Title
Receive Natividad Medical Center's financial report for the fourth quarter (April through June 2026) of fiscal year 2026.
Report
RECOMMENDATION:
Receive Natividad Medical Center's financial report for the fourth quarter (April through June 2026) of fiscal year 2026.
SUMMARY/DISCUSSION:
Financial Results for the 4th Quarter (April 2026 to June 30, 2026)
For the quarter ending June 2026, Natividad reported an average daily inpatient census (ADC) of 117.1 compared to a budgeted 128.0, reflecting lower-than-anticipated patient volumes across most inpatient nursing units, including Medical/Surgical, NICU, Pediatrics, ICU, ARU, and Psychiatric Services. Total patient days were approximately 8.5% below budget for the quarter. Average adjusted patient days, which include both inpatient and outpatient activity, totaled 16,754 compared to a budget of 17,490, an unfavorable variance of 4.2%. Emergency Department visits were also below expectations, declining 5.0% from budgeted levels for the quarter.
Despite lower patient volumes, the hospital reported a small positive net margin of $577 thousand for the quarter compared to a budgeted positive margin of $772 thousand. Net patient revenue totaled $80 million, which was $1.6 million (1.9%) below budget, primarily attributable to lower inpatient revenue performance. Government funding revenue of $25.5 million was consistent with budget projections. Other operating revenue exceeded budget by 65.2%, totaling $7.0 million, largely driven by higher interest earnings and quality incentive payments received from Central California Alliance for Health. Interest income alone exceeded budget by approximately $1.1 million for the quarter.
Operating expenses for the quarter totaled $111.9 million, 1.2% above budget. Salaries and benefits exceeded budget by $2.4 million, primarily due to cost-of-living adjustments and higher benefit costs, while physician-related costs exceeded budget by $924 thousand. These increases were partially offset by favorable variances in registry, purchased services, utilities, depreciation expense, and other direct operating expenses.
Year-to-date through June 2026, the average daily inpatient census was 116.4 compared to a budgeted 128.0, reflecting a 9.0% unfavorable variance. Adjusted patient days totaled 65,686 versus a budget of 70,153, unfavorable variance of 6.4%. Emergency Department visits totaled 58,196, which was 1.6% below prior year’s levels and 4.5% below budget.
The year-to-date net operating loss through June 2026 was $4.2 million compared to budgeted net income of $3.1 million. Net patient revenue totaled $308.2 million, approximately $18.9 million (5.8%) below budget. Government funding revenue of $102.1 million aligned with budget expectations, while other operating revenue of $29 million exceeded budget by $12.2 million, primarily due to higher interest income and additional recognized revenues during the fiscal year.
Year-to-date operating expenses totaled $443.5 million, slightly unfavorable to budget by approximately $617 thousand (0.1%). Higher salaries, wages, and physician-related costs were offset by favorable variances in registry staffing, purchased services, supplies, and depreciation expense.
Collections from patients and payers were $317.0 million for the year. Balance in Cash Fund 451 was $105.0 million, State and Federal Intergovernmental Fund was $121.8 million, Capital Fund was $157.4 million, and the Strategic Reserve was $33.5 million.
The average collections per month for the year were $26.4 million.
Gross patient receivables were $221.5 million or 53.6 days in receivables. Distribution by payer: 10.8% Medi-Cal, 24.8% Medi-Cal Managed Care, 19.9% Medicare, 39.9% Commercial, 1.5% Self-Pay, and 3.1% Short Doyle.
OTHER AGENCY INVOLVEMENT:
None.
FINANCING:
Funding provided by NMC's Enterprise Fund.
Prepared and Approved by: Cher Krause, Hospital Controller, 831-783-2373.
Attachments:
NMC's Financial Statements