Good samaritan health center of gwinnett financial analysis

Christabel Ghansah

Public Budgeting and FinanceGreg Streib

SummaryThe purpose of this paper is to conduct a financial analysis on Good Samaritan Health

Center of Gwinnett (GSHCG).To effectively to do, this paper gives an extensive background of Good Samaritan i.e. the organization’s mission and purpose/goals, objectives, and

values. Perhaps, most important are the information gathered about the health center’s finances - sources of revenues (tax and non-tax), expenditures, and budgetary process. To that effect, there are several graphs and tables to encourage an easy understanding of the

health center’s finances.

Background - About Good Samaritan Health Center“We are in the unique position to respond to the community’s increasing unmet need for charitable medical and dental services for the uninsured and to share the Gospel message with every willing listener while doing that good work.”1 Gregory E. Lang, Ph.D., Executive Director

It became very apparent after the community had organized several healthcare fairs in the fall of 2003 that there was a rather significant disparity between the health care needs of community members and the services available. Concerned citizens began to have conversations about possibly setting up a ministry to meet the medical needs of individuals without insurance and/or are not financially well-off to settle medical costs, upon learning about the state of the underserved population.

To that effect, the community conducted a needs assessment in December 2003 to gather information about the state of Gwinnett County's health care delivery system; after which, concerned individuals from local churches in the Gwinnett County area met and discussed a possible expansion of Good Samaritan Health Care Inc., Atlanta. These discussions tended to be favorable. Shortly after, in January 2004, a Board of Directors was convened and in March 2004, Good Samaritan Health Center of Gwinnett was founded and finally opened its doors for operation in 2005.2

Background - MissionGSHCG has a mission to "demonstrate the love of Christ through providing affordable primary health care and dental services to the poor and uninsured.3 Realizing that GSHCG could not function on its own, the organization joined with several community partners to promote their mission. Which is "to fulfill that which Jesus taught His disciples: to demonstrate their faith by caring for the less fortunate, the sick, the naked, the hungry, the homeless, the imprisoned and the destitute."4

Currently, the health center takes a holistic approach to healthcare and offering services. Contrary to popular belief, GSHCG is not a free health care provider. Rather it offers comprehensive primary care on a low-cost, flat fee basis in response to the non-emergency medical and wellness needs of the community.

GSHCG offers several primary health care needs, including:5

Individual, Marriage and Family Counseling General Medicine/Family Primary Care Pediatric Care Limited (first 20 weeks) Prenatal Care

1 Gregory E. Lang, Ph.D., Executive Director. Retrieved from: http://goodsamgwinnett.org/wp-content/uploads/2015/06/GS-2014-Annual-Report-WEB.pdf2 Retrieved from: http://goodsamgwinnett.org/about-us/3 Ibid4 Ibid5 Ibid

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Women’s Health Imaging and Specialty Care Pharmacy Assistance Program Social Work and Resource Referral Patient Education, and Laboratory Services. Health Education and Disease Management Classes Individual, Marriage and Family Counseling

As per the goal of GSHCG, the Health Center goes above and beyond to provide its patients with quality healthcare at an affordable price. In doing so and to prioritize the health and wellness of patients, the Center has adopted a "Patient-Centered Medical Home" (PCMH) approach. The PCMH approach includes healthcare providers, close friends and family members (as the patients wish), and of course, the patient. The Center believes that a collaborative approach is the best approach towards promoting health and wellness.

Background - Values 6 GSHCG works to ensure that:

Every patient will feel loved and respected as people made in God’s image and for whom Christ died.

Each staff member will be motivated to deepen their relationship with Jesus Christ and demonstrate their love for Him in all they do.

Each volunteer will believe their time has been effectively and efficiently spent in their service to advance His Kingdom.

The healthcare delivered will be high quality, reasonable and affordable, respecting the life circumstance of those we serve.

Our donors will believe we are acting to the best of our ability to uphold these values and will feel our love and appreciation for their support of our efforts.

Background - Goals 7 GSHCG strives:

To meet the spiritual needs of our patients through prayer and biblical counseling. To decrease the demand of the uninsured for non-emergent services on the local

hospital emergency rooms. To provide a venue for medical professionals and laymen of the Christian community to serve a marginalized and impoverished population. To be trusted and faithful stewards of the resources made available to us by donors.

