Thank you to all of you who have told me that you appreciate the information provided in my updates. It is a collaborative effort as I seek wise counsel in each of these updates. As the new Interim Board is being formed, we must look forward to what is coming next. They have many important tasks to accomplish in a short period of time, most importantly, the acquisition of ECRMC.
As you may remember, I was pleased that ECRMC made a profit in August 2023. That celebration was way too soon. For September 2023, ECRMC reported a net loss of $ 2,338,810 with a three-month net loss of $3,949,067. The stated reason was simply expenses exceeded revenues. In fairness, I wish to include the same financial data for PMHD which reported a net profit of $332,339 for September and a three-month profit of $625,510. PMHD is certainly doing better in managing their bottom line, but they need to continue working to strengthen this trend.
As a reminder, the days of cash on hand is a financial term showing the number of days that an organization can continue to pay its operating expenses, ECRMC continues to decline with only 2.82 days at the end of September 2023; PMHD was 34.7. Both hospitals will receive $28 million from the State of California Distressed Hospital Loan which may be the savior for ECRMC in the short term. With a loss of over $2 million a month, this loan could cover their operating expenses for several months, but of course, the long-term debt and pension obligation remains.
The other trackable data is the inpatient census. In September the daily average for ECRMC was 40 for a 161 bed hospital. PMDH averaged 48 for a 106 bed hospital. The question has been raised if ECRMC is still a 161 bed hospital with the closure of pediatric and maternity care. Given that they are licensed for 161 beds, you would think that with the closure of the two units plus the transfer of the base station operation ambulance service to PMHD, the staff cost reductions would reflect some savings, but the financials reflect a different outcome. December 2022 staff expenses total $7,316,280.00 and for September 2023 only $6,492,666. That is only a 12% reduction. The December total operation expense was $13,192,697 and in September 2023, $12,959,328—for a total of 7% reduction.
In looking at only the financials, I must ask who is managing this poor financial outcome. The Board of ECRMC is certainly not the day-to-day management. That management is contracted to UCSD. UCSD has just announced the approval of the $200 million purchase from Prime Healthcare of Alvarado Hospital Medical Center, a 302-bed medical campus which will be completed late this year. Even more recently Tri-City Healthcare District selected UCSD as their partner over Sharp HealthCare. Tri-City has been struggling for years and received a $32.2 million Distressed Hospital Loan, the largest amount awarded. So the question is; has UCSD been focused on acquisitions and not managing ECRMC or is the task of bringing ECRMC back to a financial viable hospital too much even for UCSD? Is Imperial Valley Healthcare District next on the acquisitions list?
My team and I will continue to watch the monthly financials. The clock is ticking for the initial board for the new Imperial Valley Healthcare District to form and make the acquisition decision. Will ECRMC be an asset that this new board will want to acquire based on these financials? Can homeowners in Imperial County generate enough property tax revenue to bring ECRMC back from the brink? In the meantime, the three hospital entities continue to operate. PMHD seems to be getting better. The numbers tell a different story for ECRMC. To use a military analogy, when you under fire, make yourself a smaller target. I call on ECRMC to make yourself a smaller target, reduce the size of your operation and your costs. Come to the negotiation table with better financial health.