As part of our ongoing effort to share information and become more transparent to our community, we are continuing to implement changes that address issues you have raised. This week we would like to discuss our latest change: making financial information about North Mississippi Health Services and its subsidiaries more transparent and accessible. Beginning this week, this information is available for viewing on our web site (which we have redesigned to make more user friendly) at www.nmhs.net/consolidatedstatement.asp .

This information is being put in place to help you have a greater understanding of NMHS' finances. Our fiscal year runs from Oct. 1-Sept. 30. The information posted on our web site reflects data from fiscal years 2003 and 2004. Having two years' financial information will help you see firsthand that health care finances fluctuate greatly from year to year.

The operating statement is broken into several key areas:

• Revenue - The "charges" we bill for services to inpatients and outpatients and other operating revenue from non-patient care activities.

• Net revenue - The amount we actually collect as payment from Medicare, Medicaid, insurance companies,self-insured payers, and charity care (individuals who are unable to pay).
 
• Expenses - This section includes salaries and benefits for employees, supplies and services, wear and tear on buildings and equipment, utilities, interest on outstanding debt, and bad debt for patients who do not pay for the services received.

The financial report details how the net revenue minus expenses provides an operating margin. When the operating margin is combined with income from investments and non-operating revenue, those funds are used to pay on outstanding debt and to invest in the organization's future. These funds are used to purchase new and replacement equipment and to fund new technology. Having a positive margin also allows us to invest in health care programs and services such as community health screenings, the school nurse health
program, Live Well and other community activities. A negative balance means programs and services might have to be eliminated because the resources wouldn't be available to fund them.

Lastly, the report offers a brief overview of the hospital system's statistics, including admissions; nursing home days; emergency, outpatient and home health visits; surgeries; and clinic encounters.

An independent auditing firm has audited the information included in these reports. We are making this information available to you so you'll have a clearer understanding of our financial operations.

Thank you for your continued support. We are confident that with your help and support we will become a better organization.
 

July 17, 2005