Tri-City’s ’09-10 budget estimates improve

OCEANSIDE —- Earlier projections that Tri-City Medical Center could face a $4 million to $6 million loss in the coming budget year have turned around, with executives saying Thursday that they believe the public hospital can turn a very modest profit by June 30, 2010.

Tri-City’s governing board held a collegial, relaxed budget session Thursday and received a much less dire calculation of the hospital’s immediate financial future.

In a public board meeting May 28, Tri-City’s interim chief Larry Anderson estimated that the hospital could lose millions of dollars during the next 12 months as it struggles to refinance debt with an unfavorable interest rate and tries regain business recently lost to neighboring Scripps Health Inc.

On Thursday, he said things had improved slightly.

“We have produced a budget that we think is challenging but doable,” Anderson said.

Next year’s draft budget forecasts $330 million in revenue and $330.8 million in expenditures, leaving a $793,865 loss for the year.

But the hospital also expects to make $1.2 million in interest on its investments, making the bottom line black by $406,135.

Anderson said the big change in expected financial health comes largely from rosier guesses at how many patients will pass through Tri-City’s doors next year.

The hospital had been seeing significantly fewer than 200 patients per day for several months after the Sharp Mission Park Medical Group was bought by Scripps Health and the group’s 64 doctors began using Scripps hospitals instead of Tri-City.

However, last month, the number of patients ticked upward and Anderson said the hospital expects to keep above 200 patients per day in the next fiscal year.

Reid Hollyfield, the hospital’s vice president of finance, said recently negotiated contract increases with insurance companies, and an 8 percent increase in prices the hospital charges for procedures also helped deliver a much more optimistic financial picture.

Hollyfield projects that Tri-City will still end the current budget year with a $5.6 million operating loss.

The hospital also stands to spend an additional $2.4 million on bank fees to refinance its existing debt, pushing the total loss for the year closer to $8 million, according to an e-mail Hollyfield wrote on May 21.

L SISSON – psisson@nctimes.com