The El Paso County Hospital District, newly known as University Medical Center of El Paso, recently asked the county commissioner’s court to approve the sale of $162 million dollars of certificates of obligation without voter approval.
The court approved $152 million. The hospital district CEO made a video presentation that you can view here if you have the time.
Toward the end of the presentation the CEO projects future operating results starting with 2013 and going out to 2016. His presentation predicts an average $5 million dollar per year net earnings, leading some of us to believe that the hospital will be operating profitably. The district predicts income rising from 2012 to 2013 from $376.4 million (actual) to $476 million (predicted). Ignoring the nice round $100 million increase (I suppose from the coming online of the children’s hospital), managing growing income by a number this large will be very hard to do. Look for problems to occur that will drive up expenses.
The last financial statements that the district has published on it’s web site are for 2012. These show a $17.8 million operating loss for 2012. That is after the taxpayers give them $71.6 million. Part of the purpose of the district is for the taxpayers to fund medical care for those in the county that cannot afford it. That seems reasonable to me. The fact is however that without the taxpayer money the hospital district would have operated at a $89.4 million loss.
The district came to the commissioner’s court and wanted $162 million dollars for outpatient clinics according to the initial impression one would get reading the county web site. Actually $29.3 million of the $162 was for renovation of the third, fifth, sixth, and seventh floors of the existing hospital.
Slow down
The district took a 28.2 million dollar charge for depreciation of it’s current facilities in 2012. Why do they need bond money? The answer is that they are running so deeply in the red that they cannot afford to update their facilities. If I am not mistaken the old building only had 7 floors. Now it looks like we will be renovating four of them. If the district has failed to keep its facilities up to date, then they have been losing even more money than they have told us about.
As part of the CEO’s presentation he tells us that they will save $17 million a year in emergency room costs by opening the clinics. Muckraker asked in Our two cents why with that kind of savings they needed bond money at all.
I think that the CEO is doing a very good job. Aside from the political questions regarding using taxpayer money to compete with private physicians, my main concern here is how fast we are moving. The $120 million children’s hospital is just starting up. They have a lot of expense to manage here.
Many in the community think that the children’s hospital will cost us a lot of money.
Eternal vigilance is the price of liberty
Cato
elpasospeak 