Background - Strategies 8 Since its inception, GSHCG:

6 Ibid7 Ibid8 Ibid

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Pray every day before we begin our work, asking God to guide our efforts and bless our patients, volunteers, and staff.

Utilize volunteer medical providers to keep our costs low, making it possible to charge our patients significantly discounted fees for our services.

Accept nursing, pharmacy, and other student healthcare professionals as interns, making it possible to train rising medical providers in a compassionate Christian setting, helping to grow within them a heart for medical ministry work.

Enter into partnerships with the medical community to maximize convenient and affordable access to other necessary services for our patients.

Partner with churches to provide a venue for deploying their members into sacrificial service for the Kingdom.

Revenues and ExpendituresI found some disparities in the amount reported in the annual form 990 and the center's annual reports. The 990 forms reported higher income and expenses than the annual reports. Upon further analysis, I noticed that the annual reports made public by the Center ignored to mention donated goods and services and "other income" as part of its revenue which forms 990 indicated. With regards to expenses, the Center did not state money spent on fundraising efforts as well as "general costs." For a more holistic analysis, I reported numbers indicated on the 990 forms.

Table 1 – Revenues and Expenses (2004 – 2014)Year Revenues Expenses Deficit/Expenses

2004 $ 224,314.00 $ 9,546.00 $ 214,768.00

2005 $ 236,156.00 $ 276,034.00 $ (39,878.00)

2006 $ 479,527.00 $ 558,166.00 $ (78,639.00)

2007 $ 598,374.00 $ 579,933.00 $ 18,441.00

2008 $ 648,802.00 $ 721,371.00 $ (72,569.00)

2009 $ 666,518.00 $ 782,135.00 $ (115,617.00)

2010 $ 494,154.00 $ 568,389.00 $ (74,235.00)

2011 $ 656,934.00 $ 594,436.00 $ 62,498.00

2012 $ 1,284,219.00 $ 954,899.00 $ 329,320.00

2013 $ 1,528,324.00 $ 1,236,988.00 $ 291,336.00

2014 $ 1,272,429.00 $ 1,074,348.00 $ 198,081.00

In the early years, GSHCG generated much of its income from contributions. Of the total revenue ($236,156), 209,039 came from direct public support. Not surprisingly, much of what the Center generated went towards program services. As well, the overall expenses exceeded the amount of income generated which came to a total of $276,034. This spending set the Center behind by about $39,878. This trend of loss which is indicative of newly established businesses went on for a couple of years.

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Graph 1- Revenues and Expenses (2004 – 2014)9

1 2 3 4 5 6 7 8 9 10 11$-

$200,000.00

$400,000.00

$600,000.00

$800,000.00

$1,000,000.00

$1,200,000.00

$1,400,000.00

$1,600,000.00

$1,800,000.00

Revenues Expenses

The Center experienced an $18,441 excess in 2007. However, this excess quickly diminished in subsequent years when the Center experienced several years on the decline emblematic of the financial crisis.

Graph 2 – Deficit and Excesses (2004 – 2014)

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$(200,000.00)

$(100,000.00)

$-

$100,000.00

$200,000.00

$300,000.00

$400,000.00

Deficit/Excesses

Deficit/Excesses

From 2008 to 2010, GSHCG suffered significant losses, particularly in 2009 where the Center raised $666,518 yet spent $782,135; this resulted in a loss of about $115,617.

Table 2 – Breakdown of Expenditures

91-11 = 2004 - 2014

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ExpendituresYear Employee Compensation Other Expenses Fundraising FeesTotal

2004 9,546.00$ 9,546.00$ 2005 84,359.00$ 189,430.00$ 2,245.00$ 276,034.00$ 2006 294,721.00$ 234,113.00$ 29,332.00$ 558,166.00$ 2007 288,169.00$ 291,764.00$ 579,933.00$ 2008 429,473.00$ 291,898.00$ 721,371.00$ 2009 482,855.00$ 292,728.00$ 6,552.00$ 782,135.00$ 2010 251,932.00$ 282,740.00$ 33,717.00$ 568,389.00$ 2011 208,836.00$ 385,600.00$ 594,436.00$ 2012 326,560.00$ 628,339.00$ 954,899.00$ 2013 548,954.00$ 688,034.00$ 1,236,988.00$ 2014 617,826.00$ 456,522.00$ 1,074,348.00$

To curb its losses, GSHCG spent thousands of dollars towards professional fundraising efforts which proved futile. The Center has since recovered from its losses and has been seeing steady excesses since 2011.

