RMCH earns biggest profit in 5 years

Rehoboth McKinley Bhristian Hospiital in Gallup released the salaries of its top administrators and doctors this week. [photo by Jeff Jones / Independent]

By Bill Donovan
Staff Writer

GALLUP — Last year, Rehoboth McKinley Christian Hospital posted its highest profit in at least the past five years.

The hospital is required annually to file a 990 with the federal government, outlining its expenditures and income, as well as the salaries of its highest-paid employees.

The form filed for the last full year — Sept. 1, 2006 to Aug. 31, 2007 — showed the hospital with a profit of $2.6 million, up almost $2.1 million over the profit it posted for the previous year. Before that, the hospital showed two years of losses, including a $12.9 million loss in fiscal year 2004.
Mark Hall, the hospital’s chief financial officer, said that the hospital is still operating in the black and is expected to show a profit for this fiscal year as well, although just how much that will be in still up in the air.

The hospital showed a profit even after writing off some $6.8 million in bad debts for fiscal year 2006.

Chuck Wright, the hospital’s CEO, recently said the hospital is trying to step up its efforts to reduce the bad debt account, which each year is in the millions of dollars. In fiscal year 2004, the year the hospital lost $12.9 million, the hospital posted a record $8 million in bad debts. The next year this was reduced to $5.4 million.

Hall said the hospital can write off a debt after seven months. He added that the $6.8 million posted last year not only includes individuals who have not paid their medical bills but bills that have not been paid under Medicaid and Medicare.
“While they are recorded as a bad debt, that doesn’t mean that we have stopped trying to collect,” he said.

One of the things that Wright did when he came on as CEO two years ago was to reorganize the hospital staff, which had the effect of reducing the number of high-paid vice

presidents, each of which were making more than $100,000 a year.

Wright makes the highest administrative salary, reported at $242,801 last year. That’s still about $7,000 less than the hospital’s former CEO, David Baltzer, made in 2004, his last year at the hospital.

The highest wages, of course, continue to be earned by the hospital’s medical staff with three doctors earning more than $400,000 for a year’s work.

But these include more than salaries. Doctors also get a fee from the hospital based on how many procedures they do; the more procedures, the more money they make. Hospital administrators have pointed this fact out, so doctors have been encouraged, especially when the hospital was losing money, to work more hours and perform more procedures.
To put the higher doctor salaries in perspective,

administrators have pointed out that doctors have to spend an extra 12 to 13 years in school and usually leave school owing hundreds of thousands of dollars in education loans. Also, the beginning base salary for a doctor here is more than $100,000.

Elaine Bobo, a spokeswoman for the hospital, said that surveys done on the amount of money that doctors earn from the hospital shows that RMCH is in the 35 percentile when it comes to doctor’s pay. That means, she said, that 65 percent of the hospitals in this country pay their doctors more.