Title
Receive Natividad Medical Center's financial report for the third quarter (January through March 2026) of fiscal year 2026 and estimated funding reductions resulting from anticipated state and federal funding changes arising from H.R.1.
Report
RECOMMENDATION:
Receive Natividad Medical Center's financial report for the third quarter (January through March 2026) of fiscal year 2026 and estimated funding reductions resulting from anticipated state and federal funding changes arising from H.R.1.
SUMMARY/DISCUSSION:
Financial Results for the 3rd Quarter (January 1, 2026, to March 31, 2026)
For the quarter ending March 2026, Natividad reported an average daily inpatient census (ADC) of 115.5 compared to a budgeted 128.0, reflecting lower-than-anticipated patient volumes across all inpatient nursing units, including Medical/Surgical, OBGYN, NICU, Pediatrics, ICU, ARU, and Psychiatric Services. Total patient days were approximately 10% below budget for the quarter. Average adjusted patient days, which include both inpatient and outpatient activity, totaled 16,016 compared to a budget of 17,682, an unfavorable variance of 9.4%. Emergency Department visits were also below expectations, declining 7.7% from budgeted levels for the quarter.
As a result of lower patient volumes and an unfavorable payer mix, the hospital reported a negative net margin of $2.1 million for the quarter compared to a budgeted positive margin of $737 thousand. Net patient revenue totaled $76.1 million, which was $4.6 million (5.7%) below budget, primarily attributable to lower inpatient revenue performance. Government funding revenue of $25.1 million was consistent with budget projections. Other operating revenue exceeded budget by 78.5%, totaling $7.5 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 $1.5 million for the quarter, while rental inc...
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