Blount Memorial Hospital marks best month in years as dispute with county ends

Blount Memorial Hospital turned a profit in February, marking its best month in almost three years. The hospital made just under $1 million last month.

Hospital directors broke into applause Tuesday, March 26, as Blount Memorial’s total operating income for February — $945,000 — was announced during a board meeting.

Last month was Blount Memorial’s best since June 2021, when it took in $949,000. But hospital leadership are hopeful that the February data might mean more than a temporary upturn. Interim hospital CEO Jonathan Smith said Tuesday the goal now is having around $2 million in operating income for the upcoming fiscal year.

In a statement to The Daily Times Wednesday, Smith attributed the recent shift in hospital fortunes to rising revenue and mostly static expenses. “This growth has been driven by our focus on emergency room and inpatient services,” he said. The hospital has reduced its use of contract labor, he noted, and the cost of some supply chain contracts has sunk.

He also pointed Tuesday to the hospital’s participation in the Mayo Clinic Care Network, which gives its staff access to additional medical experts and resources, and increased staff engagement as positives for Blount Memorial.

Less loss

The February change to Blount Memorial’s balance sheet comes after years of successive losses. The hospital has contended with problems including the COVID-19 pandemic, administrative turnover and a lengthy dispute with the county government that’s recently drawn to a close.

Eight months into the current fiscal year, the hospital’s operating loss is $2.1 million. Yet the $2.1 million figure represents a $6.5 million improvement over February 2023.

Between the pandemic, a resulting economic downturn and spiking labor costs and shortages, recent years have been historically difficult for hospitals and hospital systems across the U.S. Small and midsize institutions have been hit particularly hard. And as of early 2023, Tennessee’s rate of hospital closures was the highest in the country, per capita, according to information from the Tennessee Healthcare Campaign.

The recent shift in Blount Memorial’s fortunes also mirrors that of the hospital industry nationally; many other hospital systems are tracking recovery from damage incurred this decade.

A more profitable future

Following a protracted disagreement about hospital ownership and governance, Blount Memorial and the Blount County government recently agreed that the county owns the hospital itself. The agreement was one part of a broader conclusion to a controversy that’s caused heartache for government officials and hospital staff alike.

But despite county ownership, the hospital sits outside the budgetary process that applies to local government entities like the Blount County Sheriff’s Office. Hospital leaders don’t, as a matter of course, approach the Blount County Board of Commissioners — the local legislature — with requests for revenue appropriations, for example, though the county has issued significant revenue bonds in support of Blount Memorial.

For years, the narrative on hospital finances was negative — losses mounted, which played a role in drawing scrutiny from the county government. But in recent months, and as political conflict with the county has cooled, Blount Memorial has also gotten some additional good news on the financial front.

Smith noted Tuesday that the hospital has made progress in securing over $4.2 million in requests for COVID-era funds from the Federal Emergency Management Agency. Blount Memorial and other hospitals in the East Tennessee region have waited years for answers regarding whether it will receive some of that money.

Smith told The Daily Times Wednesday, “We are hopeful that both requests will move forward by the end of the fiscal year.”

And a cash crunch hospital administration worked for years to address looks to be settled by the end of spring. The hospital plans to sell two ventures — MorningView Village Senior Community and its Transitional Care Center — for more than $22.8 million. The transaction, which is not expected to cause job loss locally, could close by May 1.