Franklin hospital grapples with budget issues

Southern IL hospital having budget problems

BENTON, IL (KFVS) - Franklin Hospital in Benton, Illinois has is working to pay several million dollars of unpaid bills after the hospitals revenue stream was interrupted.

Since January 2015 the Franklin Hospital has had problems paying its bills largely due to staffing issues, Budnick said.

The hospital ran into problems after an employee left the hospital in 2014. The employee billed insurance companies in a process called coding. That left the hospital with just one employee to code. That employee was forced to take a leave of absence due to a medical emergency this year and left the hospital without a coder.

"We were about 35 days out in the worst point in this," Budnick said.

That left the hospital nearly $3 million behind on its bills -- The hospitals monthly operating budget is roughly $1.6 to $1.8 million, Budnick said.

With no employee processing bills to insurance companies, the hospital lost its revenue stream, Budnick said. Without a revenue stream he went on to say the hospital was forced to put off several bills to vendors it had contracts with.

"You look at that and you say Ok 'well, where are we going to put our money?' Is it better to have the drugs that we need here or is it better to have a bill go for another 30 days," Budnick said.

While the hospital grossed $41 million dollars in 2014, one of the hospitals best financial years, the hospitals Chief Operating Officer Michael Budnick said the hospital only received 45% in payments or roughly $20 million.

The hospital sees some 47,000 patients each year.

"So about 75 percent of our business that we do here we get are paid cost or less," Budnick said.

"So there's really not a lot of margin left over so to speak as an institution to make up for," Budnick said. "To break even as well as to have a few dollars available at the end of the year to you know invest and buy new equipment, pay raises for the employees and so forth."

An example of one vendor that hasn't received payment is the the company that manages the hospital's medical history computer system. The company hasn't locked employees out, but will not offer troubleshooting until the hospital pays its bill.

Dr. Tim Morthland, Chief of Medical Staff and Hospitalist with Franklin Hospital, said are several things the hospital could be doing to increase revenue and keep patients at the hospital.

Morthland suggests the hospital expands surgical services and emergency room operations.

"They want to see the hospital succeed but when there's not enough revenue coming form services then some very difficult decisions have to be made," Morthland said."I would like to see the service line expanded to where we would be offering emergency surgery."

"That is in large part due to the absence of surgical services. There is limited, it is scheduled, but in terms of emergency surgical services – That's quite rare."

Morthland said medicines such as the antibiotic Zosyn, an IV drug Hydralazine used to quickly lower blood pressure, and cartridges needed to do arterial blood gas tests have been unavailable for on the hospital floor and in the emergency room for several months.

Budnick said those medicines were on back order and were not available from the manufacturers rather than a budgetary issue. Budnick also said the hospital has alternatives to those medicines.

The Franklin Hospital has a planned $5 million improvement project that will encompass improving the emergency room facility, getting the current hospital up to electrical code and a new elevator system, and a building addition to the first floor for more outpatient clinics.

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