Over the next few weeks, you’ll see the answers to each of the questions you submitted for the Employee Meetings. Of course, we didn’t have time during the meetings to address each of these questions, but we wanted to be sure and communicate answers here on The Pulse. Deb Didier is leading off this series with a question on hospital finances.
I am confused about our Non-Profit status as a business, when our annual report suggests we have a surplus of money and operate in the black. When I worked at a non-profit in a former job, we had to use all the money we earned or received the same year, and not roll over and over and maintain a balance. I consistently hear that KSB has to cut back and make concessions to break even and that we are broke, and our numbers are down and income has slacked off. I cannot make sense of that information when I see a financial statement that reports a surplus of money. Can you explain?
Deb Didier, VP/Chief Financial Officer
KSB Hospital is a not-for-profit, 501(c)(3) organization, meaning that it has no shareholders and that no profits are distributed to owners or individuals. This status is available to many organizations, primarily those who have a charitable, educational, religious, or scientific purpose.
KSB Hospital qualifies as a not-for-profit organization because:
- It is owned by the community and run by a volunteer Board of Directors
- No profits are given to individuals, owners, or shareholders
- We serve a charitable purpose of providing medical care to everyone who walks through our doors, regardless of their ability to pay
- All profits are reinvested in the organization in the form of facilities, equipment, salaries, and supplies
KSB Hospital publishes financial information annually and the profit, or margin, you see on the report is completely used to reinvest in the organization. Recent examples of reinvestments include the ED/OR expansion, electronic health records software, the addition of physician office space for neurology, and the relocation of departments like Patient Financial Services.
Our profits are necessary to fund the kind of facility improvements and cutting-edge technology investments that make KSB Hospital a competitive, quality choice for the healthcare needs of our community.
We pay special attention to the balance between fair pricing and profits necessary for reinvestment. Decisions to cut back on expenses, hold off on purchases, and tighten our financial belt help us keep price increases as low as possible for our patients.
The truth is, there is no profit or excess money at KSB Hospital. Every dollar we collect from patients goes to pay employees, purchase supplies and equipment, expand or improve facilities, provide charity care to those in need, and fund day-to-day operations across the organization.