 (approximately 18 months).
- The District forecasts they will have obtained Critical Access Hospital designation by July 1, 2023, making them eligible to be reimbursed for inpatient, outpatient, and clinic services on a cost basis by the Medicare program.
- The District is forecasting hiring 13.5 variable full-time equivalent employees as well as 3 support staff full-time employees. The long-term care center is forecasting hiring an additional 12.5 full-time employees in 2023.
- The new CAH will add 8 inpatient hospital beds. This will allow some patients to stay in the county for overnight medical services rather than being transported to bigger hospitals in the regional area.
- The District expects to capture a portion of market share that is currently going to competitor hospitals in the region. With the new CAH, the Pinedale Clinic volume is projected to increase 1% annually as hospital services expand. No volume changes are expected for the Marbleton Clinic.
- As the District transitions to hospital-based services, bad debt is expected to decrease as a percentage of gross revenues as many of the new services offered are scheduled and will be covered by insurance carriers. It is expected there won’t be a significant portion of patient responsibility and bad debt over the forecast period.
- The Sublette County Commissioners have contributed $444,000 annually ($37,000 monthly) to the Sublette Center in support of long-term care needs. This subsidy is expected to end once the new long-term care facility is opened in October, 2022.
- Average salary per full-time employee in 2020 was approximately $28.63 per hour (approximately $59,000/year). With the new hospital, wages are expected to increase approximately 2.0% for variable and non-variable employees and 2% for providers.
- The District expects employee benefit costs will increase by approximately 2.1% annually in 2021 and 2022 as Sublette Center employees transition over to the District’s benefit package.
- The report indicates that operating expenses are forecast to exceed operating revenues at more than $5 million/year for 2021 through 2023 before the CAH goes into operation. The District is expected to pay debt loss from their existing cash reserves before the hospital opens.
- The number projections in the report indicate that once the new CAH and nursing home facility come online and the District is able to offer additional services and capture more revenue to pay for their expenses, they will be able to make the payments on the debt to build and operate the new hospital.
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