Graph 3 – Sources of Revenue

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$200,000.00

$400,000.00

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$800,000.00

$1,000,000.00

$1,200,000.00

Revenues

Contributions Program Service

Worth noting is that in comparison to program service revenue, contributions and public support income is consistently higher. GSHCG relies significantly on the public to operate. According to the 2012 report published by the Health Center, 182 volunteers worked about 11,236 hours which the center estimated to cost around $354,568. Besides these unpaid hours, actual monies gathered to run the Center comes from public contributions and grants; only about a third of total revenues is generated by the operation of the Center.

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Since its inception, the Health Center has increased the number of patients it attends on a daily basis. In 2014, Good Samaritan experienced a 400% increase in patient-centered activities as compared to the figures in 2011. 10

As such, the facility was running at capacity. At the end of that same year, it made it a goal to relocate to a much bigger location. Looking at revenues and expenditures, I found this to be overzealous; however, given their fundraising efforts, it was able to acquire necessary funds and will begin operation at the new location this year.

As part of its goal, the Center is working diligently towards establishing Gwinnett County's only full-time philanthropic dental practice. Inclined to say such a goal is overtly hopeful and unattainable, I find it possible, on the other hand, based on its success in gathering funds to relocate.

Performance-based budgetaryIt is apparent that the Center adopts a performance-based budget process. As the center has grown in capacity over the years, so have the revenues and expenditures. The center has developed from experiencing 3,139 patient encounters valued at $878,920 (in 2011) to 11,989 valued at $3,416,865 in 2014. Consequently, there's an evident correlation between funding levels and the performance of the Health Center.11

IssuesThe Center believes in serving uninsured patients in underserved communities regardless of spiritual beliefs. It believes in not forcing its beliefs on patients nor does it coerce patients to convert to Christianity. However, if a patient is open to learning about Christianity, the Center is willing to engage the interests of the patient.

I find this to be arguable. It sounds nice on paper, but I find such a stance to be difficult in practice; especially because the Center believes in praying each morning before opening for business. As such, most every employee is probably of the Christian faith and hence will engage patients in talks of Christianity whether intentionally or not. Not to mention that the Center's number one goal is to "meet the spiritual needs of our patients through prayer and biblical counseling."

Although it is symbolic of nonprofit organizations, I find the primary source (contributions) of the Facility's revenues to be problematic. These contributions directly affect the operations of the Center. Any decrease in contributions means the Center must cut down on its services or run at a loss since it does not generate many funds from the services offered. If possible, I recommend that the Center works towards establishing concrete sources of income.

10 Retrieved from: http://goodsamgwinnett.org/wp-content/uploads/2015/06/GS-2014-Annual-Report-WEB.pdf11 Ibid

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Consequent fundraising has proven to be favorable judging by the Center’s ability to raise enough funds to relocate. As well apply for government and private grants, set up galas and auction off items, throw charity balls, instead of offering flat fees for all patients regardless of financial status, charge for services according to income brackets.

Regardless, GSHCG is performing wellNotwithstanding the losses during the financial crisis and dependence on contributions, the Center has been consistent in meeting all its goals. By the end of 2014, the Health Center received 2477 new patients and provided care to about 4293 individuals which marked a 19% increase compared to the previous year. As well, GSHCG provided 387 students with mentoring and internship opportunities in the health care profession; thereby, fulfilling its goal of raising future medical missionaries. Also, Good Samaritan received several recognitions in the health care field including the Scott Hudgens Humanitarian of the Year Award and placed as a finalist in the Gwinnett Chamber of Commerce Small Business of the Year in the non-profit category.12

12 Ibid

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