Petersburg Medical Center board approves FY2026 amendment and FY2027 budgets as cash reserves double

Petersburg Medical Center has more than doubled its cash reserves over three years. The board approved spending plans for fiscal years 2026 and 2027 at its June 25 meeting.

Days cash on hand stood at 133 at the time of the meeting, up from 62 three years ago. The hospital's financial presenter told the board the improvement reflects tighter collections and the decision to bring the business office in-house. "We've managed our resources well. We've insourced the business office, done a variety of things. And now here we are. We have 133 days cash on hand," the presenter said. Accounts receivable collection time dropped from 82 days to 58 after that change.

FY2026 Amendment

The board approved a $1.3 million budget amendment for fiscal year 2026, which runs through June 30. Expected year-end expenditures are estimated at approximately $31.1 million against a budget of about $30.1 million, a difference of roughly $1 million. Revenues are expected to finish $1.5 million above budget, with higher revenues tied to 340B drug program income, grant funds, and strong patient volumes.

FY2027 Budget

For fiscal year 2027, the board approved an operating budget and a capital budget in separate roll-call votes, each passing 5-0 with two members absent. The operating budget projects $31 million in expenses and $753,000 in net income, with a $2 million revenue bump from the new MRI service line. The $1.85 million capital budget covers a CT scanner and hospital beds, which the administration plans to finance through capital leases rather than drawing down cash. The board was told the budget does not assume any significant change to Critical Access Hospital reimbursement rates, but the administration would return with amendments if federal policy changes.

The new MRI began seeing patients this week. The hospital also announced a community open house on July 14 from 3 to 6 p.m., timed to coincide with the MRI coming online, where the public can tour the facility and view presentations on future planning.

During visitor comments, a member of the public raised questions about MRI room radio-frequency shielding and asked whether the board had reviewed a 2023 study on cancer rates in Alaska communities that ranked Petersburg sixth highest among 46 communities studied.